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Exhibit 10.43
 

 
AMERICAN REAL ESTATE PARTNERS, L.P.
 
AMERICAN REAL ESTATE FINANCE CORP.
 
AND
 
AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP, AS GUARANTOR
 
VARIABLE RATE SENIOR CONVERTIBLE NOTES DUE 2013
 

INDENTURE
 
Dated as of April 5, 2007
 

 

WILMINGTON TRUST COMPANY
 
Trustee
 
 
 
 
 
 

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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)
7.10
(c)
N.A.
311(a)
7.11
(b)
7.11
(c)
N.A.
312(a)
2.05
(b)
16.03
(c)
16.03
313(a)
7.06
(b)(2)
7.06; 7.07
(c)
7.06; 12.02
(d)
7.06
314(a)
4.03;16.02; 16.05
(c)(1)
16.04
(c)(2)
16.04
(c)(3)
N.A.
(e)
16.05
(f)
N.A.
315(a)
7.01
(b)
7.05; 16.02
(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)
2.12
317(a)(1) 
6.08
(a)(2)
6.09
(b)
2.04
318(a)
12.01
(b)
N.A.
(c)
16.01

N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.

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TABLE OF CONTENTS
 
Page
 
ARTICLE 1
 
DEFINITIONS AND INCORPORATION
 
BY REFERENCE
 
Section 1.01
Definitions.
1
Section 1.02
Other Definitions.
14
Section 1.03
Rules of Construction.
15
ARTICLE 2
 
THE NOTES
 
Section 2.01
Form and Dating.
16
Section 2.02
Execution and Authentication.
17
Section 2.03
Registrar and Paying Agent.
18
Section 2.04
Paying Agent to Hold Money in Trust.
18
Section 2.05
Holder Lists.
18
Section 2.06
Transfer and Exchange.
18
Section 2.07
Replacement Notes.
29
Section 2.08
Outstanding Notes.
29
Section 2.09
Treasury Notes.
30
Section 2.10
Temporary Notes.
30
Section 2.11
Cancellation.
30
Section 2.12
Defaulted Interest.
31
Section 2.13
CUSIP Numbers.
31
ARTICLE 3
 
INTEREST
 
Section 3.01
Interest Rate.
31
ARTICLE 4
 
COVENANTS
 
Section 4.01
Payment of Notes.
32
Section 4.02
Maintenance of Office or Agency.
32
Section 4.03
Reports.
33
Section 4.04
Compliance Certificate.
34
Section 4.05
Taxes.
34
Section 4.06
Stay, Extension and Usury Laws.
35
Section 4.07
Dividends Paid on Depositary Units.
35
Section 4.08
Transactions with Affiliates.
35
Section 4.09
Corporate Existence.
37
Section 4.10
Compliance with Law
37
Section 4.11
No Investment Company
37
ARTICLE 5
 
SUCCESSORS
 
Section 5.01
Merger, Consolidation, or Sale of Assets.
37
Section 5.02
Relief from Obligation.
40

 
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ARTICLE 6
 
DEFAULTS AND REMEDIES
 
Section 6.01
Events of Default.
40
Section 6.02
Acceleration.
42
Section 6.03
Other Remedies.
43
Section 6.04
Waiver of Past Defaults.
43
Section 6.05
Control by Majority.
43
Section 6.06
Limitation on Suits.
44
Section 6.07
Rights of Holders of Notes to Receive Payment.
44
Section 6.08
Collection Suit by Trustee.
44
Section 6.09
Trustee May File Proofs of Claim.
44
Section 6.10
Priorities.
45
Section 6.11
Undertaking for Costs.
45
ARTICLE 7
 
TRUSTEE
 
Section 7.01
Duties of Trustee.
46
Section 7.02
Rights of Trustee.
47
Section 7.03
Individual Rights of Trustee.
48
Section 7.04
Trustee’s Disclaimer.
48
Section 7.05
Notice of Defaults.
48
Section 7.06
Reports by Trustee to Holders of the Notes.
48
Section 7.07
Compensation and Indemnity.
49
Section 7.08
Replacement of Trustee.
49
Section 7.09
Successor Trustee by Merger, etc.
50
Section 7.10
Eligibility; Disqualification.
50
Section 7.11
Preferential Collection of Claims Against Company.
51
ARTICLE 8
 
COVENANT DEFEASANCE
 
Section 8.01
Company May Effect Covenant Defeasance.
51
Section 8.02
Legal Defeasance and Discharge.
51
Section 8.03
Covenant Defeasance.
51
Section 8.04
Conditions to Covenant Defeasance.
51
Section 8.05
Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions.
52
Section 8.06
Repayment to Company.
53
Section 8.07
Reinstatement.
53
ARTICLE 9
 
AMENDMENT, SUPPLEMENT AND WAIVER
 
Section 9.01
Without Consent of Holders of Notes.
54
Section 9.02
With Consent of Holders of Notes.
55
Section 9.03
Revocation and Effect of Consents.
56
Section 9.04
Notation on or Exchange of Notes.
56
Section 9.05
Trustee to Sign Amendments, etc.
57
Section 9.06
Amendments, Modifications, Revisions or Supplements to Senior Notes
57

 
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ARTICLE 10
 
NOTE GUARANTEES
 
Section 10.01.
Guarantee.
58
Section 10.02.
Limitation on Guarantor Liability.
59
Section 10.03.
Execution and Delivery of Note Guarantee.
59
Section 10.04.
Guarantors May Consolidate, etc., on Certain Terms.
59
Section 10.05.
Releases.
60
ARTICLE 11
 
SATISFACTION AND DISCHARGE
 
Section 11.01
Satisfaction and Discharge.
61
Section 11.02
Application of Trust Money.
62
ARTICLE 12
 
CONVERSION
 
Section 12.01
Conversion Privilege.
62
Section 12.02
Conversion Procedure.
63
Section 12.03
Company’s Right to Require Conversion; Notices to Trustee.
63
Section 12.04
Selection of Notes to be Converted
65
Section 12.05
Delivery by Holders of Notes Subject to Forced Conversion
65
Section 12.06
Deposit of Interest and Additional Interest.
66
Section 12.07
Delivery of Depositary Units.
66
Section 12.08
No Fractional Units.
66
Section 12.09
Taxes on Conversion.
66
Section 12.10
Company to Provide Depositary Units.
67
Section 12.11
Adjustment of Conversion Price.
67
Section 12.12
No Adjustment.
71
Section 12.13
Notice of Conversion Price Adjustment
71
Section 12.14
Notice of Certain Transactions
72
Section 12.15
Effect of Reclassification, Consolidation, Merger or Sale on Conversion
Privilege.
72
Section 12.16
Trustee’s Disclaimer.
73
Section 12.17
Company Determination Final.
74
ARTICLE 13
 
REPURCHASE UPON A FUNDAMENTAL CHANGE
 
Section 13.01
Repurchase of Notes at Option of the Holder Upon Fundamental Change.
74
Section 13.02
Effect of Fundamental Change Repurchase Notice
76
Section 13.03
Notes Repurchased in Whole or in Part.
77
Section 13.04
Deposit of Fundamental Change Repurchase Price.
77
Section 13.05
Repayment to the Company.
77
ARTICLE 14
 
REPURCHASE REQUIRED BY GAMING AUTHORITIES
 
Section 14.01
Redemption Pursuant to Gaming Laws
78
Section 14.02
Notices to Trustee
79
Section 14.03
Notice of Redemption
79
Section 14.04
Effect of Notice of Redemption
80
Section 14.05
Deposit of Redemption Price
80
Section 14.06
Global Note Redeemed in Part
80

 
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ARTICLE 15
 
MAKE-WHOLE PREMIUM
 
Section 15.01
Make-Whole Premium
80
Section 15.02
Adjustment to the Make-Whole Premium
83
Section 15.03
Trustee’s Disclaimer
84
ARTICLE 16
 
MISCELLANEOUS
 
Section 16.01
Trust Indenture Act Controls
84
Section 16.02
Notices.
84
Section 16.03
Communication by Holders of Notes with Other Holders of Notes.
85
Section 16.04
Certificate and Opinion as to Conditions Precedent.
85
Section 16.05
Statements Required in Certificate or Opinion.
86
Section 16.06
Rules by Trustee and Agents.
86
Section 16.07
No Personal Liability of Directors, Officers, Employees and Stockholders.
86
Section 16.08
Governing Law.
86
Section 16.09
No Adverse Interpretation of Other Agreements.
87
Section 16.10
Successors.
87
Section 16.11
Severability.
87
Section 16.12
Counterpart Originals.
87
Section 16.13
Table of Contents, Headings, etc.
87
Section 16.14
Clarity.
87
     
EXHIBITS
 
 
Exhibit A1
FORM OF NOTE
 
Exhibit A2
FORM OF REGULATION S TEMPORARY GLOBAL NOTE
 
Exhibit B
FORM OF CERTIFICATE OF TRANSFER
 
Exhibit C
FORM OF CERTIFICATE OF EXCHANGE
 
Exhibit D
FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
 
Exhibit E
FORM OF NOTATION OF GUARANTEE
 
Exhibit F
FORM OF NOTICE OF CONVERSION
 
Exhibit G
FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE
 

 
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INDENTURE dated as of April 5, 2007 among American Real Estate Partners, L.P., a
Delaware limited partnership, as issuer (“AREP”), American Real Estate Finance
Corp., a Delaware corporation, as co-issuer (“AREP Finance”, and together with
AREP, the “Company”), American Real Estate Holdings Limited Partnership, as
Guarantor, and Wilmington Trust Company, as trustee.
 
WHEREAS, the Company has duly authorized the creation of an issue of its
Variable Rate Senior Convertible Notes Due 2013 (each a “Note” and collectively,
the “Notes”) of substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture; and
 
WHEREAS, all things necessary to make the Notes, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid and legally binding obligations of the Company, and to make this Indenture
a valid and legally binding agreement of the Company, in accordance with the
terms of the Notes and the Indenture, have been done. Further, all things
necessary to duly authorize the issuance of the Depositary Units of the Company
initially issuable upon the conversion of the Notes, and to duly reserve for
issuance the number of Depositary Units initially issuable upon such conversion,
have been done.
 
NOW, THEREFORE, the Company, the Guarantor and the Trustee agree as follows for
the benefit of each other and for the equal and ratable benefit of the Holders
(as defined below) of the Notes:
 
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
 
Section 1.01 Definitions.
 
“144A Global Note” means a Global Note substantially in the form of Exhibit A1
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
 
“2004 Indenture” means the Indenture dated as of May 12, 2004 between the
Company, AREH, as guarantor, and Wilmington Trust Company, as Trustee, as
amended from time to time, under which the 8 1/8% Senior Notes are issued and
outstanding.
 
“2005 Indenture” means the Indenture dated as of February 7, 2005 between the
Company, AREH, as guarantor, and Wilmington Trust Company, as Trustee, as
amended from time to time, under which the 7 1/8% Senior Notes are issued and
outstanding.
 
“7 1/8% Senior Notes” means the Company’s 7 1/8% Senior Notes due 2013 as
amended from time to time issued pursuant to the 2005 Indenture.
 
“8 1/8% Senior Notes” means the Company’s 8 1/8% Senior Notes due 2012 as
amended from time to time issued pursuant to the 2004 Indenture.
 
“Additional Interest” means all Additional Interest, as defined in and, then
owing pursuant to the Registration Rights Agreement.
 
“Additional Notes” means additional Notes (other than the Initial Notes) issued
under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part
of the same series as the Initial Notes.
 

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“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,”
as used with respect to any Person, means 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; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms “controlling, “controlled by” and “under common control
with” have correlative meanings.
 
“Agent” means any Registrar, co-registrar, Paying Agent, additional paying agent
or Conversion Agent.
 
“API” means American Property Investors, Inc., the general partner of AREP as of
the date of this Indenture (and not any of its subsidiaries).
 
“Applicable Procedures” means, with respect to any transfer or exchange of or
for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
 
“AREH” means American Real Estate Holdings Limited Partnership (and not any of
its subsidiaries).
 
“AREP” means American Real Estate Partners, L.P. (and not any of its
subsidiaries).
 
“AREP Finance” means American Real Estate Finance Corp.
 
“AREP Partnership Agreement” means AREP’s Amended and Restated Agreement of
Limited Partnership, dated May 12, 1987 as amended February 22, 1995, August 16,
1996, May 9, 2002 and June 27, 2005.
 
“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.
 
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3)
of the Exchange Act), such “person” will be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms “Beneficially Owns” and
“Beneficially Owned” have a corresponding meaning.
 
“Bloomberg” means Bloomberg Financial Markets.
 
“Board of Directors” means:
 
(1)  with respect to a corporation, the board of directors of the corporation or
any committee thereof duly authorized to act on behalf of such board;
 
(2)  with respect to a partnership, the Board of Directors of the general
partner of the partnership;
 

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(3)  with respect to a limited liability company, the managing member or members
or any controlling committee of managing members thereof or the Board of
Directors of the managing member; and
 
(4)  with respect to any other Person, the board or committee of such Person
serving a similar function.
 
“Broker-Dealer” means any broker or dealer registered as such under the Exchange
Act.
 
“Business Day” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such jurisdictions are authorized or required by
law or other governmental action to close.
 
“Capital Lease Obligation” means, at the time any determination is to be made,
the amount of the liability in respect of a capital lease that would at that
time be required to be capitalized on a balance sheet prepared in accordance
with GAAP, and the Stated Maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be prepaid by the lessee without payment of a penalty.
 
“Capital Stock” means:
 
(1)  in the case of a corporation, corporate stock;
 
(2)  in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;
 
(3)  in the case of a partnership or limited liability company, partnership
interests (whether general or limited) or membership interests; and
 
(4)  any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person but excluding from all of the foregoing any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.
 
“Cash Equivalents” means:
 
(1)  United States dollars;
 
(2)  securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality of the United States
government (provided that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than one
year from the date of acquisition;
 
(3)  certificates of deposit and eurodollar time deposits with maturities of one
year or less from the date of acquisition, bankers’ acceptances with maturities
not exceeding one year and overnight bank deposits, in each case, with any
domestic commercial bank having capital and surplus in excess of $500.0 million
and a Thomson Bank Watch Rating of “B” or better;
 

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(4)  repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications specified
in clause (3) above;
 
(5)  commercial paper having one of the two highest ratings obtainable from
Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services and, in
each case, maturing within one year after the date of acquisition; and
 
(6)  money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
 
“Change of Control” means the occurrence of any of the following:
 
(1)  the sale, lease, transfer, conveyance or other disposition by AREP or any
Guarantor (other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the properties or assets of
AREP or AREH to any “person” (as that term is used in Section 13(d) of the
Exchange Act) other than the Principal or a Related Party; provided, however,
that (x) if AREP or AREH receives consideration in Cash Equivalents and
marketable securities with an aggregate Fair Market Value determined at the time
of the execution of each relevant agreement of at least $1.0 billion for such
sale, lease, transfer, conveyance or other disposition of properties or assets,
then such transaction shall not be deemed a Change of Control and (y) any sale,
assignment, transfer or other disposition of Cash Equivalents, including,
without limitation, any investment or capital contribution of Cash Equivalents
or purchase of property, assets or Capital Stock with Cash Equivalents, will not
constitute a sale, assignment, transfer, conveyance or other disposition of all
or substantially all of the properties or assets for purposes of this clause
(1);
 
(2)  the adoption of a plan relating to the liquidation or dissolution of AREP;
 
(3)  the consummation of any transaction (including, without limitation, any
merger or consolidation), the result of which is that any “person” (as defined
above), other than the Principal or the Related Parties, becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the Voting Stock of a
Controlling Entity of AREP, measured by voting power rather than number of
shares;
 
(4)  the first day on which a majority of the members of the Board of Directors
of the Controlling Entity are not Continuing Directors; or
 
(5)  for so long as the Company is a partnership, upon any general partner of
AREP ceasing to be an Affiliate of the Principal or a Related Party.
 
“Clearstream” means Clearstream Banking, S.A.
 
“Company” means, collectively AREP and AREP Finance, and any and all successors
thereto.
 
“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Controlling Entity who:
 
(1)  was a member of such Board of Directors on the date of this Indenture; or
 

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(2)  was nominated for election or elected to such Board of Directors with the
approval of the Principal or any of the Related Parties or with the approval of
a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.
 
“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.
 
“Controlling Entity” means (1) for so long as AREP is a partnership, any general
partner of AREP, (2) if AREP is a limited liability company, any managing member
of AREP or (3) if AREP is a corporation, AREP.
 
“Conversion Agent” means the Trustee or such other office or agency designated
by the Company with notice provided to the Holders where Notes may be presented
for conversion.
 
“Conversion Price” means, as of any Conversion Date or other date of
determination, $132.595 subject to adjustment as provided herein.
 
“Conversion Rate” means, as of any Conversion Date or other date of
determination, for each $1,000 principal amount of Notes, the quotient of $1,000
divided by the Conversion Price in effect as of such date.
 
“Corporate Trust Office of the Trustee” will be at the address of the Trustee
specified in Section 16.02 hereof 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 Notes 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 Note” means a certificated Note registered in the name of the Holder
thereof and issued in accordance with Section 2.06 hereof, substantially in the
form of Exhibit A1 hereto except that such Note shall not bear the Global Note
Legend and shall not have the “Schedule of Exchanges of Interests in the Global
Note” attached thereto.
 
“Depositary” means, with respect to the Notes issuable or issued in whole or in
part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
 
“Depositary Unit Price” means the price paid per Depositary Unit in the
transaction constituting the Fundamental Change, determined as follows: (i) if
holders of Depositary Units receive only cash in the transaction constituting
the Fundamental Change, the Depositary Unit Price shall equal the cash amount
paid per Depositary Unit; and (ii) in all other cases, the Depositary Unit Price
shall equal the arithmetic average of the VWAP of a Depositary Unit on each of
the five (5) Trading Day period ending on the Trading Day immediately preceding
the Effective Date.
 
“Depositary Units” means Depositary Units representing limited partnership
interests of the Company listed for trading on the NYSE as they exist on the
date of this Indenture or any other units of
 

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Capital Stock of the Company into which the Depositary Units shall be
reclassified or changed or, in the event of a merger, consolidation or other
similar transaction involving the Company that is otherwise permitted hereunder
in which the Company is not the surviving entity, the Equity Interests of such
surviving entity or its direct or indirect parent entity into which the Notes
would become convertible pursuant to the applicable supplemental indenture.
 
“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms
of any security into which it is convertible, or for which it is exchangeable,
in each case, at the option of the holder of the Capital Stock), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
of the Capital Stock, in whole or in part, on or prior to the date that is 91
days after the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require AREP or any
Guarantor to repurchase such Capital Stock upon the occurrence of a change of
control, event of loss, an asset sale or other special redemption event will not
constitute Disqualified Stock if the terms of such Capital Stock provide that
AREP or any Guarantor may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.07 of the 2005 Indenture or where the funds to pay for such repurchase
was from the net cash proceeds of such Capital Stock and such net cash proceeds
was set aside in a separate account to fund such repurchase. Furthermore, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require AREP or any Guarantor to
redeem such Capital Stock, including, without limitation, upon maturity will not
constitute Disqualified Stock if the terms of such Capital Stock provide that
AREP or any Guarantor may redeem such Capital Stock for other Capital Stock that
is not Disqualified Stock. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Indenture will be the maximum
amount that AREP and its Subsidiaries (including any Guarantor) may become
obligated to pay upon the maturity of, or pursuant to any mandatory redemption
provisions of, such Disqualified Stock, exclusive of accrued dividends. For the
avoidance of doubt, and by way of example, the Preferred Units, as in effect on
the date of this Indenture, do not constitute Disqualified Stock.
 
“Eligible Market” means the NYSE, The NASDAQ Global Select Market or The NASDAQ
Global Market.
 
“Equity Conditions” means that each of the following conditions is satisfied:
(i) the Depositary Units are designated for quotation on an Eligible Market, no
suspension from trading of the Depositary Units on such exchange or market shall
exist and be continuing, and neither delisting nor suspension of the Depositary
Units by such exchange or market shall be threatened or pending, in either case
(A) in writing by such exchange or market or (B) by falling below the minimum
listing maintenance requirements of such exchange or market; and (ii) as it
relates to Article 12 and the delivery of a Forced Conversion Notice, either (A)
the Registration Statement filed pursuant to the Registration Rights Agreement
shall be effective and available for the resale of all remaining Registrable
Securities (each as defined in the Registration Rights Agreement) in accordance
with the terms of the Registration Rights Agreement or (B) all Depositary Units
issuable upon conversion of the Notes shall be eligible for resale by the
holders without restriction and without the need for registration under any
applicable federal or state securities laws, including, without limitation,
pursuant to Rule 144(k) under the 1933 Act.
 
“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
 
“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear
system.
 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Excluded Securities” means issuances of (a) any Notes or (b) any Depositary
Units (i) pursuant to any present or future plan providing for the reinvestment
of dividends or interest payable on securities of the Company and the investment
of additional optional amounts in Depositary Units under any plan; (ii) pursuant
to any present or future employee, director or consultant benefit plan or
program or employee equity purchase plan of the Company or any of its
Subsidiaries, (iii) pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security (including, without limitation, the
Preferred Units) not described in clause (ii) above and outstanding as of the
Issuance Date (provided that the terms of such option, warrant, right or
security are not amended or modified in any manner after the Issuance Date);
(iv) for any Make-Whole Premium described in Article 14; and (v) upon conversion
of any Notes.
 
“Fair Market Value” means the value that would be paid by a willing buyer to an
unaffiliated willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the Board of Directors of the
Controlling Entity (unless otherwise provided in this Indenture).
 
“Forced Conversion Period” means the period beginning on the Forced Conversion
Notice Date and ending on the Forced Conversion Date.
 
“Fundamental Change” means the occurrence of a Change in Control or a
Termination of Trading.
 
“Fundamental Change Settlement Date” means the Effective Date for a Fundamental
Change. In respect of any Fundamental Change Conversion or Fundamental Change
Repurchase for which a Notice of Conversion or Fundamental Change Repurchase
Notice, as applicable, has been delivered after the Effective Date (and during
the Fundamental Change Conversion/Repurchase Period), the Fundamental Change
Settlement Date shall mean the date that is two Business Days following the end
of the Fundamental Change Conversion/Repurchase Period.
 
“GAAP” means generally accepted accounting principles in the United States set
forth in the statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as have been approved by
a significant segment of the accounting profession, which are in effect on the
Issuance Date. For the purposes of this Indenture, the term “consolidated” with
respect to any Person shall mean such Person consolidated with its Subsidiaries.
 
“Gaming Authority” means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States or other national government, any state, province or any city or other
political subdivision, including, without limitation, the State of Nevada,
whether now or hereafter existing, or any officer or official thereof and any
other agency with authority thereof to regulate any gaming operation (or
proposed gaming operation) owned, managed or operated by the Principal, its
Related Parties, the Company or any of their respective Subsidiaries or
Affiliates.
 
“Gaming Law” means any gaming law or regulation of any jurisdiction or
jurisdictions to which the Company or any of its Subsidiaries (including AREH)
is, or may at any time after the issue date be, subject.
 
“Global Note Legend” means the legend set forth in Section 2.06(f)(2) hereof,
which is required to be placed on all Global Notes issued under this Indenture.
 

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“Global Notes” means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes deposited with or on behalf of
and registered in the name of the Depository or its nominee, substantially in
the form of Exhibit A1 hereto and that bears the Global Note Legend and that has
the “Schedule of Exchanges of Interests in the Global Note” attached thereto,
issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4) or 2.06(d)(2).
 
“Government Securities” means securities that are (1) direct obligations of the
United States of America for the timely payment of which its full faith and
credit is pledged or (2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Security
or a specific payment of principal of or interest on any such Government
Security held by such custodian for the account of the holder of such depository
receipt; provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Security or the specific payment of principal of or interest on the
Government Security evidenced by such depository receipt.
 
“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 any Subsidiary of AREP (initially only AREH) that executes a
Note Guarantee in accordance with the provisions of this Indenture, and their
respective successors and assigns, in each case, until the Note Guarantee of
such Person has been released in accordance with the provisions of this
Indenture.
 
“Hedging Obligations” means, with respect to any specified Person, the
obligations of such Person under:
 
(1)  interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements;
 
(2)  other agreements or arrangements designed to manage interest rates or
interest rate risk; and
 
(3)  other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange rates or commodity prices.
 
“Holder” means a Person in whose name a Note is registered.
 
“IAI Global Note” means a Global Note substantially in the form of Exhibit A1
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
 

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“Indebtedness” means, with respect to any specified Person, any indebtedness of
such Person (excluding accrued expenses and trade payables), whether or not
contingent:
 
(1)  in respect of borrowed money;
 
(2)  evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof);
 
(3)  in respect of banker’s acceptances;
 
(4)  representing Capital Lease Obligations;
 
(5)  representing the balance deferred and unpaid of the purchase price of any
property or services due more than six months after such property is acquired or
such services are completed; or
 
(6)  representing any Hedging Obligations,
 
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
“Indebtedness” includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
 
“Indenture” means this Indenture, as amended or supplemented from time to time.
 
“Indirect Participant” means a Person who holds a beneficial interest in a
Global Note through a Participant.
 
“Interest Payment Date” means each January 15, April 15, July 15 and October 15,
commencing July 15, 2007 and ending with a final interest payment date on the
Maturity Date. 
 
“Initial Notes” means the first $200,000,000 aggregate principal amount of Notes
issued under this Indenture on the date hereof.
 
“Initial Purchasers” means Portside Growth and Opportunity Fund and Highbridge
International LLC.
 
“Institutional Accredited Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act, who are not also QIBs.
 
“Issuance Date” means the closing date for the sale and original issuance of the
Notes.
 
“Legal Holiday” means any day other than a Business Day. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding Business Day, and no interest shall accrue on such payment for
the intervening period.
 
“LIBOR” means, as of the applicable date, the three-month London Interbank
Offered Rate for deposits in U.S. dollars, as shown on such date in The Wall
Street Journal (Eastern Edition) under the caption “Money Rates - London
Interbank Offered Rates (LIBOR)”; or (ii) if The Wall Street Journal does not
publish such rate, the offered one-month rate for deposits in U.S. dollars which
appears on the
 

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Reuters Screen LIBO Page as of 10:00 a.m., New York time, each day, provided
that if at least two rates appear on the Reuters Screen LIBO Page on any day,
the “LIBOR” for such day shall be the arithmetic mean of such rates.
 
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
 
“Maturity Date” when used with respect to any Note, means the date specified in
such Note as the fixed date on which the principal amount of such Note together
with accrued and unpaid interest and Additional Interest, if any, is due and
payable.
 
“Non-U.S. Person” means a Person who is not a U.S. Person.
 
“Note Guarantee” means the Guarantee by any Subsidiary of AREP of the Company’s
obligations under this Indenture and the Notes, executed pursuant to the
provisions of this Indenture; which initially will only be by AREH.
 
“Notes” has the meaning assigned to it in the preamble to this Indenture. The
Initial Notes and the Additional Notes shall be treated as a single class for
all purposes under this Indenture, and unless the context otherwise requires,
all references to the Notes shall include the Initial Notes and any Additional
Notes.
 
“NYSE” means the New York Stock Exchange, Inc.
 
“Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
 
“Offering” means a bona fide underwritten public offering (other than an
“at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act and
“equity lines”) by the Company lead managed by any of the investment banking
firms listed on Schedule A hereto or one of the 10 top-ranked (by dollar amount
of lead managed public offerings of common stock in the United States for the
most recently ended calendar year as such ranking is published in one or more
nationally recognized league tables) investment banking firms, in any such
case which is completed at least 30 days after the date of effectiveness of the
Initial Shelf Registration Statement (as defined in the Registration Rights
Agreement) and that results in aggregate gross proceeds to the Company in excess
of $350 million (excluding any portion of such offering sold to (a) officers and
directors of the Company; (b) any Related Party or (c) any Affiliate of any of
the foregoing).
 
“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 API or AREP
Finance, as applicable, by two Officers (or if AREP is (x) a limited liability
company, two Officers of the managing member of such limited liability company
or (y) a corporation, by two Officers thereof) of API or AREP Finance, as
applicable, one of whom must be the principal executive officer, the principal
financial
 

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officer, the treasurer or the principal accounting officer of API or AREP
Finance, as applicable, that meets the requirements of Section 16.05 hereof.
 
“Opinion of Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 16.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or any of its Affiliates or the Trustee.
 
“Other Additional Interest” means liquidated damages or additional interest
arising from a registration default under a registration rights agreement with
respect to the registration of subordinated Indebtedness permitted to be
incurred under this Indenture.
 
“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 DTC, shall include Euroclear and
Clearstream).
 
“Partners’ Equity” with respect to any Person means as of any date, the
partners’ equity as of such date shown on the consolidated balance sheet of such
Person and its Subsidiaries or if such Person is not a partnership, the
comparable line-item on a balance sheet, each prepared in accordance with GAAP. 
 
“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.
 
“Preferred Units” means AREP’s 5% Cumulative Pay-in-Kind Redeemable Preferred
Units payable on or before March 31, 2010.
 
“Preferred Unit Distribution” means the scheduled annual Preferred Unit
distribution, payable on March 31 of each year in additional Preferred Units at
the rate of 5% of the liquidation preference of $10.00 per Preferred Unit.
 
“Principal” means Carl Icahn.
 
“Private Placement Legend” means the legend set forth in Section 2.06(f)(1)
hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
 
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
 
“Record Date” for the interest payable on any Interest Payment Date means each
January 1, April 1, July 1 and October 1 (whether or not a Business Day) next
preceding such Interest Payment Date.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of April 4, 2007, among the Company, AREH and the other parties named on the
signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time.
 
“Regulation S” means Regulation S promulgated under the Securities Act.
 
“Regulation S Global Note” means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
 

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“Regulation S Permanent Global Note” means a permanent Global Note in the form
of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Regulation S Temporary Global Note upon expiration of
the Restricted Period.
 
“Regulation S Temporary Global Note” means a temporary Global Note in the form
of Exhibit A2 hereto deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
 
“Related Parties” means (1) Carl Icahn, any spouse and any child, stepchild,
sibling or descendant of Carl Icahn, (2) any estate of Carl Icahn or any person
under clause (1), (3) any person who receives a beneficial interest in any
estate under clause (2) to the extent of such interest, (4) any executor,
personal administrator or trustee who holds such beneficial interest in AREP for
the benefit of, or as fiduciary for, any person under clauses (1), (2) or (3) to
the extent of such interest and (5) any corporation, partnership, limited
liability company, trust, or similar entity, directly or indirectly owned or
Controlled by Carl Icahn or any other person or persons identified in clauses
(1), (2) or (3).
 
“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.
 
“Restricted Definitive Note” means a Definitive Note bearing the Private
Placement Legend.
 
“Restricted Global Note” means a Global Note bearing the Private Placement
Legend.
 
“Restricted Period” means the 40-day distribution compliance period as defined
in Regulation S. 
 
“Rule 144” means Rule 144 promulgated under the Securities Act.
 
“Rule 144A” means Rule 144A promulgated under the Securities Act.
 
“Rule 903” means Rule 903 promulgated under the Securities Act.
 
“Rule 904” means Rule 904 promulgated under the Securities Act.
 
“SEC” means the United States Securities and Exchange Commission.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Shelf Registration Statement” means a registration statement under the
Securities Act registering the Depositary Units issuable on conversion of the
Notes for resale pursuant to the terms of the Registration Rights Agreement.
 
“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, as such regulation is in effect on the Issuance
Date.
 

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“Stated Maturity” means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest, accreted value, or principal
prior to the date originally scheduled for the payment or accretion thereof.
 
“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).
 
For the avoidance of doubt, AREH will be deemed to be a Subsidiary of AREP so
long as AREH remains a Guarantor.
 
“Tangible Net Worth” of any specified Person as of any date means, the total
shareholders’ equity (or if such Person were not a corporation, the equivalent
account) of such Person and its Subsidiaries on a consolidated basis determined
in conformity with GAAP less any and all goodwill and other intangible assets
reflected on the consolidated balance sheet of such Person as of the last day of
the fiscal quarter most recently completed before the date of determination for
which financial statements are then available, but taking into account any
change in total shareholders’ equity (or the equivalent account) as a result of
any (x) Restricted Payments (as defined in the 2005 Indenture) made, (y) asset
sales or (z) contributions to equity or from the issuance or sale of Equity
Interests (excluding Disqualified Stock) or from the exchange or conversion
(other than to Disqualified Stock) of Disqualified Stock or debt securities,
completed since such fiscal quarter end.
 
“Termination of Trading” means that the Depositary Units or other securities
into which the Notes are then convertible are not listed for trading on an
Eligible Market. 
 
“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C.
§§ 77aaa-77bbbb).
 
“Trading Day” means (a) if the applicable security is listed or admitted for
trading on an Eligible Market, a day on such Eligible Market is open for
business or (b) if the applicable security is not so listed, admitted for
trading or quoted, any Business Day.
 
“Trustee” means Wilmington Trust Company until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means
the successor serving hereunder.
 
“Unrestricted Definitive Note” means a Definitive Note that does not bear and is
not required to bear the Private Placement Legend.
 
“Unrestricted Global Note” means a Global Note that does not bear and is not
required to bear the Private Placement Legend.
 
“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under
the Securities Act.
 

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“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.
 
“VWAP” means, for any security as of any date, the dollar volume-weighted
average price for such security on the principal market or exchange on which
such security is traded during the period beginning at 9:30:01 a.m., New York
City time (or such other time as such principal market or exchange publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
City time (or such other time as such principal market or exchange publicly
announces is the official close of trading) as reported by Bloomberg through its
“Volume at Price” functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York City time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
City time (or such other time as such market publicly announces is the official
close of trading) as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any
of the market makers for such security as reported in the “pink sheets” by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the VWAP cannot be
calculated for a security on a particular date on any of the foregoing bases,
the VWAP of such security on such date shall be the fair market value as
determined in good faith by the Company, absent manifest error. All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.
 
Section 1.02 Other Definitions.
 
(a) 2005 Indenture. Whenever, in this Indenture, it is provided that a term will
be “as defined in the 2005 Indenture” the relevant 2005 Indenture definition is
incorporated herein by reference and forms a part hereof as if it had been set
forth in its entirety herein and such definition will continue to be
applicable in the event  the 2005 Indenture is defeased, discharged or
terminated for any reason.
 
(b) Terms Defined Elsewhere in this Indenture.
 

   
Defined in
Term
 
Section
“Affiliate Transaction”
 
4.08
“Application Date”
 
14.01
“Authentication Order”
 
2.02
“Calculation Date”
 
1.01
“Clause (6) Indebtedness”
 
6.01
“Conversion Date”
 
12.02
“Covenant Defeasance”
 
8.03
“Current Market Price per Depositary Unit”
 
12.11
“Depositary Unit Delivery Date”
 
12.07
“Depositary Unit Price Cap”
 
15.01
“Depositary Unit Price Threshold”
 
15.01
“Dilutive Issuance”
 
12.11
“DTC”
 
2.03
“Effective Date”
 
15.1
“Event of Default”
 
6.01
“Expiration Date”
 
12.11
“Expiration Time”
 
12.11
“Forced Conversion”
 
12.03
“Forced Conversion Date”
 
12.03
“Forced Conversion Equity Conditions Failure”
 
12.03
“Forced Conversion Notice”
 
12.03
“Forced Conversion Notice Date”
 
12.03
“Fundamental Change Company Notice
 
13.01
“Fundamental Change Conversion”
 
12.01
“Fundamental Change Repurchase”
 
13.01
“Fundamental Change Repurchase Notice”
 
13.01
“Fundamental Change Repurchase Period”
 
13.01
“Fundamental Change Repurchase Price”
 
13.01
“Interest Rate”
 
3.01
“Make-Whole Premium”
 
15.01
“Make-Whole Premium Table
 
15.01
“Notice of Conversion”
 
12.02
“Paying Agent”
 
2.03
“Poison Pill”
 
12.11
“Purchased Depositary Units
 
12.11
“Registrar”
 
2.03
“Trigger Event”
 
12.11
“Triggering Distribution”
 
4.07
“Triggering Distribution Threshold Amount”
 
4.07

Section 1.03 Rules of Construction.
 
Unless the context otherwise requires:
 
(1) a term has the meaning assigned to it;
 
(2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
 
(3) “or” is not exclusive;
 
(4) words in the singular include the plural, and in the plural include the
singular;
 
(5) “will” shall be interpreted to express a command;
 
(6) provisions apply to successive events and transactions; and
 
(7) references to sections of or rules under the Securities Act will be deemed
to include substitute, replacement of successor sections or rules adopted by the
SEC from time to time.
 

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ARTICLE 2
THE NOTES
 
Section 2.01 Form and Dating.
 
(a) General. The aggregate principal amount of Notes that may be authenticated
and delivered under this Indenture is initially limited to $600,000,000, except
for Notes authenticated and delivered upon registration or transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Section 2.06. Other than as
set forth in the preceding sentence, the Company shall not issue any Notes under
this Indenture.
 
The Notes shall be known and designated as the “Variable Rate Senior Convertible
Notes Due 2013” of the Company. The principal amount shall be payable at the
Maturity Date, or at the election of each Holder upon a Fundamental Change as
provided for under this Indenture. The Notes shall rank pari passu with all
unsecured and unsubordinated indebtedness of the Company, including, without
limitation, the 8 1/8% Senior Notes and the 7 1/8% Senior Notes.
 
The Notes and the Trustee’s certificate of authentication will be substantially
in the form of Exhibits A1 and A2 hereto. The Notes may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Note will be
dated the date of its authentication. The Notes shall be in denominations of
$1,000 and integral multiples thereof.
 
The terms and provisions contained in the Notes will constitute, and are hereby
expressly made, a part of this Indenture and the Company, the Guarantor and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
 
The Notes shall not have the benefit of a sinking fund.
 
Except as provided in Article 14 hereof, the Notes may not be redeemed or
prepaid in whole or in part at the option of the Company, at any time prior to
the Maturity Date; provided, however that the Company and/or its Subsidiaries
are not prohibited from purchasing Notes in privately negotiated or open market
transactions, by tender offer or otherwise.
 
(b) Global Notes. Notes issued in global form will be substantially in the form
of Exhibits A1 or A2 attached hereto (including the Global Note Legend thereon
and the “Schedule of Exchanges of Interests in the Global Note” attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A1 hereto (but without the Global Note Legend thereon and without the
“Schedule of Exchanges of Interests in the Global Note” attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect conversions, exchanges,
redemptions and repurchases. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby will be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
 
(c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S
will be issued initially in the form of the Regulation S Temporary Global Note,
which will be deposited on behalf of the
 

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purchasers of the Notes represented thereby with the Trustee, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Restricted Period will be terminated upon
the receipt by the Trustee of:
 
(1) a written certificate from the Depositary, together with copies of
certificates from Euroclear and Clearstream certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note (except to the extent
of any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all
as contemplated by Section 2.06(b) hereof); and
 
(2) an Officers’ Certificate from the Company.
 
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note will be exchanged for beneficial interests in
the Regulation S Permanent Global Note pursuant to the Applicable Procedures.
Simultaneously with the authentication of the Regulation S Permanent Global
Note, the Trustee will cancel the Regulation S Temporary Global Note. The
aggregate principal amount of the Regulation S Temporary Global Note and the
Regulation S Permanent Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
 
(d) Euroclear and Clearstream Procedures Applicable. The provisions of the
“Operating Procedures of the Euroclear System” and “Terms and Conditions
Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream
Banking” and “Customer Handbook” of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Note that are held by Participants through
Euroclear or Clearstream.
 
Section 2.02 Execution and Authentication.
 
At least one Officer must sign the Notes for the Company by manual or facsimile
signature.
 
If an Officer whose signature is on a Note no longer holds that office at the
time a Note is authenticated, the Note will nevertheless be valid.
 
A Note will not be valid until authenticated by the manual signature of the
Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
 
The Trustee will, upon receipt of a written order of the Company signed by two
Officers (an “Authentication Order”), authenticate Notes for original issue that
may be validly issued under this Indenture, including any Additional Notes up to
the aggregate principal amount stated in such Authentication Order. The
aggregate principal amount of Notes outstanding at any time may not exceed the
aggregate principal amount of Notes authorized for issuance by the Company
pursuant to one or more Authentication Orders, except as provided in Section
2.07 hereof.
 
The Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference
 

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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
Holders or an Affiliate of the Company.
 
Section 2.03 Registrar and Paying Agent.
 
The Company will maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (“Registrar”), an office or agency
where Notes may be presented for payment (“Paying Agent”) and an office or
agency where Notes may be presented for conversion. The Registrar will keep a
register of the Notes and of their transfer, repurchase, redemption, conversion
and exchange. The Company may appoint one or more co-registrars, one or more
additional paying agents and/or conversion agents. The term “Registrar” includes
any co-registrar, the term “Paying Agent” includes any additional paying agent
and the term “Conversion Agent” includes and additional conversion agent. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company will notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar, Paying Agent or Conversion Agent, the Trustee shall
act as such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar or Conversion Agent.
 
The Company initially appoints The Depository Trust Company (“DTC”) to act as
Depositary with respect to the Global Notes.
 
The Company initially appoints the Trustee to act as the Registrar and Paying
Agent and to act as Custodian with respect to the Global Notes.
 
Section 2.04 Paying Agent to Hold Money in Trust.
 
The Company will 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 or
the Trustee all money held by the Paying Agent for the payment of principal,
premium or Additional Interest, if any, or interest on the Notes, 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) will
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee will serve as
Paying Agent for the Notes.
 
Section 2.05 Holder Lists.
 
The Trustee will 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 and
shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar,
the Company will 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 Notes and the Company shall
otherwise comply with TIA § 312(a).
 
Section 2.06 Transfer and Exchange.
 
(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary, by a nominee
of the Depositary to the
 

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Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes will be exchanged by the Company for Definitive
Notes if:
 
(1) the Company delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary;
 
(2) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (A) the expiration of the Restricted Period and (B)
the receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act; or
 
(3) there has occurred and is continuing a Default or Event of Default with
respect to the Notes.
 
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b) or (c) hereof.
 
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
 
(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial
interests in any Restricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set forth in the
Private Placement Legend; provided, however, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Regulation S
Temporary Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchasers). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(1).
 
(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes.
In connection with all transfers and exchanges of beneficial interests that are
not subject to Section 2.06(b)(1) above, the transferor of such beneficial
interest must deliver to the Registrar either:
 

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(A) both:
 
(i) a written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or exchanged;
and
 
(ii) instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such increase;
or
 
(B) both:
 
(i) a written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
 
(ii) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above; provided
that in no event shall Definitive Notes be issued upon the transfer or exchange
of beneficial interests in the Regulation S Temporary Global Note prior to (A)
the expiration of the Restricted Period and (B) the receipt by the Registrar of
any certificates required pursuant to Rule 903 under the Securities Act. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(g) hereof.
 
(3) Transfer of Beneficial Interests to Another Restricted Global Note. A
beneficial interest in any Restricted Global Note may be transferred to a Person
who takes delivery thereof in the form of a beneficial interest in another
Restricted Global Note if the transfer complies with the requirements of Section
2.06(b)(2) above and the Registrar receives the following:
 
(A) if the transferee will take delivery in the form of a beneficial interest in
the 144A Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;
 
(B) if the transferee will take delivery in the form of a beneficial interest in
the Regulation S Temporary Global Note or the Regulation S Permanent Global
Note, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
 
(C) if the transferee will take delivery in the form of a beneficial interest in
the IAI Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
 

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(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note
for Beneficial Interests in an Unrestricted Global Note. A beneficial interest
in any Restricted Global Note may be exchanged by any holder thereof for a
beneficial interest in an Unrestricted Global Note or transferred to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(2) above and the Registrar receives the
following:
 
(A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(a) thereof; or
 
(B) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof,
 
and, in each such case set forth in this subparagraph (4), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
 
If any such transfer is effected pursuant to subparagraph (4) above at a time
when an Unrestricted Global Note has not yet been issued, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the aggregate principal amount
of beneficial interests transferred pursuant to subparagraph (4) above.
 
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.
 
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
 
(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive
Notes. If any holder of a beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Restricted Definitive Note, then, upon receipt by the Registrar
of the following documentation:
 
(A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note,
a certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
 
(B) if such beneficial interest is being transferred to a QIB in accordance with
Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;
 

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(C) if such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in item
(2) thereof;
 
(D) if such beneficial interest is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
 
(E) if such beneficial interest is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable;
 
(F) if such beneficial interest is being transferred to the Company or any of
its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
 
(G) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
 
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
 
(2) Beneficial Interests in Regulation S Temporary Global Note to Definitive
Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial
interest in the Regulation S Temporary Global Note may not be exchanged for a
Definitive Note or transferred to a Person who takes delivery thereof in the
form of a Definitive Note prior to (A) the expiration of the Restricted Period
and (B) the receipt by the Registrar of any certificates required pursuant to
Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.
 
(3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive
Notes. A holder of a beneficial interest in a Restricted Global Note may
exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if the Registrar receives the
following:
 

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(A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for an Unrestricted Definitive
Note, a certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or
 
(B) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note, a certificate
from such holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;
 
and, in each such case set forth in this subparagraph (3), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
 
(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive
Notes. If any holder of a beneficial interest in an Unrestricted Global Note
proposes to exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then, upon satisfaction of the conditions set forth
in Section 2.06(b)(2) hereof, the Trustee, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, will cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(g) hereof, and the Company will execute and the Trustee will
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will
be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest requests through
instructions to the Registrar from or through the Depositary and the Participant
or Indirect Participant. The Trustee will deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will
not bear the Private Placement Legend.
 
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
 
(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global
Notes. If any Holder of a Restricted Definitive Note proposes to exchange such
Note for a beneficial interest in a Restricted Global Note or to transfer such
Restricted Definitive Notes to a Person who takes delivery thereof in the form
of a beneficial interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
 
(A) if the Holder of such Restricted Definitive Note proposes to exchange such
Note for a beneficial interest in a Restricted Global Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;
 
(B) if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
 
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person
in an offshore transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
 

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(D) if such Restricted Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
 
(E) if such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable;
 
(F) if such Restricted Definitive Note is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or
 
(G) if such Restricted Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(c) thereof,
 
the Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global Note,
and in all other cases, the IAI Global Note.
 
(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of a Restricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Restricted
Definitive Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note only if the Registrar
receives the following:
 
(A) if the Holder of such Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
 
(B) if the Holder of such Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;
 
and, in each such case set forth in this subparagraph (2), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
 
Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.
 
(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an
 

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Unrestricted Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or transfer,
the Trustee, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, will cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of the
Unrestricted Global Notes.
 
If any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraphs (2)(B) or (3) above at a time when an
Unrestricted Global Note has not yet been issued, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive Notes so
transferred.
 
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request
by a Holder of Definitive Notes and such Holder’s compliance with the provisions
of this Section 2.06(e), the Registrar will register the transfer or exchange of
Definitive Notes. Prior to such registration of transfer or exchange, the
requesting Holder must present or surrender to the Registrar the Definitive
Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing. In addition, the requesting Holder must provide any
additional certifications, documents and information, as applicable, required
pursuant to the following provisions of this Section 2.06(e).
 
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted
Definitive Note may be transferred to and registered in the name of Persons who
take delivery thereof in the form of a Restricted Definitive Note if the
Registrar receives the following:
 
(A) if the transfer will be made pursuant to Rule 144A, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
 
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the
transferor must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (2) thereof; and
 
(C) if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
 
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note may be exchanged by the Holder thereof for an Unrestricted
Definitive Note or transferred to a Person or Persons who take delivery thereof
in the form of an Unrestricted Definitive Note if the Registrar receives the
following:
 
(A) if the Holder of such Restricted Definitive Notes proposes to exchange such
Notes for an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item (1)(d) thereof;
or
 
(B) if the Holder of such Restricted Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery thereof in the form of an Unrestricted
 

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Definitive Note, a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
 
and, in each such case set forth in this subparagraph (2), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
 
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of
Unrestricted Definitive Notes may transfer such Notes to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of
a request to register such a transfer, the Registrar shall register the
Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.
 
(f) Legends. The following legends will appear on the face of all Global Notes
and Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture.
 
(1)  Private Placement Legend.
 
(A) Except as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the following form:
 
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND THE SECURITY
EVIDENCED HEREBY AND THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF AMERICAN REAL ESTATE
PARTNERS, L.P. AND AMERICAN REAL ESTATE FINANCE CORP. THAT (A) SUCH SECURITY AND
THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 (a) (1), (2), (3) OR (7) OF THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN
BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO AMERICAN REAL ESTATE PARTNERS, L.P. THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE
 

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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.”
 
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), or
(e)(3) of this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement Legend.
 
(2)  Global Note Legend. Each Global Note will bear a legend in substantially
the following form:
 
“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
 

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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.”
 
(3)  Regulation S Temporary Global Note Legend. The Regulation S Temporary
Global Note will bear a Legend in substantially the following form:
 
“THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES AND/OR
DEPOSITARY UNITS UPON CONVERSION HEREOF, ARE AS SPECIFIED IN THE INDENTURE (AS
DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION
S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST
HEREON.”
 
(g) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased,
converted or canceled in whole and not in part, each such Global Note will be
returned to or retained and canceled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial interest
in a Global Note is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note or
for Definitive Notes, or if any amount therein is repurchased, redeemed or
converted, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
 
(h) General Provisions Relating to Transfers and Exchanges.
 
(1)  To permit registrations of transfers and exchanges, the Company will
execute and the Trustee will authenticate Global Notes and Definitive Notes upon
receipt of an Authentication Order in accordance with Section 2.02 hereof or at
the Registrar’s request.
 
(2)  No service charge will be made to a Holder of a beneficial interest in a
Global Note or to a Holder of a Definitive Note for any registration of
conversion, repurchase, transfer or exchange, 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 2.10 and 9.04 and Article 13 hereof).
 
(3)  The Registrar will not be required to register the transfer of or exchange
of any Note selected by the Holder for repurchase in whole or in part upon a
Fundamental Change, except the unpurchased portion of any Note being repurchased
in part.
 
(4)  All Global Notes and Definitive Notes issued upon any registration of
transfer or exchange of Global Notes or Definitive Notes will be the valid
obligations of the
 

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Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
 
(5)  Neither the Registrar nor the Company will be required:
 
(A) to register the transfer of or to exchange any Notes surrendered in whole or
in part for repurchase in connection with a Fundamental Change (and not
withdrawn) except the portion of any such Note being repurchased in part;
 
(B) to register the transfer of or to exchange any Note surrendered for
conversion at the option of the Holder in whole or in part, except the
unconverted portion of any Note being converted in part;
 
(C) to register the transfer of or to exchange any Note selected in connection
with a Forced Conversion in whole or in part, except the unconverted portion of
any Note being converted in part; or
 
(D) to register the transfer of or to exchange a Note between a record date and
the next succeeding interest payment date.
 
(6)  Prior to due presentment for the registration of a transfer of any Note,
the Trustee, any Agent and the Company may deem and treat the Person in whose
name any Note is registered as the absolute owner of such Note for the purpose
of receiving payment of principal of and interest on such Notes and for all
other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
 
(7)  The Trustee will authenticate Global Notes and Definitive Notes in
accordance with the provisions of Section 2.02 hereof.
 
(8)  All certifications, certificates and Opinions of Counsel required to be
submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
 
Section 2.07 Replacement Notes.
 
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee’s
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
 
Every replacement Note is an additional obligation of the Company and will be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
 
Section 2.08 Outstanding Notes.
 
The Notes outstanding at any time are all the Notes authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Note
 

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effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note; however, Notes held by the
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 9.02 or Article 12 hereof. 
 
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
 
To the extent the principal amount of any Note is converted pursuant to Article
12 or 13, it ceases to be outstanding and interest on it ceases to accrue
 
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
 
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any
thereof) holds, on a redemption date or maturity date, money sufficient to pay
Notes payable on that date, then on and after that date such Notes will be
deemed to be no longer outstanding and will cease to accrue interest.
 
Section 2.09 Treasury Notes.
 
In determining whether the Holders of the required principal amount of Notes
have concurred in any direction, waiver or consent, Notes owned by the Company
or any Guarantor, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, will be considered as though not outstanding, except that for the
purposes of determining whether the Trustee will be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned will be so disregarded.
 
Section 2.10 Temporary Notes.
 
Until certificates representing Notes are ready for delivery, the Company may
prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
 
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
 
Section 2.11 Cancellation.
 
The Company at any time may deliver Notes to the Trustee for cancellation. The
Registrar, Paying Agent and Conversion Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange, conversion,
repurchase or payment. The Trustee and no one else will cancel all Notes
surrendered for registration of transfer, exchange, conversion, repurchase,
payment, replacement or cancellation and will destroy canceled Notes (subject to
the record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Notes will be delivered to the Company. The Company
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.
 

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Section 2.12 Defaulted Interest.
 
If the Company defaults in a payment of interest on the Notes, it will pay the
defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. 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) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
 
Section 2.13 CUSIP Numbers. 
 
In issuing the Notes, the Company may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices delivered,
and 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 Notes or as contained in any notice of a redemption, repurchase
or conversion and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption, repurchase or conversion
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee of any change in the “CUSIP” numbers.
 
ARTICLE 3
INTEREST
 
Section 3.01 Interest Rate.
 
(a) Interest on the Notes shall be payable quarterly in arrears on each Interest
Payment Date to Holders of record on the Record Date immediately preceding such
Interest Payment Date. Interest on the Notes shall accrue at a rate (the
“Interest Rate”) equal to LIBOR minus one and one-quarter percentage point
(1.25%) per annum; provided, however, that the Interest Rate shall at no time be
less than four percent (4%) per annum nor greater than five and one half percent
(5.5%) per annum. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. The applicable Interest Rate in respect of
the Notes shall be determined for each quarterly interest period on the last
Trading Day of the immediately preceding quarterly period; provided that the
initial Interest Rate shall be determined on April 4, 2007. Interest on the
Notes shall accrue from the most recent date to which interest has been paid, or
if no interest has been paid, from April 5, 2007 until the principal amount of
the Notes is paid or duly made available for payment.
 
(b) If prior to any Interest Payment Date, Additional Interest has accrued under
the Registration Rights Agreement and not theretofore been paid in full, any
such Additional Interest shall be due and payable on such Interest Payment Date,
and shall be included in interest payable on such Interest Payment Date and
shall be paid in the manner provided for herein for the payment of Interest
Payments.
 
(c) Interest on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note is registered at the close of business on the Record Date for
such interest at the office or agency of the Company maintained for such
purpose. Each installment of interest on any Note shall be made by check mailed
to the address of the
 

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Holder specified in the register of Notes; provided, however, 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 in accordance with the written wire transfer instruction supplied by such
Holder from time to time to the Trustee and Paying Agent (if different from the
Trustee) at least ten (10) days prior to the applicable Interest Payment Date.
In the case of a permanent Global Note, interest payable on any Interest Payment
Date will be paid to the Depositary, in respect of that portion of such
permanent Global Note held for its account by Cede & Co. for the purpose of
permitting such party to credit the interest received by it in respect of such
permanent Global Note to the accounts of the beneficial owners thereof.
 
ARTICLE 4
COVENANTS
 
Section 4.01 Payment of Notes.
 
The Company shall pay or cause to be paid the principal of, premium, if any,
interest and Additional Interest, if any, on, the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest and
Additional Interest, if any, will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m., Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, interest and Additional Interest, if any, then due.
The Company shall pay all Additional Interest, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
 
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Additional Interest (without regard to any applicable grace period) at the same
rate to the extent lawful.
 
Section 4.02 Maintenance of Office or Agency. 
 
The Company shall maintain an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company fails to maintain any such required office or
agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
 
The Company may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes 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 obligation to maintain an office or agency for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
 

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The Company hereby designates the Corporate Trust Office of the Trustee as one
such office or agency of the Company in accordance with Section 2.03 hereof.
 
Section 4.03 Reports. 
 
Whether or not required by the rules and regulations of the SEC, so long as any
Notes are outstanding, the Company shall furnish to the Holders of Notes or
cause the Trustee to furnish to the Holders of Notes, within the time periods
specified in the SEC’s rules and regulations:
 
(1) all quarterly and annual reports that would be required to be filed with the
SEC on Forms 10-Q and 10-K if the Company were required to file such reports;
and
 
(2) all current reports that would be required to be filed with the SEC on Form
8-K if the Company were required to file such reports.
 
All such reports shall be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports. Each annual report
on Form 10-K shall include a report on the Company’s consolidated financial
statements by the Company’s certified independent accountants. In addition, the
Company shall file a copy of each of the reports referred to in clauses (1) and
(2) above with the SEC for public availability within the time periods specified
in the rules and regulations applicable to such reports (unless the SEC will not
accept such a filing) and, if the SEC will not accept such a filing, shall post
the reports on its website within those time periods.
 
If, at any time, the Company is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Company shall nevertheless
continue filing the reports specified in the preceding paragraphs of this
Section 4.03 with the SEC within the time periods specified above unless the SEC
will not accept such a filing. The Company shall not take any action for the
purpose of causing the SEC not to accept any such filings. If, notwithstanding
the foregoing, the SEC will not accept the Company’s filings for any reason, the
Company shall post the reports referred to in the preceding paragraphs on its
website within the time periods that would apply if the Company were required to
file those reports with the SEC.
 
In addition, the Company agrees that, for so long as any Notes remain
outstanding, if at any time it is not required to file with the SEC the reports
required by the preceding paragraphs, it shall furnish to the Holders of Notes
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
 
In addition, the Company agrees that, for so long as any Notes remain
outstanding, if at any time it is not required to file with the SEC the reports
required by the preceding paragraphs, it shall furnish to the Holders of Notes
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
 
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).
 
So long as is required for offers and sales of the Notes to qualify for an
exemption under Rule 144A under the Securities Act, the Corporation shall, upon
request, provide the information required by Rule 144A(d)(4) to each Holder of
Notes and to each beneficial owner and prospective purchaser of
 

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Notes identified by each Holder of Notes, unless such information is furnished
to the Commission pursuant to Section 13 or 15(d) of the Exchange Act. For
purposes of this Section 4.03, the Company will be deemed to have furnished or
delivered reports to the Trustee and the Noteholders if (i) such reports are
filed with the Commission via the EDGAR filing system, (ii) such reports are
currently available, and (iii) the Corporation electronically delivers to the
Trustee a link to the EDGAR filing each time the Company files such a report.
 
Section 4.04 Compliance Certificate. 
 
(a) The Company and each Guarantor (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Trustee, within 90 days after the
end of each fiscal year, 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 the Company 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 the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture 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 has occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
 
(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 4.03 above shall be accompanied by a written
statement of the Company’s independent public accountants (who shall be a firm
of established national reputation) 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 the Company has violated any provisions of
Article 4 or Article 5 hereof or, if any such violation has occurred, 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 violation.
 
(c) So long as any of the Notes are outstanding, the Company shall comply with
the notice delivery requirements of Section 314(b) of the TIA.
 
(d) So long as any of the Notes are outstanding, the Company shall deliver to
the Trustee, forthwith upon any Officer becoming aware of any Default or Event
of Default, 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 4.05 Taxes. 
 
The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.
 

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Section 4.06 Stay, Extension and Usury Laws.
 
The Company and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
 
Section 4.07 Dividends Paid on Depositary Units. 
 
In case the Company shall declare a cash dividend or similar cash distribution
in respect of any calendar quarter (a “Triggering Distribution”) in respect of
its Depositary Units in an amount in excess of $0.10 per Depositary Unit (as
adjusted for splits, reverse splits and/or stock dividends effected after the
Issue Date - any such adjustment to be determined by the Company in good faith,
absent manifest error) (the “Triggering Distribution Threshold Amount”), it
shall at the same time as it makes such distribution to holders of the
Depositary Units distribute to each Holder in respect of each $1,000 principal
amount of the Notes held by such Holder on the applicable record date for such
Triggering Distribution that amount obtained by multiplying (a) the amount of
the Triggering Distribution per outstanding Depositary Unit as of such
applicable record date in excess of the Triggering Distribution Threshold Amount
by (b) the Conversion Rate in effect on the Business Day immediately prior to
the record date for such distribution in respect of the Depositary Units. It is
expressly understood that a stock buyback, repurchase or similar transaction or
program shall in no event be considered a Triggering Distribution for purposes
of this Section 4.07.
 
Section 4.08 Transactions with Affiliates. 
 
(a) AREP shall not, and shall not permit any of its Subsidiaries (including any
Guarantor) to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, any Affiliate of AREP
(each, an “Affiliate Transaction”), unless:
 
(1)  the Affiliate Transaction is on terms that are not materially less
favorable to AREP or the relevant Subsidiary (including any Guarantor) than
those that would have been obtained in a comparable transaction by AREP or such
Subsidiary (including any Guarantor) with an unrelated Person as determined in
good faith by the Board of Directors of AREP; and
 
(2)  AREP delivers to the Trustee:
 
(A) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $2.0 million, a
resolution of the Board of Directors of AREP set forth in an Officers’
Certificate certifying that such Affiliate Transaction complies with this
Section 4.08 and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Board of Directors of AREP; and
 
(B) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0 million, an
opinion as
 

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to the fairness to AREP or such Subsidiary (including any Guarantor) of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of recognized standing.
 
(b) The following items shall not be deemed to be Affiliate Transactions and,
therefore, shall not be subject to the provisions of Section 4.08(a):
 
(1)  any employment agreement, employee benefit plan, officer or director
indemnification agreement or any similar arrangement entered into by AREP or any
of its Subsidiaries (including any Guarantor) in the ordinary course of business
and payments pursuant thereto including payments or reimbursement of payments by
API with respect to any such agreement, plan or arrangement entered into by API
with respect to or for the benefit of officers or directors of API (other than
any such agreements, plans or arrangements entered into by AREP or any of its
Subsidiaries (including AREH) with Carl Icahn (other than employee benefit plans
and officer or director indemnification agreements generally applicable to
officers and directors of API, AREP or its Subsidiaries (including AREH)));
 
(2)  transactions between or among AREP, any Guarantor and/or their respective
Subsidiaries (except any Subsidiaries of which Carl Icahn or Affiliates of Carl
Icahn (other then AREP, AREH or their Subsidiaries) own more than 10% of the
Voting Stock);
 
(3)  payment (or reimbursement of payments by API) of directors’ fees to Persons
who are not otherwise Affiliates of AREP;
 
(4)  any issuance of Equity Interests (other than Disqualified Stock) and
Preferred Unit Distributions of AREP to Affiliates of AREP;
 
(5)  Restricted Payments as defined in the 2005 Indenture that do not violate
Section 4.07 thereof (and after the 2005 Indenture shall have been defeased,
which would not have violated the 2005 Indenture if made on the day immediately
preceding such defeasance);
 
(6)  transactions between AREP and/or any of its Subsidiaries (including any
Guarantor), on the one hand, and other Affiliates, on the other hand, for the
provision of goods or services in the ordinary course of business by such other
Affiliates; provided that such other Affiliate is in the business of providing
such goods or services in the ordinary course of business to unaffiliated third
parties and the terms and pricing for such goods and services overall are not
less favorable to AREP and/or its Subsidiaries (including AREH) than the terms
and pricing upon which such goods and services are provided to unaffiliated
third parties;
 
(7)  the provision or receipt of accounting, financial, management, information
technology and other ancillary services to or from Affiliates, provided that
AREP or its Subsidiaries (including any Guarantor) in the case of the provision
of such services, are paid a fee not less than its out of pocket costs and
allocated overhead (including a portion of salaries and benefits) and in the
case of the receipt of such services, paid a fee not more than such Person’s
out-of-pocket costs and allocated overhead (including a portion of salaries and
benefits), in each case, as determined by AREP in its reasonable judgment;
 
(8)  the license of a portion of office space pursuant to (x) a license
agreement entered into in July 2005, between AREP and an Affiliate of API, (y) a
license arrangement which commenced in October 2006 between an Affiliate of the
Principal and AREP, and (z) any renewal of either thereof ;
 

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(9)  the payment to API and reimbursements of payments made by API of expenses
relating to AREP’s, AREH’s or any Guarantors’ status as a public company;
 
(10)  payments by AREH, AREP or any Subsidiary to API in connection with
services provided to AREH, AREP or any Subsidiary in accordance with the AREP
Partnership Agreement; and
 
(11)  Any direct or indirect acquisition of capital stock or assets of Lear
Corporation, American Railcar, Inc. or Philips Services Corporation, whether
pursuant to a stock purchase, an asset purchase, a merger or otherwise.
 
Section 4.09 Corporate Existence. 
 
Subject to Article 5 hereof, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect:
 
(1) its partnership or corporate or limited liability company existence, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company; and
 
(2) the rights (charter and statutory), licenses and franchises of the Company.
 
Section 4.10 Compliance with Law
 
AREP shall, and shall cause its Subsidiaries (including any Guarantor) to,
comply in all material respects with all applicable laws, rules and regulations.
 
Section 4.11 No Investment Company
 
Neither AREP nor any Guarantor shall register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended.
 
ARTICLE 5
SUCCESSORS
 
Section 5.01 Merger, Consolidation, or Sale of Assets.
 
(a) AREP will not: (x) consolidate or merge with or into another Person (whether
or not AREP, is the surviving entity) or (y) sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the properties or assets of
AREP in one or more related transactions, to another Person; unless:
 
(1)  either:
 
(A) AREP is the surviving entity, or
 
(B) the Person formed by or surviving any such consolidation or merger (if other
than AREP) or to which such sale, assignment, transfer, conveyance or other
disposition has been made is a corporation, limited liability company or limited
partnership entity
 

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organized or existing under the laws of the United States, any state of the
United States or the District of Columbia;
 
(2)  the Person formed by or surviving any such consolidation or merger (if
other than AREP) or the Person to which such sale, assignment, transfer,
conveyance or other disposition has been made assumes all the obligations of
AREP under the Notes, this Indenture and the Registration Rights Agreement and
upon such assumption such Person will become the successor to, and be
substituted for, AREP hereunder and thereunder and all references to AREP in
each thereof shall then become references to such Person and such Person shall
thereafter be able to exercise every right and power of AREP hereunder and
thereunder;
 
(3)  immediately after such transaction no Default or Event of Default exists;
and
 
(4)  AREP has delivered to the Trustee an Officers’ Certificate and Opinion of
Counsel, which may be an opinion of in-house counsel of AREP or an Affiliate,
each stating that such transaction complies with the terms of this Indenture.
 
Clauses (1) or (2) above will not apply to, or be required to be complied with
in connection with, any merger or consolidation or the sale, assignment,
transfer, conveyance or other disposition of all or substantially all of AREP’s
properties or assets to:
 
(1)  an Affiliate that has no material assets or liabilities where the primary
purpose of such transaction is to change AREP into a corporation or other form
of business entity or to change the jurisdiction of formation of AREP and such
transaction does not cause the realization of any material federal or state tax
liability that will be paid by AREP or any of its Subsidiaries (including AREH).
For purposes of this paragraph (1), the term material refers to any assets,
liabilities or tax liabilities that are greater than 5.0% of the Tangible Net
Worth of AREP and its Subsidiaries (including AREH) on a consolidated basis; or
 
(2)  any Person; provided that AREP receives consideration in Cash Equivalents
and marketable securities with an aggregate Fair Market Value determined at the
time of the execution of such relevant agreement of at least $1.0 billion for
such merger or consolidation or the sale, assignment, transfer, conveyance or
other disposition of all or substantially all of AREP’s properties or assets. In
any transaction referred to in this clause (2), and subject to the terms and
conditions thereof, the Trustee shall, without the need of any action by the
Holders, (x) confirm that such other Person shall not be liable for and shall
release such other Person from any obligation of AREP’s under this Indenture and
the Notes and (y) release any Guarantor from all obligations under its Note
Guarantee if such Guarantor was directly or indirectly sold, assigned,
transferred, conveyed or otherwise disposed of to such Person in such
transaction.
 
In addition, AREP may not lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person. In the case of
a lease of all or substantially all of the assets of AREP, AREP will not be
released from its obligations under the Notes or this Indenture, as applicable.
 
(b) AREH will not: (x) consolidate or merge with or into another Person (whether
or not AREH, is the surviving entity) or (y) sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the properties or assets of
AREH in one or more related transactions, to another Person; unless:
 

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(1)  either: (i) AREH is the surviving entity, or (ii) the Person formed by or
surviving any such consolidation or merger (if other than AREH) or to which such
sale, assignment, transfer, conveyance or other disposition has been made is a
corporation, limited liability company or limited partnership entity organized
or existing under the laws of the United States, any state of the United States
or the District of Columbia;
 
(2)  the Person formed by or surviving any such consolidation or merger (if
other than AREH) or the Person to which such sale, assignment, transfer,
conveyance or other disposition has been made assumes all the obligations of
AREH under the Note Guarantee (and becomes a Guarantor), the Notes, this
Indenture and the Registration Rights Agreement, and upon such assumption such
Person will become the successor to, and be substituted for, AREH hereunder and
thereunder, and all references to AREH in each thereof shall than become
references to such Person and such Person shall thereafter be able to exercise
every right and power of AREH hereunder and thereunder;
 
(3)  immediately after such transaction no Default or Event of Default exists;
and
 
(4)  AREH has delivered to the Trustee an Officers’ Certificate and Opinion of
Counsel which may be an opinion of in-house counsel of AREP or an Affiliate,
each stating that such transaction complies with the terms of this Indenture.
 
Clauses (1) or (2) above will not apply to, or be required to be complied with
in connection with, any merger or consolidation or the sale, assignment,
transfer, conveyance or other disposition of all or substantially all of AREH’s
properties or assets to:
 
(1)  an Affiliate that has no material assets or liabilities where the primary
purpose of such transaction is to change AREH into a corporation or other form
of business entity or to change the jurisdiction of formation of AREH and such
transaction does not cause the realization of any material federal or state tax
liability that will be paid by AREP or any of its Subsidiaries (including AREH).
For purposes of this paragraph (1), the term material refers to any assets,
liabilities or tax liabilities that are greater than 5.0% of the Tangible Net
Worth of AREP and its Subsidiaries (including AREH) on a consolidated basis;
 
(2)  any Person; provided that AREP receives consideration in Cash Equivalents
and marketable securities with an aggregate Fair Market Value determined at the
time of the execution of such relevant agreement of at least $1.0 billion for
such merger or consolidation or the sale, assignment, transfer, conveyance or
other disposition of all or substantially all of AREH’s properties or assets; or
 
(3)  any Person; provided that AREH receives consideration in Cash Equivalents
and marketable securities with an aggregate Fair Market Value determined at the
time of the execution of such relevant agreement of at least $1.0 billion for
such merger or consolidation or the sale, assignment, transfer, conveyance or
other disposition of all or substantially all of AREH’s properties or assets and
AREH remains a Subsidiary of AREP.
 
In any transaction referred to in clause (2) or (3) above, and subject to the
terms and conditions thereof, the Trustee shall, without the need of any action
by the Holders, (x) confirm that such other Person shall not be liable for and
shall release such other Person from any obligation of AREP’s or AREH’s under
this Indenture, the Notes and the Note Guarantees, and (y) release any Guarantor
from all
 

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obligations under its Note Guarantee if such Guarantor was directly or
indirectly sold, assigned, transferred, conveyed or otherwise disposed of to
such Person in such transaction.
 
(c) This Section 5.01 will not apply to:
 
(1)  any consolidation or merger, or any sale, assignment, transfer, conveyance,
lease or other disposition of assets between or among AREP, AREH or any one or
more Guarantors; or
 
(2)  any sale, assignment, transfer, conveyance or other disposition of Cash
Equivalents, including, without limitation, any investment or capital
contribution of Cash Equivalents, or any purchase of property and assets,
including, without limitation, securities, debt obligations or Capital Stock,
with Cash Equivalents.
 
Section 5.02 Relief from Obligation.
 
Except as provided in the Indenture, neither AREP nor AREH shall be relieved
from the obligation to pay the principal of and interest on the Notes.
 
ARTICLE 6
DEFAULTS AND REMEDIES
 
Section 6.01 Events of Default.
 
(a) Each of the following is an “Event of Default”:
 
(1)  the Company defaults for 30 days in the payment when due of interest on, or
Additional Interest with respect to, the Notes or under any Note Guarantee;
 
(2)  the Company defaults in the payment when due and payable (at maturity, upon
repurchase or otherwise) of the principal of, or premium, if any (including any
Make-Whole Premium), on the Notes or under any Note Guarantee;
 
(3)  failure by the Company to comply with the provisions of Article 13 hereof;
 
(4)  the Company or any Guarantor fails to observe or perform any other
covenant, representation, warranty or other agreement in this Indenture or the
Notes or the Note Guarantee for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Notes voting as a single class;
 
(5)  any default under any mortgage, indenture or instrument (other than the
Indebtedness covered by clause (6) below) under which there is issued or by
which there is secured or evidenced any Indebtedness for money borrowed by the
Company or any Guarantor or default on any Guarantee by the Company or any
Guarantor of Indebtedness, whether such Indebtedness or Guarantee now exists or
is created after the Issuance Date, which default:
 
(A) is caused by a failure to pay when due at final maturity (giving effect to
any grace period or waiver related thereto) the principal of such Indebtedness
(a “Payment Default”); or
 

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(B) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness as to
which AREP or any Guarantor is obligated to pay, together with the principal
amount of any other such Indebtedness under which a Payment Default then exists
or with respect to which the maturity thereof has been so accelerated or which
has not been paid at maturity as to which AREP or any Guarantor is obligated to
pay, aggregates $10.0 million or more;
 
(6)  any default under any of (i) the 8 1/8% Senior Notes, (ii) the 7 1/8%
Senior Notes, (iii) the 2004 Indenture, (iv) the 2005 Indenture, (v) any other
unsecured Indebtedness as to which AREP or any Guarantor is obligated to pay,
aggregates $10.0 million or more or (vi) any documentation governing the terms
of any such Indebtedness (collectively, the “Clause (6) Indetbedness”), in any
such case: (A) which default results in the acceleration (which acceleration has
not been rescinded or otherwise withdrawn) of such Clause (6) Indebtedness prior
to its express maturity or (B) if such default is waived by the applicable
required holders and/or lenders as required by the documentation governing the
terms of such Clause (6) Indebtedness (in respect of which waiver negotiations
Holders shall have no rights), any consideration paid in respect of any such
waiver to such holders and/or lenders, as applicable shall not have been
simultaneously paid proportionately to the Holders (i.e. if $x is paid per $1000
of principal amount of note or outstanding amount of such Clause (6)
Indebtedness in connection with a waiver of a default thereunder, the Holders
will each receive $x per $1000 outstanding principal amount of the Notes in
respect of such waiver);
 
(7)  the Company’s (i) failure to cure a Conversion Failure by delivery of the
required number of Depositary Units within ten (10) Business Days after the
applicable Conversion Date or Forced Conversion Date or (ii) notice, written or
oral, to any Holder, including by way of public announcement or through any of
its agents, at any time, of its intention not to comply with a request for
conversion of any Notes into Depositary Units that are tendered in accordance
with the provisions of this Indenture;
 
(8)  failure by the Company or any Guarantor to pay final judgments aggregating
in excess of $10.0 million, which final judgments remain unpaid, undischarged or
unstayed for a period of more than 60 days after such judgment becomes a final
judgment;
 
(9)  except as permitted by this Indenture, any Note Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect, or AREH or any other Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Note Guarantee;
 
(10)  the Company or any Subsidiary of the Company that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
 
(A) commences a voluntary case,
 
(B) consents to the entry of an order for relief against it in an involuntary
case,
 
(C) consents to the appointment of a custodian of it or for all or substantially
all of its property,
 
(D) makes a general assignment for the benefit of its creditors, or
 

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(E) generally is not paying its debts as they become due; or
 
(11)  a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
 
(A) is for relief against the Company or any Subsidiary of the Company that is a
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary in an involuntary case;
 
(B) appoints a custodian of the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary or for all or substantially
all of the property of the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary; or
 
(C) orders the liquidation of the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary;
 
(D) and the order or decree remains unstayed and in effect for 60 consecutive
days.
 
(b) Notwithstanding the foregoing, for so long as any Clause (6) Indebtedness is
outstanding, if the Company pays any consideration in respect of any waiver to
holders and/or lenders, as applicable, under any Clause (6) Indebtedness, it
shall simultaneously pay the same consideration proportionately to the Holders
(i.e. if $x is paid per $1000 of principal amount of note or outstanding amount
of such Clause (6) Indebtedness in connection with a waiver thereunder, the
Holders will each receive $x per $1000 outstanding principal amount of the Notes
in respect of such waiver).  Without limiting the foregoing, (i) if an Event of
Default of the type described in Section 6.01(a)(5) or (8) is waived by the
applicable required holders as required by the documentation governing the terms
of such Clause (6) Indebtedness (in respect of which waiver negotiations Holders
shall have no rights), the same Event of Default will be deemed waived by the
Holders, or (ii) if compliance with any provision in any such Clause (6)
Indebtedness is waived by the applicable required holders as required by the
documentation governing the terms of such Clause (6) Indebtedness (in respect of
which waiver negotiations Holders shall have no rights), any comparable
provision of this Indenture will be deemed waived by the Holders, in either such
case provided that the Company shall have complied with the provisions of the
immediately preceding sentence.
 
Section 6.02 Acceleration.
 
In the case of an Event of Default specified in clause (10) or (11) of Section
6.01(a) hereof, with respect to the Company, any Guarantor that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary, all outstanding Notes will become due
and payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately.
 
Upon any such declaration, the Notes shall become due and payable immediately.
 

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The Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may, on behalf of all of the Holders,
rescind an acceleration and its consequences, if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Additional Interest, if
any, that has become due solely because of the acceleration) have been cured or
waived.
 
Notwithstanding the foregoing, in the event that the Notes are accelerated
pursuant to this Section 6.02 as a result of an Event of Default specified in
clause (6) of Section 6.01(a), or for so long as any Clause (6) Indebtedness is
outstanding, clause (5) or (8) of Section 6.01(a), such acceleration shall
automatically be rescinded, without further action of the Holders or the
Trustee, if (a) either (i) the default that triggered such Event of Default is
cured or waived or (ii) the acceleration of any Indebtedness that triggered such
Event of Default is rescinded or otherwise withdrawn, and (b) any consideration
paid to holders and/or lenders of Clause (6) Indebtedness in respect of any such
waiver or rescission referred to in the preceding clause (a) shall have been
simultaneously paid proportionately to the Holders (i.e. if $x is paid per $1000
of principal amount of note or outstanding amount of such Clause (6)
Indebtedness in connection with a waiver of a default thereunder, the Holders
will each receive $x per $1000 outstanding principal amount of the Notes in
respect of such waiver).
 
Section 6.03 Other Remedies.
 
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium and Additional
Interest, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
 
The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Holder of a Note in exercising any right or remedy accruing
upon an Event of Default 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 not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes 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 of, premium and Additional Interest, if any, or interest on, the Notes
(including in connection with an offer to purchase); provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration. 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 aggregate principal amount of the then outstanding
Notes 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. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
 

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Section 6.06 Limitation on Suits.
 
A Holder may pursue a remedy with respect to this Indenture or the Notes only
if:
 
(1)  such Holder gives to the Trustee written notice that an Event of Default is
continuing;
 
(2)  Holders of at least 25% in aggregate principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
 
(3)  such Holder or Holders offer and, if requested, provide to the Trustee
security or indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
 
(4)  the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of security or indemnity; and
 
(5)  during such 60-day period, Holders of a majority in aggregate principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with such request.
 
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
 
Section 6.07 Rights of Holders of Notes to Receive Payment.
 
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium and Additional Interest, if
any, and interest on the Note, on or after the respective due dates expressed in
the Notes (including in connection with an offer to purchase) or any Fundamental
Change Settlement Date, as applicable, and to convert the Notes in accordance
with Article 12, or to bring suit for the enforcement of any such payment or
conversion right on or after such respective dates, 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)(1) or (2) 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 for the whole amount of
principal of, premium and Additional Interest, if any, and interest remaining
unpaid on, the Notes and interest on overdue principal 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 of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), 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
 

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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 hereof. To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
 
Section 6.10 Priorities.
 
If the Trustee collects any money pursuant to this Article 6, 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 hereof, including payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
 
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Additional Interest, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Additional Interest, if any and
interest, respectively; and
 
Third: to the Company or to such party as a court of competent jurisdiction
shall direct.
 
The Trustee may fix a record date and payment date for any payment to Holders of
Notes 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 of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate
principal amount of the then outstanding Notes.
 

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ARTICLE 7
TRUSTEE
 
Section 7.01 Duties of Trustee.
 
(a) If an Event of Default has occurred and is continuing of which a Responsible
Officer of the Trustee has actual knowledge or of which written notice shall
have been given to the Trustee in accordance with the terms of this Indenture,
the Trustee will 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
such person’s own affairs.
 
(b) Except during the continuance of an Event of Default of which a Responsible
Officer of the Trustee has actual knowledge or of which written notice shall
have been given to the Trustee in accordance with the terms of this Indenture:
 
(1)  the duties of the Trustee will be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and
 
(2)  in the absence of bad faith on its part, the Trustee may 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. The Trustee shall be under no duty to
make any investigation as to any statement contained in any such instance, but
may accept the same as conclusive evidence of the truth and accuracy of such
statement or the correctness of such opinions. However, the Trustee will examine
the certificates and opinions to determine whether or not they conform on their
face to the requirements of this Indenture, but shall not verify the contents
thereof.
 
(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:
 
(1)  this paragraph does not and shall not be construed to limit the effect of
paragraph (b) of this Section 7.01;
 
(2)  the Trustee will 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
 
(3)  the Trustee will 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 hereof.
 
The Trustee shall not be required to examine any of the reports, information or
documents delivered to it under this Indenture to determine whether there has
been any breach of the covenants of the Company contained herein, except that if
any breach or default is expressly stated in any such reports, information or
documents, the Trustee shall be deemed to have actual knowledge of such breach
or default.
 
(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.
 

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(e) No provision of this Indenture will require the Trustee to expend or risk
its own funds or incur any liability.
 
(f) The Trustee will 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.
 
Section 7.02 Rights of Trustee.
 
(a) The Trustee may conclusively rely 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 any such document.
 
(b) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee will 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. The Trustee may consult with counsel of its
choice and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
 
(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
 
(d) The Trustee will not be liable for any action it takes or omits to take in
good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.
 
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor will be
sufficient if signed by an Officer of the Company or any Guarantor, as
applicable.
 
(f) 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, consent, order, approval, bond, debenture, note or
other paper or 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, at the expense of the
Company and shall incur no liability of any kind by reason of such inquiry or
investigation.
 
(g) The Trustee will 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 have offered to the Trustee indemnity or security
satisfactory to it against the losses, liabilities and expenses that might be
incurred by it in compliance with such request or direction.
 
(h) The rights, privileges, protections, immunities and benefits given to the
Trustee, including its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder and each agent,
custodian and other Person employed to act hereunder.
 
(i) The Trustee shall not be liable for any action taken or omitted by it in
good faith at the direction of the Holders of not less than a majority in
principal amount of the Securities as to the time,
 

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method and place of conducting any proceedings for any remedy available to the
Trustee or the exercising of any power conferred by this Indenture.
 
(j) Any action taken, or omitted to be taken, by the Trustee in good faith
pursuant to this Indenture upon the request or authority or consent of any
person who, at the time of making such request or giving such authority or
consent, is the Holder of any Security shall be conclusive and binding upon
future Holders of Securities and upon Securities executed and delivered in
exchange therefor or in place thereof.
 
Section 7.03 Individual Rights of Trustee.
 
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and, subject to TIA §310(b), may otherwise deal with the
Company or any Affiliate of the Company with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights and duties.
 
Section 7.04 Trustee’s Disclaimer.
 
The Trustee will not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Notes or the Note Guarantee, it
shall not be accountable for the Company’s use of the proceeds from the Notes or
any money paid to the Company or upon the Company’s direction under any
provision of this Indenture, it will not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it will not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
 
Section 7.05 Notice of Defaults.
 
If a Default or Event of Default occurs and is continuing of which a Responsible
Officer of the Trustee has actual knowledge, the Trustee will mail to Holders of
Notes a notice of the Default or Event of Default within 90 days after such
Responsible Officer has actual knowledge of such Default or Event of Default.
Except in the case of a Default or Event of Default in payment of principal of,
premium or Additional Interest, if any, or interest on, any Note, 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 of the Notes.
 
Section 7.06 Reports by Trustee to Holders of the Notes.
 
(a) Within 60 days after each May 15 beginning with the May 15, 2008, and for so
long as Notes remain outstanding, the Trustee will mail to the Holders of the
Notes a brief report dated as of such reporting date that complies with TIA
§ 313(a) (but if no event described in TIA § 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also will comply with TIA § 313(b)(2). The Trustee will also transmit by
mail all reports as required by TIA § 313(c).
 
(b) A copy of each report at the time of its mailing to the Holders of Notes
will be mailed by the Trustee to the Company and filed by the Trustee with the
SEC and each stock exchange on which the Notes are listed in accordance with TIA
§ 313(d). The Company will promptly notify the Trustee when the Notes are listed
on any stock exchange.
 

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Section 7.07 Compensation and Indemnity.
 
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee’s compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will 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 will
include the reasonable compensation, disbursements, costs and expenses of the
Trustee’s agents, consultants and counsel (including the costs and expenses of
collection on the Notes and the Note Guarantees and the enforcement and
administration of any right or remedy or observing any of its duties under this
Indenture).
 
(b) The Company and each Guarantor will indemnify the Trustee and hold the
Trustee harmless against any and all losses, liabilities or expenses incurred by
it arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and each Guarantor (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company, each
Guarantor, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except any
such loss, liability or expense attributable to its negligence or bad faith. The
Trustee will notify the Company and each Guarantor promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company and
each Guarantor will not relieve the Company or any of the Guarantors of their
obligations hereunder. The Company or such Guarantor will defend the claim and
the Trustee will cooperate in the defense. The Trustee may have separate counsel
and the Company will pay the reasonable fees and expenses of such counsel.
Neither the Company nor any Guarantor need pay for any settlement made without
its consent, which consent will not be unreasonably withheld.
 
(c) The obligations of the Company and each Guarantor under this Section 7.07
shall constitute additional Indebtedness hereunder and will survive the
satisfaction and discharge of this Indenture.
 
(d) To secure the Company’s and each Guarantor’s payment obligations in this
Section 7.07, the Trustee will have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien will survive the
satisfaction and discharge of this Indenture.
 
(e) The Company’s and the Guarantors’ payment obligations pursuant to this
Section shall survive the satisfaction or discharge of this Indenture, any
rejection or termination of this Indenture under any bankruptcy law or the
resignation or removal of the Trustee. Without prejudice to any other rights
available to the Trustee under applicable law, when the Trustee incurs expenses
or renders services after an Event of Default specified in Section 6.01(a)(10)
or (11) hereof 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.
 
(f) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent
applicable.
 
Section 7.08 Replacement of Trustee.
 
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.
 

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(b) The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
aggregate principal amount of the then outstanding Notes may remove the Trustee
by so notifying the Trustee and the Company in writing. The Company may remove
the Trustee if:
 
(1)  the Trustee fails to comply with Section 7.10 hereof;
 
(2)  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;
 
(3)  a custodian or public officer takes charge of the Trustee or its property;
or
 
(4)  the Trustee becomes incapable of acting.
 
(c) If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company will promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a
majority in aggregate principal amount of the then outstanding Notes may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
 
(d) 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 aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction, at the
expense of the Company for the appointment of a successor Trustee.
 
(e) If the Trustee, after written request by any Holder who has been a Holder
for at least six months, fails to comply with Section 7.10 hereof, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
 
(f) A successor Trustee will deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Thereupon, the resignation or removal
of the retiring Trustee will become effective, and the successor Trustee will
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee will mail a notice of its succession to Holders. The retiring
Trustee will promptly transfer all property held by it as Trustee to the
successor Trustee; provided all sums owing to the Trustee hereunder have been
paid and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company’s obligations under Section 7.07 hereof will 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 will be the successor Trustee.
 
Section 7.10 Eligibility; Disqualification.
 
There will 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 that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
 

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This Indenture will always have a Trustee who satisfies the requirements of TIA
§ 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).
 
Section 7.11 Preferential Collection of Claims Against Company.
 
The Trustee is subject to TIA § 311(a), excluding any creditor relationship
listed in TIA § 311(b). A Trustee who has resigned or been removed shall be
subject to TIA § 311(a) to the extent indicated therein.
 
ARTICLE 8
COVENANT DEFEASANCE
 
Section 8.01 Company May Effect Covenant Defeasance.
 
The Company may at any time, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers’ Certificate, elect to have Section
8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.
 
Section 8.02 Legal Defeasance and Discharge.
 
Legal defeasance of the Notes shall only occur upon satisfaction and discharge
of the Notes as set forth in Article 11.
 
Section 8.03 Covenant Defeasance.
 
Upon the Company’s exercise of the option under Section 8.01 hereof applicable
to this Section 8.03, the Company and each of the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.08,
4.10 and 4.11 hereof, Section 5.01(a)(4) and Section 5.01(b)(4) hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and
the Notes will 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 will
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes will not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Note Guarantees, the Company and the Guarantors may omit
to comply with and will 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 will not constitute a Default or an Event
of Default under Section 6.01(a) hereof, but, except as specified above, the
remainder of this Indenture and such Notes and Note Guarantees will be
unaffected thereby. In addition, upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(a)(3) through 6.01(a)(6) hereof will not constitute Events of Default.
 
Section 8.04 Conditions to Covenant Defeasance.
 
In order to exercise Covenant Defeasance under Section 8.03 hereof:
 

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(1)  the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized investment bank, appraisal firm, or firm
of independent public accountants, to pay the principal of, premium and
Additional Interest, if any, on the outstanding Notes on the Maturity Date, and
interest in an amount equal to five and one half percent (5.5%) of the principal
amount of the outstanding Notes through the Maturity Date, and the Company must
specify whether the Notes are being defeased to such stated date for payment;
 
(2)  the Company must deliver to the Trustee an Opinion of Counsel confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, substantially in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
 
(3)  no Default or Event of Default 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) and the deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound;
 
(4)  such Covenant Defeasance will 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 or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;
 
(5)  the Company must deliver to the Trustee an Opinion of Counsel, containing
customary assumptions and exceptions, to the effect that upon and immediately
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 under any applicable law;
 
(6)  the Company must deliver to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Company with the intent of preferring the
Holders of Notes over the other creditors of the Company with the intent of
defeating, hindering, delaying or defrauding any creditors of the Company or
others; and
 
(7)  the Company must deliver to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to 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 hereof, 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 hereof in respect of the outstanding Notes will be held in trust
and applied by the Trustee, in accordance with the provisions of such Notes 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 Notes of all sums due and to become due thereon in respect
of principal, premium and Additional Interest, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.
 

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The Company will 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 hereof 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 Notes.
 
Notwithstanding anything in this Article 8 to the contrary, the Trustee will
deliver or pay to the Company from time to time upon the request of the Company
any money or non-callable Government Securities held by it as provided in
Section 8.04 hereof 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(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Covenant Defeasance.
 
Section 8.06 Repayment to 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 or Additional
Interest, if any, or interest on, any Note and remaining unclaimed for two years
after such principal, premium or Additional Interest, if any, or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) will be discharged from such trust; and the Holder of such
Note will thereafter be permitted to 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, will
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 will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
 
Section 8.07 Reinstatement.
 
If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.03 hereof by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company’s and the Guarantors’ obligations under this Indenture and the Notes and
the Note Guarantees will be revived and reinstated as though no deposit had
occurred pursuant to Section 8.03 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.03 hereof, as the case may be; provided, however, that, if the Company makes
any payment of principal of, premium or Additional Interest, if any, or interest
on, any Note following the reinstatement of its obligations, the Company will be
subrogated to the rights of the Holders of such Notes 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 of Notes.
 
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and
the Trustee may amend or supplement this Indenture or the Notes or the Note
Guarantees without the consent of any Holder of a Note:
 

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(1)  to cure any ambiguity, defect or inconsistency;
 
(2)  to provide for uncertificated Notes in addition to or in place of
certificated Notes;
 
(3)  to provide for the assumption of the Company’s or a Guarantor’s obligations
to the Holders of the Notes and Note Guarantees by a successor to the Company or
such Guarantor pursuant to Article 5 or Article 10 hereof;
 
(4)  to make any change that would provide any additional rights or benefits to
the Holders of the Notes or that does not adversely affect the legal rights
hereunder of any Holder;
 
(5)  to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;
 
(6)  to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof;
 
(7)  to decrease the Conversion Price of the Notes; provided, however, that such
decrease shall be in accordance with the terms of this Indenture or shall not
adversely affect the interests of the Holders;
 
(8)  to amend, modify, revise or supplement this Indenture to conform to any
amendments, modifications, revisions or supplements made to any Clause (6)
Indebtedness in respect of any provisions therein for which there are
substantially identical provisions in this Indenture, including without
limitation with respect to analogous provisions in Articles 8, 10 and 16, only
to the extent that any such amendments, modifications, revisions or supplements
are more favorable or beneficial to the holders of such notes and the Holders;
or
 
(9)  to allow any Guarantor to enter into a supplemental indenture and/or
execute a Note Guarantee with respect to the Notes.
 
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
7.02 hereof, the Trustee will join with the Company and the Guarantors 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 will 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 Notes.
 
Except as provided below in this Section 9.02, the Company and the Trustee may
amend or supplement this Indenture (including, without limitation, Article 13
hereof) and the Notes and the Note Guarantees with the consent of the Holders of
at least a majority in aggregate principal amount of the then outstanding Notes
(including, without limitation, Additional Notes, if any) voting as a single
class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium
or Additional Interest, if any, or interest on, the Notes, except a payment
default resulting from an
 

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acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes or the Note Guarantees may be waived with the consent of
the Holders of a majority in aggregate principal amount of the then outstanding
Notes (including, without limitation, Additional Notes, if any) voting as a
single class (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes). Section
2.08 hereof shall determine which Notes are considered to be “outstanding” for
purposes of this Section 9.02.
 
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 Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental Indenture.
 
No consideration shall be offered or paid to any Holder to amend or consent to a
waiver or modification of any provision of any of this Indenture or the Notes
unless the same consideration also is offered to all Holders.
 
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it is sufficient if such consent approves the
substance thereof.
 
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the outstanding Notes voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes or the Note Guarantees. However,
without the consent of each Holder affected, an amendment, supplement or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
 
(1)  reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
 
(2)  reduce the principal of or change the fixed maturity of any Note or alter
or waive the provisions with respect to the redemption of the Notes;
 
(3)  reduce the rate of or change the time for payment of interest on any Note;
 
(4)  make any change that impairs or adversely affects the conversion rights of
any Note;
 
(5)  except as expressly provided in this Indenture, change the Conversion
Price;
 
(6)  reduce the Fundamental Change Repurchase Price or the Make-Whole Premium of
any Note or amend or modify in any manner adverse to the Holders the Company’s
 

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obligation to make such payments, whether through an amendment or waiver of
provisions in the covenants, definitions or otherwise;
 
(7)  modify the provisions in respect of the right of Holders to cause the
Company to repurchase Notes upon a Fundamental Change in a manner adverse to
Holders;
 
(8)  waive a Default or Event of Default in the payment of principal of, premium
or interest on the Notes (except a rescission of acceleration of the Notes by
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted from such
acceleration);
 
(9)  make any Note payable in money other than that stated in the Notes;
 
(10)  make any change in the provisions of this Indenture relating to waivers of
past Defaults or the rights of Holders of Notes to receive payments of principal
of or premium, if any, or interest on the Notes;
 
(11)  waive a redemption payment with respect to any Note;
 
(12)  change the ranking of the Notes in a manner adverse to the Holders;
 
(13)  release any Guarantor from any of its obligations under its Note Guarantee
or this Indenture, except in accordance with the terms of this Indenture; or
 
(14)  make any change in this Article 9 relating to the amendment and waiver
provisions.
 
Section 9.03 Revocation and Effect of Consents.
 
Until an amendment, supplement or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder’s Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
 
Section 9.04 Notation on or Exchange of Notes.
 
The Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall, upon receipt of an Authentication Order,
authenticate new Notes that reflect the amendment, supplement or waiver.
 
Failure to make the appropriate notation or issue a new Note will not affect the
validity and effect of such amendment, supplement or waiver.
 
Section 9.05 Trustee to Sign Amendments, etc.
 
The Trustee will 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
 

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the Trustee. The Company may not sign an amended or supplemental indenture until
the Board of Directors of AREP approves it. In executing any amended or
supplemental indenture, the Trustee shall not be under any responsibility to
determine the correctness of any provisions contained therein, and will be
entitled to receive and (subject to Section 7.01 hereof) will be fully protected
in relying upon, in addition to the documents required by Section 16.04 hereof,
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.
 
Section 9.06 Amendments, Modifications, Revisions or Supplements to Senior Notes
 
(a) If, at any time, the provisions of the 8 1/8% Senior Notes, the 7 1/8%
Senior Notes, the 2004 Indenture or the 2005 Indenture are amended, modified,
revised or supplemented in any manner that is favorable or beneficial to the
holders of such notes and in respect of any provisions therein for which there
are substantially identical provisions in this Indenture, the Company and the
Trustee shall, in accordance with this Article 9, including without limitation,
Section 9.01, enter into a supplemental indenture amending, modifying, revising
or supplementing this Indenture in an identical manner and no action by the
Holders shall be required hereunder for the execution or effectiveness of such
supplemental indenture.
 
(b) If, at any time, the provisions of the 8 1/8% Senior Notes, the 7 1/8%
Senior Notes, the 2004 Indenture or the 2005 Indenture are amended, modified,
revised or supplemented in any manner that is adverse to the holders of such
notes and in respect of any provisions therein for which there are substantially
identical provisions in this Indenture, the Holders shall have the right, in
their sole discretion and in accordance with this Article 9, including without
limitation, Section 9.02, to cause this Indenture to be amended, modified,
revised or supplemented in an identical manner. Upon any such amendment,
modification, revision or supplement of the 8 1/8% Senior Notes or the 7 1/8%
Senior Notes, the Company shall, or shall cause the Trustee, in the name and at
the expense of the Company to provide the Holders with a notice describing such
amendment, modification, revision or supplement accompanied by a request to the
Holders that such Holders consent to the same amendment, modification, revision
or supplement of this Indenture.
 
(c) No consideration shall be offered or paid to any holder of the 8 1/8% Senior
Notes or the 7 1/8% Senior Notes to amend, modify, revise or supplement any
provision of any of such notes, the 2004 Indenture or the 2005 Indenture, as
applicable, for which there are substantially identical provisions in the Notes
or this Indenture, unless the same consideration also is offered to the Holders
of Notes under this Indenture. No consideration shall be offered or paid to any
holder of the 8 1/8% Senior Notes or the 7 1/8% Senior Notes to waive any
default or event of default thereunder or to consent to any non-compliance with
any provision of any of such notes, the 2004 Indenture or the 2005 Indenture, as
applicable, unless there shall be paid to the Holders (at the same time and in
the same manner) proportional consideration (i.e. for every $x paid per $1000 of
principal amount of 7 1/8% Senior Notes or 8 1/8% Senior Notes outstanding
amount in connection with such a waiver or consent, the Holders will each
receive $x per $1000 outstanding principal amount of the Notes).
 

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ARTICLE 10
NOTE GUARANTEES
 
Section 10.01. Guarantee.
 
(a) Subject to this Article 10, each Guarantor hereby unconditionally guarantees
to each Holder of a Note 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 Notes or the obligations of the Company
hereunder or thereunder, that:
 
(1) the principal of, premium and Additional Interest, 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
 
(2) in case of any extension of time of payment or renewal of any Notes 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, each Guarantor will pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
 
(b) Each Guarantor hereby agrees that its obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes 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. Each 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 Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
 
(c) If any Holder or the Trustee is required by any court or otherwise to return
to the Company, any Guarantor or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company or any Guarantor, any
amount paid by either to the Trustee or such Holder, this Note Guarantee, to the
extent theretofore discharged, will be reinstated in full force and effect.
 
(d) Each 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. Each
Guarantor further agrees that, as between any Guarantors, 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 Note 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 each Guarantor for
the purpose of this Note Guarantee. Each Guarantor will have the right to seek
contribution
 

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from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Note Guarantee.
 
Section 10.02. Limitation on Guarantor Liability.
 
Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms
that it is the intention of all such parties that the Note 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 Note Guarantee.
To effectuate the foregoing intention, the Trustee, the Holders and each
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 such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 10, result in the obligations of such Guarantor under its Note Guarantee
not constituting a fraudulent transfer or conveyance.
 
Section 10.03. Execution and Delivery of Note Guarantee.
 
To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor
hereby agrees that a notation of such Note Guarantee substantially in the form
attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on
each Note authenticated and delivered by the Trustee and that this Indenture
will be executed on behalf of such Guarantor by one of its Officers.
 
Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01
hereof will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.
 
If an Officer whose signature is on this Indenture or on the Note Guarantee no
longer holds that office at the time the Trustee authenticates the Note on which
a Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.
 
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.
 
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms.
 
(e) Except as otherwise provided in Section 10.05 hereof and subject to 10.04(b)
hereof, no Guarantor may sell or otherwise dispose of all or substantially all
of its assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person, other than the Company or
another Guarantor, unless:
 
(1)  immediately after giving effect to such transaction, no Default or Event of
Default exists; and
 
(2)  subject to Section 10.05 hereof, the Person acquiring the property in any
such sale or disposition or the Person formed by or surviving any such
consolidation or merger unconditionally assumes all the obligations of that
Guarantor under this Indenture, its Note Guarantee and the Registration Rights
Agreement on the terms set forth herein or therein, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee.
 

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In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person will succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
 
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clause 2
above, nothing contained in this Indenture or in any of the Notes will prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or will prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
 
(f) Notwithstanding the foregoing, any merger or consolidation of AREH (or an
Affiliate referred to in clause (1) of the second paragraph of Section 5.01(b)
or any Person that is the successor of AREH or any such successor ad infinitum)
or any sale of all or substantially all of AREH’s assets (or of an Affiliate
referred to in clause (1) of the second paragraph of Section 5.01(b) or any
Person that is the successor of AREH or any such successor ad infinitum) shall
be governed by Section 5.01(b) hereof and Section 10.04(a) shall not apply to
any such transaction.
 
Section 10.05. Releases.
 
(a) In the event of any sale or other disposition of all or substantially all of
the assets of any Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of any Guarantor, in each
case to a Person that is not (either before or after giving effect to such
transactions) the Company or another Guarantor, then such Guarantor (in the
event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor) or the entity
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Note Guarantee. Upon delivery by the Company to the
Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in accordance with the
provisions of this Indenture the Trustee will execute any documents reasonably
required in order to evidence the release of any Guarantor from its obligations
under its Note Guarantee.
 
(b) Upon satisfaction and discharge of this Indenture in accordance with Article
11 hereof, each Guarantor will be released and relieved of any obligations under
its Note Guarantee.
 
Any Guarantor not released from its obligations under its Note Guarantee as
provided in this Section 10.05 will remain liable for the full amount of
principal of and interest and premium and Additional Interest, if any, on the
Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
 

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ARTICLE 11
SATISFACTION AND DISCHARGE
 
Section 11.01  Satisfaction and Discharge.
 
This Indenture will be discharged and will cease to be of further effect as to
all Notes and Note Guarantees issued hereunder, when:
 
(1)  either:
 
(a) all Notes that have been authenticated, except lost, stolen or destroyed
Notes that have been replaced or paid and Notes for whose payment money has
theretofore been deposited in trust and thereafter repaid to AREP, have been
delivered to the Trustee for cancellation; or
 
(b) all Notes that have not been delivered to the Trustee for cancellation (1)
have become due and payable by reason of the mailing of a notice of redemption
or otherwise, (2) will become due and payable within one year or (3) are to be
called for redemption within 12 months under arrangements reasonably
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the reasonable expense of the Company, and the
Company or any Guarantor have irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a combination of
cash in U.S. dollars and non-callable Government Securities, in amounts as will
be sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire Indebtedness on the Notes not delivered to the Trustee for
cancellation for principal and premium, if any, and accrued but unpaid interest
to the date of maturity or redemption;
 
(2)  no Default or Event of Default has occurred and is continuing on the date
of the deposit or will occur as a result of the deposit and the deposit will not
result in a breach or violation of, or constitute a default under, any other
material instrument to which the Company is a party or by which the Company is
bound;
 
(3)  the Company has paid or caused to be paid all sums payable by it under this
Indenture; and
 
(4)  the Company or any Guarantor have delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
the Notes at maturity or the redemption date, as the case may be.
 
In addition, the Company must deliver an Officers’ Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
 
Notwithstanding the satisfaction and discharge of this Indenture, if money has
been deposited with the Trustee pursuant to subclause (b) of clause (1) of this
Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In
addition, nothing in this Section 11.01 will be deemed to discharge those
provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
 

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Section 11.02  Application of Trust Money.
 
Subject to the provisions of Section 8.06 hereof, all money deposited with the
Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Additional Interest, if any)
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
 
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company’s and any Guarantor’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01 hereof; provided that if the Company has made any payment of
principal of, premium or Additional Interest, if any, or interest on, any Notes
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money or Government Securities held by the Trustee or Paying Agent.
 
ARTICLE 12
CONVERSION
 
Section 12.01 Conversion Privilege. 
 
(a) Conversion. Subject to the further provisions of this Article 12, at any
time or times after the Issuance Date and prior to the close of business on the
Business Day prior to the Maturity Date, a Holder may convert all or any portion
of the principal amount of such Holder’s Notes (in principal amounts of $1,000
or any integral multiple of $1,000 in excess thereof) into Depositary Units at
the Conversion Rate then in effect.
 
(b) Conversion Period. Notwithstanding the foregoing, if such Note is presented
for repurchase pursuant to Article 13, such conversion right shall terminate at
the close of business on the last day of the Fundamental Change Repurchase
Period for such Note (unless the Company shall default on payment when due, in
which case the conversion right shall extend to the close of business on the
date such default is cured and such Note is repurchased).
 
(c) Fundamental Change Conversion. The conversion by the Holder following its
receipt of a Fundamental Change Company Notice during the Fundamental Change
Repurchase Period shall be a “Fundamental Change Conversion”. In connection with
a Fundamental Change Conversion, the Holder shall be entitled to receive a
Make-Whole Premium in accordance with Article 15.
 
(d) Rights of Holders. Unless otherwise provided herein, a Holder of Notes is
not entitled to any rights of a holder of Depositary Units until such Holder has
converted its Notes to Depositary Units, and only to the extent such Notes are
deemed to have been converted into Depositary Units pursuant to this Article 12.
 

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Section 12.02 Conversion Procedure.
 
(a) To convert a Note (or any portion thereof) into Depositary Units (other than
in respect of a Forced Conversion, the procedures for which are set forth below)
on any date (the “Conversion Date”), a Holder must (i) complete and manually
sign a Notice of Conversion in the form attached hereto as Exhibit F (or a
facsimile of the conversion notice) specifying the principal amount of such Note
such Holder seeks to convert and deliver such notice (the “Notice of
Conversion”) to a Conversion Agent, (ii) surrender the Note to a Conversion
Agent, (iii) furnish appropriate endorsements and transfer documents if required
by a Registrar or a Conversion Agent and (iv) pay any transfer or similar tax,
if required. Anything herein to the contrary notwithstanding, in the case of
Global Notes, a Notice of Conversion shall be delivered and such Notes shall be
surrendered for conversion in accordance with the rules and procedures of the
Depositary as in effect from time to time.
 
(b) If the last day on which Note may be converted is not a Business Day in a
place where a Conversion Agent is located, the Notes may be surrendered to that
Conversion Agent on the next succeeding Business Day.
 
(c) Holders that have already delivered a Fundamental Change Repurchase Notice
in respect of a Note may not surrender such Note for conversion until the
Fundamental Change Repurchase Notice has been withdrawn in accordance with the
procedures set forth in Article 13.
 
(d) All Notes or portions thereof surrendered for conversion during the period
from the close of business on a Record Date to the opening of business on the
immediately following Interest Payment Date shall be accompanied by payment, in
funds acceptable to the Company, of an amount equal to the interest otherwise
payable on such Interest Payment Date on the principal amount of the Notes being
converted; provided, however, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest on the
Notes. Notwithstanding the foregoing, upon any conversion pursuant to this
Article 12, the Company shall pay to the applicable Holder the amount of accrued
and unpaid interest and Additional Interest, if any, on the principal amount of
the Notes so converted in accordance with Section 12.06.
 
Section 12.03 Company’s Right to Require Conversion; Notices to Trustee. 
 
(a) The Company may, at its option, automatically convert all or a portion of
the Notes (a “Forced Conversion”) at any time on or after April 5, 2009 and
prior to the Maturity Date if: (i) the VWAP per Depositary Unit has exceeded One
Hundred Fifty percent (150%) of the Conversion Price then in effect for at least
twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days
ending within five (5) Trading Days of the Forced Conversion Notice Date; and
(ii) the Equity Conditions shall have been satisfied as of the date of the
Forced Conversion Notice. The Holders shall be entitled to receive a Make-Whole
Premium in accordance with Article 15 for any Forced Conversion which occurs
following the public announcement of a Fundamental Change during the applicable
Fundamental Change Repurchase Period. Notwithstanding anything herein to the
contrary, if at any time during the Forced Conversion Period, the Equity
Conditions are no longer satisfied (a “Forced Conversion Equity Conditions
Failure”), the Company shall provide a notice to the Trustee and each Holder of
such failure and, unless the Holders of not less than a majority in aggregate
principal amount of the then outstanding Notes waive such failure, the Company
shall be required to withdraw the Forced Conversion Notice. 
 
(b) If the Company elects to convert all or a portion of the principal amount of
the Notes pursuant to this Section 12.03, the Company, or at its request (which
must be received by the Trustee at
 

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least five (5) Business Days prior to the date the Trustee is requested to give
notice as described below unless a shorter period is agreed to by the Trustee),
the Trustee in the name of and at the expense of the Company, shall send or
cause to be sent a notice (the “Forced Conversion Notice”) of the Forced
Conversion not more than thirty (30) days and not less than ten (10) days before
the Forced Conversion Date (the “Forced Conversion Notice Date”) to the Holders
at their last addresses as they shall appear upon the register of the Notes.
Except as required by Section 12.03(a), such notice shall be irrevocable. Any
notice that is sent in the manner herein provided shall be deemed given upon
such Holder’s actual receipt of the Forced Conversion Notice.
 
(c) The Forced Conversion Notice shall identify the Notes to be converted and
shall state:
 
(1)  the date on which a Forced Conversion will become effective (the “Forced
Conversion Date”);
 
(2)  the CUSIP number of the Notes;
 
(3)  the place or places where the Notes (if such Notes are held other than in
global form) are to be surrendered for conversion;
 
(4)  the Conversion Price then in effect;
 
(5)  the name and address of the Conversion Agent;
 
(6)  if fewer than all the outstanding Notes are to be converted, the
certificate number (if such Notes are held other than in global form) and
principal amounts of the particular Notes to be converted;
 
(7)  that, unless the Company fails to issue the Depositary Units in respect of
the Notes subject to the Forced Conversion and interest and Additional Interest,
if applicable, interest will cease to accrue on and after the Forced Conversion
Date in respect of the Notes to be redeemed; and
 
(8)  whether a Make-Whole Premium is required to be paid by the Company upon any
Forced Conversion occurring after the public announcement of a Fundamental
Change.
 
In case the Notes are to be converted in part only, the Forced Conversion Notice
shall state the portion of the principal amount thereof to be converted and
shall state that on and after the Forced Conversion Date, upon surrender of such
Notes (if such Notes are held other than in global form), a new Note or Notes in
a principal amount equal to the unconverted portion thereof will be issued.
 
Concurrently with the mailing of any such Forced Conversion Notice (or any
withdrawal of such Forced Conversion Notice or notice of a Forced Conversion
Equity Conditions Failure), the Company shall file a Form 8-K with the SEC, the
form and content of which shall be determined by the Company in good faith, but
in its sole discretion, and in accordance with applicable securities laws.
 
(d) During the period beginning on the Forced Conversion Date and ending on the
date thirty (30) days thereafter, the Company shall not publicly offer to sell
any Capital Stock (or securities convertible into, or exchangeable for, Capital
Stock) of the Company (other than Depositary Units issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation plans
existing prior to such Forced Conversion Date or pursuant to then outstanding
options, warrants or rights, including the Preferred Units), or publicly offer
to sell or grant options, rights or warrants with respect to
 

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any Capital Stock or securities convertible into or exercisable or exchangeable
for Capital Stock (other than the grant of options pursuant to option plans
existing prior to such Forced Conversion Date). The foregoing sentence shall not
apply to (i) the issuance of Depositary Units upon conversion of any of the
Notes, (ii) in connection with any employee benefit plan which has been approved
by the Board of Directors of the general partner of the Company, pursuant to
which the Company’s securities may be issued to any employee, officer or
director for services provided to the Company, (iii) the issuance by the Company
of any Depositary Units upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof (provided that the terms
relating to pricing of the number of Depositary Units issuable upon exercise of
such options or warrants are not amended or modified in any manner after the
date hereof) or an option or warrant issued or granted in compliance with this
paragraph, (iv) the sale of Depositary Units in a bona fide firm commitment
underwritten offering with a nationally recognized underwriter if the price per
share in such offering exceeds 115% of the Conversion Price (other than an
“at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act and
“equity lines”); (v) the entry into an agreement to issue, and the issuance of,
Depositary Units, other equity securities of the Company or equity equivalents
in exchange for assets or equity securities of another entity to be acquired by
the Company, the primary purpose of which is not to raise equity capital, and
(vi) the issuance of Preferred Units distributed (A) as dividends on Preferred
Units which are currently outstanding or (B) to satisfy any redemption
obligation in respect of Preferred Units which are currently outstanding or
which are issued as dividends in respect thereof.
 
Section 12.04 Selection of Notes to be Converted. 
 
If less than all the Notes are to be converted pursuant to a Forced Conversion,
the Trustee (or the Depositary, if the Notes are held in global form) shall
select the Notes to be converted pro rata or by lot (so long as such method is
not prohibited by the rules of any stock exchange on which the Notes are then
listed). The Trustee or the Depositary, as applicable, shall make the selection
within seven (7) days following its receipt of the notice from the Company
delivered pursuant to Section 12.03(b) from outstanding Notes and shall notify
the Company of its selection. 
 
Notes and portions of them the Trustee selects shall be in principal amounts of
$1,000 or integral multiples of $1,000.
 
If any Note selected for Forced Conversion is converted at the election of the
Holder in part before termination of the conversion right in respect of the
portion of the Note so selected, the converted portion of such Note shall be
deemed (so far as may be) to be the portion selected for Forced Conversion.
Notes which have been converted during a selection of Notes subject to Forced
Conversion may be treated by the Trustee or Depositary, as applicable, as
outstanding for the purpose of such selection.
 
Section 12.05 Delivery by Holders of Notes Subject to Forced Conversion. 
 
All Notes subject to Forced Conversion (if such Notes are held other than in
global form) shall be delivered to the Company to deliver to the Trustee to be
canceled. Failure to deliver such Notes shall not affect their cancellation. In
case any Note of a denomination greater than One Thousand United States Dollars
($1,000) shall be surrendered for partial conversion, and subject to Section
2.02, the Company shall execute and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate and deliver
to the Holder of Notes so surrendered, without charge to such Holder, a new Note
or Notes in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Note. 
 

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Section 12.06 Deposit of Interest and Additional Interest.
 
On or prior to 10:00 a.m., Eastern Time on the Forced Conversion Date or within
three (3) Trading Days following any other Conversion Date, as applicable, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 2.04) interest accrued on the Notes being converted on the
applicable Conversion Date or Forced Conversion Date, as applicable, and
Additional Interest, if any, thereon to such date. The Trustee or the Paying
Agent (or, if the Company is acting as its own Paying Agent, the Company), shall
pay such interest and Additional Interest, if any, to the converting Holder no
later than the third Business Day after (a) the Conversion Date or (b) receipt
of the Notes delivered as required by Section 12.05, in the case of a Forced
Conversion. 
 
Section 12.07 Delivery of Depositary Units. 
 
The Company will, as soon as practicable after the Conversion Date, but in no
event later than three (3) Trading Days following the delivery of a Notice of
Conversion or on the Forced Conversion Date, as applicable (each, a “Depositary
Unit Delivery Date”) issue, or cause to be issued, and deliver to the Conversion
Agent or to such Holder, or such Holder’s nominee or nominees, certificates for
the number of full Depositary Units to which such Holder shall be entitled. The
Person or Persons entitled to receive such Depositary Units upon such conversion
shall be treated for all purposes as the record holder or holders of such
Depositary Units, as of the close of business on Conversion Date or Forced
Conversion Date, as applicable; provided, however, that no surrender of a Note
on any date when the stock transfer books of the Company shall be closed shall
be effective to constitute the Person or Persons entitled to receive the
Depositary Units upon such conversion as the record holder or holders of such
Depositary Units on such date, but such surrender shall be effective to
constitute the Person or Persons entitled to receive such Depositary Units as
the record holder or holders thereof for all purposes at the close of business
on the next succeeding day on which such stock transfer books are open; provided
further that such conversion shall be at the Conversion Price in effect on the
Conversion Date as if the stock transfer books of the Company had not been
closed. Upon conversion in full of a Note, such Person shall no longer be a
Holder of such Note. Except as otherwise provided in Section 12.11, no payment
or adjustment will be made for dividends or distributions on Depositary Units
issued upon conversion of a Note. 
 
Upon surrender of a Note that is converted in part, the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder, as soon as
practicable, a new Note equal in principal amount to the unconverted portion of
the Note surrendered.
 
Section 12.08 No Fractional Units. 
 
The Company shall not issue any fraction of a Depositary Unit upon any
conversion. If the issuance would result in the issuance of a fraction of a
Depositary Unit, the Company shall round such fraction of a Depositary Unit to
the nearest whole unit. 
 
Section 12.09 Taxes on Conversion. 
 
If a Holder converts a Note, the Company shall pay any documentary, stamp or
similar issue or transfer tax due on, or in respect of, the issuance or delivery
to such Holder of Depositary Units upon such conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the Depositary
Units to be issued in a name other than the Holder’s name. The Conversion Agent
may refuse to deliver the certificate representing the Depositary Units being
issued in a name other than the Holder’s name until the Conversion Agent
receives a sum sufficient to pay any tax which will be
 

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due because the Depositary Units are to be issued in a name other than the
Holder’s name. Nothing herein shall preclude any tax withholding required by law
or regulation. 
 
Section 12.10 Company to Provide Depositary Units. 
 
(a) The Company shall, prior to issuance of any Notes hereunder, and from time
to time as may be necessary, reserve, out of its authorized but unissued
Depositary Units, a sufficient number of Depositary Units to permit the
conversion of all outstanding Notes into Depositary Units (including after
taking into account any adjustments to the Conversion Price pursuant to Section
12.11). 
 
(b) All Depositary Units delivered upon conversion of the Notes shall be newly
issued units, shall be duly authorized and validly issued, and shall be free
from preemptive rights and free of any lien or adverse claim, other than any
lien or claim created by the Holder thereof.
 
(c) The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of Depositary Units upon
conversion of Notes, if any, and will list or cause to have quoted such
Depositary Units on any Eligible Market. Any Depositary Units issued upon
conversion of a Note hereunder which at the time of conversion was a Restricted
Definitive Note or a Restricted Global Note will remain a Restricted Definitive
Note or a Restricted Global Note, as applicable.
 
Section 12.11 Adjustment of Conversion Price. 
 
The Conversion Price shall be adjusted from time to time by the Company as
follows: 
 
(a) Upon the completion of the first Offering that is executed at a price per
Depositary Unit that is less than $_________1  (as adjusted for splits, reverse
splits and/or stock dividends effected prior to the date of such Offering in
respect of the Depositary Units - any such adjustment to be determined by the
Company in good faith, absent manifest error), the Conversion Price will be
adjusted so that it equals 115% of the price per Depositary Unit at which
Depositary Units were offered (as reflected on the applicable registration
statement) by the Company in the Offering. If (and only if) no Offering occurs
within 18 months after the date Notes are first issued hereunder, the Conversion
Price will adjusted so that it equals 115% of the arithmetic average of the VWAP
per Depositary Unit of the Depositary Units on the thirty (30) Trading Days
ending on October 5, 2008; provided that after giving effect to such adjustment,
the Conversion Price as adjusted would be less than $132.595 (as adjusted for
splits, reverse splits and/or stock dividends effected prior to the date of such
Offering in respect of the Depositary Units - any such adjustment to be
determined by the Company in good faith, absent manifest error). Notwithstanding
the preceding contingent adjustments, in no event will the Conversion Price be
adjusted pursuant to this Section 12.11(a) to a Conversion Price that is less
than $105.00 (as adjusted for splits, reverse splits, and/or stock dividends
effected prior to the date of such Offering in respect of the Depositary Units -
any such adjustment to be determined by the Company in good faith, absent
manifest error) per Depositary Unit.
 
(b) In case the Company shall (i) pay a dividend on its Depositary Units in
Depositary Units, (ii) make a distribution on its Depositary Units in Depositary
Units, (iii) subdivide its outstanding Depositary Units into a greater number of
units, or (iv) combine its outstanding Depositary Units into a smaller number of
units, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the
 
 

--------------------------------------------------------------------------------

1 
Insert the arithmetic average of the VWAP for Depositary Units for the ten (10)
Trading Days ending on April 4, 2007.

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Holder of any Note thereafter surrendered for conversion shall be entitled to
receive that number of Depositary Units which it would have owned had such Note
been converted immediately prior to the happening of such event. An adjustment
made pursuant to this subsection (c) shall become effective immediately after
the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of subdivision or
combination.
 
(c) In case the Company shall issue or declare rights, options or warrants
(other than pursuant to a Poison Pill) to all holders of its Depositary Units
entitling them (for a period commencing no earlier than the record date
described below and expiring not more than 60 days after such record date) to
subscribe for or purchase Depositary Units (or securities convertible into or
exercisable or exchangeable for Depositary Units) at a price per unit (or having
a conversion, exercise or exchange price per unit) less than the Current Market
Price per Depositary Unit on the record date with respect to such issuance, (or
if no such record date is fixed, the Business Day immediately prior to the date
of announcement of such issuance) (treating the conversion, exercise or exchange
price per unit of the securities convertible into or exercisable or exchangeable
for Depositary Units as equal to (x) the sum of (i) the price for a unit of the
security convertible into or exercisable or exchangeable for Depositary Units
and (ii) any additional consideration initially payable upon the conversion of
such security into or exercise or exchange of such security for Depositary Units
divided by (y) the number of Depositary Units initially underlying such
security), the Conversion Price in effect shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
at the opening of business on the date after such record date (or if no such
record date is fixed, the applicable Business Day) by a fraction of which:
 
(1)  the numerator of which shall be the number of Depositary Units outstanding
on the close of business on the record date (or is no such record date is fixed,
the date of announcement of such issuance), plus the number of units which the
aggregate offering price of the total number of units so offered for
subscription or purchase (or the aggregate conversion, exercise or exchange
price of the securities so offered) would purchase at such Current Market Price
per Depositary Unit; and
 
(2)  the denominator of which shall be the number of Depositary Units
outstanding at the close of business on the record date (or is no such record
date is fixed, the date of announcement of such issuance), plus the total number
of additional Depositary Units so offered for subscription or purchase (or into
which the securities so offered are convertible, exercisable or exchangeable).
 
Such adjustment shall be made successively whenever any such rights, options or
warrants are issued, and shall become effective on the day following the date of
announcement of such issuance. To the extent that Depositary Units (or
securities convertible into or exercisable or exchangeable for Depositary Units)
are not delivered pursuant to such rights, options or warrants, upon the
expiration or termination of such rights, option or warrants the Conversion
Price shall be readjusted to the Conversion Price which would then be in effect
had the adjustments made upon the issuance of such rights, options or warrants
been made on the basis of the delivery of only the number of Depositary Units
(or securities convertible into or exercisable or exchangeable for Depositary
Units) actually delivered. In the event that such rights, options or warrants
are not so issued, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if the announcement of such
issuance had not been made.
 
(d) In case the Company shall declare a distribution in respect of its
Depositary Units of any Capital Stock of the Company (other than Depositary
Units), evidences of indebtedness or other non-cash assets (including securities
of any person other than AREP but excluding (1) dividends or distributions paid
exclusively in cash, (2) dividends or distributions referred to in Section
12.11(b) or (3) distributions made in connection with the liquidation,
dissolution or winding up of the Company), or shall declare a
 

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distribution to all holders of its Depositary Units of rights, options or
warrants to subscribe for or purchase any of its securities (excluding those
rights, options and warrants referred to in Section 12.11(c) and also excluding
the distribution of rights to all holders of Depositary Units pursuant to a
Poison Pill or the detachment of such rights to the extent set forth in the
second following paragraph), then in each such case the Conversion Price shall
be adjusted so that the same shall equal the price determined by multiplying the
current Conversion Price by a fraction of which:
 
(1)  the numerator of which shall be the Current Market Price per Depositary
Unit on such record date, less the fair market value on such record date (as
determined by the Board of Directors, whose determination shall be conclusive
evidence of such fair market value and which shall be evidenced by an Officers’
Certificate delivered to Trustee) of the portion of the distributed assets so
distributed applicable to one Depositary Unit (determined on the basis of the
number of Depositary Units outstanding on the record date); and
 
(2)  the denominator of which shall be such Current Market Price per Depositary
Unit on such record date mentioned below.
 
Such adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution. Subject to
the terms of the first paragraph of this Section 12.11(d):
 
(i) in the event that the Company has in effect a preferred shares/units rights
plan (“Poison Pill”), upon conversion of the Notes into Depositary Units, to the
extent that the Poison Pill is still in effect upon such conversion, the Holders
will receive, in addition to the Depositary Units, the rights described therein
(whether or not the rights have separated from the Depositary Units at the time
of conversion), subject to the limitations set forth in the Poison Pill. If the
Poison Pill provides that upon separation of rights under such plan from the
Company’s Depositary Units that the Holders would not be entitled to receive any
such rights in respect of the Depositary Units issuable upon conversion of the
Notes, the Conversion Price will be adjusted as provided in this Section
12.11(d) (with such separation deemed to be the distribution of such rights),
subject to readjustment in the event of the expiration, termination or
redemption of the rights. Any distribution of rights or warrants pursuant to a
Poison Pill that would allow a Holder to receive upon conversion, in addition to
the Depositary Units, the rights described therein (whether or not the rights
have separated from the Depositary Units at the time of conversion), shall not
constitute a distribution of rights, options or warrants pursuant to this
Article 12.
 
(ii) Rights, options or warrants distributed by the Company to all holders of
Depositary Units entitling the holders thereof to subscribe for or purchase
Capital Stock (either initially or under certain circumstances), which rights,
options or warrants, until the occurrence of a specified event or events
(“Trigger Event”): (A) are deemed to be transferred with such Depositary Units;
(B) are not exercisable; and (C) are also issued in respect of future issuances
of Depositary Units, shall be deemed not to have been distributed for purposes
of this Section 12.11 (and no adjustment to the Conversion Price under this
Section 12.11 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights, options and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 12.11(d). If any such right or warrant,
including any such existing rights, options or warrants distributed prior to the
date of this Indenture, are subject to events, upon the occurrence of which such
rights, options or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
record date in respect of new rights, options or warrants with such rights (and
a termination or expiration of the existing rights, options or warrants without
exercise by any of the holders thereof). In addition, in the event of any
distribution (or deemed distribution) of rights, options or warrants, or any
 

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Trigger Event or other event (of the type described in the preceding sentence)
in respect thereof that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 12.11
was made, in the case of any such rights, options or warrants which shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per unit redemption or repurchase
price received by a holder or holders of Depositary Units in respect of such
rights, options or warrants (assuming such holder had retained such rights,
options or warrants), made to all holders of Depositary Units as of the date of
such redemption or repurchase.
 
(e) In case the Company or any of its Subsidiaries shall purchase any Depositary
Units (as defined below) by means of a tender offer, then, effective immediately
prior to the opening of business on the day after the last date (the “Expiration
Date”) tenders could have been made pursuant to such tender offer (as it may be
amended) (the last time at which such tenders could have been made on the
Expiration Date is hereinafter sometimes called the “Expiration Time”), the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Expiration Date by a fraction of which:
 
(1)  the numerator shall be the product of the number of Depositary Units
outstanding (including Purchased Depositary Units (as defined below) but
excluding any units held in the treasury of the Company) immediately prior to
the Expiration Time multiplied by the Current Market Price per Depositary Unit
(as determined in accordance with Section 12.11(f)); and
 
(2)  the denominator shall be the sum of (x) the aggregate consideration
(determined as set forth below) payable to stockholders of the Company based on
the acceptance (up to any maximum specified in the terms of the tender offer) of
all units validly tendered and not withdrawn as of the Expiration Time (the
units deemed so accepted, up to any such maximum, being referred to as the
“Purchased Depositary Units”) and (y) the product of the number of Depositary
Units outstanding (less any Purchased Depositary Units and excluding any units
held in the treasury of the Company) immediately prior to the Expiration Time
and the Current Market Price per Depositary Unit (as determined in accordance
with Section 12.11(f)).
 
For purposes of this Section 12.11(e), the aggregate consideration in any such
tender offer shall equal the sum of the aggregate amount of cash consideration
and the aggregate fair market value (as determined by the Board of Directors,
whose determination shall be conclusive evidence thereof and which shall be
evidenced by an Officers’ Certificate delivered to the Trustee) of any other
consideration payable in such tender offer. In the event that the Company is
obligated to purchase units pursuant to any such tender offer, but the Company
is permanently prevented by applicable law from effecting any or all such
purchases or any or all such purchases are rescinded, the Conversion Price shall
again be adjusted to be the Conversion Price which would have been in effect
based upon the number of units actually purchased. If the application of this
Section 12.11(e) to any tender offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender offer under this
Section 12.11(e). For purposes of this Section 12.11(e), the term “tender offer”
shall mean and include both tender offers and exchange offers, all references to
“purchases” of units in tender offers (and all similar references) shall mean
and include both the purchase of units in tender offers and the acquisition of
units pursuant to exchange offers, and all references to “tendered units” (and
all similar references) shall mean and include units tendered in both tender
offers and exchange offers.
 
(f) “Current Market Price per Depositary Unit” on any date means (i) for the
purpose of any computation under clauses (c), or (d) of this Section 12.11, the
VWAP per Depositary Unit for the ten
 

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(10) consecutive Trading Days commencing 11 Trading Days before the record date
in respect of distributions, issuances or other events requiring such
computation under Section 12.11 and (ii) for purposes of any computation under
Section 12.11(e), the arithmetic average of the VWAP per Depositary Unit for the
ten (10) consecutive Trading Days commencing on the Trading Day next succeeding
the Expiration Date.
 
(g) In any case in which this Section 12.11 shall require that an adjustment be
made to the Conversion Price, in lieu of the foregoing adjustment, the Company
may, at its option, distribute, concurrently with the distribution to the
holders of the outstanding Depositary Units, Depositary Units, rights, options,
warrants, any Capital Stock (other than Depositary Units), evidences of
indebtedness or other non-cash assets that such Holder of a Note would have been
entitled to receive, as applicable, had such Note been converted immediately
prior to the happening of the record date relating to the event that would have
caused such adjustment (without regard to the Conversion Limitation).
 
(h) In any case in which this Section 12.11 shall require that an adjustment be
made following a record date, an announcement date or a Determination Date or
Expiration Date, as the case may be, established for purposes of this Section
12.11, the Company may elect to defer (but only until five (5) Business Days
following the filing by the Company with the Trustee of the certificate
described in Section 12.13) issuing to the Holder of any Note converted after
such record date or announcement date or Expiration Date the Depositary Units
and other Capital Stock of the Company issuable upon such conversion over and
above the Depositary Units and other Capital Stock of the Company issuable upon
such conversion only on the basis of the Conversion Rate prior to adjustment;
and, in lieu of the units the issuance of which is so deferred, the Company
shall issue or cause its transfer agents to issue due bills or other appropriate
evidence prepared by the Company of the right to receive such units.
 
Section 12.12 No Adjustment.
 
(a) No adjustment need be made for issuances of Excluded Securities. 
 
(b) Without limiting the provisions of Section 12.11, no adjustment shall be
made thereunder, nor shall an adjustment be made to the ability of the Holder to
convert, for any distribution described therein if the Holder participates or
will participate in the distribution without conversion of such Holder’s Notes
as if such Holder held a number of Depositary Units equal to the applicable
Conversion Rate, multiplied by the principal amount (expressed in thousands) of
Notes held by such Holder, without having to convert its Notes. Further, if the
application of the foregoing formulas in Section 12.11 would result in an
increase in the Conversion Price, no adjustment to the Conversion Price will be
made (except on account of unit combinations).
 
(c) No adjustment in the Conversion Price shall be required unless the
adjustment would require a decrease of at least 1% in the Conversion Price as
last adjusted; provided, however, that any adjustments which by reason of this
Section 12.12 are not required to be made shall be carried forward and taken
into account in any subsequent adjustment and, in any event, shall be carried
forward and taken into account regardless of whether the aggregate adjustment is
less than 1% upon the announcement by the Company of a Fundamental Change, upon
any Forced Conversion Date, upon any redemption of the Notes pursuant to Article
14 and at the Maturity Date.
 
Section 12.13 Notice of Conversion Price Adjustment. 
 
(a) Whenever the Conversion Price is adjusted, the Company shall promptly mail
to the Holders a notice of the adjustment and file with the Trustee an Officers’
Certificate briefly stating the facts
 

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requiring the adjustment and the manner of computing it. Unless and until the
Trustee shall receive an Officers’ Certificate setting forth an adjustment of
the Conversion Price, the Trustee may assume without inquiry that the Conversion
Price has not been adjusted and that the last Conversion Price of which it has
knowledge remains in effect. 
 
(b) Whenever, rather than adjusting the Conversion Price, the Company elects to
distribute, concurrently with the distribution to the holders of the outstanding
Depositary Units, Depositary Units, rights, options, warrants, Capital Stock
(other than Depositary Units), evidences of indebtedness or other non-cash
assets that such Holder of a Note would have been entitled to receive, as
applicable, had such Note been converted immediately prior to the happening of
the record date relating to the event that would have caused such adjustment
(without regard to the Conversion Limitation) as provided in Section 12.11(g),
the Company shall, contemporaneously with announcing such distribution, or
giving notice thereof to the holders of Depositary Units, provide notice to the
Holders, with a copy to the Trustee, that they will participate in such
distribution on an as converted basis.
 
Section 12.14 Notice of Certain Transactions. 
 
In the event that: 
 
(a) the Company shall authorize the granting to the holders of its Depositary
Units of rights or warrants to subscribe for or purchase any Capital Stock of
any class (or securities convertible into or exercisable or exchangeable for
Capital Stock of any class) or of any other rights;
 
(b) there shall occur any reclassification of the Depositary Units (other than a
subdivision or combination of its outstanding Depositary Units);
 
(c) the Company consolidates or merges with, or transfers all or substantially
all of its property and assets (or the Capital Stock, property or assets of any
of its Significant Subsidiaries) to, another entity and holders of Depositary
Units of the Company must approve the transaction; or
 
(d) there is a dissolution or liquidation of the Company,
 
and in any such case the Company (i) is obligated to deliver notice thereof to
NYSE or any Eligible Market on which the Depositary Units are then listed or
(ii) delivers a notice thereof to any holders of its 7 1/8% Senior Notes or 8
1/8% Senior Notes, the Company shall, on the same date as it (x) is required to
deliver any similar notice to NYSE or such Eligible Market or (y) delivers such
notice to such holders, file with the Trustee a notice and file a Form 8-K with
the SEC stating the proposed record or effective date, as the case may be, and
the action to be effected on such effective date, or as to which such record
date is being set. Failure to file such notice or any defect therein shall not
affect the validity of any transaction referred to in clause (a), (b), (c) or
(d) of this Section 12.14.
 
Section 12.15 Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege. 
 
If any of the following shall occur, namely:
 
(a) any reclassification or change of Depositary Units issuable upon conversion
of the Notes (other than any change for which an adjustment is provided in
Section 12.11);
 

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(b) any consolidation or merger or combination to which AREP is a party other
than a merger in which AREP is the continuing entity and which does not result
in any reclassification of, or change (other than as a result of a subdivision
or combination) in, outstanding Depositary Units; or
 
(c) any sale or conveyance as an entirety or substantially as an entirety of the
property and assets of AREP, directly or indirectly, to any Person,
 
and as a result thereof holders of Depositary Units are entitled to receive any
kind or amount of shares of stock, units and other securities and/or property
(including cash) in respect of their Depositary Units, then the Company, or such
successor, purchasing or transferee corporation, as the case may be, shall, as a
condition precedent to such reclassification, change, combination,
consolidation, merger, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Note then outstanding
shall have the right to convert such Note into the kind and amount of shares of
stock, units and other securities and property (including cash) receivable upon
such reclassification, change, combination, consolidation, merger, sale or
conveyance by a holder of the number of Depositary Units deliverable upon
conversion of such Note immediately prior to such reclassification, change,
combination, consolidation, merger, sale or conveyance. Such supplemental
indenture shall provide for adjustments of the Conversion Price which shall be
as nearly equivalent as may be practicable to the adjustments of the Conversion
Price provided for in this Article 12. If, in the case of any such
consolidation, merger, combination, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Depositary Units include shares of stock or other securities and property of a
Person other than the successor, purchasing or transferee corporation, as the
case may be, in such consolidation, merger, combination, sale or conveyance,
then such supplemental indenture shall contain such additional provisions to
protect the interests of the Holders as the Board of Directors shall reasonably
consider necessary by reason of the foregoing. The provisions of this Section
12.15 shall similarly apply to successive reclassifications, changes,
combinations, consolidations, mergers, sales or conveyances. 
 
In the event that a supplemental indenture pursuant to this Section 12.15 is to
be executed, without prejudice to any other rights of the Trustee hereunder, the
Company shall promptly file with the Trustee (x) an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or
other securities or property (including cash) receivable by Holders upon the
conversion of their Notes after any such reclassification, change, combination,
consolidation, merger, sale or conveyance, any adjustment to be made in respect
thereof and that all conditions precedent have been complied with and (y) an
Opinion of Counsel that all conditions precedent have been complied with, and
shall promptly mail notice thereof to all Holders.
 
Section 12.16 Trustee’s Disclaimer. 
 
The Trustee shall have no duty to determine when an adjustment under this
Article 12 should be made, how it should be made or what such adjustment should
be, but may accept as conclusive evidence of that fact or the correctness of any
such adjustment, and shall be protected in relying upon, an Officers’
Certificate including the Officers’ Certificate in respect thereof which the
Company is obligated to file with the Trustee pursuant to Section 12.13. The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of Notes and the Trustee shall not be responsible
for the Company’s failure to comply with any provisions of this Article 12. 
 
The Trustee shall not be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture executed pursuant to
Section 12.15, but may accept as conclusive evidence of the correctness thereof,
and shall be fully protected in relying upon, the Officers’
 

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Certificate in respect thereof which the Company is obligated to file with the
Trustee pursuant to Section 12.15.
 
Section 12.17 Company Determination Final. 
 
Any determination that the Company or the Board of Directors must make pursuant
to this Article 12 shall be conclusive if made in good faith and in accordance
with the provisions of this Article 12, absent manifest error, and set forth in
a resolution of the Board of Directors. 
 
ARTICLE 13
REPURCHASE UPON A FUNDAMENTAL CHANGE
 
Section 13.01 Repurchase of Notes at Option of the Holder Upon Fundamental
Change. 
 
(a) General. If prior to the Maturity Date there shall have occurred a
Fundamental Change, each Holder shall have the option to require all or a
portion of its Notes to be repurchased (the “Fundamental Change Repurchase”) in
cash by the Company at the Fundamental Change Repurchase Price on the
Fundamental Change Settlement Date in accordance with the following procedures.
The “Fundamental Change Repurchase Price” means the principal amount of the
Notes to be repurchased, together with accrued and unpaid interest and
Additional Interest, if any, to, but excluding, the Fundamental Change
Settlement Date.
 
(b) Company Notice of Fundamental Change. Within 15 days after the Company knows
or reasonably should know of the occurrence of a Fundamental Change, the Company
shall deliver a written notice of Fundamental Change (the “Fundamental Change
Company Notice”) by first-class mail or by overnight courier to the Trustee and
to each Holder (and to beneficial owners as required by applicable law). The
notice shall include a form of Fundamental Change Repurchase Notice
(substantially in the Form of Exhibit H hereto) to be completed by the Holder
and shall state:
 
(1)  the events causing a Fundamental Change and the date of such Fundamental
Change;
 
(2)  the last date of the Fundamental Change Repurchase Period by which a Holder
must deliver a Fundamental Change Repurchase Notice to elect the repurchase
option pursuant to this Section 13.01;
 
(3)  the Fundamental Change Settlement Date;
 
(4)  the Fundamental Change Repurchase Price;
 
(5)  the Conversion Price applicable on the date of the Fundamental Change
Company Notice;
 
(6)  that Notes as to which a Fundamental Change Repurchase Notice has been
given may be converted pursuant to Article 12 hereof only if such Fundamental
Change Repurchase Notice has been withdrawn in accordance with the terms of this
Indenture;
 
(7)  that Notes must be surrendered to the Paying Agent for cancellation to
collect payment;
 

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(8)  that the Fundamental Change Repurchase Price for any Note as to which a
Fundamental Change Repurchase Notice has been duly given and not withdrawn will
be paid promptly following the later of the Fundamental Change Settlement Date
and the time of surrender of such Note as described in clause (7) above;
 
(9)  the procedures the Holder must follow to exercise rights under this Section
13.01;
 
(10)  the conversion rights of the Notes;
 
(11)  the procedures for withdrawing a Fundamental Change Repurchase Notice;
 
(12)  that, unless the Company defaults in making payment of such Fundamental
Change Repurchase Price, Notes covered by any Fundamental Change Repurchase
Notice will cease to be outstanding and interest will cease to accrue on and
after the Fundamental Change Settlement Date;
 
(13)  the CUSIP number of the Notes; and
 
(14)  whether a Make-Whole Premium is required to be paid by the Company upon
any conversion in connection such a Fundamental Change.
 
If the Company requests that the Trustee shall give (at the Company’s expense)
such Fundamental Change Company Notice in the Company’s name, the Company shall,
in all cases, prepare the text of such Fundamental Change Company Notice. In
connection with delivery of the Fundamental Change Company Notice to the
Holders, the Company shall file a Form 8-K with the SEC containing substantially
the same information that is required in the Fundamental Change Company Notice,
or publish such information on the Company’s website or through such other
public medium as the Company may use at such time.
 
(c) Fundamental Change Repurchase Notice. In order to exercise its rights under
this Section 13.01, a Holder must deliver to the Paying Agent:
 
(1)  a written notice of repurchase (a “Fundamental Change Repurchase Notice”),
substantially in the form of Exhibit G hereto, at any time during the period
beginning upon receipt of the Fundamental Change Company Notice and ending on
the twenty (20) Trading Days after the Effective Date (the “Fundamental Change
Repurchase Period”):
 
(A) if not in global form, the certificate numbers of the Notes which such
Holder will deliver to be repurchased, or, if not certificated, the Fundamental
Change Repurchase Notice must comply with appropriate procedures of the
Depositary;
 
(B) the portion of the principal amount of the Notes which the Holder will
deliver to be repurchased, which portion must be in a principal amount of $1,000
or integral multiples thereof; and
 
(C) that such Notes shall be repurchased as of the Fundamental Change Settlement
Date pursuant to the terms and conditions specified in the Notes and in this
Indenture; and
 

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(2)  the Note (if such Note is held other than in global form) for cancellation
prior to, on or after the Fundamental Change Settlement Date (together with all
necessary endorsements) at the offices of the Paying Agent, such delivery being
a condition to receipt by the Holder of the Fundamental Change Repurchase Price
therefor; provided that such Fundamental Change Repurchase Price shall be so
paid pursuant to this Section 13.01 only if the Note so delivered to the Paying
Agent shall conform in all respects to the description thereof in the related
Fundamental Change Repurchase Notice.
 
Provisions of this Indenture that apply to the repurchase of all of a Note also
apply to the repurchase of such portion of such Note.
 
Any repurchase by the Company contemplated pursuant to the provisions of this
Section 13.01 shall be consummated by the delivery to the Paying Agent of the
consideration to be received by the Holder promptly following the later of the
Fundamental Change Settlement Date and the time of delivery of the Note.
Anything herein to the contrary notwithstanding, in the case of any repurchase
of all or part of any Global Note, such Note(s) shall be surrendered for
repurchase in accordance with the rules and procedures of the Depositary as in
effect from time to time.
 
Notwithstanding anything herein to the contrary, any Holder delivering to the
Paying Agent the Fundamental Change Repurchase Notice contemplated by this
Section 13.01(c) shall have the right to withdraw such Fundamental Change
Repurchase Notice at any time prior to the close of business on the Business Day
prior to the Fundamental Change Settlement Date by delivery of a written notice
of withdrawal to the Paying Agent in accordance with Section 13.02.
 
The Paying Agent shall promptly notify the Company of the receipt by it of any
Fundamental Change Repurchase Notice or written notice of withdrawal thereof.
 
(d) Procedure Upon Repurchase. The Company shall deposit cash at the time and in
the manner as provided in Section 13.05, sufficient to pay the aggregate
Fundamental Change Repurchase Price of all Notes to be purchased pursuant to
this Section 13.01.
 
Section 13.02 Effect of Fundamental Change Repurchase Notice
 
Upon receipt by the Paying Agent of the Fundamental Change Repurchase Notice
specified in Section 13.01(c), the Holder of the Note in respect of which such
Fundamental Change Repurchase Notice was given shall (unless such Fundamental
Change Repurchase Notice is withdrawn as specified in the following two
paragraphs) thereafter be entitled to receive solely the Fundamental Change
Repurchase Price in respect of such Note. Such Fundamental Change Repurchase
Price shall be paid to such Holder, subject to receipt of funds by the Paying
Agent, promptly following the later of (x) the Fundamental Change Settlement
Date in respect of such Note (provided the conditions in Section 13.01(c) have
been satisfied) and (y) the time of delivery of such Note to the Paying Agent by
the Holder thereof in the manner required by Section 13.01(c). Notes in respect
of which a Fundamental Change Repurchase Notice has been given by the Holder
thereof may not be converted pursuant to Article 12 on or after the date of the
delivery of such Fundamental Change Repurchase Notice unless such Fundamental
Change Repurchase Notice has first been validly withdrawn as specified in the
following two paragraphs.
 
A Fundamental Change Repurchase Notice may be withdrawn only by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the procedures set forth in the Fundamental Change Company
Notice at any time prior to the close of business on the Business Day prior to
the Fundamental Change Settlement Date specifying:
 

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(a) the principal amount of the Notes in respect of which such notice of
withdrawal is being submitted;
 
(b) if certificated, the certificate numbers of the Notes in respect of which
such notice of withdrawal is being submitted, or, if not certificated, such
notice of withdrawal must comply with appropriate procedures of the Depositary;
and
 
(c) the principal amount, if any, of such Notes which remains subject to the
original Fundamental Change Repurchase Notice and which has been or will be
delivered for repurchase by the Company.
 
There shall be no repurchase of any Notes pursuant to Section 13.01 if there has
occurred (prior to, on or after, as the case may be, the giving, by the Holders
of such Notes, of the required Fundamental Change Repurchase Notice) and is
continuing an Event of Default (other than a default in the payment of the
Fundamental Change Repurchase Price in respect of such Notes). The Paying Agent
will promptly return to the respective Holders thereof any Notes (x) in respect
of which a Fundamental Change Repurchase Notice has been withdrawn in compliance
with this Indenture, or (y) held by it during the continuance of an Event of
Default (other than a default in the payment of the Fundamental Change
Repurchase Price in respect of such Notes) in which case, upon such return, the
Fundamental Change Repurchase Notice in respect thereof shall be deemed to have
been withdrawn.
 
Section 13.03 Notes Repurchased in Whole or in Part. 
 
In connection with any offer to repurchase Notes under Section 13.01 (provided
that such offer or repurchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or repurchase), the
Company shall (a) comply with Rule 13e-4 and Rule 14e-1 under the Exchange Act,
(b) file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act, and (c) otherwise comply with all Federal and state
securities laws so as to permit the rights and obligations under Section 13.01to
be exercised in the time and in the manner specified in Section 13.01 as
applicable.
 
Section 13.04 Deposit of Fundamental Change Repurchase Price. 
 
Prior to 10:00 a.m., Eastern Time, on the Business Day preceding the Fundamental
Change Settlement Date, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the Paying Agent, shall segregate and hold in trust as
provided herein) an amount of money (in immediately available funds if deposited
on such Business Day), sufficient to pay the Fundamental Change Repurchase Price
of all the Notes or portions thereof which are to be repurchased as of the
Fundamental Change Settlement Date. The Company shall promptly notify the
Trustee in writing of the amount of any deposits of cash made pursuant to this
Section 13.04
 
Section 13.05 Repayment to the Company. 
 
The Trustee and the Paying Agent shall return to the Company any cash that
remains unclaimed, together with interest or dividends, if any, thereon, held by
them for the payment of the Fundamental Change Repurchase Price; provided that
to the extent that the aggregate amount of cash or Depositary Units deposited by
the Company pursuant to Section 13.05 exceeds the aggregate Fundamental Change
Repurchase Price of the Notes or portions thereof which the Company is obligated
to repurchase as of the Fundamental Change Settlement Date, then as soon as
practicable following the Fundamental Change Settlement Date, the Trustee or the
Paying Agent, as the case may be, shall return any such excess to the Company.
 

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ARTICLE 14
REPURCHASE REQUIRED BY GAMING AUTHORITIES
 
Section 14.01 Redemption Pursuant to Gaming Laws.
 
(a) Notwithstanding any other provision of this Indenture, if any Gaming
Authority requires that a Holder or Beneficial Owner of Notes be licensed,
qualified or found suitable under any applicable Gaming Law and such Holder or
Beneficial Owner:
 
(1)  fails to apply for a license, qualification or a finding of suitability
within 30 days (or such shorter period as may be required by the applicable
Gaming Authority) after being requested to do so by the Gaming Authority; or
 
(2)  is denied such license or qualification or not found suitable;
 
AREP shall then have the right, at its option:
 
(3)  to require each such Holder or Beneficial Owner to dispose of its Notes
within 30 days (or such earlier date as may be required by the applicable Gaming
Authority) of the occurrence of the event described in clause (1) or (2) above,
or
 
(4)  to redeem the Notes of each such Holder or Beneficial Owner, in accordance
with Rule 14e-1, if applicable, at a redemption price equal to the lowest of:
 
(A) the principal amount thereof, together with accrued and unpaid interest and
Additional Interest, if any, to the earlier of the date of redemption, the date
30 days after such Holder or Beneficial Owner is required to apply for a
license, qualification or finding of suitability (or such shorter period that
may be required by any applicable Gaming Authority) if such Holder or Beneficial
Owner fails to do so (“Application Date”) or of the date of denial of license or
qualification or of the finding of unsuitability by such Gaming Authority;
 
(B) the price at which such Holder or Beneficial Owner acquired the Notes,
together with accrued and unpaid interest and Additional Interest, if any, to
the earlier of the date of redemption, the Application Date or the date of the
denial of license or qualification or of the finding of unsuitability by such
Gaming Authority; and
 
(C) such other lesser amount as may be required by any Gaming Authority.
 
Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:
 
(5)  to exercise, directly or indirectly, through any trustee or nominee or any
other person or entity, any right conferred by the Notes, the Note Guarantee or
this Indenture; or
 
(6)  to receive any interest, Liquidated Damages, dividend, economic interests
or any other distributions or payments with respect to the Notes and the Note
Guarantee
 

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or any remuneration in any form with respect to the Notes and the Note Guarantee
from the Company, any Note Guarantor or the Trustee, except the redemption price
referred to above.
 
(b) AREP shall notify the Trustee in writing of any such redemption as soon as
practicable. Any Holder or Beneficial Owner that is required to apply for a
license, qualification or a finding of suitability will be responsible for all
fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities and the Company and any Note Guarantor will not reimburse any Holder
or Beneficial Owner for such expense.
 
(c) Except as set forth in this Article 14, the Notes shall not be redeemable at
the option of the Company.
 
Section 14.02 Notices to Trustee.
 
If the Company elects to redeem Notes pursuant to the redemption provisions of
Section 14.01(a)(4) hereof, it must furnish to the Trustee, at least 15 days but
not more than 60 days before the applicable redemption date, an Officers’
Certificate setting forth:
 
(1) that a redemption is being effected pursuant to Section 14.01(a)(4) hereof;
 
(2) the applicable redemption date;
 
(3) the principal amount of Notes to be redeemed
 
(4) the Holder(s) whose Notes are to be redeemed pursuant to Section 14.01(a)(4)
hereof; and
 
(5) the redemption price pursuant to Section 14.01(a)(4)(A) through (C) hereof.
 
Section 14.03 Notice of Redemption.
 
The Company will mail or cause to be mailed, at least 15 days but not more than
60 days before the applicable redemption date, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.
 
The notice will identify the Notes to be redeemed and will state:
 
(1) that the redemption is being effected pursuant to Section 14.01(a)(4) hereof
 
(2) the redemption date;
 
(3) the redemption price;
 
(4) the name and address of the Paying Agent;
 
(5) that Notes called for redemption must be surrendered to the Paying Agent to
collect the redemption price;
 
(6) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
applicable redemption date; and
 

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(7) 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 Notes.
 
At the Company’s request, the Trustee will give the notice of redemption in the
Company’s name and at its expense; provided, however, that the Company has
delivered to the Trustee, at least 45 days prior to the redemption date, 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 14.04 Effect of Notice of Redemption.
 
Once notice of redemption is mailed in accordance with Section 14.03 hereof,
Notes called for redemption become irrevocably due and payable on the applicable
redemption date at the applicable redemption price. A notice of redemption
pursuant to this Article 14 may not be conditional.
 
Section 14.05 Deposit of Redemption Price.
 
One Business Day prior to the applicable redemption date, the Company will
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest and Additional Interest, if any, on all
Notes to be redeemed on such date. The Trustee or the Paying Agent will promptly
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 and Additional Interest, if any, on, all Notes to be
redeemed.
 
If the Company complies with the provisions of the preceding paragraph, on and
after the applicable redemption date, interest will cease to accrue on the Notes
or the portions of Notes called for redemption. If a Note 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 Note was registered at the close of business on such record date. If
any Note called for redemption or purchase is not so paid upon surrender for
redemption or purchase 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 Notes and in Section 3.01 hereof.
 
Section 14.06 Global Note Redeemed in Part.
 
Upon surrender of a Note that is redeemed in part, the Company will issue and,
upon receipt of an Authentication Order, the Trustee will authenticate for the
Holder(s) at the expense of the Company a new Note equal in principal amount to
the unredeemed portion of the Global Note surrendered.
 
ARTICLE 15
MAKE-WHOLE PREMIUM
 
Section 15.01 Make-Whole Premium. 
 
(a) If, and only if, a Fundamental Change occurs while any Notes remain
outstanding, the Company shall pay the Make-Whole Premium to Holders of the
Notes who effect a Fundamental Change Conversion at any time during the
Fundamental Change Repurchase Period or in connection with any Forced Conversion
occurring following the public announcement of a Fundamental Change and during
the applicable Fundamental Change Repurchase Period. 
 

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(b) The Make-Whole Premium shall be equal to an additional number of Depositary
Units calculated in accordance with Section 15.01(c) hereof. The Make-Whole
Premium will be in addition to, and not in substitution for, any cash,
securities or other assets otherwise due to Holders of Notes upon conversion as
described in this Indenture.
 
(c) The “Make-Whole Premium” shall be equal to the principal amount of the Notes
to be converted divided by $1,000 and multiplied by the applicable number of
Depositary Units determined by reference to the table below (the “Make-Whole
Premium Table”) and is based on the effective date of such Change in Control
(the “Effective Date”) and the Depositary Unit Price.
 
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 [graph1.jpg]
 
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The exact Depositary Unit Price and Effective Date may not be set forth on the
Make-Whole Premium Table, in which case, if the Depositary Unit Price is between
two Depositary Unit Prices on the Make-Whole Premium Table or the Effective Date
is between two Effective Dates on the Make-Whole Premium Table, the Make-Whole
Premium shall be determined by straight-line interpolation between Make-Whole
Premium amounts set forth for the higher and lower Depositary Unit Prices and
the two Effective Dates, as applicable, based on a 365-day year (or a 366-day
year if the Effective Date occurs in a leap year). The Depositary Unit Prices
set forth in the column headers are subject to adjustment pursuant to Section
15.02.
 
If the Depositary Unit Price is less than or equal to $90.00 (subject to
adjustment pursuant to Section 15.02, the “Depositary Unit Price Threshold”),
the Make-Whole Premium shall be equal to zero Depositary Units. If the
Depositary Unit Price is equal to or greater than $270.00 (subject to adjustment
pursuant to Section 15.02, the “Depositary Unit Price Cap”), the Make-Whole
Premium shall be equal to zero Depositary Units.
 
(d) The Company shall pay the Make-Whole Premium solely in Depositary Units
(other than cash paid in lieu of fractional units) or in the same form of
consideration into which all or substantially all of the Depositary Units have
been converted or exchanged in connection with the Fundamental Change. If
holders of the Depositary Units receive or have the right to receive more than
one form of consideration in connection with such Fundamental Change, then, for
purposes of the foregoing, the forms of consideration in which the Make-Whole
Premium shall be paid shall be in proportion to the different forms of
consideration paid to holders of Depositary Units in connection with such
Fundamental Change.
 
(e) The Company or, at the Company’s request, the Trustee, in the name and at
the expense of the Company, (A) shall notify the Holders of the Depositary Unit
Price and the estimated Make-Whole Premium per $1,000 original principal amount
of Notes in respect of a Fundamental Change as part of the Fundamental Change
Company Notice or otherwise in accordance with the notice provisions of the
Indenture and (B) shall notify the Holders, promptly upon the opening of
business on the Effective Date of the number of Depositary Units (or such other
securities, assets or property (including cash) into which all or substantially
all of the Depositary Units have been converted as of the Effective Date as
described above) to be paid in respect of the Make-Whole Premium in connection
with such Fundamental Change, in the manner provided in this Indenture.
 
(f) Promptly after determination of the actual number of Depositary Units to be
issued in respect of the Make-Whole Premium, the Company shall file a Form 8-K
with the SEC containing this information or publish such information on the
Company’s website or through such other public medium as the Company may use at
that time.
 
Section 15.02 Adjustment to the Make-Whole Premium. 
 
Whenever the Conversion Price shall be adjusted from time to time by the Company
pursuant to Section 12.11, the Depositary Unit Price Threshold and the
Depositary Unit Price Cap shall be adjusted and each of the Depositary Unit
Prices set forth in the Make-Whole Premium Table shall be adjusted. The adjusted
Depositary Unit Price Threshold, Depositary Unit Price Cap and Depositary Unit
Prices set forth in the Make-Whole Premium Table shall equal the Depositary Unit
Price Threshold, Depositary Unit Price Cap and such Depositary Unit Prices, as
the case may be, immediately prior to such adjustment multiplied by a fraction,
the numerator of which is the Conversion Price as so adjusted and the
denominator of which is the Conversion Price immediately prior to the adjustment
giving rise to such adjustment. Each of the share amounts set forth in the body
of the Make-Whole Premium Table shall also be adjusted in the same manner and at
the same time.
 

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Section 15.03 Trustee’s Disclaimer.
 
The Trustee shall have no duty to determine when a Make-Whole Premium shall be
required under this Indenture, nor the amount thereof but may accept as
conclusive evidence of the correctness thereof, and shall be fully protected in
relying upon, the Officers’ Certificate in respect thereof, nor shall the
Trustee have a duty to determine when an adjustment to the Depositary Unit Price
Threshold, Depositary Unit Price Cap and Depositary Unit Prices should be made,
how it should be made or what such adjustment should be, but may accept as
conclusive evidence of that fact or the correctness of any such adjustment, and
shall be protected in relying upon, an Officers’ Certificate.
 
ARTICLE 16
MISCELLANEOUS
 
Section 16.01  Trust Indenture Act Controls.
 
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA §318(c), the imposed duties will control.
 
Section 16.02  Notices.
 
Any notice or communication by the Company, any Guarantor or the Trustee to the
others is duly given if in writing and delivered in Person or by first class
mail (registered or certified, return receipt requested), facsimile transmission
or overnight air courier guaranteeing next day delivery, to the others’ address:
 
If to the Company and/or any Guarantor:
 
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
767 Fifth Avenue, Suite 4700
New York, New York 10153
Facsimile No.: (646) 365-2833
Attention: Felicia P. Buebel, Esq.
 
With a copy to:
 
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Telephone: (212) 969-3000
Telecopier: (212) 969-2900
Attention: Ian Blumenstein, Esq.
 
If to the Trustee:
 

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Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention of: Corporate Trust Administration
Facsimile: (302) 636-4145
 
With a copy to:

Curtis, Mallet-Prevost, Colt & Mosle LLP
101 Park Avenue
Suite 3500
New York, New York 10178
Telecopier No.: (212) 697-1559
Attention: Kathryn Alisbah, Esq.
                   Steven J. Reisman, Esq.
 
The Company, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
 
All notices and communications (other than those sent to Holders) will be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if transmitted by facsimile; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
 
Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA § 313(c), to the extent required by the TIA. Failure to mail a
notice or communication to a Holder or any defect in it will 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 will mail a copy
to the Trustee and each Agent at the same time.
 
Section 16.03  Communication by Holders of Notes with Other Holders of Notes.
 
Holders may communicate pursuant to TIA § 312(b) with other Holders with respect
to their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA § 312(c).
 
Section 16.04  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 to the Trustee:
 
(1)  an Officers’ Certificate in form and substance reasonably satisfactory to
the Trustee (which must include the statements set forth in Section 16.05
hereof) stating that, in
 

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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
 
(2)  an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 16.05 hereof)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.
 
Section 16.05  Statements Required in Certificate or Opinion.
 
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and
must include:
 
(1) a statement that the Person making such certificate or opinion has read such
covenant or condition;
 
(2) 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;
 
(3) a statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
 
(4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
 
Section 16.06 Rules by Trustee and Agents.
 
The Trustee may make reasonable rules for action by or at a meeting of Holders.
The Registrar, Paying Agent or Conversion Agent may make reasonable rules and
set reasonable requirements for its functions.
 
Section 16.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
 
No director, officer, employee, incorporator, manager (or managing member)
direct or indirect member, partner or stockholder of the Company, AREH, API or
any additional Guarantor shall have any liability for any obligations of the
Company, AREH, API or any additional Guarantor under the Notes, this Indenture,
any Note Guarantee or for any claim based on, in respect of, or by reason of
such obligations or its creation. Each Holder of the Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
 
Section 16.08 Governing Law.
 
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE
THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
 

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Section 16.09 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 16.10 Successors.
 
All agreements of the Trustee in this Indenture will bind its successors. All
agreements of each Guarantor in this Indenture will bind its successors, except
as otherwise provided in Sections 5.01 and 10.05 hereof.
 
Section 16.11 Severability.
 
In case any provision in this Indenture, the Note Guarantees or in the Notes is
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.
 
Section 16.12 Counterpart Originals.
 
The parties may sign any number of copies of this Indenture. Each signed copy
will be an original, but all of them together represent the same agreement.
 
Section 16.13 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 will in no way modify or
restrict any of the terms or provisions hereof.
 
Section 16.14 Clarity.
 
For the avoidance of doubt, the inclusion of exceptions to the provisions
(including covenants and definitions) set forth in this Indenture will not be
interpreted to imply that the matters permitted by the exception would be
limited by the terms of such provisions but for such exceptions.
 
[Signatures on following page]
 
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SIGNATURES
 
Dated as of April 5, 2007
AMERICAN REAL ESTATE PARTNERS L.P.
 
By: American Property Investors, Inc., its general partner
 
By:

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Name:
Title:
 
 
AMERICAN REAL ESTATE FINANCE CORP.
 
By:

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Name:
Title:
 
 
AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP
 
By: American Property Investors, Inc., its general partner
 
By:

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Name:
Title:
 
 
WILMINGTON TRUST COMPANY
 
By:

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Name:
Title:
 
 
 

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