Document:

<PAGE>

                                                                    EXHIBIT 4.10

                                                                      EXHIBIT A1

                                 [Face of Note]

                                                         CUSIP/CINS ____________

                          7 1/8% Senior Notes due 2013

No. ___                                                            $____________

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

promises to pay to _____________ or registered assigns,

the principal sum of __________________________________________________ DOLLARS
on February 15, 2013.

Interest Payment Dates: February 15 and August 15

Record Dates: February 1 and August 1

Dated:

                                      AMERICAN REAL ESTATE PARTNERS, L.P.

                                      By: American Property Investors, Inc., its
                                      general partner

                                      By: ______________________________________
                                          Name:
                                          Title:

                                      AMERICAN REAL ESTATE FINANCE CORP.

                                      By: ______________________________________
                                          Name:
                                          Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY,
 as Trustee

By: __________________________________
          Authorized Signatory

                                      A1-1

<PAGE>

                                 [Back of Note]
                          7 1/8% Senior Notes due 2013

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

      Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

            (1) INTEREST. American Real Estate Partners, L.P., a Delaware
      limited partnership ("AREP") and American Real Estate Finance Corp. ("AREP
      Finance", together with AREP, the "Company"), promises to pay interest on
      the principal amount of this Note at 7 1/8% per annum from
      ________________, 20__ until maturity and shall pay the Liquidated
      Damages, if any, payable pursuant to Section 5 of the Registration Rights
      Agreement referred to below. The Company will pay interest and Liquidated
      Damages, if any, semi-annually in arrears on February 15 and August 15 of
      each year, or if any such day is not a Business Day, on the next
      succeeding Business Day (each, an "Interest Payment Date"). Interest on
      the Notes will accrue from the most recent date to which interest has been
      paid or, if no interest has been paid, from the date of issuance; provided
      that if there is no existing Default in the payment of interest, and if
      this Note is authenticated between a record date referred to on the face
      hereof and the next succeeding Interest Payment Date, interest shall
      accrue from such next succeeding Interest Payment Date; provided further
      that the first Interest Payment Date shall be _____________, 20__. The
      Company will pay interest (including post-petition interest in any
      proceeding under any Bankruptcy Law) on overdue principal and premium, if
      any, from time to time on demand at a rate that is 1% per annum in excess
      of the rate then in effect to the extent lawful; it will pay interest
      (including post-petition interest in any proceeding under any Bankruptcy
      Law) on overdue installments of interest and Liquidated Damages, if any,
      (without regard to any applicable grace periods) from time to time on
      demand at the same rate to the extent lawful. Interest will be computed on
      the basis of a 360-day year of twelve 30-day months.

            (2) METHOD OF PAYMENT. The Company will pay or cause to pay interest
      on the Notes (except defaulted interest) and Liquidated Damages, if any,
      to the Persons who are registered Holders of Notes at the close of
      business on the February 1 or August 1 next preceding the Interest Payment
      Date, even if such Notes are canceled after such record date and on or
      before such Interest Payment Date, except as provided in Section 2.12 of
      the Indenture with respect to defaulted interest. The Notes will be
      payable as to principal, premium and Liquidated Damages, if any, and
      interest at the office or agency of the Company maintained for such
      purpose within or without the City and State of New York, or, at the
      option of the Company, payment of interest and Liquidated Damages, if any,
      may be made by check mailed to the Holders at their addresses set forth in
      the register of Holders; provided that payment by wire transfer of
      immediately available funds will be required with respect to principal of
      and interest, premium and Liquidated Damages, if any, on, all Global Notes
      and all other Notes the Holders of which will have provided wire transfer
      instructions to the Company or the Paying Agent. Such payment will be in
      such coin or currency of the United States of America as at the time of
      payment is legal tender for payment of public and private debts.

            (3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
      the Trustee under the Indenture, will act as Paying Agent and Registrar.
      The Company may change any

                                      A1-2

<PAGE>

      Paying Agent or Registrar without notice to any Holder. The Company or any
      of its Subsidiaries may act in any such capacity.

            (4) INDENTURE. The Company issued the Notes under an Indenture dated
      as of February 7, 2005 (the "Indenture") among the Company, the Guarantor
      and the Trustee. The terms of the Notes include those stated in the
      Indenture and those made part of the Indenture by reference to the TIA.
      The Notes are subject to all such terms, and Holders are referred to the
      Indenture and such Act for a statement of such terms. To the extent any
      provision of this Note conflicts with the express provisions of the
      Indenture, the provisions of the Indenture shall govern and be
      controlling. The Notes are unsecured obligations of the Company.

            (5) OPTIONAL REDEMPTION.

      (a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to February 15, 2009.
On or after February 15, 2009, the Company will have the option to redeem all or
a part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed to the applicable redemption date, if redeemed during the twelve-month
period beginning on February 15 of the years indicated below, subject to the
rights of Holders on the relevant record date to receive interest on the
relevant interest payment date:

<TABLE>
<CAPTION>
Year                                                Percentage
----                                                ----------
<S>                                                 <C>
2009.............................................    103.563%
2010.............................................    101.781%
2011 and thereafter..............................    100.000%
</TABLE>

      Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.

      (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to February 15, 2008, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including
Additional Notes) issued under the Indenture at a redemption price of 107.125%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings; provided that at least 65% of the aggregate principal
amount of Notes issued under the Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by AREP and its
Subsidiaries (including any Guarantor)) and such redemption occurs within 60
days of the date of the closing of such Equity Offering.

            (6) MANDATORY REDEMPTION.

      Other than in connection with redemption pursuant to Gaming Laws, the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.

            (7) REDEMPTION PURSUANT TO GAMING LAWS

      If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:

                                      A1-3

<PAGE>

      (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:

      (1) 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

      (2) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:

      (a) the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, 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 Liquidated Damages, 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:

      (1) to exercise, directly or indirectly, through any trustee or nominee or
any other person or entity, any right conferred by the Notes, the Note Guarantee
or the Indenture; or

      (2) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantee or any remuneration in any form with respect to the Notes and
the Note Guarantee from the Company, any Note Guarantor or the Trustee, except
the redemption price referred to above.

      AREP shall notify the Trustee in writing of any such redemption 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.

            (8) REPURCHASE AT THE OPTION OF HOLDER.

                  (a) If there is a Change of Control, the Company will be
      required to make an offer (a "Change of Control Offer") to each Holder to
      repurchase all or any part (equal to $1,000

                                      A1-4

<PAGE>

      or an integral multiple thereof) of each Holder's Notes at a purchase
      price in cash equal to 101% of the aggregate principal amount thereof plus
      accrued and unpaid interest and Liquidated Damages, if any, thereon to the
      date of purchase, subject to the rights of Holders on the relevant record
      date to receive interest due on the relevant interest payment date (the
      "Change of Control Payment"). Within 30 days following any Change of
      Control, the Company will mail a notice to each Holder setting forth the
      procedures governing the Change of Control Offer as required by the
      Indenture.

            (9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
      least 15 days but not more than 60 days before the redemption date to each
      Holder whose Notes are to be redeemed at its registered address, except
      that redemption notices may be mailed more than 60 days prior to a
      redemption date if the notice is issued in connection with a defeasance of
      the Notes or a satisfaction or discharge of the Indenture. Notes in
      denominations larger than $1,000 may be redeemed in part but only in whole
      multiples of $1,000, unless all of the Notes held by a Holder are to be
      redeemed.

            (10) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
      form without coupons in denominations of $1,000 and integral multiples of
      $1,000. The transfer of Notes may be registered and Notes may be exchanged
      as provided in the Indenture. The Registrar and the Trustee may require a
      Holder, among other things, to furnish appropriate endorsements and
      transfer documents and the Company may require a Holder to pay any taxes
      and fees required by law or permitted by the Indenture. The Company need
      not exchange or register the transfer of any Note or portion of a Note
      selected for redemption, except for the unredeemed portion of any Note
      being redeemed in part. Also, the Company need not exchange or register
      the transfer of any Notes for a period of 15 days before a selection of
      Notes to be redeemed or during the period between a record date and the
      corresponding Interest Payment Date.

            (11) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
      treated as its owner for all purposes.

            (12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
      exceptions, the Indenture or the Notes or the Note Guarantees may be
      amended or supplemented with the consent of the Holders of at least a
      majority in aggregate principal amount of the then outstanding Notes
      including Additional Notes, if any, voting as a single class, and any
      existing Default or Event or Default or compliance with any provision of
      the Indenture or the Notes or the Note Guarantees may be waived with the
      consent of the Holders of a majority in aggregate principal amount of the
      then outstanding Notes including Additional Notes, if any, voting as a
      single class. Without the consent of any Holder of a Note, the Indenture
      or the Notes or the Note Guarantees may be amended or supplemented to cure
      any ambiguity, defect or inconsistency, to provide for uncertificated
      Notes in addition to or in place of certificated Notes, to provide for the
      assumption of the Company's or a Guarantor's obligations to Holders of the
      Notes and Note Guarantees in case of a merger or consolidation, to make
      any change that would provide any additional rights or benefits to the
      Holders of the Notes or that does not adversely affect the legal rights
      under the Indenture of any such Holder, to comply with the requirements of
      the SEC in order to effect or maintain the qualification of the Indenture
      under the TIA, to conform the text of the Indenture or the Notes to any
      provision of the "Description of Notes" section of the Company's Offering
      Memorandum dated February 1, 2005, as supplemented, relating to the
      initial offering of the Notes, to the extent that such provision in that
      "Description of Notes" was intended to be a verbatim recitation of a
      provision of the Indenture, the Note Guarantees or the Notes; to provide
      for the issuance of Additional Notes in accordance with the limitations
      set forth in the Indenture,

                                      A1-5

<PAGE>

      or to allow any Guarantor to execute a supplemental indenture to the
      Indenture and/or a Note Guarantee with respect to the Notes.

            (13) DEFAULTS AND REMEDIES. Events of Default include: (i) default
      for 30 days in the payment when due of interest on, or Liquidated Damages,
      if any, with respect to the Notes; (ii) default in the payment when due of
      the principal of, or premium, if any, on, the Notes when the same becomes
      due and payable at maturity, upon redemption (including in connection with
      an offer to purchase) or otherwise, (iii) failure by the Company to comply
      with Section 4.15, of the Indenture; (iv) failure by the Company or any
      Guarantor to comply with Sections 4.07, 4.09, 4.16 or 4.17 for 30 days
      after written notice from the Trustee, (v) failure by the Company or any
      Guarantor for 60 days after written notice to the Company by the Trustee
      or the Holders of at least 25% in aggregate principal amount of the Notes
      including Additional Notes, if any, then outstanding voting as a single
      class to comply with any of the other agreements in the Indenture or the
      Notes; (vi) default under certain other agreements relating to
      Indebtedness of the Company or any Guarantor which default results in the
      acceleration of such Indebtedness prior to its express maturity; (vii)
      certain final judgments for the payment of money that remain undischarged
      for a period of 60 days; (viii) certain events of bankruptcy or insolvency
      with respect to the Company or any Guarantor that is a Significant
      Subsidiary and (ix) except as permitted by the Indenture, any Note
      Guarantee is held in any judicial proceeding to be unenforceable or
      invalid or ceases for any reason to be in full force and effect or AREH or
      any other Guarantor or any Person acting on behalf of any Guarantor denies
      or disaffirms its obligations under such Guarantor's Note Guarantee. If
      any 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.
      Notwithstanding the foregoing, in the case of an Event of Default arising
      from certain events of bankruptcy or insolvency, all outstanding Notes
      will become due and payable immediately without further action or notice.
      Holders may not enforce the Indenture or the Notes except as provided in
      the Indenture. Subject to certain limitations, Holders of a majority in
      aggregate principal amount of the then outstanding Notes may direct the
      Trustee in its exercise of any trust or power. The Trustee may withhold
      from Holders of the Notes notice of any continuing Default or Event of
      Default (except a Default or Event of Default relating to the payment of
      principal or interest or premium or Liquidated Damages, if any,) if it
      determines that withholding notice is in their interest. The Holders of a
      majority in aggregate principal amount of the then outstanding Notes by
      notice to the Trustee may, on behalf of the Holders of all of the Notes,
      rescind an acceleration or waive any existing Default or Event of Default
      and its consequences under the Indenture except a continuing Default or
      Event of Default in the payment of interest or premium or Liquidated
      Damages, if any, on, or the principal of, the Notes. The Company is
      required to deliver to the Trustee annually a statement regarding
      compliance with the Indenture, and the Company is required, upon becoming
      aware of any Default or Event of Default, to deliver to the Trustee a
      statement specifying such Default or Event of Default.

            (14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
      or any other capacity, may make loans to, accept deposits from, and
      perform services for the Company or its Affiliates, and may otherwise deal
      with the Company or its Affiliates, as if it were not the Trustee.

            (15) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
      managing member), direct or indirect member, partner, employee,
      incorporator or stockholder of the Company API, or the general partner of
      the Company or any Guarantor or any of the Guarantors, as such, will not
      have any liability for any obligations of the Company or the Guarantors
      under the Notes, the Note Guarantees or the Indenture or for any claim
      based on, in respect of, or by

                                      A1-6

<PAGE>

      reason of, such obligations or their creation. Each Holder by accepting a
      Note waives and releases all such liability. The waiver and release are
      part of the consideration for the issuance of the Notes.

            (16) AUTHENTICATION. This Note will not be valid until authenticated
      by the manual signature of the Trustee or an authenticating agent.

            (17) ABBREVIATIONS. Customary abbreviations may be used in the name
      of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
      ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
      survivorship and not as tenants in common), CUST (= Custodian), and
      U/G/M/A (= Uniform Gifts to Minors Act).

            (18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
      RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
      of Notes under the Indenture, Holders of Restricted Global Notes and
      Restricted Definitive Notes will have all the rights set forth in the
      Registration Rights Agreement dated as of February 7, 2005, among the
      Company, the Guarantor and the other parties named on the signature pages
      thereof or, in the case of Additional Notes, Holders of Restricted Global
      Notes and Restricted Definitive Notes will have the rights set forth in
      one or more registration rights agreements, if any, among the Company, the
      Guarantor and the other parties thereto, relating to rights given by the
      Company and the Guarantor to the purchasers of any Additional Notes
      (collectively, the "Registration Rights Agreement").

            (19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
      Committee on Uniform Security Identification Procedures, the Company has
      caused CUSIP numbers to be printed on the Notes, and the Trustee may use
      CUSIP numbers in notices of redemption as a convenience to Holders. No
      representation is made as to the accuracy of such numbers either as
      printed on the Notes or as contained in any notice of redemption, and
      reliance may be placed only on the other identification numbers placed
      thereon.

            (20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
      GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE
      GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
      LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
      WOULD BE REQUIRED THEREBY.

      The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.

                                      A1-7

<PAGE>

                                 ASSIGNMENT FORM

      To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: __________________________________
                                               (Insert assignee's legal name)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date: _______________

                Your Signature: ________________________________________________
                    (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*: _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee)

                                      A1-8
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

      If you want to elect to have this Note purchased by the Company pursuant
to Section 4.15 of the Indenture, check the box below:

                                 -- Section 4.15

      If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount you elect to
have purchased:

                              $___________________

Date: _______________

                 Your Signature: _______________________________________________
                    (Sign exactly as your name appears on the face of this Note)

                 Tax Identification No.: _______________________________________

Signature Guarantee*: _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                      A1-9
<PAGE>

             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

      The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:

<TABLE>
<CAPTION>
                                                                        Principal Amount
                                                                       at maturity of this
                       Amount of decrease    Amount of increase in         Global Note            Signature of
                       in Principal Amount      Principal Amount         following such        authorized officer
                         at maturity of          at maturity of             decrease              of Trustee or
Date of Exchange        this Global Note        this Global Note          (or increase)             Custodian
----------------        ----------------        ----------------          -------------             ---------
<S>                    <C>                   <C>                       <C>                     <C>
</TABLE>

* This schedule should be included only if the Note is issued in global form.

                                     A1-10
<PAGE>

                                                                      EXHIBIT A2

                  [Face of Regulation S Temporary Global Note]

                                                           CUSIP/CINS __________

                          7 1/8% Senior Notes due 2013

No. ___                                                             $__________

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

promises to pay to ______________ or registered assigns,

the principal sum of ________________________________________________ DOLLARS
on February 15, 2013.

Interest Payment Dates: February 15 and August 15

Record Dates: February 1 and August 1

Dated:

                                      AMERICAN REAL ESTATE PARTNERS, L.P.

                                      By: American Property Investors, Inc., its
                                      general partner

                                      By: _____________________________________
                                          Name:
                                          Title:

                                      AMERICAN REAL ESTATE FINANCE CORP.

                                      By: _____________________________________
                                          Name:
                                          Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY,
 as Trustee

By:_______________________________
       Authorized Signatory

                                      A2-1
<PAGE>

                  [Back of Regulation S Temporary Global Note]
                          7 1/8% Senior Notes due 2013

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, 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.

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE PARTNERS, L.P.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND THE SECURITY
EVIDENCED HEREBY 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 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

                                      A2-2
<PAGE>

SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO AMERICAN REAL
ESTATE PARTNERS, L.P. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
AMERICAN REAL ESTATE PARTNERS, L.P. SO REQUESTS), (2) TO AMERICAN REAL ESTATE
PARTNERS, L.P. OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.

      Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

            (1) INTEREST. American Real Estate Partners, L.P., a Delaware
      limited partnership ("AREP") and American Real Estate Finance Corp. ("AREP
      Finance", together with AREP, the "Company"), promises to pay interest on
      the principal amount of this Note at 7 1/8% per annum from
      ________________, 20__ until maturity and shall pay the Liquidated
      Damages, if any, payable pursuant to Section 5 of the Registration Rights
      Agreement referred to below. The Company will pay interest and Liquidated
      Damages, if any, semi-annually in arrears on February 15 and August 15 of
      each year, or if any such day is not a Business Day, on the next
      succeeding Business Day (each, an "Interest Payment Date"). Interest on
      the Notes will accrue from the most recent date to which interest has been
      paid or, if no interest has been paid, from the date of issuance; provided
      that if there is no existing Default in the payment of interest, and if
      this Note is authenticated between a record date referred to on the face
      hereof and the next succeeding Interest Payment Date, interest shall
      accrue from such next succeeding Interest Payment Date; provided further
      that the first Interest Payment Date shall be _____________, 20__. The
      Company will pay interest (including post-petition interest in any
      proceeding under any Bankruptcy Law) on overdue principal and premium, if
      any, from time to time on demand at a rate that is 1% per annum in excess
      of the rate then in effect to the extent lawful; it will pay interest
      (including post-petition interest in any proceeding under any Bankruptcy
      Law) on overdue installments of interest and Liquidated Damages, if any,
      (without regard to any applicable grace periods) from time to time on
      demand at the same rate to the extent lawful. Interest will be computed on
      the basis of a 360-day year of twelve 30-day months.

      Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.

            (2) METHOD OF PAYMENT. The Company will pay or cause to pay interest
      on the Notes (except defaulted interest) and Liquidated Damages, if any,
      to the Persons who are registered Holders of Notes at the close of
      business on the February 1 or August 1 next preceding the

                                      A2-3
<PAGE>

      Interest Payment Date, even if such Notes are canceled after such record
      date and on or before such Interest Payment Date, except as provided in
      Section 2.12 of the Indenture with respect to defaulted interest. The
      Notes will be payable as to principal, premium and Liquidated Damages, if
      any, and interest at the office or agency of the Company maintained for
      such purpose within or without the City and State of New York, or, at the
      option of the Company, payment of interest and Liquidated Damages, if any,
      may be made by check mailed to the Holders at their addresses set forth in
      the register of Holders; provided that payment by wire transfer of
      immediately available funds will be required with respect to principal of
      and interest, premium and Liquidated Damages, if any, on, all Global Notes
      and all other Notes the Holders of which will have provided wire transfer
      instructions to the Company or the Paying Agent. Such payment will be in
      such coin or currency of the United States of America as at the time of
      payment is legal tender for payment of public and private debts.

            (3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
      the Trustee under the Indenture, will act as Paying Agent and Registrar.
      The Company may change any Paying Agent or Registrar without notice to any
      Holder. The Company or any of its Subsidiaries may act in any such
      capacity.

            (4) INDENTURE. The Company issued the Notes under an Indenture dated
      as of February 7, 2005 (the "Indenture") among the Company, the Guarantor
      and the Trustee. The terms of the Notes include those stated in the
      Indenture and those made part of the Indenture by reference to the TIA.
      The Notes are subject to all such terms, and Holders are referred to the
      Indenture and such Act for a statement of such terms. To the extent any
      provision of this Note conflicts with the express provisions of the
      Indenture, the provisions of the Indenture shall govern and be
      controlling. The Notes are unsecured obligations of the Company.

            (5) OPTIONAL REDEMPTION.

                  (a) Except as set forth in subparagraph (b) of this Paragraph
      5, the Company will not have the option to redeem the Notes prior to
      February 15, 2009. On or after February 15, 2009, the Company will have
      the option to redeem all or a part of the Notes upon not less than 30 nor
      more than 60 days' notice, at the redemption prices (expressed as
      percentages of principal amount) set forth below plus accrued and unpaid
      interest and Liquidated Damages, if any, on the Notes redeemed to the
      applicable redemption date, if redeemed during the twelve-month period
      beginning on February 15 of the years indicated below, subject to the
      rights of Holders on the relevant record date to receive interest on the
      relevant interest payment date:

<TABLE>
<CAPTION>
Year                                        Percentage
----                                        ----------
<S>                                         <C>
2009...................................      103.563%
2010...................................      101.781%
2011 and thereafter....................      100.000%
</TABLE>

      Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.

                  (b) Notwithstanding the provisions of subparagraph (a) of this
      Paragraph 5, at any time prior to February 15, 2008, the Company may on
      one or more occasions redeem up to 35% of the aggregate principal amount
      of Notes (including Additional Notes) issued under the Indenture at a
      redemption price of 107.125% of the principal amount thereof, plus accrued
      and unpaid interest and Liquidated Damages, if any, to the redemption
      date, with the net cash proceeds of one or more Equity Offerings; provided
      that at least 65% of the aggregate principal

                                      A2-4
<PAGE>

      amount of Notes issued under the Indenture remains outstanding immediately
      after the occurrence of such redemption (excluding Notes held by AREP and
      its Subsidiaries (including any Guarantor)) and such redemption occurs
      within 60 days of the date of the closing of such Equity Offering.

            (6) MANDATORY REDEMPTION.

      Other than in connection with redemption pursuant to Gaming Laws, the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.

            (7) REDEMPTION PURSUANT TO GAMING LAWS

      If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:

      (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:

      (1) 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

      (2) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:

      (a) the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, 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 Liquidated Damages, 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:

      (1) to exercise, directly or indirectly, through any trustee or nominee or
any other person or entity, any right conferred by the Notes, the Note Guarantee
or the Indenture; or

                                      A2-5
<PAGE>

      (2) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantee or any remuneration in any form with respect to the Notes and
the Note Guarantee from the Company, any Note Guarantor or the Trustee, except
the redemption price referred to above.

      AREP shall notify the Trustee in writing of any such redemption 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.

            (8) REPURCHASE AT THE OPTION OF HOLDER.

                  (a) If there is a Change of Control, the Company will be
      required to make an offer (a "Change of Control Offer") to each Holder to
      repurchase all or any part (equal to $1,000 or an integral multiple
      thereof) of each Holder's Notes at a purchase price in cash equal to 101%
      of the aggregate principal amount thereof plus accrued and unpaid interest
      and Liquidated Damages, if any, thereon to the date of purchase, subject
      to the rights of Holders on the relevant record date to receive interest
      due on the relevant interest payment date (the "Change of Control
      Payment"). Within 30 days following any Change of Control, the Company
      will mail a notice to each Holder setting forth the procedures governing
      the Change of Control Offer as required by the Indenture.

            (9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
      least 15 days but not more than 60 days before the redemption date to each
      Holder whose Notes are to be redeemed at its registered address, except
      that redemption notices may be mailed more than 60 days prior to a
      redemption date if the notice is issued in connection with a defeasance of
      the Notes or a satisfaction or discharge of the Indenture. Notes in
      denominations larger than $1,000 may be redeemed in part but only in whole
      multiples of $1,000, unless all of the Notes held by a Holder are to be
      redeemed.

            (10) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
      form without coupons in denominations of $1,000 and integral multiples of
      $1,000. The transfer of Notes may be registered and Notes may be exchanged
      as provided in the Indenture. The Registrar and the Trustee may require a
      Holder, among other things, to furnish appropriate endorsements and
      transfer documents and the Company may require a Holder to pay any taxes
      and fees required by law or permitted by the Indenture. The Company need
      not exchange or register the transfer of any Note or portion of a Note
      selected for redemption, except for the unredeemed portion of any Note
      being redeemed in part. Also, the Company need not exchange or register
      the transfer of any Notes for a period of 15 days before a selection of
      Notes to be redeemed or during the period between a record date and the
      corresponding Interest Payment Date.

      This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day distribution compliance period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.

                                      A2-6
<PAGE>

            (11) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
      treated as its owner for all purposes.

            (12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
      exceptions, the Indenture or the Notes or the Note Guarantees may be
      amended or supplemented with the consent of the Holders of at least a
      majority in aggregate principal amount of the then outstanding Notes
      including Additional Notes, if any, voting as a single class, and any
      existing Default or Event or Default or compliance with any provision of
      the Indenture or the Notes or the Note Guarantees may be waived with the
      consent of the Holders of a majority in aggregate principal amount of the
      then outstanding Notes including Additional Notes, if any, voting as a
      single class. Without the consent of any Holder of a Note, the Indenture
      or the Notes or the Note Guarantees may be amended or supplemented to cure
      any ambiguity, defect or inconsistency, to provide for uncertificated
      Notes in addition to or in place of certificated Notes, to provide for the
      assumption of the Company's or a Guarantor's obligations to Holders of the
      Notes and Note Guarantees in case of a merger or consolidation, to make
      any change that would provide any additional rights or benefits to the
      Holders of the Notes or that does not adversely affect the legal rights
      under the Indenture of any such Holder, to comply with the requirements of
      the SEC in order to effect or maintain the qualification of the Indenture
      under the TIA, to conform the text of the Indenture or the Notes to any
      provision of the "Description of Notes" section of the Company's Offering
      Memorandum dated February 1, 2005, as supplemented, relating to the
      initial offering of the Notes, to the extent that such provision in that
      "Description of Notes" was intended to be a verbatim recitation of a
      provision of the Indenture, the Note Guarantees or the Notes; to provide
      for the issuance of Additional Notes in accordance with the limitations
      set forth in the Indenture, or to allow any Guarantor to execute a
      supplemental indenture to the Indenture and/or a Note Guarantee with
      respect to the Notes.

            (13) DEFAULTS AND REMEDIES. Events of Default include: (i) default
      for 30 days in the payment when due of interest on, or Liquidated Damages,
      if any, with respect to the Notes; (ii) default in the payment when due of
      the principal of, or premium, if any, on, the Notes when the same becomes
      due and payable at maturity, upon redemption (including in connection with
      an offer to purchase) or otherwise, (iii) failure by the Company to comply
      with Section 4.15, of the Indenture; (iv) failure by the Company or any
      Guarantor to comply with Sections 4.07, 4.09, 4.16 or 4.17 for 30 days
      after written notice from the Trustee, (v) failure by the Company or any
      Guarantor for 60 days after written notice to the Company by the Trustee
      or the Holders of at least 25% in aggregate principal amount of the Notes
      including Additional Notes, if any, then outstanding voting as a single
      class to comply with any of the other agreements in the Indenture or the
      Notes; (vi) default under certain other agreements relating to
      Indebtedness of the Company or any Guarantor which default results in the
      acceleration of such Indebtedness prior to its express maturity; (vii)
      certain final judgments for the payment of money that remain undischarged
      for a period of 60 days; (viii) certain events of bankruptcy or insolvency
      with respect to the Company or any Guarantor that is a Significant
      Subsidiary and (ix) except as permitted by the Indenture, any Note
      Guarantee is held in any judicial proceeding to be unenforceable or
      invalid or ceases for any reason to be in full force and effect or AREH or
      any other Guarantor or any Person acting on behalf of any Guarantor denies
      or disaffirms its obligations under such Guarantor's Note Guarantee. If
      any 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.
      Notwithstanding the foregoing, in the case of an Event of Default arising
      from certain events of bankruptcy or insolvency, all outstanding Notes
      will become due and payable immediately without further action or notice.
      Holders may not enforce the Indenture or the Notes except as provided in
      the Indenture. Subject to certain limitations, Holders of a majority in
      aggregate

                                      A2-7
<PAGE>

      principal amount of the then outstanding Notes may direct the Trustee in
      its exercise of any trust or power. The Trustee may withhold from Holders
      of the Notes notice of any continuing Default or Event of Default (except
      a Default or Event of Default relating to the payment of principal or
      interest or premium or Liquidated Damages, if any,) if it determines that
      withholding notice is in their interest. The Holders of a majority in
      aggregate principal amount of the then outstanding Notes by notice to the
      Trustee may, on behalf of the Holders of all of the Notes, rescind an
      acceleration or waive any existing Default or Event of Default and its
      consequences under the Indenture except a continuing Default or Event of
      Default in the payment of interest or premium or Liquidated Damages, if
      any, on, or the principal of, the Notes. The Company is required to
      deliver to the Trustee annually a statement regarding compliance with the
      Indenture, and the Company is required, upon becoming aware of any Default
      or Event of Default, to deliver to the Trustee a statement specifying such
      Default or Event of Default.

            (14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
      or any other capacity, may make loans to, accept deposits from, and
      perform services for the Company or its Affiliates, and may otherwise deal
      with the Company or its Affiliates, as if it were not the Trustee.

            (15) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
      managing member), direct or indirect member, partner, employee,
      incorporator or stockholder of the Company API, or the general partner of
      the Company or any Guarantor or any of the Guarantors, as such, will not
      have any liability for any obligations of the Company or the Guarantors
      under the Notes, the Note Guarantees or the Indenture or for any claim
      based on, in respect of, or by reason of, such obligations or their
      creation. Each Holder by accepting a Note waives and releases all such
      liability. The waiver and release are part of the consideration for the
      issuance of the Notes.

            (16) AUTHENTICATION. This Note will not be valid until authenticated
      by the manual signature of the Trustee or an authenticating agent.

            (17) ABBREVIATIONS. Customary abbreviations may be used in the name
      of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
      ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
      survivorship and not as tenants in common), CUST (= Custodian), and
      U/G/M/A (= Uniform Gifts to Minors Act).

            (18) ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights
      provided to Holders of Notes under the Indenture, Holders of Restricted
      Global Notes and Restricted Definitive Notes will have all the rights set
      forth in the Registration Rights Agreement dated as of February 7, 2005,
      among the Company, the Guarantor and the other parties named on the
      signature pages thereof or, in the case of Additional Notes, Holders of
      Restricted Global Notes and Restricted Definitive Notes will have the
      rights set forth in one or more registration rights agreements, if any,
      among the Company, the Guarantor and the other parties thereto, relating
      to rights given by the Company and the Guarantor to the purchasers of any
      Additional Notes (collectively, the "Registration Rights Agreement").

            (19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
      Committee on Uniform Security Identification Procedures, the Company has
      caused CUSIP numbers to be printed on the Notes, and the Trustee may use
      CUSIP numbers in notices of redemption as a convenience to Holders. No
      representation is made as to the accuracy of such numbers either as
      printed on the Notes or as contained in any notice of redemption, and
      reliance may be placed only on the other identification numbers placed
      thereon.

                                      A2-8
<PAGE>

            (20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
      GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE
      GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
      LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
      WOULD BE REQUIRED THEREBY.

      The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.

                                      A2-9
<PAGE>

                                 ASSIGNMENT FORM

      To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: __________________________________
                                                (Insert assignee's legal name)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date: _______________

               Your Signature: _________________________________________________
                    (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*: _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                     A2-10
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 of the Indenture, check the box below:

                                 -- Section 4.15

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount you elect to
have purchased:

                                                       $_______________

Date: _______________

               Your Signature: _________________________________________________
                    (Sign exactly as your name appears on the face of this Note)

               Tax Identification No.: _________________________________________

Signature Guarantee*: _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                     A2-11
<PAGE>

        SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY
                                   GLOBAL NOTE

      The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges of a part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:

<TABLE>
<CAPTION>
                                                                      Principal Amount
                   Amount of decrease in   Amount of increase in     at maturity of this
                      Principal Amount       Principal Amount       Global Note following   Signature of authorized
                       at maturity of         at maturity of            such decrease        officer of Trustee or
Date of Exchange      this Global Note       this Global Note           (or increase)              Custodian
----------------   ---------------------   ---------------------    ---------------------   -----------------------
<S>                <C>                     <C>                      <C>                     <C>
</TABLE>

                                     A2-12
<PAGE>

                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel, Esq.

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

      Re: 7 1/8% Senior Notes due 2013

      Reference is hereby made to the Indenture, dated as of February 7, 2005
(the "Indenture"), among American Real Estate Partners, L.P. ("AREP"), American
Real Estate Finance Corp. ("AREP Finance", together with AREP, the "Company"),
the Guarantor party thereto and Wilmington Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

      ___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

      1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.

      2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S PERMANENT GLOBAL NOTE
OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a Person in the United States and (x) at
the time the buy order was

                                      B-1
<PAGE>

originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchasers). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Permanent Global Note,
the Regulation S Temporary Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.

      3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

            (a) [ ] such Transfer is being effected pursuant to and in
      accordance with Rule 144 under the Securities Act;

                                       or

            (b) [ ] such Transfer is being effected to the Company or a
      subsidiary thereof;

                                       or

            (c) [ ] such Transfer is being effected pursuant to an effective
      registration statement under the Securities Act and in compliance with the
      prospectus delivery requirements of the Securities Act;

                                       or

            (d) [ ] such Transfer is being effected to an Institutional
      Accredited Investor and pursuant to an exemption from the registration
      requirements of the Securities Act other than Rule 144A, Rule 144, Rule
      903 or Rule 904, and the Transferor hereby further certifies that it has
      not engaged in any general solicitation within the meaning of Regulation D
      under the Securities Act and the Transfer complies with the transfer
      restrictions applicable to beneficial interests in a Restricted Global
      Note or Restricted Definitive Notes and the requirements of the exemption
      claimed, which certification is supported by (1) a certificate executed by
      the Transferee in the form of Exhibit D to the Indenture and (2) if such
      Transfer is in respect of a principal amount of Notes at the time of
      transfer of less than $250,000, an Opinion of Counsel provided by the
      Transferor or the Transferee (a copy of which the Transferor has attached
      to this certification), to the effect that such Transfer is in compliance
      with the Securities Act. Upon consummation of the proposed transfer in
      accordance with the terms of the Indenture, the transferred beneficial
      interest or Definitive Note will be subject to the restrictions on
      transfer enumerated in the Private Placement Legend printed on the IAI
      Global Note and/or the Restricted Definitive Notes and in the Indenture
      and the Securities Act.

                                      B-2
<PAGE>

      4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

      (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

      (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

      (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.

      This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                               _________________________________
                                               [Insert Name of Transferor]

                                               By: _____________________________
                                                   Name:
                                                   Title:

      Dated: _______________________

                                      B-3
<PAGE>

                       ANNEX A TO CERTIFICATE OF TRANSFER

      1.    The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) OR (b)]

            (a) [ ] a beneficial interest in the:

                  (i)   [ ] 144A Global Note (CUSIP _________), or

                  (ii)  [ ] Regulation S Global Note (CUSIP _________), or

                  (iii) [ ] IAI Global Note (CUSIP _________); or

            (b) [ ] a Restricted Definitive Note.

      2.    After the Transfer the Transferee will hold:

                                   [CHECK ONE]

            (a) [ ] a beneficial interest in the:

                  (i)   [ ] 144A Global Note (CUSIP _________), or

                  (ii)  [ ] Regulation S Global Note (CUSIP _________), or

                  (iii) [ ] IAI Global Note (CUSIP _________); or

                  (iv)  [ ] Unrestricted Global Note (CUSIP _________); or

            (b) [ ] a Restricted Definitive Note; or

            (c) [ ] an Unrestricted Definitive Note,

            in accordance with the terms of the Indenture.

                                      B-4
<PAGE>

                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.

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

      Re: 7 1/8% Senior Notes due 2013

                              (CUSIP ____________)

      Reference is hereby made to the Indenture, dated as of February 7, 2005
(the "Indenture"), among American Real Estate Partners, L.P. ("AREP"), American
Real Estate Finance Corp. ("AREP Finance", together with AREP, the "Company"),
the Guarantor party thereto and Wilmington Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

      __________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:

      1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE

      (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

      (b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and

                                       C-1
<PAGE>

pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

      (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

      (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

      2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES

      (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.

      (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
[ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.

      This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                      C-2
<PAGE>

                                                 _______________________________
                                                 [Insert Name of Transferor]

                                             By: _______________________________
                                                 Name:
                                                 Title:

Dated: ______________________

                                      C-3
<PAGE>

                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.

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

      Re: 7 1/8% Senior Notes due 2013

            Reference is hereby made to the Indenture, dated as of February 7,
2005 (the "Indenture"), among American Real Estate Partners, L.P. ("AREP"),
American Real Estate Finance Corp. ("AREP Finance", together with AREP, the
"Company"), the Guarantor party thereto and Wilmington Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

      In connection with our proposed purchase of $____________ aggregate
principal amount of:

      (a) [ ] a beneficial interest in a Global Note, or

      (b) [ ] a Definitive Note,

      we confirm that:

      1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").

      2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the

                                      D-1
<PAGE>

                                                                       EXHIBIT D

Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any Person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a transaction
meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.

                                      D-2
<PAGE>

      3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.

      4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

      5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.

      You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                      __________________________________________
                                         [Insert Name of Accredited Investor]

                                      By: ______________________________________
                                          Name:
                                          Title:

Dated: _______________________

                                      D-3
<PAGE>

                                                                       EXHIBIT E

                          FORM OF NOTATION OF GUARANTEE

      For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of February 7, 2005 (the "Indenture"),
among American Real Estate Partners, L.P. ("AREP"), American Real Estate Finance
Corp. ("AREP Finance", together with AREP, the "Company"), the Guarantor party
thereto and Wilmington Trust Company, as trustee (the "Trustee"), (a) the due
and punctual payment of the principal of, premium and Liquidated Damages, if
any, and interest on, the Notes, whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal of and interest on the Notes, if any, if lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of the Indenture and (b) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the 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. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article 10 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Note Guarantee.
Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound
by such provisions and (b) appoints the Trustee attorney-in-fact of such Holder
for all purposes

      Capitalized terms used but not defined herein have the meanings given to
them in the Indenture.

                                             [NAME OF GUARANTOR(S)]

                                             By: _______________________________
                                                 Name:
                                                 Title:

                                      E-1
<PAGE>

                                                                       EXHIBIT F

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

      SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of American Real Estate Partners, L.P., a Delaware
limited partnership, as issuer ("AREP") (or its permitted successor), American
Real Estate Finance Corp., a Delaware corporation, as co-issuer ("AREP Finance",
together with AREP, the "Company"), the other Guarantors (as defined in the
Indenture referred to herein) and Wilmington Trust Company, as trustee under the
Indenture referred to below (the "Trustee").

                               W I T N E S S E T H

      WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of February 7, 2005 providing for the
issuance of 7 1/8% Senior Notes due 2013 (the "Notes");

      WHEREAS, the Indenture provides that a Guaranteeing Subsidiary may execute
and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's
Obligations under the Notes and the Indenture on the terms and conditions set
forth herein (the "Note Guarantee"); and

      WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

      NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

      1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

      2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Note Guarantee and in the Indenture including but not limited
to Article 10 thereof.

         4. NO RECOURSE AGAINST OTHERS. 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.

      5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE 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.

                                      F-1
<PAGE>

      6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

      7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.

      8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.

                                      F-2
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

      Dated: _______________, 20___

                                      [GUARANTEEING SUBSIDIARY]

                                      By:  _______________________________
                                            Name:
                                            Title:

                                      AMERICAN REAL ESTATE PARTNERS, L.P.

                                      By: American Property Investors, Inc., its
                                          general partner

                                      By:  _______________________________
                                            Name:
                                            Title:

                                      AMERICAN REAL ESTATE FINANCE CORP.

                                      By:  _______________________________
                                            Name:
                                            Title:

                                      AMERICAN REAL ESTATE HOLDINGS LIMITED
                                      PARTNERSHIP

                                      By: American Property Investors, Inc., its
                                          general partner

                                      By:  _______________________________
                                            Name:
                                            Title:

                                      WILMINGTON TRUST COMPANY,
                                        as Trustee

                                      By:  _______________________________
                                            Authorized Signatory

                                       F-3
<PAGE>

                                                                       EXHIBIT G

                     FORM OF SECURITY AND CONTROL AGREEMENT

            This Security and Control Agreement (this "Agreement") dated as of
[__________], 200[___] among American Real Estate Partners, L.P. (the "Grantor"
or "AREP"), Wilmington Trust Company in its capacity as Trustee on behalf of the
Holders (as defined in the Indenture) (the "Secured Party") and Wilmington Trust
Company in its capacity as a "bank" as defined in Section 9-102 of the UCC (in
such capacity, the "Financial Institution"). Capitalized terms used but not
defined herein shall have the meanings assigned in the Indenture, dated as of
February 7, 2005, between the Grantor, American Real Estate Holdings Limited
Partnership, a Delaware limited partnership ("AREH") and the Secured Party (the
"Indenture"). All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York.

            WHEREAS, the Grantor, AREH and the Secured Party on behalf of the
Noteholders have entered into the Indenture relating to the Grantor's and
AMERICAN Real Estate Finance Corp.'s, a Delaware corporation ("Finance Corp",
together with the Grantor, the "Issuers"), 7 1/8% senior notes due 2013;

            WHEREAS, the Grantor and the Secured Party are entering into this
Agreement to grant the Secured Party a security interest in the Pledged Account
(as hereinafter defined) and the Collateral (as hereinafter defined);

            WHEREAS, the parties hereto are entering into this Agreement to
perfect and ensure the priority of such security interest;

            NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

            SECTION 1. GRANT OF SECURITY.

                  (a) The Grantor hereby assigns, grants, hypothecates and
pledges to, and grants a lien on and a security interest in favor of the Secured
Party, on behalf of the Noteholders, on all estate, right, title and interest of
the Grantor, whether now owned or hereafter acquired, in the Pledged Account and
in all cash and other assets or property held therein or credited thereto or
received in connection therewith and all proceeds thereof, including all rights
of the Grantor to receive moneys due in respect of such Pledged Account, and all
claims with respect to such Pledged Account, all income or gain earned in
respect of any assets held in or credited to such Pledged Account, and all
proceeds receivable or received when any asset held in or credited to such
Pledged Account is collected, exchanged or otherwise disposed of, whether
voluntarily or involuntarily (all of the foregoing being collectively referred
to as the "Collateral").

                  (b) The Grantor agrees that from time to time it shall
promptly execute and deliver all instruments and documents, and take all
actions, that may be reasonably necessary, or that the Secured Party may
reasonably request, in order to perfect and protect the assignment and security
interest granted or intended to be granted hereby or to enable the Secured Party
to exercise or enforce its rights and remedies hereunder with respect to the

                                      G-1
<PAGE>

Pledged Account and the Collateral. Furthermore, the Grantor hereby authorizes
the Secured Party to file such financing or continuation statements, or
amendments thereto, and such other instruments, endorsements or notices, as the
Secured Party may reasonably deem necessary or advisable in order to perfect and
preserve the assignment and security interest granted or purported to be granted
hereby.

                  (c) The Grantor represents and warrants that:

            (i) the Agreement constitutes the valid and legally binding
obligation of the Grantor, enforceable in accordance with its terms and
conditions;

            (ii) it has not assigned any of its rights under the Pledged Account
or the Collateral;

            (iii) it has not executed and is not aware of any effective
financing statement, security agreement, control agreement or other instrument
similar in effect covering all or any part of the Pledged Account or the
Collateral;

            (iv) it has full power and authority to grant a security interest in
and assign its right, title and interest in the Pledged Account and the
Collateral; and

            (v) upon the execution and delivery of this Agreement by the
Grantor, the security interest granted to the Secured Party pursuant to this
Agreement in and to the Pledged Account and the Collateral will constitute, a
first priority perfected security interest.

            SECTION 2. ESTABLISHMENT AND MAINTENANCE OF COLLATERAL ACCOUNTS.

                  (a) The Financial Institution hereby represents and warrants
that it has established and currently maintains the account listed on Schedule 1
hereto as a separate account segregated from all other custodial, collateral or
other accounts, and that the Grantor is its sole customer with respect to such
account (such account and any successor account being referred to herein as the
"Pledged Account.") The Financial Institution agrees to act as bank with respect
to the Pledged Account and covenants and agrees that it shall not change the
name or account number of the Pledged Account without the prior written consent
of the Secured Party or, except in an Event of Default, the Grantor;

                  (b) The Financial Institution represents and warrants that the
Pledged Account is a "deposit account" (as defined in Section 9-102(a)(29) of
the UCC); and

                  (c) Each of the Financial Institution and the Grantor
represents, warrants and covenants that no investment property (as defined in
Section 9-102(a)(49) of the UCC) shall be deposited or otherwise included in the
Pledged Account and agrees no funds on deposit in the Pledged Account shall be
invested in any investment property.

            SECTION 3. SECURED PARTY'S CONTROL OF THE PLEDGED ACCOUNTS. If at
any time the Financial Institution shall receive any instruction (within the
meaning of Section 9-104 of the UCC, i.e., an order directing the disposition of
funds in a Pledged Account) originated by

                                      G-2
<PAGE>

the Secured Party, the Financial Institution shall comply with such instruction
without further consent by the Grantor or any other person.

            SECTION 4. GRANTOR'S ACCESS TO THE ACCOUNT.

                  (a) It is understood and agreed that until this Agreement is
terminated in accordance with the terms hereof, the Financial Institution shall
not comply with instructions of the Grantor or any person other than the Secured
Party without the express consent of the Secured Party to each such instruction;

                  (b) Except if an Event of Default shall have occurred and be
continuing, if at any Quarterly Determination Date the amount of Collateral
exceeds the amount required to then be deposited in the Pledged Account pursuant
to Section 4.16 of the Indenture, the Grantor may provide a Notice of Partial
Release in substantially the form of Exhibit A hereto requesting that the
Secured Party instruct the Financial Institution to release such excess amount
to the Grantor.

            SECTION 5. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event
that the Financial Institution has or subsequently obtains by agreement, by
operation of law or otherwise a security interest in the Pledged Account or the
Collateral, the Financial Institution hereby agrees that such security interest
shall be subordinate to the security interest of the Secured Party. The money
and other items credited to the Pledged Account will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any person
other than the Secured Party.

            SECTION 6. REMEDIES. If any Event of Default shall have occurred and
be continuing, the Secured Party may exercise in respect of the Pledged Account
and the Collateral, in addition to all other rights and remedies provided for
herein, in the Indenture or otherwise available to it at law or in equity, all
right and remedies of the Secured Party on default under the UCC (whether or not
the UCC applies to the affected Pledged Account or any Collateral) to collect,
enforce or satisfy any Obligation then owing, whether by acceleration or
otherwise, including, without limitation, applying any or all of the cash in the
Pledged Account in full or partial satisfaction of the Obligations, or otherwise
selling in one or more public or private sales or retaining in full or partial
satisfaction of the Obligations any or all of the Collateral granted hereunder.

            SECTION 7. CHOICE OF LAW. This Agreement shall each be governed by
the laws of the State of New York. Regardless of any provision in any other
agreement, for purposes of the UCC, with respect to the Pledged Account, New
York shall be deemed to be the bank's jurisdiction (within the meaning of
Section 9-304 of the UCC). The Pledged Account shall be governed by the laws of
the State of New York.

            SECTION 8. CONFLICT WITH OTHER AGREEMENTS. The Financial Institution
hereby represents, warrants, covenants and agrees that:

                  (a) There are no other agreements entered into between the
Financial Institution and the Grantor (or any other person) with respect to the
Pledged Account or the Collateral;

                                      G-3
<PAGE>

                  (b) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any person other than the
Secured Party relating to the Pledged Account or the Collateral pursuant to
which it agrees or has agreed to comply with instructions (within the meaning of
Section 9-104 of the UCC) of such other person;

                  (c) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Grantor or the Secured
Party purporting to limit or condition the obligation of the Financial
Institution to comply with instructions with respect to the Pledged Account or
the Collateral; and

                  (d) In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into with respect to the Pledged Account or the Collateral, the terms of this
Agreement shall prevail.

            SECTION 9. ADVERSE CLAIMS. The Financial Institution represents and
warrants that except for the claims and interest of the Secured Party and of the
Grantor in the Pledged Account and the Collateral, it does not know of any
security interest in, lien on or claim to, or other interest in, the Pledged
Account or the Collateral. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Pledged Account or the Collateral, the
Financial Institution will promptly notify the Secured Party and the Grantor
thereof.

            SECTION 10. ADDITIONAL PROVISIONS REGARDING MAINTENANCE OF ACCOUNTS.
The Financial Institution covenants and agrees:

                  (a) Statements and Confirmations. The Financial Institution
will promptly send copies of all statements, confirmations and other
correspondence concerning the Pledged Account or the Collateral, simultaneously
to each of the Grantor and the Secured Party at the address for each set forth
in Section 14 of this Agreement.

                  (b) Tax Reporting. All interest, if any, relating to the
Pledged Account, shall be reported to the Internal Revenue Service and all state
and local taxing authorities under the name and taxpayer identification number
of the Grantor.

            SECTION 11. ADDITIONAL REPRESENTATION AND WARRANTY OF THE FINANCIAL
INSTITUTION. The Financial Institution represents and warrants that this
Agreement constitutes the valid and legally binding obligation of the Financial
Institution, enforceable in accordance with its terms and conditions.

            SECTION 12. INDEMNIFICATION OF FINANCIAL INSTITUTION AND SECURED
PARTY.

            (a) The Grantor hereby agrees that the Financial Institution shall
be relieved from liabilities (i) arising from the error of judgment made in good
faith by it, unless it is proved that the Financial Institution was negligent in
ascertaining the pertinent facts; and (ii) with respect to any action it takes
or omits to take in good faith in accordance with a direction received pursuant
to the terms of this Agreement.

                                      G-4
<PAGE>

            The Financial Institution (i) 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 Agreement; (ii) 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; (iii) may
conclusively rely upon any document believed by it to be genuine and to have
been signed or presented by the proper person and it need not investigate any
fact or matter stated in any such document; and (iv) may consult with counsel of
its choice and the written advice of such 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.

            The Grantor will indemnify the Financial Institution and hold it
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 Agreement, including the costs and expenses of enforcing this
Agreement against the Grantor (including this Section 12) and defending itself
against any claim (whether asserted by the Grantor 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 Financial Institution will notify the Grantor
promptly of any claim for which it may seek indemnity. Failure by the Financial
Institution to so notify the Grantor will not relieve the Grantor of its
obligations hereunder. The Grantor will defend the claim and the Financial
Institution will cooperate in the defense. The Financial Institution may have
separate counsel and the Grantor will pay the reasonable fees and expenses of
such counsel. The Grantor need not pay for any settlement made without its
consent, which consent will not be unreasonably withheld.

            (b) The Secured Party shall be entitled to all benefits and rights
arising under the protections and indemnification granted to it by Grantor under
the terms of the Indenture in connection with any actions taken or omissions
made by the Secured Party with respect to its duties and obligations hereunder
as if such protections and indemnification were explicitly granted hereunder.

            (c) The obligations of the Grantor under this Section 12 will
survive the termination of this Agreement.

            SECTION 13. SUCCESSORS; ASSIGNMENT. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and assigns, except that neither the Grantor nor the
Financial Institution may delegate their obligations hereunder without the prior
written consent of the Secured Party. Additionally, in the event that the
Secured Party is replaced as Trustee under the Indenture any entity that
succeeds to such role shall be entitled to the benefits of this Agreement. The
Secured Party agrees to send written notice to the Financial Institution of any
such replacement.

            SECTION 14. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.

                                      G-5
<PAGE>

            Grantor:

                     American Real Estate Partners, L.P.
                     100 South Bedford Road
                     Mt. Kisco, New York 10549
                     Attention: Chief Financial Officer
                     Facsimile: (914) 242-9282

            Secured Party:

                     Wilmington Trust Company
                     Rodney Square North
                     1100 North Market Street
                     Wilmington, Delaware 19890
                     Attention: Corporate Trust Administration
                                Michael G. Oller
                     Facsimile: (302) 636-4140

            Financial Institution:

                     Wilmington Trust Company
                     Rodney Square North
                     1100 North Market Street
                     Wilmington, Delaware 19890
                     Attention: Corporate Capital Markets
                                Trust Officer
                     Facsimile: (302) 636-4140

            Any party may change its address for notices by giving notice to the
other parties hereto in the manner set forth above.

            SECTION 15. AMENDMENT. No amendment or modification of this
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all of the parties hereto.

            SECTION 16. TERMINATION.

                  (a) The obligations of the Financial Institution to the
Secured Party pursuant to this Agreement shall continue in effect until the
security interests of the Secured Party in the Pledged Account and the
Collateral have been terminated pursuant to the terms of the Indenture and the
Secured Party has notified the Financial Institution of such termination in
writing. The Secured Party agrees to provide Notice of Termination in
substantially the form of Exhibit B hereto to the Financial Institution upon the
request of the Grantor on or after the termination of the Secured Party's
security interest in the Pledged Account and the Collateral pursuant to the
terms of the Indenture. The termination of this Agreement shall not terminate
the Pledged Account or alter the obligations of the Financial Institution to the
Grantor pursuant to any other agreement with respect to the Pledged Account.

                                      G-6
<PAGE>

                  (b) Without limitation to the foregoing, if at any Quarterly
Determination Date, the Fixed Charge Coverage Ratio of AREP and the Guarantors
is at least 1.5 to 1.0 for the four consecutive fiscal quarters most recently
completed prior to such Quarterly Determination Date, the Secured Party shall
provide to the Financial Institution a Notice of Termination in the form of
Exhibit B.

            SECTION 17. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing and
delivering one or more counterparts.

                  [Remainder of page intentionally left blank]

                                      G-7
<PAGE>

            IN WITNESS WHEREOF, each of the Grantor, the Secured Party and the
Financial Institution have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date
first written above.

                                    AMERICAN REAL ESTATE PARTNERS,
                                    L.P., as Grantor

                                    By: American Property Investors, Inc., its
                                        general partner

                                    By: ______________________________________
                                          Name:
                                          Title:

                                    WILMINGTON TRUST COMPANY, as Secured
                                    Party in its capacity as Trustee on behalf
                                    of the Noteholders

                                    By: ______________________________________
                                          Name:
                                          Title:

                                    WILMINGTON TRUST COMPANY, in its capacity
                                    as Financial Institution

                                    By: ______________________________________
                                          Name:
                                          Title:

                                      G-8
<PAGE>

                                                                      SCHEDULE 1

Existing Deposit Account Subject to this Agreement

Exact Name of Account            Account Number

                                      G-9
<PAGE>

                                                                       Exhibit A

                             [Letterhead of Grantor]

                                                 [Date]

[Name and Address of Secured Party]

Attention: ______

                  Re: Notice of Partial Release

            Reference is made to the Security and Control Agreement, between
you, the Financial Institution and the undersigned, dated as of [__________,
200__]. We hereby notify you that as of [________, 200__] the Collateral held in
the Pledged Account exceeded the amount required to be deposited in the Pledged
Account, as follows:

            QUARTERLY DETERMINATION BALANCE:     $[ ]

            LESS: ONE YEAR OF INTEREST PAYMENTS: $[ ]
                                                 ----
            AMOUNT OF PARTIAL RELEASE:           $[ ]

            We hereby request that you instruct the Financial Institution to
release to us such Amount of Partial Release.

            We hereby certify that no Event of Default has occurred and is
continuing under the Indenture.

                                              Very truly yours,

                                              [Grantor]

                                              By: ______________________________
                                                      Title:

                                      G-10
<PAGE>

                                                                       Exhibit B

                             [Letterhead of Grantor]

                                                [Date]

[Name and Address of Secured Party]

Attention: ______

                  Re: Termination of Security and Control Agreement

            You are hereby notified that the Security and Control Agreement
between you, the Grantor and the undersigned is terminated and you have no
further obligations to the undersigned pursuant to such Agreement.
Notwithstanding any previous instructions to you, you are hereby instructed to
accept all future directions with respect to account number _______from the
Grantor. This notice terminates any obligations you may have to the undersigned
with respect to such account, however nothing contained in this notice shall
alter any obligations which you may otherwise owe to the Grantor pursuant to any
other agreement.

            You are instructed to deliver a copy of this notice by facsimile
transmission to American Real Estate Partners, L.P.

                                              Very truly yours,

                                              [Name of Secured Party]

                                              By: ______________________________
                                                      Title:

                                      G-11<PAGE>
                                                                    Exhibit 4.11

                                                                  EXECUTION COPY

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

                          REGISTRATION RIGHTS AGREEMENT

                          Dated as of February 7, 2005
                                  by and among

                      AMERICAN REAL ESTATE PARTNERS, L.P.,
                       AMERICAN REAL ESTATE FINANCE CORP.,
                AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP

                                       and

                            BEAR, STEARNS & CO. INC.
                            JEFFERIES & COMPANY, INC.

================================================================================
<PAGE>

        This Registration Rights Agreement (this "Agreement") is made and
entered into as of February 7, 2005, by and 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"), American
Real Estate Holdings Limited Partnership, a Delaware limited partnership (the
"Guarantor", and together with AREP and AREP Finance, the "Company") and Bear,
Stearns & Co. Inc. and Jefferies & Company, Inc. (each an "Initial Purchaser,"
and together, the "Initial Purchasers"), who have agreed to purchase
$480,000,000 aggregate principal amount of AREP's 7 1/8% Senior Notes due 2013
(the "Initial Notes") pursuant to the Purchase Agreement (as defined below). The
Initial Notes are to be guaranteed (the "Guarantee", and together with the
Initial Notes, the "Offered Securities") by the Guarantor.

        This Agreement is made pursuant to the Purchase Agreement, dated
February 1, 2005 (the "Purchase Agreement"), by and among the AREP, AREP
Finance, AREH, as Guarantor and the Initial Purchasers. In order to induce the
Initial Purchasers to purchase the Initial Notes, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 10(r) of the Purchase Agreement. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Indenture, dated as of February 7, 2005, among the Company and
Wilmington Trust Company, as trustee, relating to the Offered Securities and the
Exchange Securities (the "Indenture").

        The parties hereby agree as follows:

SECTION 1.  DEFINITIONS

        As used in this Agreement, the following capitalized terms shall have
the following meanings:

        Act: The Securities Act of 1933, as amended.

        Affiliate: As defined in Rule 144.

        AREH: Shall have the meaning set forth in the preamble of this
Agreement.

        AREP: Shall have the meaning set forth in the preamble of this
Agreement.

        AREP Finance: Shall have the meaning set forth in the preamble of this
Agreement.

        Broker-Dealer: Any broker or dealer registered under the Exchange Act.

        Business Day: Any day other than a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at place of payment are
authorized by law, regulation or executive order to remain closed.

        Closing Date: The date hereof.

        Commission: The Securities and Exchange Commission.

        Company: Shall have the meaning set forth in the preamble of this
Agreement.

<PAGE>

        Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Exchange
Securities to be issued in the Exchange Offer, (b) the maintenance of the
continuous effectiveness of such Exchange Offer Registration Statement and the
keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Exchange Securities in the same aggregate
principal amount as the aggregate principal amount of Offered Securities
tendered by Holders thereof pursuant to the Exchange Offer.

        Consummation Deadline: As defined in Section 3(b) hereof.

        Effectiveness Deadline: As defined in Sections 3(a) and 4(a) hereof.

        Exchange Act: The Securities Exchange Act of 1934, as amended.

        Exchange Offer: The exchange and issuance by the Company of a principal
amount of Exchange Securities (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Offered Securities that are tendered by such Holders in connection with such
exchange and issuance.

        Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

        Exchange Securities: AREP and AREP Finance's 7 1/8% Senior Notes due
2013 to be issued pursuant to the Indenture: (a) in the Exchange Offer or (b) as
contemplated by Section 4 hereof.

        Filing Deadline:  As defined in Sections 3(a) and 4(a) hereof.

        Guarantee: Shall have the meaning set forth in the preamble of this
Agreement.

        Holders: As defined in Section 2 hereof.

        Indenture: Shall have the meaning set forth in the preamble of this
Agreement.

        Initial Notes: Shall have the meaning set forth in the preamble of this
Agreement.

        Initial Purchasers: Shall have the meaning set forth in the preamble of
this Agreement.

        Liquidated Damages: As defined in Section 5 hereof.

        Offered Securities: Shall have the meaning set forth in the preamble of
this Agreement.

        Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

                                       2
<PAGE>

        Purchase Agreement: Shall have the meaning set forth in the preamble of
this Agreement.

        Recommencement Date: As defined in Section 6(d) hereof.

        Registration Default: As defined in Section 5 hereof.

        Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) that is filed pursuant to
the provisions of this Agreement, (ii) including the Prospectus included therein
and (iii) including all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

        Rule 144: Rule 144 promulgated under the Act.

        Shelf Registration Statement: As defined in Section 4 hereof.

        Suspension Notice: As defined in Section 6(d) hereof.

        TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.

        Transfer Restricted Securities: Each Offered Security until the earliest
to occur of (a) the date on which such Offered Security has been exchanged by a
Person other than a Broker-Dealer for an Exchange Security in the Exchange
Offer, (b) following the exchange by a Broker-Dealer in the Exchange Offer of an
Offered Security for an Exchange Security, the date on which such Exchange
Security is sold to a purchaser who receives from such Broker-Dealer on or prior
to the date of such sale a copy of the Prospectus contained in the Exchange
Offer Registration Statement, (c) the date on which such Offered Security has
been effectively registered under the Act and disposed of in accordance with the
Shelf Registration Statement or (d) the date on which such Offered Security is
distributed to the public pursuant to Rule 144.

SECTION 2.  HOLDERS

        A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.

SECTION 3.  REGISTERED EXCHANGE OFFER

        (a) Unless the Exchange Offer shall not be permitted by applicable law
or Commission rule, regulation or policy (after the procedures set forth in
Section 6(a)(i) below have been complied with), the Company shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission no later
than 180 days after the Closing Date (such 180th day being the "Filing
Deadline"), (ii) use all commercially reasonable efforts to cause such Exchange
Offer Registration Statement to become effective no later than 300 days after
the Closing Date (such 300th day being the "Effectiveness Deadline"), (iii) in
connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause it
to become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A

                                       3

<PAGE>

under the Act and (C) cause all necessary filings, if any, in connection with
the registration and qualification of the Exchange Securities to be made under
the Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The Exchange
Offer shall be on the appropriate form permitting (i) registration of the
Exchange Securities to be offered in exchange for the Offered Securities that
are Transfer Restricted Securities and (ii) resales of Exchange Securities by
Broker-Dealers that tendered into the Exchange Offer Offered Securities that
such Broker-Dealer acquired for its own account as a result of market-making
activities or other trading activities (other than Offered Securities acquired
directly from the Company or any of its Affiliates) as contemplated by Section
3(c) below.

        (b) The Company shall use all commercially reasonable efforts to cause
the Exchange Offer Registration Statement to be effective continuously, and
shall keep the Exchange Offer open for a period of not less than the minimum
period required under applicable federal and state securities laws to Consummate
the Exchange Offer; provided, however, that in no event shall such period be
less than 20 Business Days. The Company shall cause the Exchange Offer to comply
in all material respects with all applicable federal and state securities laws.
No securities other than the Exchange Securities shall be included in the
Exchange Offer Registration Statement. The Company shall use all commercially
reasonable efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 Business Days thereafter, or longer, if
required by federal securities laws (the last day of such period being the
"Consummation Deadline").

        (c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Offered Securities acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement.

        Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Exchange
Securities received by such Broker-Dealer in the Exchange Offer, the Company
shall permit the use of the Prospectus contained in the Exchange Offer
Registration Statement by such Broker-Dealer to satisfy such prospectus delivery
requirement. To the extent necessary to ensure that the Prospectus contained in
the Exchange Offer Registration Statement is available for sales of Exchange
Securities by Broker-Dealers, the Company agrees to use all commercially
reasonable efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(a) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the

                                       4
<PAGE>

Commission as announced from time to time, for a period of 270 days from the
Consummation Deadline or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been sold
pursuant thereto. The Company shall provide sufficient copies of the latest
version of such Prospectus to such Broker-Dealers, promptly upon request, and in
no event later than two Business Days after such request, at any time during
such period.

SECTION 4.  SHELF REGISTRATION

        (a) Shelf Registration. If (i) the Company is not (A) required to file
the Exchange Offer Registration Statement or (B) permitted to Consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or
Commission regulations, rules or policy (after the Company has complied with the
procedures set forth in Section 6(a)(i) below) or (ii) any Holder of Transfer
Restricted Securities notifies the Company prior to 20 Business Days following
Consummation of the Exchange Offer that (A) such Holder was prohibited by law or
Commission policy from participating in the Exchange Offer, (B) such Holder may
not resell the Exchange Securities acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds Offered
Securities acquired directly from the Company or any of its Affiliates, then the
Company shall:

    (x) use all commercially reasonable efforts on or prior to 30 days after the
earlier of (i) the date as of which the Company determines that the Exchange
Offer Registration Statement will not be or cannot be, as the case may be, filed
as a result of clause (a)(i) above (after the Company has complied with the
procedures set forth in Section 6(a)(i) below, and (ii) the date on which the
Company receives the notice specified in clause (a)(ii) above (such earlier
date, the "Filing Deadline"), to file a shelf registration statement pursuant to
Rule 415 under the Act (which may be an amendment to the Exchange Offer
Registration Statement (the "Shelf Registration Statement")), relating to all
Transfer Restricted Securities, and

    (y) shall use all commercially reasonable efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after the
Filing Deadline such obligation arises (such 90th day being the "Effectiveness
Deadline").

        If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e., clause
(a)(i)(B) above), then the filing of the Exchange Offer Registration Statement
shall be deemed to satisfy the requirements of clause (x) above; provided that,
in such event, the Company shall remain obligated to meet the Effectiveness
Deadline set forth in clause (y).

        To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company shall
use all commercially reasonable efforts to keep any Shelf Registration Statement
required by this Section 4(a) continuously effective, supplemented, amended and
current as required by and subject to the provisions of Sections 6(b) and (c)
hereof and in

                                       5
<PAGE>

conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the expiration of the period referred to in Rule 144(k) (as extended pursuant to
Section 6(d)), or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto.

        (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 Business Days after receipt of a request
therefor, (x) the information specified in Item 507 or 508 of Regulation S-K, as
applicable, of the Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary prospectus included therein, (y) an
agreement to update such information, from time to time, as required or
appropriate, and (z) an agreement to comply with the prospectus delivery
requirements in connection with the offer and sale of Transfer Restricted
Securities. No Holder of Transfer Restricted Securities shall be entitled to
Liquidated Damages pursuant to Section 5 hereof unless and until such Holder
shall have provided all such information and agreements. Each selling Holder
agrees to promptly furnish additional information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading.

SECTION 5.  LIQUIDATED DAMAGES

        If: (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated within 30 Business Days of the
applicable Effectiveness Deadline or (iv) any Registration Statement required by
this Agreement is filed and declared effective but shall thereafter cease to be
effective or usable in connection with resales of Transfer Restricted Securities
during the periods specified herein (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then the Company hereby jointly and
severally agrees to pay to each Holder of Transfer Restricted Securities
affected thereby Liquidated Damages in an amount equal to $.05 per week per
$1,000 in principal amount of Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such Registration
Default. The amount of the Liquidated Damages shall increase by an additional
$.05 per week per $1,000 in principal amount of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages for all
Registration Defaults of $.50 per week per $1,000 in principal amount of
Transfer Restricted Securities; provided that the Company shall in no event be
required to pay Liquidated Damages for more than one Registration Default at any
given time. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon
the filing of a post-effective amendment to the Registration Statement or an
additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable, in

                                       6
<PAGE>

the case of (iv) above, the Liquidated Damages payable with respect to the
Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or
(iv), as applicable, shall cease.

        All accrued Liquidated Damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Initial Notes. Notwithstanding the fact that any securities for which Liquidated
Damages are due cease to be Transfer Restricted Securities, all obligations of
the Company to pay Liquidated Damages with respect to securities shall survive
until such time as such obligations with respect to such securities shall have
been satisfied in full.

SECTION 6.  REGISTRATION PROCEDURES

        (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall (x) comply with all applicable provisions of
Section 6(c) below, (y) use all commercially reasonable efforts to effect such
exchange and to permit the resale of Exchange Securities by Broker-Dealers that
tendered in the Exchange Offer Offered Securities that such Broker-Dealer
acquired for its own account as a result of its market-making activities or
other trading activities (other than Offered Securities acquired directly from
the Company or any of its Affiliates) being sold in accordance with the intended
method or methods of distribution thereof, and (z) comply with all of the
following provisions:

                (i) If, following the date hereof there has been announced a
        change in Commission policy with respect to exchange offers such as the
        Exchange Offer, that in the reasonable opinion of counsel to the Company
        raises a substantial question as to whether the Exchange Offer is
        permitted by applicable federal law, the Company hereby agrees to seek a
        no-action letter or other favorable decision from the Commission or the
        staff of the Commission allowing the Company to Consummate an Exchange
        Offer for such Transfer Restricted Securities. The Company hereby agrees
        to pursue the issuance of such a no-action letter or decision to the
        Commission staff level. In connection with the foregoing, the Company
        hereby agrees to take all such other actions as may be requested by the
        Commission or otherwise required by the Commission in connection with
        the issuance of such decision, including without limitation (A)
        participating in telephonic conferences with the Commission, (B)
        delivering to the Commission staff an analysis prepared by counsel to
        the Company setting forth the legal bases, if any, upon which such
        counsel has concluded that such an Exchange Offer should be permitted
        and (C) diligently pursuing a resolution (which need not be favorable)
        by the Commission staff; provided that this Section 6(a)(i) shall not
        restrict or limit the Company from complying with the requirements of
        Section 4, including filing and making effect a Shelf Registration
        Statement before obtaining a no-action letter or other decision or
        resolution from the Commission or the staff of the Commission.

                (ii) As a condition to its participation in the Exchange Offer,
        each Holder of Transfer Restricted Securities (including, without
        limitation, any Holder who is a Broker-Dealer) shall furnish, upon the
        request of the Company, prior to the Consummation of the Exchange Offer,
        a written representation to the Company (which may be contained in the
        letter of transmittal contemplated by the Exchange Offer Registration
        Statement) to the effect that (A) it is not an Affiliate of the Company,
        (B) it is not engaged in, and does not intend to engage in, and has no
        arrangement or understanding with any person to participate in, a
        distribution of the Exchange Securities to be issued in the Exchange

                                       7
<PAGE>

        Offer and (C) it is acquiring the Exchange Securities in its ordinary
        course of business. As a condition to its participation in the Exchange
        Offer each Holder using the Exchange Offer to participate in a
        distribution of the Exchange Securities shall acknowledge and agree
        that, if the resales are of Exchange Securities obtained by such Holder
        in exchange for Offered Securities acquired directly from the Company or
        an Affiliate thereof, it (1) could not, under Commission policy as in
        effect on the date of this Agreement, rely on the position of the
        Commission enunciated in Morgan Stanley and Co., Inc. (available June 5,
        1991) and Exxon Capital Holdings Corporation (available May 13, 1988),
        as interpreted in the Commission's letter to Shearman & Sterling dated
        July 2, 1993, and similar no-action letters (including, if applicable,
        any no-action letter obtained pursuant to clause (i) above), and (2)
        must comply with the registration and prospectus delivery requirements
        of the Act in connection with a secondary resale transaction and that
        such a secondary resale transaction must be covered by an effective
        registration statement containing the selling security holder
        information required by Item 507 or 508, as applicable, of Regulation
        S-K.

                (iii) Prior to effectiveness of the Exchange Offer Registration
        Statement, the Company shall, upon request of the Commission, provide a
        supplemental letter to the Commission (A) stating that the Company is
        registering the Exchange Offer in reliance on the position of the
        Commission enunciated in Exxon Capital Holdings Corporation (available
        May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
        interpreted in the Commission's letter to Shearman & Sterling dated July
        2, 1993, and, if applicable, any no-action letter obtained pursuant to
        clause (i) above, (B) including a representation that the Company has
        not entered into any arrangement or understanding with any Person to
        distribute the Exchange Securities to be received in the Exchange Offer
        and that, to the best of the Company's information and belief, each
        Holder participating in the Exchange Offer is acquiring the Exchange
        Securities in its ordinary course of business and has no arrangement or
        understanding with any Person to participate in the distribution of the
        Exchange Securities received in the Exchange Offer and (C) any other
        undertaking or representation required by the Commission as set forth in
        any no-action letter obtained pursuant to clause (i) above, if
        applicable.

        (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall:

               (i) comply with all the provisions of Section 6(c) below and use
        all commercially reasonable efforts to effect such registration to
        permit the sale of the Transfer Restricted Securities being sold in
        accordance with the intended method or methods of distribution thereof
        (as indicated in the information furnished to the Company pursuant to
        Section 4(b) hereof), and pursuant thereto the Company will prepare and
        file with the Commission a Registration Statement relating to the
        registration on any appropriate form under the Act, which form shall be
        available for the sale of the Transfer Restricted Securities in
        accordance with the intended method or methods of distribution thereof
        within the time periods and otherwise in accordance with the provisions
        hereof, and

               (ii) issue, upon the request of any Holder or purchaser of
         Offered Securities covered by any Shelf Registration Statement
         contemplated by this Agreement, Exchange Securities having an aggregate
         principal amount

                                       8
<PAGE>

        equal to the aggregate principal amount of Offered Securities sold
        pursuant to the Shelf Registration Statement and surrendered to the
        Company for cancellation; the Company shall register Exchange Securities
        on the Shelf Registration Statement for this purpose and issue the
        Exchange Securities to the purchaser(s) of securities subject to the
        Shelf Registration Statement in the names as such purchaser(s) shall
        designate.

        (c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company shall:

                (i) use all commercially reasonable efforts to keep such
        Registration Statement continuously effective and provide all requisite
        financial statements for the period specified in Section 3 or 4 of this
        Agreement, as applicable. Upon the occurrence of any event that would
        cause any such Registration Statement or the Prospectus contained
        therein (A) to contain an untrue statement of material fact or omit to
        state any material fact necessary to make the statements therein in
        light of the circumstances under which they were made not misleading or
        (B) not to be effective and usable for resale of Transfer Restricted
        Securities during the period required by this Agreement, the Company
        shall file promptly an appropriate amendment to such Registration
        Statement or supplement to the Prospectus curing such defect, and, if
        Commission review is required of any such amendment, use all
        commercially reasonable efforts to cause such amendment to be declared
        effective as soon as practicable;

                (ii) prepare and file with the Commission such amendments and
        post-effective amendments to the applicable Registration Statement as
        may be necessary to keep such Registration Statement effective for the
        applicable period set forth in Section 3 or 4 hereof, as the case may
        be; cause the Prospectus to be supplemented by any required Prospectus
        supplement, and as so supplemented to be filed pursuant to Rule 424
        under the Act, and to comply fully with Rules 424 and 430A, as
        applicable, under the Act in a timely manner; and comply with the
        provisions of the Act with respect to the disposition of all securities
        covered by such Registration Statement during the applicable period in
        accordance with the intended method or methods of distribution by the
        sellers thereof set forth in such Registration Statement or supplement
        to the Prospectus;

                (iii) advise each Holder promptly and, if requested by such
        Holder, confirm such advice in writing, (A) when the Prospectus or any
        Prospectus supplement or post-effective amendment to the Registration
        Statement has been filed, and, with respect to any applicable
        Registration Statement or any post-effective amendment thereto, when the
        same has become effective, (B) of any request by the Commission for
        amendments to the Registration Statement or amendments or supplements to
        the Prospectus or for additional information relating thereto, (C) of
        the issuance by the Commission of any stop order suspending the
        effectiveness of the Registration Statement under the Act or of the
        suspension by any state securities commission of the qualification of
        the Transfer Restricted Securities for offering or sale in any
        jurisdiction, or the initiation of any proceeding for any of the
        preceding purposes, and (D) of the existence of any fact or the
        happening of any event that makes any statement of a material fact made
        in the Registration Statement, the Prospectus, any amendment or
        supplement thereto or any document incorporated by reference therein
        untrue, or that requires the making of any additions to or changes in
        the Registration Statement in order to make the statements therein not
        misleading, or that requires the making of any additions to or changes
        in the

                                       9
<PAGE>

        Prospectus in order to make the statements therein, in the light of the
        circumstances under which they were made, not misleading; provided that
        any notice required pursuant to this Section 6(c)(iii) shall be provided
        by the Company on its behalf and on behalf of the Guarantors. If at any
        time the Commission shall issue any stop order suspending the
        effectiveness of the Registration Statement, or any state securities
        commission or other regulatory authority shall issue an order suspending
        the qualification or exemption from qualification of the Transfer
        Restricted Securities under state securities or Blue Sky laws, the
        Company shall use all commercially reasonable efforts to obtain the
        withdrawal or lifting of such order at the earliest possible time;

                (iv) subject to Section 6(c)(i), if any fact or event
        contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
        prepare a supplement or amendment to the Registration Statement or
        related Prospectus or any document incorporated therein by reference or
        file any other required document so that, as thereafter delivered to the
        purchasers of Transfer Restricted Securities, the Prospectus will not
        contain an untrue statement of a material fact or omit to state any
        material fact necessary to make the statements therein, in the light of
        the circumstances under which they were made, not misleading;

                (v) furnish to each Holder in connection with such exchange or
        sale, if any, before filing with the Commission, copies of any
        Registration Statement or any Prospectus included therein or any
        amendments or supplements to any such Registration Statement or
        Prospectus (including all documents incorporated by reference after the
        initial filing of such Registration Statement), which documents, upon
        such Holders' request, will be subject to the review and comment of such
        Holders in connection with such sale, if any, for a period of at least
        five Business Days, and the Company will not file any such Registration
        Statement or Prospectus or any amendment or supplement to any such
        Registration Statement or Prospectus (including all such documents
        incorporated by reference) to which such Holders shall reasonably object
        within five Business Days after the receipt thereof. A Holder shall be
        deemed to have reasonably objected to such filing if such Registration
        Statement, amendment, Prospectus or supplement, as applicable, as
        proposed to be filed, contains an untrue statement of a material fact or
        omits any material fact necessary to make the statements therein in
        light of the circumstances under which they were made not misleading or
        fails to comply with the applicable requirements of the Act;

                (vi) promptly prior to the filing of any document that is to be
        incorporated by reference into a Registration Statement or Prospectus in
        connection with such exchange or sale, if any, provide copies of such
        document to each Holder, make the Company's representatives available
        for discussion of such document and other customary due diligence
        matters, and include such information in such document prior to the
        filing thereof as such Holders may reasonably request;

                (vii) make available, at reasonable times, for inspection by
        each Holder and any attorney or accountant retained by such Holders at
        the offices at which such information normally is kept during normal
        business hours, all financial and other records, pertinent corporate
        documents of the Company and cause the Company's officers, directors and
        employees to supply all information reasonably requested by any such
        Holder, attorney

                                       10
<PAGE>

        or accountant in connection with such Registration Statement or any
        post-effective amendment thereto subsequent to the filing thereof and
        prior to its effectiveness;

                (viii) if requested by any Holders in connection with such
        exchange or sale, promptly include in any Registration Statement or
        Prospectus, pursuant to a supplement or post-effective amendment if
        necessary, such information as such Holders may reasonably request to
        have included therein, including, without limitation, information
        relating to the "Plan of Distribution" of the Transfer Restricted
        Securities; and make all required filings of such Prospectus supplement
        or post-effective amendment as soon as practicable after the Company is
        notified of the matters to be included in such Prospectus supplement or
        post-effective amendment;

                (ix) furnish to each Holder in connection with such exchange or
        sale, without charge, at least one copy of the Registration Statement,
        as first filed with the Commission, and of each amendment thereto,
        including, upon request, all documents incorporated by reference therein
        and all exhibits (including exhibits incorporated therein by reference);

                (x) deliver to each Holder without charge, as many copies of the
        Prospectus (including each preliminary prospectus) and any amendment or
        supplement thereto as such Persons reasonably may request; the Company
        hereby consents to the use (in accordance with law) of the Prospectus
        and any amendment or supplement thereto by each selling Holder in
        connection with the offering and the sale of the Transfer Restricted
        Securities covered by the Prospectus or any amendment or supplement
        thereto;

                (xi) upon the request of any Holder, enter into such agreements
        (including underwriting agreements) and make such representations and
        warranties and take all such other actions in connection therewith in
        order to expedite or facilitate the disposition of the Transfer
        Restricted Securities pursuant to any applicable Registration Statement
        contemplated by this Agreement as may be reasonably requested by any
        Holder in connection with any sale or resale pursuant to any applicable
        Registration Statement. In such connection, the Company shall:

                        (A) upon request of any Holder, furnish (or, in the case
                of paragraphs (2), (3) and (4), use all commercially reasonable
                efforts to cause to be furnished) to each Holder, upon the
                effectiveness of the Shelf Registration Statement:

                                (1) a certificate, dated such date, signed on
                        behalf of the Company, in form and substance reasonably
                        satisfactory to the Initial Purchasers, including such
                        matters as such Holders may reasonably request;

                                (2) an opinion, dated the date of effectiveness
                        of the Shelf Registration Statement, of counsel for the
                        Company, in form and substance reasonably satisfactory
                        to the Initial Purchasers and counsel for the Initial
                        Purchasers, to the effect set forth in Exhibit C to the
                        Purchase Agreement and such other similar matters as
                        such Holders may reasonably request;

                                       11
<PAGE>

                                (3) an opinion, dated the date of effectiveness
                        of the Shelf Registration Statement, of Nevada counsel
                        for the Company, in form and substance reasonably
                        satisfactory to the Initial Purchasers and counsel for
                        the Initial Purchasers, to the effect set forth in
                        Exhibit D to the Purchase Agreement and such other
                        similar matters as such Holders may reasonably request;

                                (4) an opinion, dated the date of effectiveness
                        of the Shelf Registration Statement, of New Jersey
                        counsel for the Company, in form and substance
                        reasonably satisfactory to the Initial Purchasers and
                        counsel for the Initial Purchasers, to the effect set
                        forth in Exhibit E to the Purchase Agreement and such
                        other similar matters as such Holders may reasonably
                        request;

                                (5) a customary comfort letter, dated the date
                        of effectiveness of the Shelf Registration Statement,
                        from the Company's independent accountants, in the
                        customary form and covering matters of the type
                        customarily covered in comfort letters to underwriters
                        in connection with underwritten offerings, and affirming
                        the matters set forth in the comfort letters delivered
                        pursuant to Section 10(j) and (k) of the Purchase
                        Agreement, provided that any Holder so requesting a
                        comfort letter confirms in writing to the Company's
                        independent accountants that it is of the class of
                        persons entitled to receive a comfort letter under
                        applicable accounting standards or pronouncements; and

                        (B) deliver such other documents and certificates as may
                be reasonably requested by the selling Holders to evidence
                compliance with clause (A) above and with any customary
                conditions contained in the any agreement entered into by the
                Company pursuant to this clause (xi);

                (xii) prior to any public offering of Transfer Restricted
        Securities, cooperate with the selling Holders and their counsel in
        connection with the registration and qualification of the Transfer
        Restricted Securities under the securities or Blue Sky laws of such
        jurisdictions as the selling Holders may reasonably request and do any
        and all other acts or things necessary or advisable to enable the
        disposition in such jurisdictions of the Transfer Restricted Securities
        covered by the applicable Registration Statement; provided, however,
        that the Company shall not be required to register or qualify as a
        foreign corporation where it is not now so qualified or to take any
        action that would subject it to the service of process in suits or to
        taxation, other than as to matters and transactions relating to the
        Registration Statement, in any jurisdiction where it is not now so
        subject;

                (xiii) in connection with any sale of Transfer Restricted
        Securities that will result in such securities no longer being Transfer
        Restricted Securities, cooperate with the Holders to facilitate the
        timely preparation and delivery of certificates representing Transfer
        Restricted Securities to be sold and not bearing any restrictive
        legends; and to register such Transfer Restricted Securities in such
        denominations and such names as the selling Holders may request at least
        two Business Days prior to such sale of Transfer Restricted Securities;

                                       12
<PAGE>

                (xiv) use all commercially reasonable efforts to cause the
        disposition of the Transfer Restricted Securities covered by the
        Registration Statement to be registered with or approved by such other
        governmental agencies or authorities as may be necessary to enable the
        seller or sellers thereof to consummate the disposition of such Transfer
        Restricted Securities, subject to the proviso contained in clause (xii)
        above;

                (xv) obtain a CUSIP number for all Transfer Restricted
        Securities not later than the effective date of a Registration Statement
        covering such Transfer Restricted Securities and provide the Trustee
        under the Indenture with printed certificates for the Transfer
        Restricted Securities which are in a form eligible for deposit with the
        Depository Trust Company;

                (xvi) otherwise use all commercially efforts to comply with all
        applicable rules and regulations of the Commission, and make generally
        available to its security holders with regard to any applicable
        Registration Statement, as soon as practicable, a consolidated earnings
        statement meeting the requirements of Rule 158 under the Act (which need
        not be audited) covering a twelve-month period beginning after the
        effective date of the Registration Statement (as such term is defined in
        paragraph (c) of Rule 158 under the Act);

                (xvii) cause the Indenture to be qualified under the TIA not
        later than the effective date of the first Registration Statement
        required by this Agreement and, in connection therewith, cooperate with
        the Trustee and the Holders to effect such changes to the Indenture as
        may be required for such Indenture to be so qualified in accordance with
        the terms of the TIA; and execute and use all commercially reasonable
        efforts to cause the Trustee to execute, all documents that may be
        required to effect such changes and all other forms and documents
        required to be filed with the Commission to enable such Indenture to be
        so qualified in a timely manner; and

                (xviii) provide promptly to each Holder, upon request, each
        document filed with the Commission pursuant to the requirements of
        Section 13 or Section 15(d) of the Exchange Act.

        (d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"Suspension Notice"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "Recommencement
Date"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable,

                                       13
<PAGE>

shall be extended by a number of days equal to the number of days in the period
from and including the date of delivery of the Suspension Notice to the
Recommencement Date.

SECTION 7.  REGISTRATION EXPENSES

        (a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Exchange
Securities to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company and the Holders of Transfer Restricted Securities
(subject to (b) below); (v) all application and filing fees in connection with
listing the Exchange Securities on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance).

        The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.

        Anything contained herein to the contrary notwithstanding, the Company
shall not have any obligation whatsoever in respect of any brokerage
commissions, dealers' selling concessions, transfer taxes or, except as
otherwise expressly set forth herein, any other selling expenses incurred in
connection herewith or the Exchange Offer or sale of Transfer Restricted Notes,
Offered Securities or Exchange Securities.

        (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities who are
tendering Initial Securities in the Exchange Offer and/or selling or reselling
Offered Securities or Exchange Securities pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, who shall be Latham & Watkins LLP, unless another firm shall
be chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared; provided that the Company's reimbursement obligation relating to such
fees and disbursements shall not exceed $15,000.

SECTION 8.  INDEMNIFICATION

        (a) Indemnification by Company. The Company agrees to indemnify and hold
harmless each Holder, its directors, officers and each Person, if any, who
controls such Holder (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act), from and against any and all losses, claims, damages,

                                       14
<PAGE>

liabilities, judgments, (including without limitation, any reasonable legal or
other expenses incurred in connection with investigating or defending any
matter, including any action that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Company to any Holder or any prospective purchaser of Exchange
Securities or registered Offered Securities, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or omission
or alleged untrue statement or omission that is based upon information relating
to any of the Holders furnished in writing to the Company by any of the Holders.

        (b) Indemnification by Holders. Each Holder of Transfer Restricted
Securities agrees, severally and not jointly, to indemnify and hold harmless the
Company and its directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company to the same extent as the foregoing indemnity from the Company set
forth in section (a) above, but only with reference to information relating to
such Holder furnished in writing to the Company by such Holder expressly for use
in any Registration Statement. In no event shall any Holder, its directors,
officers or any Person who controls such Holder be liable or responsible for any
amount in excess of the amount by which the total amount received by such Holder
with respect to its sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages that such
Holder, its directors, officers or any Person who controls such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

        (c) Notice. In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying person") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to assume
the defense of such action on behalf of the indemnified party). In any such
case, the indemnifying party shall not, in connection with any one action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all

                                       15
<PAGE>

indemnified parties and all such fees and expenses shall be reimbursed as they
are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action effected with its written consent;
provided that such consent was not unreasonably withheld. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.

        (d) Contribution. To the extent that the indemnification provided for in
this Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Holders, on the other hand, from their sale of Transfer
Restricted Securities or (ii) if the allocation provided by clause 8(d)(i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i) above but
also the relative fault of the Company, on the one hand, and of the Holder, on
the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by the Holder, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and judgments referred to above shall be deemed to include, subject
to the limitations set forth in the second paragraph of Section 8(a), any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.

        The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its

                                       16
<PAGE>

officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.

SECTION 9.  RULE 144A AND RULE 144

        AREP agrees with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which AREP (i) is not
subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any Holder, to such Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.

SECTION 10. MISCELLANEOUS

        (a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Sections 3 and 4 hereof may
result in material irreparable injury to the Initial Purchasers or the Holders
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Sections 3 and
4 hereof. The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

        (b) No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into, and is not currently a party to, any agreement granting any
registration rights with respect to its securities to any Person that would
require such securities to be included in any Registration Statement filed
hereunder. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date hereof.

        (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer

                                       17
<PAGE>

Restricted Securities (except that in the event Holders of less than all
outstanding Transfer Restricted Securities provide their written consent, such
amendment, modification or supplement and waiver or consent shall only be
enforceable against such Holders that provided their written consent) and (ii)
in the case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.

        (d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.

        (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier or air courier
guaranteeing overnight delivery:

                (i) if to a Holder, at the address set forth on the records of
        the Registrar under the Indenture, with a copy to the Registrar under
        the Indenture; and

                (ii) if to the Company:

                             American Real Estate Partners, L.P.
                             100 Bedford Road
                             Mt. Kisco, N.Y. 10549
                             Telecopier No.: (914) 242-9282
                             Attention: Chief Financial Officer

                             With a copy to:

                             DLA Piper Rudnick Gray Cary US LLP
                             1251 Avenue of the Americas
                             New York, New York 10020
                             Telecopier No.: (212) 884-8448
                             Attention: Steven L. Wasserman, Esq.

        All notices and communications 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 answered back, if
telexed; when receipt acknowledged in writing, if telecopied; and on the next
Business Day, if timely delivered to an overnight air courier guaranteeing next
day delivery.

                                       18
<PAGE>

        Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

        (f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Transfer
Restricted Securities in violation of the terms hereof or of the Purchase
Agreement, the terms of the offering described in the Offering Memorandum under
the caption "Notice to Investors" or the Indenture. If any transferee of any
Holder shall acquire Transfer Restricted Securities in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.

        (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

        (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

        (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

        (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

        (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                  [Remainder of page intentionally left blank]

                                       19
<PAGE>

        IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                            AMERICAN REAL ESTATE PARTNERS, L.P.

                            By: American Property Investors, Inc.,
                                its general partner

                            By: /s/ Keith A. Meister
                                --------------------------------------------
                                Name:  Keith A. Meister
                                Title: President and Chief Executive Officer

                            AMERICAN REAL ESTATE FINANCE CORP.

                            By: /s/ Keith A. Meister
                                --------------------------------------------
                                Name:  Keith A. Meister
                                Title: President and Chief Executive Officer

                            AMERICAN REAL ESTATE HOLDINGS
                            LIMITED PARTNERSHIP

                            By: American Property Investors, Inc.,
                                its general partner

                            By: /s/ Keith A. Meister
                                --------------------------------------------
                                Name:  Keith A. Meister
                                Title: President and Chief Executive Officer

BEAR, STEARNS & CO. INC.
JEFFERIES & COMPANY, INC.

     By:  Bear, Stearns & Co. Inc.

     By: /s/ Steve Mongillo
         -----------------------------------
     Name:  Steve Mongillo
     Title: Senior Managing Director

                                       20

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