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<SEC-DOCUMENT>0000950123-05-008206.txt : 20050706
<SEC-HEADER>0000950123-05-008206.hdr.sgml : 20050706
<ACCEPTANCE-DATETIME>20050706155054
ACCESSION NUMBER:		0000950123-05-008206
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20050629
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050706
DATE AS OF CHANGE:		20050706

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN REAL ESTATE PARTNERS L P
		CENTRAL INDEX KEY:			0000813762
		STANDARD INDUSTRIAL CLASSIFICATION:	OPERATORS OF NONRESIDENTIAL BUILDINGS [6512]
		IRS NUMBER:				133398766
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09516
		FILM NUMBER:		05940664

	BUSINESS ADDRESS:	
		STREET 1:		100 SOUTH BEDFORD ROAD
		CITY:			MT KISCO
		STATE:			NY
		ZIP:			10549
		BUSINESS PHONE:		9142427700
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>y10465e8vk.htm
<DESCRIPTION>AMERICAN REAL ESTATE PARTNERS, L.P.
<TEXT>
<HTML>
<HEAD>
<TITLE>AMERICAN REAL ESTATE PARTNERS, L.P.</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>


<P align="center" style="font-size: 10pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>


<P align="center" style="font-size: 18pt"><B>FORM 8-K</B>


<P align="center" style="font-size: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 or 15(d) of the<BR>
Securities Exchange Act of 1934</B>


<P align="center" style="font-size: 10pt">Date of Report (Date of Earliest Event Reported): June&nbsp;29, 2005


<P align="center" style="font-size: 24pt"><B>American Real Estate Partners, L.P.</B>


<DIV align="center" style="font-size: 10pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 1pt; width: 65%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>1-9516</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>13-3398766</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of<BR>
incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(IRS Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="100%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="100%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">100 South Bedford Road, Mt. Kisco, NY 10549</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices) (Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Registrant&#146;s telephone number, including area code: <B>(914)&nbsp;242-7700</B>



<P align="center" style="font-size: 10pt"><B>N/A</B>


<DIV align="center" style="font-size: 10pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 1pt; width: 40%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="center" style="font-size: 10pt">(Former name or former address, if changed since last report)</DIV>


<P align="left" style="font-size: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Written communication pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act
(17 CFR 240.14a-12)


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))



<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
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	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD></TD><TD colspan="8"><A HREF="#000">Section&nbsp;1 &#150; Registrant&#146;s Business and Operations</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">Item&nbsp;1.01 Entry into a Material Definitive Agreement.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">Section&nbsp;2 &#150; Financial Information</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">Item&nbsp;2.01 Completion of Acquisition or Disposition of Assets.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">Section&nbsp;3 &#150; Securities and Trading Markets</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">Item&nbsp;3.02 Unregistered Sales of Equity Securities</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Section&nbsp;8 &#150; Other Events</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Item&nbsp;8.01 Other Events.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">Section&nbsp;9 &#150; Financial Statements and Exhibits</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#009">Item&nbsp;9.01 Financial Statements and Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="y10465exv10w1.htm">EX-10.1: OPTION GRANT AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y10465exv99w1.htm">EX-99.1: PRESS RELEASE</A></TD></TR>
</TABLE>
</CENTER>
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<!-- link2 "Section&nbsp;1 &#150; Registrant&#146;s Business and Operations" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Section&nbsp;1 &#150; Registrant&#146;s Business and Operations</B>


<!-- link2 "Item&nbsp;1.01 Entry into a Material Definitive Agreement." -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;29, 2005, we entered into an Option Grant Agreement with our Chief Executive Officer,
Keith A. Meister. The agreement permits Mr.&nbsp;Meister to purchase up to 700,000 of our Depositary
Units, at an exercise price of $35.00 per unit.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The options will vest at a rate of 100,000 units on the first seven anniversaries of the date
on which the options are granted, which is June&nbsp;29, 2005, or the Grant Date, such that the options
will become fully vested by the seventh anniversary of the Grant Date. The options would vest
sooner upon the occurrence of two events: (a)&nbsp;a change of control, as defined, in the Option
Agreement or (b)&nbsp;if Mr.&nbsp;Meister is terminated by us or our general partner without &#147;cause&#148; as
defined in the Option Grant Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The options will expire as to 600,000 of the vested units on the last business day preceding
the seventh anniversary of the Grant Date. The options for the remaining 100,000 vested units will
expire after the last business day prior to the eighth anniversary of the Grant Date. All unvested
options will terminate immediately if Mr.&nbsp;Meister otherwise ceases being employed by us or our
general partner. With regard to vested options which have not expired, Mr.&nbsp;Meister will have 180
days after termination of his employment to exercise the vested options.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The options and the terms of the Option Grant Agreement may be adjusted for certain
transactions and other events and may be amended from time to time, as set forth in the Option
Grant Agreement which is attached as Exhibit&nbsp;10.1.

<!-- link2 "Section&nbsp;2 &#150; Financial Information" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Section&nbsp;2 &#150; Financial Information</B>


<!-- link2 "Item&nbsp;2.01 Completion of Acquisition or Disposition of Assets." -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;2.01 Completion of Acquisition or Disposition of Assets.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>NEG Holding LLC.</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;30, 2005, we completed the acquisition of the managing membership interest in NEG
Holding LLC from Gascon Partners, in consideration for 11,034,408 of our depositary units
representing limited partner interests in American Real Estate Partners, L.P. The membership
interest we acquired constitutes all of the membership interests other than the membership interest
already owned by National Energy Group, Inc., which is itself 50.01% owned by us. NEG Holding owns
NEG Operating LLC, which is engaged in the exploration and production of oil and gas, primarily in
Arkansas, Louisiana, Texas and Oklahoma.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transaction was considered and approved by the audit committee of our general partner who
was advised by its own independent legal counsel and independent financial advisor. The audit
committee received an opinion as to the fairness to AREP of the consideration to be paid by AREP,
from a financial point of view.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Panaco, Inc.</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;30, 2005, we completed the merger of Panaco, Inc. with and into our indirect wholly
owned subsidiary, National Offshore LP. Panaco&#146;s shareholders, Highcrest Investors Corp. and Arnos
Corp., received 3,452,586 and 857,759 of our depositary units, respectively. Panaco is engaged in
the exploration and production of oil and gas, primarily in the Gulf of Mexico and the Gulf Coast
Region and, at March&nbsp;31, 2005, owned interests in 123 wells.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transaction was considered and approved by the audit committee of our general partner who
was advised by its own independent legal counsel and independent financial advisor.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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\
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">The audit committee received an opinion as to the fairness to AREP of the consideration to be
paid by AREP, from a financial point of view.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Securities of GB Holdings, Inc. and Atlantic Coast Entertainment Holdings, Inc.</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;30, 2005, we completed the purchase of 4,121,033 shares of common stock of GB
Holdings, Inc. and 1,133,284 shares of common stock of Atlantic Coast Entertainment Holdings, Inc.,
or Atlantic Holdings, from Cyprus, LLC in consideration for 413,793 of our depositary units. Up to
an additional 206,897 depositary units may be issued if Atlantic Holdings meets certain earnings
targets during 2005 and 2006. Atlantic Holdings owns ACE Gaming LLC which operates the Sands Hotel
and Casino in Atlantic City, New Jersey.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transaction was considered and approved by the audit committee of our general partner who
was advised by its own independent legal counsel and independent financial advisor. The audit
committee received an opinion as to the fairness to AREP of the consideration to be paid by AREP,
from a financial point of view.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gascon, Highcrest Investors, Arnos and Cyprus each are controlled by Carl C. Icahn. Mr.&nbsp;Icahn
is the Chairman of the Board of Directors of American Property Investors, Inc., our general
partner. With the closing of these transactions, Mr.&nbsp;Icahn now owns 90.0% of our depositary units
and 86.5% of our preferred units and we own 100% of NEG Holding, Panaco and 77.5% of the common
stock of GB Holdings and 58.3% of the common stock of Atlantic Holdings.

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<DIV align="left"><A NAME="004"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Section&nbsp;3 &#150; Securities and Trading Markets</B>


<!-- link2 "Item&nbsp;3.02 Unregistered Sales of Equity Securities" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;3.02 Unregistered Sales of Equity Securities</B>


<P align="left" style="font-size: 10pt">On June&nbsp;30, 2005, we issued 11,034,408 of our depositary units to Gascon in consideration for the
managing membership interest in NEG Holding, pursuant to a membership interest purchase agreement
dated as of January&nbsp;21, 2005, by and among us and Gascon, a copy of which is filed as Exhibit&nbsp;10.2.


<P align="left" style="font-size: 10pt">On June&nbsp;30, 2005, we issued 3,452,586 of our depositary units to Highcrest Investors and 857,759 of
our depositary units to Arnos in consideration for 100% of the equity of Panaco, pursuant to an
agreement and plan of merger dated as of January&nbsp;21, 2005, by and among National Offshore,
Highcrest Investors, Arnos, us and Panaco, a copy of which is filed as Exhibit&nbsp;10.3.


<P align="left" style="font-size: 10pt">On June&nbsp;30, 2005, we issued 413,793 of our depositary units to Cyprus in consideration for
4,121,033 shares of common stock of GB Holdings and 1,133,284 shares of common stock of Atlantic
Holdings, pursuant to a purchase agreement dated as of January&nbsp;21, 2005, by and among us and
Cyprus, as amended, a copy of which is filed as Exhibit&nbsp;10.4 and 10.5.


<P align="left" style="font-size: 10pt">Each of these issuances of depositary units was exempt from the registration requirements of the
Securities Act of 1933 pursuant to Section&nbsp;4(2) of the Securities Act of 1933.


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<DIV align="left"><A NAME="006"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Section&nbsp;8 &#150; Other Events</B>


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<DIV align="left"><A NAME="007"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;8.01 Other Events.</B>


<P align="left" style="font-size: 10pt">On June&nbsp;30, 2005, we issued a press release, a copy of which is filed as Exhibit&nbsp;99.1.



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
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<DIV align="left"><A NAME="008"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Section&nbsp;9 &#150; Financial Statements and Exhibits</B>


<!-- link2 "Item&nbsp;9.01 Financial Statements and Exhibits" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;9.01 Financial Statements and Exhibits</B>


<P align="left" style="font-size: 10pt">(a)&nbsp;Financial statements of businesses acquired.

<P align="left" style="font-size: 10pt">The financial statements for
NEG Holding, Panaco and GB Holdings will be provided by amendment to
this Form 8-K within 71&nbsp;calendar days.



<P align="left" style="font-size: 10pt">(b)&nbsp;Pro forma financial information.


<P align="left" style="font-size: 10pt">Our pro forma financial information will be provided by amendment to this Form 8-K
within 71&nbsp;calendar days.


<P align="left" style="font-size: 10pt">(c)&nbsp;Exhibits



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">10.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Option Grant Agreement between American Real Estate Partners, L.P. and Keith A. Meister.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">10.2</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Membership Interest Purchase Agreement, dated January&nbsp;21, 2005, by and among American Real
Estate Partners, L.P. as Purchaser and Gascon Partners, as Seller (incorporated by reference
to Exhibit&nbsp;99.1 to AREP&#146;s Form 8-K (SEC File No.&nbsp;1-9516), filed on January&nbsp;27, 2005).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">10.3</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agreement and Plan of Merger, dated January&nbsp;21, 2005, by and among National Offshore LP,
Highcrest Investors Corp., Arnos Corp., American Real Estate Partners, L.P. and Panaco, Inc.
(incorporated by reference to Exhibit&nbsp;99.3 to AREP&#146;s Form 8-K (SEC File No.&nbsp;1-9516), filed on
January&nbsp;27, 2005).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">10.4</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Purchase Agreement, dated January&nbsp;21, 2005, by and among American Real Estate Partners, L.P.,
as Purchaser, and Cyprus, LLC as Seller (incorporated by reference to Exhibit&nbsp;99.4 to AREP&#146;s
Form 8-K (SEC File No.&nbsp;1-9516), filed on January&nbsp;27, 2005).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">10.5</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amendment No.&nbsp;1, dated as of May&nbsp;23, 2005, to the Purchase Agreement, dated January&nbsp;21, 2005,
by and among American Real Estate Partners, L.P., as Purchaser, and Cyprus, LLC as Seller
(incorporated by reference to Exhibit&nbsp;99.1 to AREP&#146;s Form 8-K (SEC File No.&nbsp;1-9516), filed on
May&nbsp;27).</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">99.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Press Release dated June&nbsp;30, 2005.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&#091;remainder of page intentionally left blank; signature page follows&#093;



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
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<DIV align="left"><A NAME="010"></A></DIV>

<P align="center" style="font-size: 10pt">SIGNATURES



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="46%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">AMERICAN REAL ESTATE PARTNERS, L.P.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Registrant)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Property Investors, Inc.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">General Partner</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>

<TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/&nbsp;John P. Saldarelli</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">John P. Saldarelli&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Vice President, Chief Financial<BR>
Officer, Secretary and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">Date: June&nbsp;30, 2005




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>y10465exv10w1.htm
<DESCRIPTION>EX-10.1: OPTION GRANT AGREEMENT
<TEXT>
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<TITLE>EXHIBIT 10.1</TITLE>
</HEAD>
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<P align="right" style="font-size: 10pt">Exhibit 10.1

<P align="right" style="font-size: 10pt">EXECUTION COPY



<P align="center" style="font-size: 10pt"><FONT style="font-variant: SMALL-CAPS"><B>Option Grant Agreement </B></FONT>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Option Grant Agreement (the <I>&#147;Agreement&#148;</I>) is entered into this 29th day of June, 2005, by
and between, American Real Estate Partners, L.P., a Delaware master limited partnership (together,
with its successors, the <I>&#147;Partnership&#148;</I>), and Keith A. Meister (the <I>&#147;Optionee&#148;</I>), effective as of
June&nbsp;29, 2005 (the <I>&#147;Grant Date&#148;</I>).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration of the premises, mutual covenants and agreements herein, the Partnership and
the Optionee agree as follows:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<I>Grant of Option</I>. The Partnership hereby grants to the Optionee an option to purchase from
the Partnership, at a price of $35.00 per unit (the <I>&#147;Exercise Price&#148;</I>), up to 700,000 depositary
(common)&nbsp;units of the type of units currently listed on the New York Stock Exchange representing
limited partnership interests of the Partnership (the <I>&#147;Units&#148;</I>), subject to the provisions of this
Agreement (each an &#147;<I>Option</I>,&#148; collectively the <I>&#147;Options&#148;</I>).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<I>Vesting</I>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>In General</I>. All of the Options are nonvested and forfeitable as of the Grant Date.
Subject to the Optionee&#146;s continued employment with the Partnership or American Property Investors,
Inc. (together, with its successors, the &#147;<I>General Partner</I>&#148;), Options with respect to 100,000 Units
will vest on each of the first seven anniversaries of the Grant Date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Acceleration of Vesting</I>. Notwithstanding Section (a), all Options that have not been
previously forfeited or expired shall become fully vested and nonforfeitable upon the earliest to
occur of the following: (I)&nbsp;the occurrence of a Change in Control (as defined in Appendix&nbsp;A),
vesting to occur immediately before such Change in Control, or (II)&nbsp;termination by the General
Partner or the Partnership of the Optionee&#146;s employment with the Partnership or General Partner
without Cause.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, Cause shall mean: (i)&nbsp;willful failure to carry out the
instructions of the Board of Directors of the General Partner or the Partnership (other than any
such failure resulting from incapacity due to a physical or mental illness or disability) which
failure continues for more than 48 hours after a written demand for performance is delivered to
Optionee by the General Partner or Partnership; (ii)&nbsp;substance abuse which materially affects
Optionee&#146;s ability to discharge his duties; (iii)&nbsp;conviction of a crime (other than traffic
violations or similarly minor infractions of law) or being charged with a felony; (iv)&nbsp;federal or
state criminal indictment for securities law violation; (v)&nbsp;commission of a fraudulent act that
affects the Partnership, General Partner or any of their respective subsidiaries; (vi)&nbsp;breach of
any of the terms of an applicable written employment agreement between the Optionee and the General
Partner or the Partnership resulting in the termination of such agreement or the Optionee&#146;s
employment thereunder for &#147;Cause&#148; as defined in such agreement; (vii)&nbsp;willful disclosure, not
required by any law or court order, of any material inside information of the Partnership, General
Partner or any of their respective subsidiaries, to persons not authorized to know the same; or
(viii)&nbsp;any act by the Optionee not authorized by the Partnership or the General Partner which
causes any gaming authorities, having jurisdiction over the Partnership or any of its affiliates,
to seek any redress or remedy against Optionee, the Partnership or its affiliates.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<I>Cessation of Employment or Other Service Relationship. </I>Except as provided in Section
2(b)(II), all unvested Options terminate immediately upon the cessation of the Optionee&#146;s
employment with the Partnership or the General Partner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<I>Other Activities</I>. The Parties acknowledge that the Optionee provides services to other
entities affiliated with Mr.&nbsp;Icahn and such performance of services does not violate the terms of
this Agreement or constitute Cause.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<I>Term of Options</I>. The Options to purchase the 100,000 Units that vest on each of the first
six anniversaries of the Grant Date will expire at 5:00 p.m. Eastern Time on the last business day
preceding the seventh anniversary of the Grant Date and the Options to purchase the 100,000 Units
that vest on the seventh anniversary of the Grant Date will expire at 5:00 p.m. Eastern Time on the
last business day preceding the eighth anniversary of the Grant Date (each such business day prior
to an anniversary of the Grant Date, an &#147;<I>Expiration Date&#148;).</I>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<I>Exercise of Vested Options</I>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Right to Exercise</I>. The Optionee may exercise a vested Option at any time on or before the
relevant Expiration Date, provided he is then in the employment of the Partnership or the General
Partner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Exercise Period Following Termination of Employment or Other Service Relationship</I>. Upon
cessation of the Optionee&#146;s employment with the Partnership or General Partner the vested Options
shall terminate upon the earlier of (1)&nbsp;the 180<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day following such cessation or (2)
the relevant Expiration Date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<I>Exercise Procedure</I>. In order to exercise the Options, the following items must be
delivered to the Secretary of the General Partner (i)&nbsp;an exercise notice in the form attached
hereto as Appendix&nbsp;B, (ii)&nbsp;full payment of the Exercise Price for such Units, and (iii)&nbsp;an executed
copy of any other agreements or documents reasonably required by the General Partner or the
Partnership. An exercise will not be effective until all of the foregoing items are received by
Secretary of the General Partner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<I>Method of Payment</I>. Payment of the Exercise Price may be made at the election of the
Optionee (i)&nbsp;by delivery of cash, certified or cashier&#146;s check, money order or other cash
equivalent acceptable to the Partnership in its discretion, (ii)&nbsp;by a broker-assisted cashless
exercise in accordance with Regulation&nbsp;T of the Board of Governors of the Federal Reserve System
through a brokerage firm approved by the Partnership, or (iii)&nbsp;by a cashless exercise for purposes
of Section&nbsp;20 of this Agreement, or (iv)&nbsp;a combination of the foregoing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<I>Issuance of Units</I>. Upon exercise of the Options in accordance with the terms of this
Agreement, the Partnership will issue to the Optionee or to the brokerage firm specified in the
Optionee&#146;s delivery instructions pursuant to a broker-assisted cashless exercise,


<P align="center" style="font-size: 10pt">2
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<P align="left" style="font-size: 10pt">as the case may be, the number of Units so paid for, in the form of fully paid and nonassessable
Depositary Units representing limited partner interests of the Partnership.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<I>Tax Withholding</I>. The Partnership or General Partner shall have the right to deduct from
the Optionee&#146;s compensation or any other payment of any kind (including by withholding the issuance
of Units) the amount of any federal, state, local or foreign taxes required by law to be withheld
as a result of the grant, vesting, or exercise of the Options in whole or in part; provided,
however, that the value of the Units withheld may not exceed the statutory minimum withholding
amount required by law; provided further that the Optionee may direct the Partnership to withhold
from Units issuable in respect of the Options the number of Units with an aggregate Fair Market
Value as of the date of withholding equal to the statutory minimum withholding amount required by
law.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement<I>, </I>Fair Market Value means, with respect to a Unit for any
purpose on a particular date, (A)&nbsp;if Units are registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and listed for trading on a national exchange or
market, the average, for the 30-day period preceding such date, of: (i)&nbsp;the closing price quoted on
the New York Stock Exchange, the American Stock Exchange, or the Nasdaq National Market, as
applicable; (ii)&nbsp;the last sale price quoted on the Nasdaq SmallCap Market; (iii)&nbsp;the average of the
high bid and low asked prices on the Nasdaq OTC Bulletin Board Service or by the National Quotation
Bureau, Inc.; or (iv)&nbsp;if Units are not quoted by any of the above, the average of the closing bid
and asked prices on the relevant date furnished by a professional market maker for the Units, and
(B)&nbsp;if there are not any quoted bid and asked prices, the value as determined in good faith by the
Board of Directors of the General Partner (the &#147;Board&#148;).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<I>Adjustments for Transactions and Other Events</I>. In the event that the Partnership engages
in:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a split or combination of Units (whether by dividend of Units or
otherwise);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an Excess Dividend; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an issuance of Units of the Partnership or securities convertible into
or exchangeable for Units of the Partnership, to Mr.&nbsp;Carl C. Icahn or his
affiliates, at a price per Unit less than Partners&#146; equity per Unit. (For
purposes of calculating Partners&#146; equity per Unit, (1)&nbsp;Partners&#146; equity shall
be Partners&#146; equity as stated in the Partnership&#146;s consolidated financial
statements, prepared in accordance with generally accepted accounting
principles, as of the last day of the most recently completed quarterly
financial period of the Partnership prior to the authorization by the Board of
Directors of the General Partner or any committee thereof of the issuance of
the Units or convertible or exchangeable securities to Mr.&nbsp;Icahn or his
affiliates and (2)&nbsp;Partners&#146; equity per Unit shall be determined by multiplying
Partners&#146; equity (as determined in accordance with (1)) by 98.01% (or, if
different, the percentage of Partners&#146; equity attributable, as of the last day
of such most recently completed quarterly period, to all limited partnership
interests), and dividing the result so obtained by the</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">3
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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>number of outstanding Units as of the last day of such most recently
completed quarterly period),</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">then the Board shall, in its reasonable discretion and without the consent of the Optionee, make
such adjustments and modifications to the Options and the terms of this Agreement, including but
not limited to the number or kind of interests covered by the Options, the Exercise Price, or the
manner in which the Options are to be exercised, as the Board reasonably determines to be
appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits
provided in respect of Options under this Agreement.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board is also authorized to make (but shall have no obligation or duty to make), in its
reasonable discretion and without the consent of the Optionee, adjustments in the Options and the
terms of this Agreement in recognition of (i)&nbsp;unusual or nonrecurring events affecting the
Partnership, or the financial statements of the Partnership or any affiliate, or (ii)&nbsp;changes in
applicable laws, regulations, or accounting principles, whenever the Board determines in its
reasonable discretion that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits provided in respect of Options under this
Agreement. For example, for reasons of illustration and without limiting the authority of the
Board, among other things, in the event that the Partnership is to be combined, by merger or
otherwise, with any other entity, the Board may elect to cause the Options to: (i)&nbsp;accelerate, vest
and become fully exercisable immediately prior to any such event, and to terminate and be cancelled
at the time of the closing of any such transaction if not exercised prior thereto; (ii)&nbsp;be
cancelled in exchange for a payment in cash in an amount equal to the inherent value of the Options
based upon the values attributed to the Partnership in such transaction, as determined in the
reasonable discretion of the Board; or (iii)&nbsp;be assumed by the surviving entity and to thereafter
be exercisable (subject to the vesting and other terms set forth herein) for the type of
consideration received in such transaction by a holder of the Units.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the purposes of this Agreement, the term Excess Dividend shall mean the amount, if any, by
which the aggregate dividends, paid to holders of Units from and after January&nbsp;1, 2005, in either
cash or other property (valued at fair market value as determined by the Board, in its reasonable
discretion) exceeds the Available Amount. For purposes of this Agreement, Available Amount shall
mean an amount, as reasonably estimated by the Board, equal to the combined federal, state and
local income and franchise taxes, including estimated taxes, that would be paid by the Partnership
on the aggregate income of the Partnership for all periods from and after January&nbsp;1, 2005, if the
Partnership were a corporation organized in Delaware having its sole place of business, in New York
City, which files a separate tax return (together with its consolidated subsidiaries).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<I>The Partnership&#146;s Rights</I>. The existence of the Options shall not affect in any way the
right or power of the Partnership or its partners to engage in any act or activity including
without limitation, making or authorizing any or all adjustments, recapitalizations,
reorganizations or other changes in the Partnership&#146;s capital structure or its business, or any
merger or consolidation of the Partnership, or any issue of Units, limited partner interests,
general partner interests, notes, debentures, preferred or other interests with preference ahead of
or convertible into, options, warrants or subscription rights or otherwise affecting the Options or


<P align="center" style="font-size: 10pt">4
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">the Units or the rights thereof, or the dissolution or liquidation of the Partnership, or any
sale or transfer of all or any part of the Partnership&#146;s assets or business, or any other
partnership act or proceeding, whether of a similar character or otherwise.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<I>Notices</I>. All notices and other communications made or given pursuant to this Agreement
shall be in writing and shall be sufficiently made or given if hand delivered or mailed by
certified mail, addressed to the Optionee at the address contained in the records of the
Partnership or General Partner, or addressed to the Partnership for the attention of the Secretary
of the General Partner at its principal executive office or, if the receiving party consents in
advance, transmitted and received via telecopy or via such other electronic transmission mechanism
as may be available to the parties.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<I>Investment Representation</I>. If at any time the Partnership determines that the delivery of
Units under this Agreement is or may be unlawful under the laws of any applicable jurisdiction, or
federal or state securities laws, the right to exercise the Options or receive Units pursuant to
the Options or exercise of any particular right hereunder shall be suspended until the Partnership
determines that such delivery is lawful. The Partnership may require that the Optionee, as a
condition to exercise of the Option, and as a condition to the delivery of any Units, make such
written representations (including representations to the effect that such person will not dispose
of the Units so acquired in violation of federal or state securities laws) and furnish such
information as may, in the opinion of counsel for the Partnership, be appropriate to permit the
Partnership to issue the Units in compliance with applicable federal and state securities laws.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<I>Entire Agreement</I>. This Agreement contains the entire agreement between the parties with
respect to the Options granted hereunder. Any oral or written agreements, representations,
warranties, written inducements, or other communications made prior to the execution of this
Agreement with respect to the Options granted hereunder shall be void and ineffective for all
purposes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<I>Partnership&#146;s Authority</I>. The Partnership shall have full power and authority to interpret
and construe this Agreement and to take all actions necessary to administer and to otherwise carry
out the purpose and intent of this Agreement. All actions taken and determinations made by the
Partnership on all matters relating to this Agreement shall be in the Partnership&#146;s sole and
absolute discretion and shall be conclusive and binding on all parties concerned.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;<I>Amendment</I>. This Agreement may be amended from time to time in a written document signed
by each of the parties hereto.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;<I>Governing Law</I>. The validity, construction and effect of this Agreement, and of any
determinations or decisions made by the Partnership relating to this Agreement, and the rights of
any and all persons having or claiming to have any interest under this Agreement, shall be
determined exclusively in accordance with the laws of Delaware without regard to its provisions
concerning the applicability of laws of other jurisdictions. Any suit with respect hereto will be
brought in the federal or state courts in the districts which include courts in


<P align="center" style="font-size: 10pt">5
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">Delaware, and the Optionee hereby agrees and submits to the personal jurisdiction and venue
thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;<I>Headings</I>. The headings in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;<I>Options Conditioned Upon Unit Holder Approval</I>. This Agreement and the Options are
conditioned upon and subject to approval thereof by a vote of the depositary unit holders in
accordance with rules of the New York Stock Exchange. In the event such approval is not obtained
by December&nbsp;31 of the year of the Grant Date, this Agreement and the Options shall be null and
void.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;<I>Non-Guarantee of Employment or Other Service Relationship</I>. Nothing in this Agreement
shall alter the Optionee&#146;s at-will or other employment status with the Partnership or the General
Partner, nor be construed as a contract of employment or other service relationship between the
Partnership or the General Partner and the Optionee, or as a contractual right of the Optionee to
continue in the employ of, or in a service relationship with (or to occupy any particular position
with, or receive any particular benefit or compensation from the Partnership, and any change
thereof shall not be deemed to constitute a termination of employment hereunder) the Partnership or
the General Partner for any period of time, or as a limitation of the right of the Partnership or
the General Partner to discharge the Optionee at any time with or without cause or notice and
whether or not such discharge results in the forfeiture of any Units.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;<I>No Rights as a Holder of a Unit</I>. The Optionee will not have any of the rights of a holder
of a Unit until such Units have been issued to him upon the due exercise of the Options.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;<I>Registration of Units</I>. The Options and the Units issuable in connection with the exercise
of the Options shall be registered on a Form S-8 registration statement which also cover the resale
of such Units.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;<I>Nontransferability of Options</I>. The Options are nontransferable and may be exercised only
by Optionee except that (a)&nbsp;upon the death of the Optionee, vested Options may be transferred by
will or the laws of descent and distribution or (b)&nbsp;if the Optionee is under a legal disability,
the vested Options may be transferred to the Optionee&#146;s guardian or legal representative. Except
as provided above, the Options may not be assigned, transferred, pledged, hypothecated or disposed
of in any way (whether by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;<I>Units No Longer Publicly Traded</I>. In the event that the Units are no longer publicly
traded, the Optionee may exercise the vested Options on a cashless basis, in which event the
Optionee will be paid with respect to each Unit for which the Option is exercised the amount by
which the Fair Market Value of the Unit, on the date of exercise exceeds, the Exercise Price.


<P align="center" style="font-size: 10pt">6
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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Partnership has caused this Agreement to be executed this
29<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day of June, 2005.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Real Estate Partners, L.P.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD valign="top">By:</TD>
    <TD align="left" valign="top">American Property Investors, Inc.,<BR>its general partner</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top"><DIV style="border-bottom: 1px solid #000000">/s/&nbsp;Jon F. Weber</DIV>
By: Jon F. Weber</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Its: President</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby acknowledges that he has carefully read this Agreement and agrees to be
bound by all of the provisions set forth herein.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">WITNESS
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">OPTIONEE</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="border-bottom: 1px solid #000000">/s/&nbsp;Jesse
Lynn</DIV>
Jesse Lynn
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top"><DIV style="border-bottom: 1px solid #000000">/s/&nbsp;Keith A. Meister</DIV>
Keith A. Meister</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date: June&nbsp;29, 2005</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><U>Appendix&nbsp;A</U>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Agreement, &#147;<I>Change in Control</I>&#148; means the consummation of any transaction
(including, without limitation, any merger or consolidation), the result of which is that any
Person, other than Carl Icahn or the Related Parties, becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of the Partnership, measured by voting power
rather than number of shares.



<P align="left" style="margin-left:3%; font-size: 10pt">For purposes of the definition of Change in Control, the following capitalized terms will
have the following meaning:



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;<I>Beneficial Owner</I>&#148; has the meaning assigned to such term in Rule&nbsp;13d-3 and Rule&nbsp;13d-5
under the Exchange Act, except that in calculating the beneficial ownership of any
particular &#147;person&#148; (as that term is used in Section&nbsp;13(d)(3) of the Exchange Act), such
&#147;person&#148; will be deemed to have beneficial ownership of all securities that such &#147;person&#148;
has the right to acquire by conversion or exercise of other securities, whether such right
is currently exercisable or is exercisable only after the passage of time. The terms
&#147;Beneficially Owns&#148; and &#147;Beneficially Owned&#148; have a corresponding meaning.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Exchange Act</I>&#148; means the Securities Exchange Act of 1934, as amended, and any successor
thereto.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Person</I>&#148; means any individual, entity or group within the meaning of Section&nbsp;13(d)(3)
of the Exchange Act, other than employee benefit plans sponsored or maintained by the
Partnership or by entities controlled by the Partnership.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Related Parties</I>&#148; means: (1)&nbsp;Carl Icahn, any spouse and any child, stepchild, sibling
or descendant of Carl Icahn; (2)&nbsp;any estate of Carl Icahn or of any person under clause (1);
(3)&nbsp;any person who receives a beneficial interest in any estate under clause (2)&nbsp;to the
extent of such interest; (4)&nbsp;any executor, personal administrator or trustee who holds such
beneficial interest in the Partnership for the benefit of, or as fiduciary for, any person
under clauses (1), (2)&nbsp;or (3)&nbsp;to the extent of such interest; (5)&nbsp;any corporation,
partnership, limited liability Partnership, trust, or similar entity, directly or indirectly
owned or controlled by Carl Icahn or any other person or persons identified in clauses (1),
(2), (3)&nbsp;or (4)&nbsp;and (6)&nbsp;any not-for-profit entity not subject to taxation pursuant to
Section&nbsp;501(c)(3) of the Internal Revenue Code or any successor provision to which Carl
Icahn or any person identified in clauses (1), (2), or (3)&nbsp;above contributes his beneficial
interest in the Partnership or to which such beneficial interest passes pursuant to such
person&#146;s will.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;<I>Voting Stock</I>&#148; means, with respect to any Person that is (a)&nbsp;a corporation, any class
or series of capital stock of such Person that is ordinarily entitled to vote in the
election of directors thereof at a meeting of stockholders called for such purpose, without
the occurrence of any additional event or contingency, (b)&nbsp;a limited liability company,
membership interests entitled to manage, or to elect or appoint the Persons that will


<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="margin-left:3%; font-size: 10pt">manage the operations or business of the limited liability company, or (c)&nbsp;a partnership,
partnership interests entitled to elect or replace the general partner thereof.


<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><U>Appendix&nbsp;B</U>



<P align="center" style="font-size: 10pt"><B>AMERICAN REAL ESTATE PARTNERS, L.P.</B><BR>
<U><B>OPTION GRANT AGREEMENT EXERCISE FORM</B></U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">TO:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">Secretary of American Real Estate Partners, L.P.</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">FROM:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">I hereby irrevocably exercise my option to purchase depositary (common)&nbsp;units representing limited
partner interests of American Real Estate Partners, L.P. subject to all the terms and provisions of
the Option Grant Agreement as follows:



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date of Option Grant:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date(s) of Vesting of Option:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise Price: $35.00 per unit</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of Units to be Purchased:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Exercise Price Enclosed: $</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Units should be registered as follows:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT> &nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In Optionee&#146;s name or the name of another individual:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">Name(s)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="84%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">Address</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="84%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="16%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">Social Security Number:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="80%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="left">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> In the name of Optionee&#146;s broker</TD>
</TR>
<TR valign="top" style="font-size: 1px; color: #000000; background: transparent">
    <TD width="6%" nowrap align="left">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width:30%; margin-left: 30%">&nbsp;</DIV></TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">Full payment of the aggregate option exercise price pursuant to Sections 4(c) and (d)&nbsp;of the Option
Grant Agreement is enclosed as follows:



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Cash, certified or cashier&#146;s check, money order or other cash equivalent in the amount of $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, (number of Units being exercised x grant price per unit)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Broker-assisted cashless exercise pursuant to Federal Reserve Regulation&nbsp;T in the amount of $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (broker is hereby authorized to make such payment directly to American Real Estate Partners, L.P. <B>)</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Contact Information for Broker:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="17%">&nbsp;</TD>
    <TD width="3%" nowrap align="left">Name</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="79%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width: 30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">10
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="17%">&nbsp;</TD>
    <TD width="3%" nowrap align="left">Address</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="79%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width: 30%">&nbsp;</DIV><BR>&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width: 30%">&nbsp;</DIV></TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="17%">&nbsp;</TD>
    <TD width="3%" nowrap align="left">Telephone:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="79%">&nbsp;<BR><DIV style="border-bottom: 1px solid #000000; font-size: 1px; width: 30%">&nbsp;</DIV></TD>
</TR>
</TABLE>



<P align="left" style="margin-left:12%; font-size: 10pt">Any broker-assisted cashless exercise must be in accordance with Federal
Reserve Regulation&nbsp;T.

<P>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Optionee&#146;s Signature</TD>
</TR>
<TR style="font-size: 10pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">11
</DIV>


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<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>y10465exv99w1.htm
<DESCRIPTION>EX-99.1: PRESS RELEASE
<TEXT>
<HTML>
<HEAD>
<TITLE>EXHIBIT 99.1</TITLE>
</HEAD>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt">EXHIBIT 99.1



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR valign="top">
    <TD width="3%" nowrap align="left">Contact: &nbsp;&nbsp;&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">John P. Saldarelli<BR>
Vice President, Chief Financial Officer, Secretary and Treasurer<BR>
(914)&nbsp;242-7700</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><B>FOR IMMEDIATE RELEASE</B>


<P align="left" style="font-size: 10pt"><B>American Real Estate Partners Closes the Previously Announced Acquisitions of Two Oil and Gas
Companies and the Purchase of Securities of GB Holdings and Atlantic Coast Entertainment Holdings</B>


<P align="left" style="font-size: 10pt">Mount Kisco, New York, June&nbsp;30, 2005 &#151; American Real Estate Partners, L.P. (NYSE:ACP) (&#147;AREP&#148;)
announced today that it has obtained the approval of its depositary unit holders to issue
depositary units to affiliates of Carl C. Icahn in connection with its previously announced
acquisitions of two oil and gas companies, NEG Holding LLC and Panaco, Inc., and the purchase of
securities of GB Holdings, Inc. and Atlantic Coast Entertainment Holdings, Inc. Atlantic Coast,
through its subsidiary, ACE Gaming LLC, owns and operates The Sands Hotel and Casino in Atlantic
City, New Jersey.


<P align="left" style="font-size: 10pt">AREP also announced today that it has closed the NEG Holding, Panaco, GB Holdings and Atlantic
Coast transactions. The aggregate number of units issued was 15,758,546 depositary units. With
the closing of the transactions, Mr.&nbsp;Icahn owns approximately 90.0% of AREP&#146;s outstanding
depositary units and 86.5% of its preferred units. As a result of these transactions, AREP has
substantially increased its oil and gas exploration and production business and expanded its casino
gaming and associated hotel, restaurant and entertainment operations.


<P align="left" style="font-size: 10pt">In addition, AREP received the approval of its depositary unit holders to amend and has amended, as
of June&nbsp;29, 2005, its partnership agreement and the partnership agreement of its subsidiary limited
partnership, American Real Estate Holdings Limited Partnership. Holders of depositary units also
approved an Option Grant Agreement with AREP&#146;s Chief Executive Officer, Keith A. Meister, pursuant
to which he may purchase up to 700,000 depositary units at an exercise price of $35.00 per unit.


<P align="left" style="font-size: 10pt">AREP is a master limited partnership engaged in a variety of businesses including oil and gas
exploration and production; casino gaming and associated hotel, restaurant and entertainment
operations; real estate activities including commercial rentals, residential development and
associated resort activities; and investments in equity and debt securities. AREP seeks to
continue to grow and enhance the value of its core businesses and to acquire undervalued assets and
companies that are distressed or in out-of-favor industries.


<P align="left" style="font-size: 10pt">This release contains certain &#147;forward-looking statements&#148; within the meaning of the Private
Securities Litigation Reform Act of 1995, many of which are beyond our ability to control or
predict. Forward-looking statements may be identified by words such as &#147;expects,&#148; &#147;anticipates,&#148;
&#147;intends,&#148; &#147;plans,&#148; &#147;believes,&#148; &#147;seeks,&#148; &#147;estimates,&#148; &#147;will&#148; or words of similar meaning and
include, but are not limited to, statements about the expected future business and financial
performance of AREP and its

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">subsidiaries. Among these risks and uncertainties are changes in risks related to our oil and gas
exploration and production operations, including costs of drilling, completing and operating wells
and the effects of regulation, risks related to our casino gaming and associated hotel, restaurant
and entertainment operations, including the effects of regulation, substantial competition, rising
operating costs and economic downturns, risks related to our real estate activities including the
extent of any tenant bankruptcies and insolvencies, our ability to maintain tenant occupancy at
current levels, our ability to obtain, at reasonable costs, adequate insurance coverage,
competition for investment properties, and other risks and uncertainties detailed from time to time
in our filings with the SEC. We undertake no obligation to publicly update or review any
forward-looking information, whether as a result of new information, future developments or
otherwise.




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


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