Exhibit (c)(1)
UNDERTAKING
UNDERTAKING entered into this 20th day of November, 1998, by
STARFIRE HOLDING CORPORATION, a Delaware corporation (the "Indemnitor"), for the
benefit of AMERICAN REAL ESTATE PARTNERS, L.P., a Delaware limited partnership
("AREP") and its subsidiaries (collectively with AREP, the "Indemnitees" and
each of such Indemnitees individually, an "Indemnitee").
WHEREAS, Leyton LLC, a Delaware limited liability company (the
"Purchaser"), a company affiliated with Xx. Xxxx X. Icahn, has commenced a
tender offer (the "Offer") for depositary units ("Units") representing limited
partner interests in AREP pursuant to an Offer to Purchase dated November 20,
1998 (the "Offer to Purchase");
WHEREAS, entities directly or indirectly owned by Xxxx X.
Icahn that are under common control or members of a controlled group, in each
case within the meaning of Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and Section 414 of the Internal
Revenue Code of 1986, as amended (the "Code") and the rules and regulations
promulgated thereunder (the "Controlled Group"), are subject to liability under
ERISA and the Code with respect to certain pension plan minimum funding and
termination liabilities (such minimum funding and termination liabilities, as
more fully described in Section 10 of the Offer to Purchase entitled
"Information Concerning the Purchaser and Certain Affiliates of the Purchaser;
Pension Liability Considerations," the "Pension Liabilities");
WHEREAS, the Indemnitor is an indirect beneficial owner of
interests in the Purchaser;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Indemnitor hereby undertakes and agrees as follows:
1. Defined Terms. Unless otherwise defined herein, each
capitalized term used herein shall have the meaning attributed to it below:
"Effective Date" shall mean that date, if any, on
which the Purchaser acquires pursuant to the Offer a number of
Units such that the Partnership is deemed under ERISA or the
Code to be a member of the Controlled Group .
"Entity" shall mean any partnership, limited
liability company, joint venture, corporation, trust or other
business entity or vehicle.
"Losses" shall mean any and all losses, costs,
damages, fees or expenses (including, without limitation,
reasonable attorneys fees and disbursements) arising
from Pension Liabilities imposed upon any Indemnitee as a
result of such person being deemed, under ERISA or the Code,
to a member of the Controlled Group.
"Net Worth" shall mean, as to any Entity, the amount
by which its total assets exceed its total liabilities, all as
determined on a consolidated basis in accordance with
generally accepted accounting principles applicable in the
United States of America.
"Termination Date" shall mean that date, if any,
on which the Indemnitees are no longer subject to any: (x)
Pension Liability; or (y) any contingency that could result in
the imposition of any Losses upon an Indemnitee.
2. Indemnity. The Indemnitor agrees that from the Effective
Date and through the Termination Date, at its sole cost and expense, it will
indemnify and defend and hold harmless, each Indemnitee, from any and all Losses
imposed on any Indemnitee or its assets.
3. Net Worth. Any Indemnitor that is an Entity agrees that
from the Effective Date and through the Termination Date, the Indemnitor will
not make any distributions to its stockholders or other owners that would reduce
its Net Worth to less than $250 million.
4. Delegation. Any Indemnitor may delegate its duties and
obligations under this Undertaking to Mr. Icahn, or to an Entity affiliated with
Mr. Icahn, so long as Mr. Icahn or such Entity agrees to assume and fully
perform all of the obligations of the Indemnitor hereunder (the "Assumed
Obligations"). Any such delegation may be made without the consent of any
Indemnitee.
In the case of any such delegation to any Entity, the
Entity to which such delegation is made shall have a Net Worth in an amount
greater than the lesser of: (i) $250 million, or (ii) the Net Worth of the
delegating Indemnitor at the time of such delegation.
5. Release. Following any delegation in accordance with the
terms of this Section 4 of this Undertaking: (i) the delegating Indemnitor shall
be, and shall be deemed to be, released from all of its duties and obligations
hereunder and shall have no liability to any Indemnitee in respect of this
Undertaking, and all of the same shall, for all purposes be deemed to have been
included in the Assumed Obligations; and (ii) thereafter the person or Entity
assuming such duties and obligations shall be deemed for all purposes to be the
"Indemnitor" (and no other person or Entity shall be deemed to be the Indemnitor
for any purpose) until such time, if any, of a subsequent delegation pursuant
hereto.
6. Effect; Termination. Notwithstanding the other provisions
hereof, the duties and obligations of the Indemnitor hereunder will: (i) be
effective and enforceable only from the Effective Date, if any; and (ii)
terminate on the Termination Date, if any.
7. Enforcement. Each Indemnitee shall be an express third
party beneficiary of this Undertaking and shall be entitled to enforce the same
as if it were a party hereto.
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8. Waiver; Amendment. The provisions of this Undertaking may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the Indemnitor and AREP.
9. Governing Law. This Undertaking shall in all respects be
governed by, and construed and enforced in accordance with, the laws of the
State of New York.
IN WITNESS WHEREOF, the Indemnitor has caused this Undertaking
to be executed as of the date first written above.
INDEMNITOR:
STARFIRE HOLDING CORPORATION
/s/ Xxxx X. Icahn
---------------------------
Name: Xxxx X. Icahn
Title: President
[SIGNATURE PAGE FOR UNDERTAKING BY
STARFIRE HOLDING CORPORATION DATED NOVEMBER 20, 1998]
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Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and any other required documents should be
sent or delivered by each Holder or such Holder's broker, dealer, bank, trust
company or other nominee to the Depositary as set forth below.
THE DEPOSITARY FOR THE OFFER IS:
XXXXXX TRUST COMPANY OF NEW YORK
BY MAIL:
Wall Street Station
X.X. Xxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
BY HAND/OVERNIGHT DELIVERY:
Receive Window
Wall Street Plaza
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
CONFIRM BY TELEPHONE:
(000) 000-0000
Questions and requests for assistance or for additional copies of the
Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent at its telephone number and address listed below. You may also
contact your broker, dealer, bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
BEACON HILL PARTNERS, INC.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (Collect)
or
(000) 000-0000 (Toll Free)
