EXHIBIT 99.1
AMERICAN REAL ESTATE INVESTMENT CORPORATION,
a Maryland Corporation
SUBSCRIPTION DOCUMENTS
FOR
COMMON STOCK
American Real Estate Investment Corporation
Plymouth Meeting Executive Campus
000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Plymouth Meeting, Pennsylvania 19462
NO OFFER OR SALE OF SECURITIES IS MADE IN ANY JURISDICTION WHERE THE
OFFER OR SALE WOULD BE UNLAWFUL.
American Real Estate Investment Corporation
Plymouth Meeting Executive Campus
000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Plymouth Meeting, Pennsylvania 19462
Attention: Xxxxxxx X. Xxxxxxxx, Vice President
Ladies and Gentlemen:
This Agreement (the "AGREEMENT") is executed by each undersigned
purchaser in connection with the offer by American Real Estate Investment
Corporation, a Maryland corporation (the "COMPANY"), to sell, and the agreement
by each undersigned purchaser to purchase, shares of common stock, par value
$.001 per share, of the Company (the "COMMON STOCK").
SECTION 1.
1.1 SUBSCRIPTION. Each undersigned purchaser hereby agrees to purchase
such number of shares of Common Stock set forth opposite such undersigned
purchaser's name on EXHIBIT A (the "PURCHASERS") attached hereto (the "SHARES")
at the Closing (as defined below) at $14.50 per share of Common Stock (the
"PURCHASE PRICE"). In respect of this subscription, each undersigned purchaser
herewith delivers to the Company a fully completed Investor Information Sheet
attached as EXHIBIT B.
1.2 CLOSING. The purchase and sale of the Shares shall take place at
the offices of Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00
a.m., subject to satisfaction of the conditions set forth in Section 4 and
Section 5, on (i) the earlier to occur of (a) December 31, 1999 or (b) such
earlier date as the Company may elect, provided the Company gives the
undersigned purchasers at least four (4) prior days notice; or (ii) such other
time and place as the Company and the undersigned purchasers mutually agree (the
"CLOSING"). At the Closing the Company shall deliver to each undersigned
purchaser a certificate representing the Shares that such undersigned purchaser
is purchasing, registered in such name or names as such undersigned purchaser
shall designate at least two (2) business days prior to the date of the Closing,
against payment of the Purchase Price thereof in the manner contemplated by
Section 1.3.
1.3 PURCHASE PRICE. At the Closing, the payment of the Purchase Price
shall be, at the Company's option, by check or wire transfer in immediately
available funds.
1.4 TERMINATION. If the Closing does not occur on or before December
31, 1999, the Company may terminate this Agreement upon notice to the
undersigned, and thereafter there will be no liability or obligation on the part
of any undersigned purchaser or the Company (or any of their respective
officers, directors, employees, agents or other representatives or affiliates),
except that, notwithstanding any other provision in this Agreement to the
contrary, upon termination of this Agreement pursuant to this Section 1.4, each
undersigned purchaser will remain liable to the Company for any breach of this
Agreement by such undersigned purchaser existing at the time of such
termination, and the Company will remain liable to each undersigned purchaser
for any breach of the Agreement by the Company existing at the time of such
termination, and the Company or any undersigned purchaser may seek such
remedies, including damages and fees of attorneys, against the other with
respect to such breach as are provided in this Agreement or as are otherwise
available at law or in equity.
SECTION 2.
INVESTOR REPRESENTATIONS AND WARRANTIES. Each Purchaser hereby
acknowledges, represents and warrants to, severally and not jointly, and agrees
with, the Company as follows:
2.1 AUTHORIZATION. This Agreement and the Registration Rights Agreement
(as defined below) constitute valid and legally binding obligations of each
Purchaser, enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Registration Rights Agreement (as
defined below) may be limited by applicable federal or state securities laws.
Each Purchaser represents that it has full power and authority to enter into
this Agreement.
2.2 RESTRICTIONS ON TRANSFER. Each Purchaser is aware of the provisions
of Rule 144 promulgated under the Securities Act of 1933, as amended (the
"SECURITIES ACT") as currently in effect, pursuant to which the undersigned
purchaser may be able to sell the Shares, subject to certain exceptions, one
year after it receives such Shares so long as certain current public information
is available about the Company, the sale is through a broker in an unsolicited
"broker's transaction" and such Purchaser does not sell, in any three-month
period, more than the greater of 1% of the outstanding Common Stock or the
average weekly trading volume of the Common Stock for the four-week period
preceding the sale. Each Purchaser generally will be able to sell the Shares
without regard to any volume or other limitations discussed above beginning two
years after it receives the Shares, unless it is an affiliate of the Company
(I.E., a person controlling, controlled by or under common control with the
Company). Affiliates of the Company will continue to be subject to the volume
limitations on unregistered sales following the expiration of the two-year
period. The preceding description is a general summary of the restrictions of
Rule 144 as currently in effect, and each Purchaser should consult with his, her
or its own legal advisor to ensure compliance with all of the requirements of
applicable federal and state securities laws and regulations. In this
connection, each Purchaser understands Rule 144 may or may not be available for
the resale of the Shares and each Purchaser should consult an attorney with
regard to the availability of Rule 144. The Company is subject to the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"). Upon notice of issuance, the Shares will be listed for trading
on the American Stock Exchange (the "AMEX"). If all of the requirements of Rule
144 are not met, registration under the Securities Act or some other
registration exemption may be required for a disposition of the Shares.
SECTION 3.
COMPANY REPRESENTATIONS AND WARRANTIES. The Company hereby
acknowledges, represents and warrants to, and agrees with, each Purchaser
follows:
3.1 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the adoption, authorization,
execution, filing (where applicable) and delivery of this Agreement and the
Registration Rights Agreement, the performance of all obligations of the Company
hereunder and thereunder, and the authorization, issuance (or reservation for
issuance), sale and delivery of the Common Stock being sold hereunder has been
taken or will be taken prior to the Closing. This Agreement and the Registration
Rights Agreement constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Registration Rights Agreement may be
limited by applicable federal or state securities laws.
3.2 VALID ISSUANCE OF COMMON STOCK. The Common Stock that is being
purchased by each Purchaser hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable.
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3.3 NO OTHER REPRESENTATIONS. The Company shall not be deemed to have
made to any Purchaser any representation or warranty other than as expressly
made by the Company in Section 3 hereof. Without limiting the generality of the
foregoing, and notwithstanding any otherwise express representations and
warranties made by the Company, in this Section 3, the Company makes no
representation or warranty to any undersigned purchaser with respect to any
projections, estimates or budgets heretofore delivered to or made available to
the undersigned of future revenues, expenses or expenditures or future results
of operations.
SECTION 4.
CONDITIONS OF PURCHASERS' OBLIGATIONS AT CLOSING. The obligations of
each Purchaser under Section 1.2 of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 3 (other than those made as of a specified
date earlier than the date of Closing) shall be true and correct in all material
respects on and as of the date of the Closing with the same effect as though
such representation or warranty was made on and as of the date of such Closing,
and any representation or warranty made as of a specified date earlier than the
date of such Closing shall have been true and correct in all material respects
as of such earlier date.
4.2 PERFORMANCE. The Company shall have performed and complied with, in
all material respects, all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
4.3 QUALIFICATIONS. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be duly obtained and effective as of the
Closing.
4.4 REGISTRATION RIGHTS AGREEMENT. The Company shall have executed the
Registration Rights Agreement, in substantially the form attached hereto as
EXHIBIT C (the "REGISTRATION RIGHTS AGREEMENT").
4.5 STOCK EXCHANGE LISTING. The Shares shall have been approved for
listing on the AMEX.
4.6 CERTIFICATES. Certificates representing the Shares in such name as
each Purchaser has designated pursuant to SECTION 1.2 hereof shall have been
delivered to each Purchaser.
4.7 WARRANT EXCHANGE. The Company shall have issued 125,103 units of
limited partnership interest in American Real Estate Investment, L.P. to Xxxxxx
Bay Partners II, L.P. ("XXXXXX BAY") in exchange for the cancellation of that
certain Warrant to Purchase Shares of Common Stock of American Real Estate
Investment Corporation, No. W-001, dated December 12, 1997, representing the
right to purchase 300,000 shares of Common Stock.
4.8 AMENDMENT TO STOCK PURCHASE AGREEMENT. The Company shall have
executed and delivered to Xxxxxx Bay an agreement in form and substance
reasonably satisfactory to Xxxxxx Bay which amends Section 1.03 of that certain
Stock Purchase Agreement dated as of August 20, 1997 made and entered into by
and between Xxxxxx Bay Partners, L.P. and the Company.
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SECTION 5.
CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of
the Company to each Purchaser under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by each
Purchaser:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of each Purchaser contained in Section 2 (other than those made as of a
specified date earlier than the date of Closing) shall be true and correct in
all material respects on and as of the date of the Closing with the same effect
as though such representation or warranty was made on and as of the date of such
Closing, and any representation or warranty made as of a specified date earlier
than the date of such Closing shall have been true and correct in all material
respects as of such earlier date.
5.2 PAYMENT OF PURCHASE PRICE. Each Purchaser shall have executed and
delivered payment to the Company of the Purchase Price in the manner
contemplated by Section 1.3.
5.3 QUALIFICATIONS. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be duly obtained and effective as of the
Closing.
SECTION 6.
6.1 MODIFICATION. Neither this Agreement nor any provisions hereof
shall be waived, modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
6.2 NOTICES. All notices, payments, demands or other communications
given hereunder shall be deemed to have been duly given and received (i) upon
personal delivery, (ii) in the case of notices sent within, and for delivery
within, the United States, as of the date shown on the return receipt after
mailing by registered or certified mail, return receipt requested, postage
prepaid, or (iii) the second succeeding business day after deposit with Federal
Express or other equivalent air courier delivery service, unless the notice is
held or retained by the customs service, in which case the date shall be the
fifth succeeding business day after such deposit.
6.3 BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and permitted
assigns.
6.4 ENTIRE AGREEMENT. This Agreement and all exhibits hereto including,
without limitation, the Investor Information Sheet, Accredited Investor
Questionnaire and Registration Rights Agreement, contain the entire agreement of
the parties with respect to this subscription, and there are no representations,
covenants or other agreements except as stated or referred to herein or therein.
6.5 ASSIGNABILITY. This Agreement is not transferable or assignable by
any undersigned purchaser.
6.6 APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State without giving effect to the
conflict of law provisions thereof. The parties agree that all disputes between
any of them arising out of, connected with, related to, or incidental to the
relationship established
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between them in connection with this Agreement or the Registration Rights
Agreement, and whether arising in law or in equity or otherwise, shall be
resolved by the federal or state courts located in New York, New York. Nothing
herein shall affect the right of any party to serve process in any manner
permitted by law or to commence legal proceedings or otherwise proceed against
the other in any other jurisdiction. In addition, each of the parties hereto
consents to submit to the personal jurisdiction of any federal or state court
located in the state of New York in the event that any dispute arises out of
this Agreement or the Registration Rights Agreement or any of the transactions
contemplated hereby or thereby. The parties, for themselves and their respective
affiliates, hereby irrevocably waive all right to a trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to the actions of the parties or their respective
affiliates pursuant to this Agreement in the negotiation, administration,
performance or enforcement thereof.
6.7 GENDER. All pronouns contained herein and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the parties hereto may require.
6.8 COUNTERPARTS. This Agreement may be executed through the use of
separate signature pages or in counterparts, and each of such counterparts
shall, for all purposes, constitute one agreement binding on the parties hereto,
notwithstanding that the parties hereto are not signatories to the same
counterpart.
6.9 FURTHER ASSURANCES. Each Purchaser will, from time to time, execute
and deliver to the Company all such other and further instruments and documents
and take or cause to be taken all such other and further action as the Company
may reasonably request in order to effect the transactions contemplated by this
Agreement.
6.10 EXPENSES. All parties shall pay all costs and expenses which they
incur in connection with the negotiation, execution, delivery and performance of
this Agreement.
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AMERICAN REAL ESTATE INVESTMENT CORPORATION
SUBSCRIPTION AGREEMENT
COUNTERPART SIGNATURE PAGE
The undersigned purchaser, desiring to enter into this Subscription
Agreement for the subscription of the number of Shares indicated below, hereby
agrees to all of the terms and provisions of this Subscription Agreement and
agrees to be bound by all such terms and provisions.
The undersigned has executed this Subscription Agreement as of the ____
day of September, 1999.
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Agreed and Accepted this
____ day of September, 1999.
AMERICAN REAL ESTATE INVESTMENT CORPORATION,
a Maryland corporation
By:
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(Signature)
Name:
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(Print or Type)
Title:
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(Print or Type)
