SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
-------------------------
AMERICAN REAL ESTATE
INVESTMENT CORPORATION
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
029166105
(Cusip Number)
-------------------------
MR. DAVID H. LESSER
HUDSON BAY PARTNERS II, L.P.
237 PARK AVENUE
SUITE 900
NEW YORK, NEW YORK 10017
(212) 692-3622
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
-------------------------
COPY TO:
ROBERT E. KING, JR., ESQ.
ROGERS & WELLS
200 PARK AVENUE
NEW YORK, NEW YORK 10166
212-878-8000
-------------------------
DECEMBER 12, 1997
(Date of event which requires filing of this statement)
- -------------------------------------------------------------------------------
<square> Check box if the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4).
<square> Check box if a fee is being paid with the statement.
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 029166105 13D Page 2 of 8 Pages
<TABLE>
<CAPTION>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Hudson Bay Partners II, L.P.
<S> <C> <C> <C>
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) <square>
(B) <square>
3. SEC USE ONLY
4. SOURCES OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e)
<square>
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. SOLE VOTING POWER
NUMBER OF 1,754,545*
UNITS
8. SHARED VOTING POWER
BENEFICIALLY
1,754,545*
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 1,754,545*
PERSON WITH
10. SHARED DISPOSITIVE POWER
1,754,545*
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,754,545
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
<square>
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.23%
14. TYPE OF REPORTING PERSON
PN
</TABLE>
* Mr. Lesser is President, sole director and sole shareholder of Hudson Bay
Partners, Inc., the general partner of Hudson Bay Partners II, L.P., and,
as a result of such affiliation, may be deemed to have shared voting and
dispositive power over the 1,754,545 shares of Common Stock owned by
Hudson Bay Partners II, L.P.; however, Mr. Lesser expressly disclaims
beneficial ownership of any Common Stock not directly owned by him.
<PAGE>
CUSIP No. 029166105 13D Page 3 of 8 Pages
<TABLE>
<CAPTION>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
David H. Lesser
<S> <C> <C> <C>
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) <square>
(B) <square>
3. SEC USE ONLY
4. SOURCES OF FUNDS
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e)
<square>
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7. SOLE VOTING POWER
NUMBER OF 9,827
UNITS
8. SHARED VOTING POWER
BENEFICIALLY
1,754,545*
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 9,827
PERSON WITH
10. SHARED DISPOSITIVE POWER
1,754,545*
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,764,372*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
<square>
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.41%
14. TYPE OF REPORTING PERSON
IN
</TABLE>
* Mr. Lesser is President, sole director and sole shareholder of Hudson Bay
Partners, Inc., the general partner of Hudson Bay Partners II, L.P., and,
as a result of such affiliation, may be deemed to have shared voting and
dispositive power over the 1,754,545 shares of Common Stock owned by
Hudson Bay Partners II, L.P.; however, Mr. Lesser expressly disclaims
beneficial ownership of any Common Stock not directly owned by him.
<PAGE>
SCHEDULE 13D
FILED PURSUANT TO RULE 13d-1
OF THE GENERAL RULES AND REGULATIONS UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (this "Statement") relates to shares
of the common stock, par value $0.001 per share (the "Common Stock") of
American Real Estate Investment Corporation, a Maryland corporation (the
"Issuer"). The Issuer's principal executive offices are located at Plymouth
Meeting Executive Campus, 620 W. Germantown Pike, Suite 200, Plymouth Meeting,
Pennsylvania 19462.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) The entity filing this statement is Hudson Bay Partners II, L.P.,
a Delaware limited partnership ("Hudson Bay") of which Hudson Bay Partners,
Inc., a New York corporation, is the sole general partner (the "General
Partner"). David H. Lesser is the sole director and executive officer of the
General Partner. The principal executive offices of Hudson Bay and the General
Partner and the principal business address of Mr. Lesser are located at 237
Park Avenue, Suite 900, New York, New York 10017. Hudson Bay's principal
business is investments in real estate related securities. The General
Partner's principal business is acting as general partner of Hudson Bay and
Hudson Bay Partners, L.P., a Delaware limited partnership. Mr. Lesser's
current principal occupation is to serve as President of the General Partner.
(d)-(e) During the last five years, neither Hudson Bay, the General
Partner, nor Mr. Lesser (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining further violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Hudson Bay used funds from its working capital for the purchases
described in Items 4 and 5 below.
ITEM 4. PURPOSE OF THE TRANSACTION.
On August 20, 1997, the Issuer and American Real Estate Investment,
L.P. (the "Operating Partnership") entered into agreements with Hudson Bay and
other investors (collectively with Hudson Bay, the "Investor Group") providing
for a series of transactions (the "Transactions") involving the contribution by
the Investor Group of cash, real estate properties and other assets to the
Issuer and to the Operating Partnership in exchange for shares of Common Stock
and units of limited partnership interest of the Operating Partnership ("OP
Units").
The Transactions involved, among other things, (i) the cash
investment in the Issuer by Hudson Bay and certain other investors, the
contribution by McBride Hudson Bay, L.P. and various entities affiliated with
it of interests in certain entities owning real property, cash and acquisition
agreements, the contribution by Jeffrey E. Kelter of a 95% non-voting equity
interest in Penn Square Properties, Inc., a Pennsylvania corporation ("Penn
<PAGE>
Square"), the contribution by Penn Square of contracts relating to the
acquisition of certain real estate properties and the merger of Fair Lawn
Industrial Park, Inc., a New York corporation, with and into the Issuer with
the Issuer as the surviving corporation (the "Merger"), in each case in
exchange for either Common Stock, OP Units or warrants for the purchase of
Common Stock or OP Units, or a combination of the foregoing; (ii) the election
of five persons to the Issuer's board of directors (the "Board") to fill five
vacancies that existed upon the consummation of the Transactions by reason of
the resignations of three of the Issuer's previous directors and the expansion
of the Board by two persons; (iii) the adoption, as a consequence of the
Merger, of Amended and Restated Articles of Incorporation and Amended and
Restated Bylaws of the Issuer; (iv) the disposition of the multi-family
residential properties or interests therein owned by the Operating Partnership;
(v) the amendment of the Agreement of Limited Partnership of the Operating
Partnership; (vi) in consideration of the Transactions described in clause
(i) above, the issuance to members of the Investor Group of an aggregate of
4,136,033 shares of Common Stock and an aggregate of 3,362,503 OP Units,
and the issuance of warrants to purchase 300,000 shares of Common Stock and
375,000 OP Units; and (vii) the assumption by the Issuer of approximately
$56.8 million in certain indebtedness as part of the Transactions described in
clause (i) above.
The Issuer's stockholders approved the Transactions at a special
meeting held on December 11, 1997, and the Transactions were consummated on
December 12, 1997. Upon consummation of the Transactions, the Issuer issued to
Hudson Bay 1,454,545 shares of Common Stock and a warrant (the "Warrant") to
purchase 300,000 shares of Common Stock, in exchange for Hudson Bay's
investment of $16 million in the Issuer.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) Hudson Bay is the record and beneficial owner of 1,454,545
shares of Common Stock of the Issuer and has sole voting and dispositive power
with respect to such shares. Hudson Bay also owns a Warrant to purchase
300,000 shares of Common Stock of the Issuer. The Warrant is exercisable by
Hudson Bay at any time before 5:00 p.m. New York City time on December 12,
2004. Upon exercise of the Warrant, Hudson Bay would have sole voting and
dispositive power for any shares of Common Stock issued pursuant to such
exercise. Accordingly, pursuant to the Warrant, Hudson Bay owns beneficially
300,000 shares of the Common Stock of the Issuer, and therefore owns
beneficially an aggregate of 1,754,545 shares of Common Stock, representing
approximately 33.23% of the outstanding Common Stock of the Issuer. The
General Partner owns no shares of Common Stock, except indirectly as general
partner of Hudson Bay.
Mr. Lesser is the record and beneficial owner of 9,827 shares of
Common Stock, constituting approximately 0.19% of the outstanding Common Stock
of the Issuer, and has sole voting and dispositive power with respect to such
shares. As a result of his affiliation with the General Partner, Mr. Lesser
may be deemed to beneficially own the 1,454,545 shares of Common Stock owned by
Hudson Bay and the 300,000 shares of Common Stock issuable upon exercise of the
Warrant. Mr Lesser expressly disclaims beneficial ownership of any shares of
Common Stock not directly owned by him. Mr. Lesser may also be deemed to share
with Hudson Bay voting and dispositive power over the 1,454,545 shares of
Common Stock owned by Hudson Bay and the 300,000 shares of Common Stock to be
received upon exercise of the Warrant.
(c) On December 10, 1997, Mr. Lesser acquired 144 shares of Common
Stock through the Issuer's dividend reinvestment program. On December 12,
1997, Hudson Bay acquired 1,454,545 shares of Common Stock and the Warrant in
the Transactions described in Item 4 above.
(d)-(e) Not applicable.
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Issuer, Hudson Bay and certain other holders of Common Stock of
the Issuer (collectively, the "Holders") entered into a Registration Rights
Agreement, dated December 12, 1997 (the "Registration Rights Agreement"),
pursuant to which the Issuer granted the Holders certain registration rights
with respect to the shares of Common Stock held by them. A copy of the
Registration Rights Agreement is attached herein as Exhibit 7.2.
Other than the Registration Rights Agreement, no contracts,
arrangements, understandings or relationships (legal or otherwise) between
Hudson Bay, the General Partner or Mr. Lesser and any other person exists with
respect to any securities of the Issuer, including but not limited to transfer
or voting of any such securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 7.1 Agreement of Joint Filing between Hudson Bay Partners II,
L.P., and David H. Lesser, dated December 19, 1997.
Exhibit 7.2 Registration Rights Agreement, dated December 12, 1997.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 19, 1997
HUDSON BAY PARTNERS II, L.P.
By: Hudson Bay Partners, Inc.,
General Partner
By: /S/ DAVID H. LESSER
---------------------------------------
David H. Lesser
President
By: /S/ DAVID H. LESSER
---------------------------------------------
David H. Lesser, individually
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
7.1 Agreement of Joint Filing between Hudson Bay Partners II,
L.P. and David H. Lesser, dated December 19, 1997.
7.2 Registration Rights Agreement, dated December 12, 1997.
</TABLE>
<PAGE>
EXHIBIT 7.1
AGREEMENT OF JOINT FILING
-------------------------
Hudson Bay Partners II, L.P. and David H. Lesser hereby agree that the
Statement on Schedule 13D to which this agreement is attached as an exhibit, as
well as all future amendments to such Statement, shall be filed jointly on
behalf of each of them. This agreement is intended to satisfy the requirements
of Rule 13d-1(f)(1)(iii) under the Securities Exchange Act of 1934, as amended.
Dated: December 19, 1997
HUDSON BAY PARTNERS II, L.P.
By: Hudson Bay Partners, Inc.,
General Partner
By: /S/ DAVID H. LESSER
------------------------------
Name: David H. Lesser
Title: President
By: /S/ DAVID H. LESSER
--------------------------------
David H. Lesser, individually
<PAGE>
EXHIBIT 7.2
REGISTRATION RIGHTS AGREEMENT dated as of December 12, 1997,
between AMERICAN REAL ESTATE INVESTMENT CORPORATION, a Maryland corporation
(the "Company"), and the persons listed on the signature pages hereto (each
an "Initial Holder" and collectively, the "Initial Holders").
WHEREAS, in connection with the Master Investment Agreement,
dated as of August 20, 1997 (the "Master Agreement"), among the Company and
the parties listed on the signature pages thereto, each Initial Holder will
receive shares of Common Stock (as defined below); and
WHEREAS, in order to induce the Initial Holders to enter into the
First Amendment to the Master Agreement dated December [12], 1997, the
Company has agreed to provide each Initial Holder with the registration
rights set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
Section 1. DEFINITIONS. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Master
Agreement. For purposes of this Agreement, the following terms shall have
the following meanings:
"Closing Date" has the meaning given to it in the Master
Agreement.
"Common Stock" means the common stock, par value $.001, of the
Company.
"Counsel to the Holders" means the single law firm from time to
time representing the Holders, as appointed by the Holders of a majority in
number of the Registrable Securities, which law firm shall be reasonably
acceptable to the Company.
"Effective Period" means, with respect to any Holder, a period
commencing on the date of this Agreement and ending on the earlier of (i)
the first date as of which all Registrable Securities cease to be
Registrable Securities and (ii) the date on which such Holder may sell
Registrable Securities in accordance with Rule 145(d)(3) under the
Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means a person who owns Registrable Securities and is
either (i) named on the signature pages hereof as an Initial Holder, or
(ii) a person who has agreed to be bound by the terms of this Agreement as
if such person were a Holder and is (A) a person to whom a Holder has
<PAGE>
transferred Registrable Securities pursuant to an applicable exemption from
registration under the Securities Act, the executor of the estate of such
Holder or any of such Holder's heirs, devisees, legatees or assigns, or (C)
upon the disability of any Holder, any guardian or conservator of such
Holder.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf
Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by any Shelf Registration Statement and by
all other amendments and supplements to the prospectus, including
post-effective amendments and all material incorporated by reference in
such prospectus.
"Registrable Securities" means the shares of Common Stock to be
issued on the Closing Date in connection with the Master Agreement and the
transactions described therein, unless (i) they have been effectively
registered under Section 5 of the Securities Act and disposed of pursuant
to an effective Shelf Registration Statement, (ii) such securities can be
freely sold and transferred without restriction under Rule 144(k) or Rule
145 or any other similar restrictions under the Securities Act, (iii) such
securities have been transferred pursuant to Rule 144 under the Securities
Act or any successor rule such that, after any such transfer referred to in
this clause (iii), such securities may be freely transferred without
restriction under the Securities Act or (iv) such securities have ceased to
be outstanding.
"Registration Expenses" means any and all reasonable expenses
incident to performance of or compliance with this Agreement, including,
without limitation, (i) all SEC, NASD and securities exchange registration
and filing fees, (ii) all fees and expenses of complying with state
securities or blue sky laws, (iii) all printing, messenger and delivery
expenses, (iv) all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange or
automated quotation system pursuant to Section 3(h), (v) the fees and
disbursements of counsel for the Company and of its independent public
accountants, (vi) the reasonable fees and expenses of any special experts
retained by the Company in connection with the requested registration and
(vii) the reasonable fees and expenses of Counsel to the Holders.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration" means a "shelf" registration statement on an
appropriate form pursuant to Rule 415 under the Securities Act (or any
successor rule that may be adopted by the SEC).
2
<PAGE>
"Shelf Registration Statement" means any Shelf Registration of
the Company referred to in Section 2, including any Prospectus, amendments
and supplements to any such registration statement, including
post-effective amendments, and all exhibits and all material incorporated
by reference in any such registration statement.
Section 2. SHELF REGISTRATION UNDER THE SECURITIES ACT.
Within 22 months following the Closing Date, the Company
shall cause to be filed a Shelf Registration Statement providing for the
sale by the Holders of all of the Registrable Securities in accordance with
the terms hereof and will use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective by the SEC as soon as
reasonably practicable, but in any event no later than the second
anniversary of the Closing Date. The Company agrees to use its reasonable
best efforts to keep the Shelf Registration Statement continuously
effective under the Securities Act until such time as there are no
Registrable Securities outstanding and further agrees to supplement or
amend the Shelf Registration Statement, if and as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or
by any other rules and regulations thereunder for Shelf Registration.
Section 3. REGISTRATION PROCEDURES. In connection with the
obligations of the Company with respect to the Shelf Registration Statement
pursuant to Section 2 hereof, the Company shall:
(a) prepare and file with the SEC a Shelf Registration
Statement with respect to the Registrable Securities on any form for which
the Company then qualifies or which counsel for the Company shall deem
appropriate, and which form shall be available for the sale of the
Registrable Securities in accordance with the intended methods of
distribution thereof (including distributions under Rule 415 under the
Securities Act), and use commercially reasonable efforts to cause such
Shelf Registration Statement to become and remain effective;
(b) prepare and file with the SEC amendments and
post-effective amendments to such Shelf Registration Statement and such
amendments and supplements to the Prospectus used in connection therewith
as may be necessary to maintain the effectiveness of such registration or
as may be required by the rules, regulations or instructions applicable to
the registration form utilized by the Company or by the Securities Act or
rules and regulations thereunder necessary to keep such Shelf Registration
Statement continuously effective as provided in Section 2, and cause the
Prospectus as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to otherwise comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Shelf Registration Statement until such time as all Registrable
Securities covered by such Shelf Registration Statement have ceased to be
Registrable Securities;
(c) furnish to each Holder of such Registrable Securities
such number of copies of such Shelf Registration Statement and of each
amendment and post-effective amendment thereto (in each case including all
exhibits), any Prospectus (including each preliminary prospectus) or
Prospectus supplement and such other documents as such Holder may
3
<PAGE>
reasonably request in order to facilitate the disposition of the
Registrable Securities by such Holder (the Company hereby consenting to the
use (subject to the limitations set forth in the last paragraph of this
Section 3) of the Prospectus (including each preliminary prospectus) or any
amendment or supplement thereto in connection with such disposition);
(d) use commercially reasonable efforts to register or
qualify such Registrable Securities covered by such Shelf Registration
Statement under such other securities or blue sky laws of such
jurisdictions in the United States as each Holder shall reasonably request,
and do any and all other acts and things which may be reasonably necessary
or advisable to enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder, except
that the Company shall not for any such purpose be required to (i) qualify
generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this Section 3(d), it would not be
obligated to be so qualified, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction;
(e) notify each Holder of any such Registrable Securities
covered by such Shelf Registration Statement, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of
the Company's becoming aware that the Prospectus included in such Shelf
Registration Statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing, and prepare and furnish to such Holder
a reasonable number of copies of an amendment to such Shelf Registration
Statement or related Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(f) notify each Holder of Registrable Securities covered by
such Shelf Registration Statement at any time,
(1) when the Prospectus or any Prospectus supplement
or post-effective amendment has been filed, and, with respect to the Shelf
Registration Statement or any post-effective amendment, when the same has
become effective;
(2) of any request by the SEC for amendments or
supplements to the Shelf Registration Statement or the Prospectus or for
additional information;
(3) of the issuance by the SEC of any stop order of
which the Company or its counsel is aware or should be aware suspending the
effectiveness of the Shelf Registration Statement or any order preventing
the use of a related Prospectus, or the initiation or any threats of any
proceedings for such purposes; and
4
<PAGE>
(4) of the receipt by the Company of any written
notification of the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
any threats of any proceeding for that purpose;
(g) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC, and make available to
the Holders an earnings statement which shall satisfy the provisions of
Section 11(a) of the Securities Act, provided that the Company shall be
deemed to have complied with this paragraph if it has complied with Rule
158 under the Securities Act;
(h) use commercially reasonable efforts to cause all such
Registrable Securities to be listed on any securities exchange or automated
quotation system on which the Common Stock is then listed, if such
Registrable Securities are not already so listed and if such listing is
then permitted under the rules of such exchange or automated quotation
system, and to provide a transfer agent and registrar for such Registrable
Securities covered by such Shelf Registration Statement no later than the
effective date of such Shelf Registration Statement;
(i) cooperate with the Holders of Registrable Securities
covered by such Shelf Registration Statement to facilitate, to the extent
commercially reasonable under the circumstances, the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing
the securities to be sold under such Shelf Registration Statement, and
enable such securities to be in such denominations and registered in such
names as such Holders may request;
(j) provide any Holder of Registrable Securities included
in such Shelf Registration Statement and any attorney, accountant or other
agent retained by any such Holder (collectively, the "Inspectors") with
reasonable access to appropriate officers of the Company and the Company's
subsidiaries to ask questions and to obtain information reasonably
requested by any such Inspector and make available for inspection all
financial and other records and other information, pertinent corporate
documents and properties of any of the Company and its subsidiaries and
affiliates (collectively, the "Records"), as shall be reasonably necessary
to enable them to exercise their due diligence responsibility; provided,
however, that the Records that the Company determines, in good faith, to be
confidential and which it notifies the Inspectors in writing are
confidential shall not be disclosed to any Inspector unless such Inspector
signs a confidentiality agreement reasonably satisfactory to the Company
but in any event permitting disclosure by an Inspector if (i) the
disclosure of such Records is necessary to avoid or correct a misstatement
or omission of a material fact in such Shelf Registration Statement or (ii)
the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction; provided further, however,
that any decision regarding the disclosure of information pursuant to
subclause (i) shall be made only after consultation with counsel for the
applicable Inspectors. Each Holder of Registrable Securities agrees that it
will, promptly after learning that disclosure of such Records is sought in
a court having jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of such Records; and
5
<PAGE>
(k) in the event of the issuance of any stop order of which
the Company or its counsel is aware or should be aware suspending the
effectiveness of the Shelf Registration Statement or of any order
suspending or preventing the use of any related Prospectus or suspending
the qualification of any Registrable Securities included in the Shelf
Registration Statement for sale in any jurisdiction, the Company will use
commercially reasonable efforts promptly to obtain its withdrawal.
The Company may require each Holder of Registrable Securities as
to which any registration is being effected to furnish the Company with
such information regarding such Holder and pertinent to the disclosure
requirements relating to the registration and the distribution of such
securities as the Company may from time to time reasonably request in
writing.
Each Holder of Registrable Securities agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 3(e), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Prospectus or Shelf
Registration Statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(e), and, if so directed by the Company, such
Holder will 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 Registrable Securities current at the time of
receipt of such notice.
Section 4. REGISTRATION EXPENSES. The Company will pay all
Registration Expenses in connection with all registrations of Registrable
Securities pursuant to Section 2 upon the written request of any of the
Holders, and each Holder shall pay (x) any fees or disbursements of counsel
to such Holder (other than Counsel to the Holders, if any) and (y) all
commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
Section 5. REPORTS UNDER THE EXCHANGE ACT. The Company agrees to:
(a) file with the SEC in a timely manner all reports and
other documents required of the Company under the Exchange Act; and
(b) furnish to any Holder, during the Effective Period,
upon request (A) a written statement by the Company that it has complied
with the current public information and reporting requirements of Rule 144
under the Securities Act and the Exchange Act and (B) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company.
Section 6. RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE
SECURITIES. Each Holder agrees with the Company that:
(a) If the Board of Directors of the Company determines in
its good faith judgment that the filing of the Shelf Registration Statement
under Section 2 hereof or the use of any Prospectus would materially
impede, delay or interfere with any pending material financing, acquisition
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or corporate reorganization or other material corporate development
involving the Company or any of its subsidiaries, or require the disclosure
of important information which the Company has a bona fide business purpose
for preserving as confidential or the disclosure of which would impede the
Company's ability to consummate a significant transaction, upon written
notice of such determination by the Company, the rights of the Holders to
offer, sell or distribute any Registrable Securities pursuant to the Shelf
Registration Statement or to require the Company to take action with
respect to the registration or sale of any Registrable Securities pursuant
to the Shelf Registration Statement (including any action contemplated by
Section 3 hereof) will be suspended until the date upon which the Company
notifies the Holders in writing that suspension of such rights for the
grounds set forth in this Section 6(a) is no longer necessary, but no such
period shall extend for longer than 90 days.
(b) In the case of the registration of any underwritten
equity offering proposed by the Company (other than any registration by the
Company of (i) an employee stock option, stock purchase or compensation
plan or of securities issued or issuable pursuant to any such plan or (ii)
a dividend reinvestment plan), each Holder agrees, if requested in writing
by the managing underwriter or underwriters administering such offering,
not to effect any offer, sale or distribution of Registrable Securities (or
any option or right to acquire Registrable Securities) during the period
commencing on the 7th day prior to the expected effective date (which date
shall be stated in such notice) of the registration statement covering such
underwritten primary equity offering and ending on the date specified by
such managing underwriter in such written request to such Holder, which
date shall not be later than 90 days after such expected date of
effectiveness.
(c) In the event that any Holder uses a Prospectus in
connection with the offering and sale of Registrable Securities covered by
such Prospectus, such Holder will use only the latest version of such
Prospectus provided to it by the Company.
Section 7. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Holder of Registrable Securities, its
officers, directors, agents, trustees, stockholders and each Person who
controls such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act), against all losses, claims,
damages, liabilities and expenses (including reasonable attorneys' fees,
disbursements and expenses) incurred by such party pursuant to any actual
or threatened action, suit, proceeding or investigation arising out of or
based upon (i) any violation by the Company (or its officers, directors or
controlling persons) of any Federal or state law, rule or regulation
applicable to the Company and relating to any action required or inaction
by the Company (or such other person) in connection with any Shelf
Registration Statement, (ii) any untrue or alleged untrue statement of
material fact contained in the Shelf Registration Statement, any Prospectus
or preliminary Prospectus, or any amendment or supplement to any of the
foregoing or (iii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus or a preliminary
Prospectus, in light of the circumstances then existing) not misleading,
except in each case insofar as the same arise out of or are based upon any
such untrue statement or omission made in reliance on and in conformity
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with information with respect to such indemnified party furnished in
writing to the Company by such indemnified party or its counsel expressly
for use therein. Notwithstanding the foregoing provisions of this Section
7(a), the Company will not be liable to any Holder of Registrable
Securities (or any officer, director, agent, trustee, stockholder or
controlling person thereof) or any other Person, if any, who controls such
Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act), under the indemnity agreement in this Section 7(a)
for any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense that arises out of such Holder's or other
Person's failure to send or deliver a copy of the final Prospectus to the
Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the
sale of the Registrable Securities to such Person if such statement or
omission was corrected in such final Prospectus and the Company has
previously furnished copies thereof to such Holder or other Person in
accordance with this Agreement.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES.
In connection with the Shelf Registration Statement, each Holder will
furnish to the Company in writing such information, including the name,
address and the amount of Registrable Securities held by such Holder, as
the Company reasonably requests for use in such Shelf Registration
Statement or the related preliminary or final Prospectus and agrees to
indemnify and hold harmless (in the same manner and to the same extent as
set forth in Section 7(a)) the Company, all other Holders and any of their
respective affiliates, directors, officers, agents, trustees, stockholders
and controlling Persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act), against any losses, claims,
damages, liabilities and expenses resulting from (i) any violation by such
Holder (or its officers, directors, agents, trustees, stockholders or
controlling persons) of any Federal or state law, rule or regulation
relating to action required of or inaction by such Holder (or other Person)
in connection with its offer and sale of Registrable Securities and (ii)
any untrue or alleged untrue statement of a material fact contained in, or
any omission or alleged omission of a material fact required to be stated
in, such Shelf Registration Statement or preliminary or final Prospectus or
any amendment or supplement to any of them or necessary to make the
statements therein (in the case of a Prospectus, in the light of the
circumstances then existing) not misleading, but only to the extent that
any such untrue statement or omission is made in reliance on and in
conformity with information with respect to such Holder furnished in
writing to the Company by such Holder or its counsel specifically for
inclusion therein.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder agrees to give prompt written notice
to the indemnifying party after the receipt by such indemnified party of
any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such indemnified
party may claim indemnification or contribution pursuant to this Agreement
(provided that failure to give such notification shall not affect the
obligations of the indemnifying party pursuant to this Section 7 except to
the extent the indemnifying party shall have been actually prejudiced as a
result of such failure). In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
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party), and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under these
indemnification provisions for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs
of investigation, unless in the reasonable judgment of any indemnified
party a conflict of interest is likely to exist, based on the written
opinion of counsel, between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the reasonable fees and
expenses of such additional counsel or counsels. No indemnifying party, in
defense of any such action, suit, proceeding or investigation, shall,
except with the written consent of each indemnified party, consent to the
entry of any judgment or entry into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to such
action, suit, proceeding or investigation to the extent the same is covered
by the indemnity obligation set forth in this Section 7. No indemnified
party shall consent to entry of any judgment or enter into any settlement
without the written consent of each indemnifying party.
(d) CONTRIBUTION. If the indemnification from the
indemnifying party provided for in this Section 7 is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the 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 and expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions which resulted in such
losses, claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among
other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7(c), any legal and other fees and expenses reasonably incurred by
such indemnified party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 7(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Each Holder's obligation to contribute is
several in the proportion that the proceeds of the offering received by
such Holder bears to the total proceeds of the offering, and not joint.
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If indemnification is available under this Section 7,
the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Section 7(a) or (b), as the case may be, without regard
to the relative fault of said indemnifying parties or indemnified party or
any other equitable consideration provided for in this Section 7(d).
(e) In no event shall any Holder of Registrable Securities
be liable or required to pay any amount under this Section 7 or otherwise
in respect of any untrue or alleged untrue statement or omission or alleged
omission for amounts in excess of the amount by which the total price at
which the Registrable Securities of such Holder were offered to the public
exceeds the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue statement or omission.
(f) The provisions of this Section 7 shall be in addition
to any liability which any indemnifying party may have to any indemnified
party and shall survive the termination of this Agreement.
Section 8. MISCELLANEOUS.
(a) REMEDIES. Each Holder of Registrable Securities in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement.
(b) AMENDMENTS AND WAIVERS. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written
consent of Holders of at least a majority in number of the Registrable
Securities then outstanding, and, in any case, of each Holder whose rights
would be materially adversely affected by such amendment, modification,
supplement, waiver or consent, as the case may be.
(c) NOTICES. Any notice required to be given hereunder
shall be sufficient if in writing, and sent by facsimile transmission or by
courier service (with proof of service), hand delivery or certified or
registered mail (return receipt requested and first-class postage prepaid),
addressed as follows:
(i) if to a Holder of Registrable Securities, at the
address of such Holder below such Holder's name on the signature pages
hereof or, if not a party hereto on the date hereof, such other address as
such Holder may designate to the Company in writing; and
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(ii) if to the Company to:
American Real Estate Investment Corporation
Plymouth Meeting Executive Campus
620 W. Germantown Pike
Plymouth Meeting, PA 19462
Phone: (610) 834-7950
Facsimile: (610) 834-9560
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the
date so telecommunicated, personally delivered or mailed.
(d) SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon
the successors, assigns, heirs, executors, and administrators of the
parties hereto; provided, however, that (i) any Holder shall have agreed in
writing to become a Holder under this Agreement and to be bound by the
terms and conditions hereof and (ii) subject to clause (i), this Agreement
and the provisions of this Agreement that are for the benefit of the
Holders shall not be assignable by any Holder to any Person that is not so
permitted to be a Holder, and any such purported assignment shall be null
and void.
(e) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
(f) DESCRIPTIVE HEADINGS. The descriptive headings used
herein are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
(h) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein
shall not be in any way impaired thereby and that all remaining provisions
contained herein shall not be in any way impaired thereby.
(i) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression and a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter hereof. There are no restrictions, promises, warranties or
undertakings with respect to the subject matter hereof, other than those
set forth or referred to herein and therein. This Agreement supersedes all
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prior agreements and understandings between the parties with respect to
such subject matter.
12
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
AMERICAN REAL ESTATE INVESTMENT
CORPORATION
By:/S/ EVAN ZUCKER
_______________________________________________
Evan Zucker
President
HUDSON BAY PARTNERS II, L.P.
By: Hudson Bay Partners, Inc.,
its General Partner
By:/S/ DAVID LESSER
______________________________________________
David Lesser
President
237 Park Avenue, Suite 900
New York, NY 10017
FRANCIS V. MCBRIDE
REVOCABLE TRUST, UID 4/22/96
By:/S/ ANTOINETTE R. McBRIDE
_______________________________________________
Antoinette R. McBride
Trustee
12512 Marsh Creek Drive
Ponte Vedra, FL 32082
/S/ JOAN H. McBRIDE
_________________________________________________
JOAN H. MCBRIDE
440 Weymouth Drive
Wyckoff, NJ 07481
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/S/ MARY V. DEKORTE
_______________________________________________
MARY V. DEKORTE
736 Tegawitha Way
Franklin Lakes, NJ 07417
/S/ TIMOTHY B. McBRIDE
_______________________________________________
TIMOTHY B. MCBRIDE
4939 Quebec Street, N.W.
Washington, D.C. 20016
/S/ KATHRYN M. KRUCKEL
_______________________________________________
KATHRYN M. KRUCKEL
950 Franklin Lakes Road
Franklin Lakes, NJ 07417
/S/ MOIRA McBRIDE MURPHY
_______________________________________________
MOIRA MCBRIDE MURPHY
328 Longbow Drive
Franklin Lakes, NJ 07417
/S/ J. NEVINS McBRIDE, JR.
_______________________________________________
J. NEVINS MCBRIDE, JR.
1635 El Paso Real
La Jolla, CA 92037
/S/ W. PETER McBRIDE
_______________________________________________
W. PETER MCBRIDE
710 Franklin Lakes Road
Franklin Lakes, NJ 07417
/S/ DAVID F. McBRIDE
_______________________________________________
DAVID F. MCBRIDE
1000 Scioto Drive
Franklin Lakes, NJ 07417
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/S/ TERENCE A. McBRIDE
_______________________________________________
TERENCE A. MCBRIDE
954 Colonial Road
Franklin Lakes, NJ 07417
/S/ SHEILA JAMES
_______________________________________________
SHEILA JAMES
260 Upper Gulph Road
Radnor, PA 19087
/S/ MICHAEL X. McBRIDE
_______________________________________________
MICHAEL X. MCBRIDE
18 North Murray Avenue
Ridgewood, NJ 07450
/S/ MARK J. McBRIDE
_______________________________________________
MARK J. MCBRIDE
2 Wyndhurst Drive
Madison, NJ 07923
URBAN HOLDINGS, L.L.C.
By:/S/ DAVID F. McBRIDE
____________________________________________
Name:
Title:
c/o McBride Enterprises, Inc.
808 High Mountain Road
Franklin Lakes, NJ 07417
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MARGARET MARY MCBRIDE
REVOCABLE TRUST A, UID 3/10/88
By:/S/ TIMOTHY B. McBRIDE
____________________________________________
Timothy B. McBride
Trustee
4939 Quebec Street, N.W.
Washington, D.C. 20016
JOHN NEVINS MCBRIDE
ARTICLE THIRD, TESTAMENTARY TRUST "B",
UWD 3/26/93
By:/S/ DAVID F. McBRIDE
____________________________________________
David F. McBride
Trustee
1000 Scioto Drive
Franklin Lakes, NJ 07417
/S/ MARY K. McBRIDE
_______________________________________________
MARY K. MCBRIDE
349 Algonquin Road
Franklin Lakes, NJ 07417
/S/ JOSEPH A. McBRIDE
_______________________________________________
JOSEPH A. MCBRIDE
999 Cherokee Lane
Franklin Lakes, NJ 07417
16
<PAGE>
/S/ ROBERT BRANSON
_______________________________________________
ROBERT BRANSON
5013 Scarsdale Road
Bethesda, MD 20816
THE BRANSON FAMILY LLC
By:/S/ ROBERT BRANSON
____________________________________________
Robert Branson
Managing Member
5013 Scarsdale Road
Bethesda, MD 20816
CRA REAL ESTATE SECURITIES, L.P.
By: CRA Real Estate Securities, Inc.,
its general partner
By:/S/ T. RITSON FERGUSON
____________________________________________
T. Ritson Ferguson
President
259 Radnor-Chester Road, Suite 205
Radnor, PA 19087
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