EX-10.1



 






Exhibit 10.1




DISTRIBUTION REINVESTMENT PLAN




     American Real Estate Partners, L.P. (the “Partnership”), a Delaware limited partnership,
governed under the Agreement of Limited Partnership of the Partnership, dated as of April 29, 1987
(the “Partnership Agreement”), by and among American property Investors, Inc., a Delaware
corporation, as general partner (the “General Partner”), Julia DeSantis, as organizational limited
partner, and the limited partners of the Partnership (the “Limited Partners”), has adopted a
Distribution Reinvestment Plan (the “Plan”), the terms and conditions of which follow. Any term
used herein which is defined in the Partnership Agreement shall have the same meaning herein as
therein, unless otherwise defined or unless the context otherwise indicates.



     1. The effective date of the Plan shall be January 1, 1988.



     2. As agent for participants (the “Participants”) in the Plan, Registrar and Transfer Company
(the “Agent”) will receive all distributions paid after the effective date of the Plan in respect
of Units and Depositary Units held by each Participant and in respect of any Depositary Units
acquired under the Plan. The Agent will apply such funds, after deducting applicable service
charges specified in Paragraph 8 below, as follows:



     Commencing with the distribution for the first full calendar quarter after the effective date
of the Plan, all distributions in respect of the Depositary Units and Units of the Participants
will be paid over to the Agent, which will purchase additional Depositary Units, to the extent
available at a price deemed reasonable by the Agent, for the Participants’ accounts from securities
broker-dealers to whom it will pay commissions.



     Purchases hereunder may be made on any securities exchange on which such Depositary Units are
traded, in the over-the-counter market, or in negotiated transactions, and shall be made at prices
competitive with prevailing market prices and on such other terms as the Agent may determine.



     3. Limited Partners may become Participants in the Plan at any time commencing with the
effective date of the Plan by completing the appropriate authorization form available from the
Agent or the General Partner. Only Limited Partners may become Participants in the Plan, not
Non-Consenting Investors or Subsequent Transferees.



     4. In making purchases for the Participants’ accounts, the Agent may commingle the funds of
any Participant with those of other Participants. The price at which Depositary Units shall be
deemed to have been acquired for a Participant’s account shall be the market price (including such
Participant’s allocable portion of the aggregate brokerage commissions and all costs of purchasing
except the service charge specified in Paragraph 8 below) of all Depositary Units purchased for the
Participants in the Plan with the proceeds of a single distribution. Such distributions shall be
invested by the Agent promptly following the payment date with respect thereto, and in no event
later than 30 days from such receipt. However, under certain circumstances, observance of the
rules and regulations of the Securities and Exchange Commission may require temporary suspension of
such purchases or may require that purchases be spread over a period of more than 30 days, in which
event such purchases will be made or resumed as or when permitted by such rules and regulations.
The Agent may rely and act upon an opinion of counsel in this respect, and in such event will not
be accountable for such inability



 









 







to make all purchases prior to the end of such 30-day period. To the extent the Agent is
unable to make purchases in accordance with the terms of this paragraph, distributions received by
the Agent on behalf of the Participants will be distributed by the Agent to the Participants. The
Agent will hold the Depositary Units of all Participants together in the name of its nominee.



     Neither the Partnership nor the Agent shall have any responsibility or liability as to the
value of the Depositary Units or any change in the value of the Depositary Units acquired for the
Participant’s account.



     5. Pending investment, funds shall be held in a non-interest bearing account maintained by the
Agent in a bank having capital and surplus of not less than $100,000,000. The bank account shall
be specifically designated as being for the benefit of the Reinvestment Plan and disbursements
shall be permitted from such account only for purchases of Depositary Units or to make
distributions to Participants if required pursuant to the terms of Paragraph 4 hereof.



     6. The Agent will distribute to Participants proxy solicitation material received by it from
the Partnership which is attributable to Depositary Units held in the Plan. The Agent will vote
any Depositary Units that it holds for the account of a Participant in accordance with the
Participant’s written instructions. If a Participant gives a proxy to person(s) representing the
General Partner covering Depositary Units registered in the Participant’s name, such proxy will be
deemed to be an instruction to the Agent to vote the full Depositary Units in the Participant’s
account in like manner. If a Participant does not direct the Agent as to how the Depositary Units
should be voted and does not give a proxy to person(s) representing the General Partner covering
these Depositary Units, the Agent will not vote said Depositary Units.



     7. The Agent will mail to each Participant a statement of account describing the distributions
received, the number of Depositary Units purchased, the purchase price per Depositary Unit, and the
total Depositary Units accumulated under the Plan as soon as practicable after all distributions
paid on any payment date with respect thereto have been invested (and also as soon as practicable
after the sale of Depositary Units described in Paragraph 11). Fractional Depositary Units will be
credited to a Participant’s account computed to three decimal places. No Depositary Receipts
representing Depositary Units will be issued for Depositary Units credited to an account until the
account is terminated.



     8. The charge to each Participant, payable to the Agent, for the services of the Agent shall
be five percent (5%) of the amount invested but not less than $.75 or more than $2.50 per
investment transaction for each Participant’s account, plus a proportionate share of the cost of
acquiring the Depositary Units for all Participants.



     9. No Partcipant shall have any right to draw checks or drafts against his account or to give
instructions to the Partnership or the Agent except as expressly provided here.



     10. It is understood that reinvestment of distributions does not relieve a Participant of any
income tax which may be payable on such distributions.



     11. A Participant may terminate an account at any time by written notice to the Agent. To be
effective for any distribution, such notice must be received on or before the record date for such
payment. The Agent may terminate a Participant’s individual participation in the Plan, and the
Partnership or the Agent may terminate the Plan itself at any time by written notice mailed to a
Participant, or to all Participants, as the case may be, at the address or addresses shown on their
account or such more recent address as a Participant may furnish to the Agent in



2









 







writing. Upon termination of the Plan, or upon termination of an individual Participant’s
involvement in the plan, the Agent will send to each Participant a Depositary Receipt evidencing
the whole Depositary Units of the Participant standing in such Participant’s account and, as soon
as practicable, will pay in cash the value of any fractional Depositary Units standing to the
credit of a Participant’s account based upon the market price of Depositary Units, determined as
set forth below. A Participant who terminates his participation in the Plan may either request
that the Agent send Depositary Receipts for the Depositary Units in the account or may request that
the Agent sell all or part of such Depositary Units and deliver the net proceeds, after deduction
of any applicable brokerage commission or other applicable costs of sale, to the Participant. In
the absence of a specific request, the Agent will proceed by the delivery of Depositary Receipts
representing the Depositary Units, in accordance with the foregoing. Such sales may, but need not,
be made by purchase of Depositary Units for the account of the other Participants. Any such
transactions shall be deemed to have been made based upon the price determined as follows, on the
day following the date on which individual termination notice is received by the Agent: The last
sales price on that day regular way, or if no sale takes place on such day, the average of the
closing bid and asked prices the regular way (a) as officially quoted by the principal stock
exchange on which the Depositary Units are listed, or (b) if the Depositary Units are not listed on
any stock exchange, then as quoted on the principal United States market as determined by the
Agent, or (c) if, in the reasonable judgment of the Agent, there exists no principal United States
market for the Depositary Units, or no quote is available on any such market, then the average
price in privately negotiated transactions known to the Agent. If none of the above are available
on such date, then the price shall be determined on the next succeeding day on which any of the
above are available. A service charge of $2.50 will be charged by the Agent to the Participant in
connection with each termination of a Participant’s individual participation in the Plan.



     If the Agent does not receive instructions from the Participant, if a Participant disposes of
all Depositary Units registered on the books of the Partnership in his name, it may, in its
discretion, terminate the Participant’s further participation in the Plan by distributing
Depositary Receipts representing the Depositary Units in a Participant’s account, in accordance
with the foregoing, or continue to reinvest the distributions paid in respect of the Depositary
Units in the account until otherwise notified in writing.



     12. Neither the Partnership nor the Agent shall be liable for any act done in good faith, or
for any good faith omission to act, including, without limitation, any claims of liability (a)
arising out of failure to terminate a Participant’s account upon such Participant’s death prior to
receipt of notice in writing of such death, and (b) with respect to the time and the prices at
which Depositary Units are purchased or sold for a Participant’s account.



     13. Each Participant agrees to notify the Agent promptly in writing of any change of address.
Notices to the Participant may be given by letter addressed to the Participant in his last address
of record with the Agent.



     14. These terms and conditions may be amended or supplemented by an agreement between the
Agent and the Partnership at any time, including but not limited to an amendment to substitute a
new Agent to act as agent for the Participants by mailing an appropriate notification to each
Participant at his last address of record. Such amendment or supplement shall be deemed
conclusively accepted by each Participant except those Participants from whom the Agent receives
written notice of termination prior to the effective date thereof.



3









 





     15. This Plan and a Participant’s election to participate in the Plan shall be governed by the
laws of the State of Delaware. The Partnership may terminate the Plan by giving notice at least 10
days prior to the effective date thereof to each Participant at his last address of record. In
such case, termination shall be made by distributing the whole Depositary Units held by the Agent
under the Plan to each Participant and making cash payments in respect of any fractional Depositary
Units held for the account of each Participant, based upon the actual sales price of such
Depositary Units less any applicable brokerage commissions or other applicable costs of sale.




4