CONTRIBUTION AND EXCHANGE AGREEMENT dated as of August 8, 2007 by and among American Real Estate Partners, L.P., Icahn Management LP and Carl C. Icahn
dated
as
of August 8, 2007
by
and
among
American
Real Estate Partners, L.P.,
CCI
Offshore Corp.,
CCI
Onshore Corp.,
Icahn
Management LP
and
▇▇▇▇
▇.
Icahn
TABLE
OF CONTENTS
Page
ARTICLE
I
EXCHANGE
AND CONTRIBUTION OF PARTNERSHIP INTERESTS
1.1Exchange
and Contribution of Partnership Interests
1.2Consideration
1.3Earn-out.
1.4Tax
Treatment
ARTICLE
II
CLOSING
2.1Closing
2.2The
Contributors’ Closing Deliveries
2.3The
Issuer’s Closing Deliveries
2.4Tax
Opinion
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE CONTRIBUTORS AND ICAHN
3.1Organization
and Qualification of the Contributors and the Partnerships; Status.
3.2Authority.
3.3No
Conflicts.
3.4Ownership
Interests.
3.5Assets
Under Management.
3.6Funds.
3.7Investment
Company Act; Investment Advisers Act
3.8Financial
Statements.
3.9No
Adverse Effects; Absence of Certain Changes
3.10Title
to
Properties
3.11Litigation
3.12Claims
Against Officers and Directors
3.13Insurance.
3.14Compliance
with Laws.
3.15Undisclosed
Liabilities
3.16Transactions
with Interested Persons
3.17Intellectual
Property.
3.18Anti-Money
Laundering
3.19Employees,
Labor Matters, etc
3.20Employee
Benefit Plans.
3.21Real
Property
3.22Contracts.
3.23Taxes
3.24Powers
of
Attorney
3.25Finders’
Fees
3.26Trading
Policies.
3.27Delinquent
And Wrongful Acts
3.28Books
and
Records
3.29Investment
Intent
3.30Access
to
Information
3.31Investor
Status
3.32Experience
of the Contributors
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE ISSUER
4.1Organization
and Qualification of the Issuer
4.2Authority.
4.3No
Conflicts
4.4Finders’
Fees
4.5The
AREP
Units
4.6Investment
Intent
4.7Tax.
4.8Access
to
Information
4.9Investor
Status
4.10Experience
of Investor
ARTICLE
V
COVENANTS
5.1Legending
of AREP Units
5.2Access
to
Information
5.3Decisions
of the Issuer
5.4Right
to
Use Icahn Name
ARTICLE
VI
TAX
MATTERS
6.1Consistent
Reporting
6.2No
Change
6.3Cooperation
on Tax Matters
6.4704(c)
Methods
ARTICLE
VII
EMPLOYEES
7.1Service
Credit; Welfare Benefits.
7.2Assumption
of Existing Arrangements
7.3No
Third-Party Beneficiaries
ARTICLE
VIII
INDEMNIFICATION
8.1Survival
8.2Indemnification
8.3Procedures.
8.4Limitations
of Indemnification Obligations.
8.5Calculation
of Damages.
8.6Investigation
8.7Tax
Character
ARTICLE
IX
DEFINITIONS
9.1Defined
Terms
ARTICLE
X
MISCELLANEOUS
10.1Expenses
10.2Entire
Agreement.
10.3Waiver
10.4Amendment
10.5No
Third-Party Beneficiaries
10.6Assignment;
Binding Effect
10.7Interpretation.
10.8Specific
Performance
10.9Further
Assurances
10.10Severability
10.11Delays
or
Omissions
10.12Remedies
10.13Governing
Law
10.14Counterparts
10.15Consent
to Jurisdiction
10.16Notices
List
of Exhibits
Exhibit
A
- Form of Amendment to Limited Partnership Agreement of Onshore GP
Exhibit
B
- Form of Amendment to Limited Partnership Agreement of Offshore GP
Exhibit
C
- Form of Covered Affiliate Agreement
Exhibit
D
- Form of Consent to Assignment
Exhibit
E
- Form of Non-Competition Agreement
Exhibit
F
- Form of Registration Rights Agreement Amendment
Exhibit
G
- Form of Contribution Agreement
Exhibit
H
- Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
Exhibit
I
- Form of Opinion of Walkers SPV Limited
Exhibit
J
- Form of Opinion of Proskauer Rose LLP
Exhibit
K
- Form of Tax Opinion of Proskauer Rose LLP
List
of Schedules
Schedule
1.2 -
Allocation
among Contributors
Schedule
2.3(l) -
Required
Closing Deliveries under Indentures
Schedule
3.3(a) -
Consents
Obtained by the Contributors, the Partnerships and the Funds
Schedule
3.3(b) -
Consents
Obtained by Icahn
Schedule
3.4(e) -
Rights
to
Acquire Interests in any Contributor or Partnership
Schedule
3.5(a) -
Management
Agreements
Schedule
3.5(b) -
Management
Agreements - Exceptions
Schedule
3.5(d) -
Icahn
Group - Regulatory Matters
Schedule
3.8(b) -
Financial
Statements
Schedule
3.9 -
Absence
of Adverse Effects and Changes
Schedule
3.9(j) -
Affiliate
Payments
Schedule
3.11 -
Litigation
Schedule
3.14(a) -
Compliance
with Laws - Exceptions
Schedule
3.15 -
Absence
of Undisclosed Liabilities
Schedule
3.16 -
Transactions
with Interested Persons
Schedule
3.17(a) -
Trademarks
Schedule
3.17(b) -
Intellectual
Property Rights
Schedule
3.19 -
Employees;
Labor Matters
Schedule
3.20(a) -
Employee
Benefit Plans
Schedule
3.21 -
Leased
Real Property
Schedule
3.22(a) -
Material
Contracts
Schedule
3.23 - Tax
Matters
Schedule
3.23(q) -
Tax
Status
Schedule
3.24 -
Powers
of
Attorney
Schedule
4.3(b) -
Consents
Obtained by the Issuer
Schedule
7.2 -
Employees
- Certain Arrangements
CONTRIBUTION
AND EXCHANGE AGREEMENT
This
CONTRIBUTION
AND EXCHANGE AGREEMENT
(“Agreement”)
is
made as of this 8th day of August, 2007 by and among CCI Offshore Corp., a
Delaware corporation (“CCI
Offshore”),
CCI
Onshore Corp., a Delaware corporation (“CCI
Onshore”),
Icahn
Management LP, a Delaware limited partnership (“Icahn
Management”
and
together with CCI Onshore and CCI Offshore, the “Contributors”),
▇▇▇▇
▇. Icahn, an individual (“Icahn”),
and
American Real Estate Partners, L.P., a Delaware limited partnership (the
“Issuer”).
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in Article IX.
WHEREAS,
CCI Offshore is the general partner of Icahn Offshore LP, a Delaware limited
partnership (“Offshore
GP”),
which
is the general partner of each of Icahn Partners Master Fund LP, a Cayman
Islands limited partnership (“Offshore
Master Fund I”),
Icahn
Partners Master Fund II L.P., a Cayman Islands limited partnership
(“Master
Fund II”),
and
Icahn Partners Master Fund III L.P., a Cayman Islands limited partnership
(“Master
Fund III” and,
collectively with Offshore Master Fund I and Master Fund II, the “Offshore
Master Funds”);
WHEREAS,
CCI Onshore is the general partner of Icahn Onshore LP, a Delaware limited
partnership (“Onshore
GP”),
which
is the general partner of Icahn Partners LP, a Delaware limited partnership
(“Onshore
Master Fund I”
and,
collectively with the Offshore Master Funds, the “Master
Funds”);
WHEREAS,
CCI Offshore desires to contribute to Icahn Partners Holding LP, a Delaware
limited partnership (“Icahn
Partners Holding”),
the
sole limited partnership interest in which is owned by the Issuer and the
general partnership interest in which is owned by IPH GP LLC, and the Issuer,
IPH GP LLC and Icahn Partners Holding desire Icahn Partners Holding to receive,
100% of CCI Offshore’s general partnership interests in Offshore GP (the
“Offshore
Partnership Interests”)
on the
terms and subject to the conditions of this Agreement;
WHEREAS,
CCI Onshore desires to contribute to Icahn Partners Holding, and the Issuer,
IPH
GP LLC and Icahn Partners Holding desire Icahn Partners Holding to receive,
100%
of CCI Onshore’s general partnership interests in Onshore GP (the “Onshore
Partnership Interests”)
on the
terms and subject to the conditions of this Agreement;
WHEREAS,
immediately prior to the execution and delivery of this Agreement by the parties
hereto, CCI Offshore contributed 100% of its general partnership interests
in
Icahn Partners Master Fund II Feeder, LP, a Delaware limited partnership, to
Offshore GP and 100% of its shares of capital stock of CCI Administrative GP,
a
Cayman Islands exempted corporation (“CCI
Administrative”),
to
Offshore GP;
WHEREAS,
immediately prior to the execution and delivery of this Agreement by the parties
hereto, Icahn Management and Icahn Capital Management LP, a Delaware limited
partnership (“Icahn
Capital Management”),
entered into that certain Management Contribution, Assignment and Assumption
Agreement, dated as of the date hereof (the “Management
Contribution Agreement”),
pursuant to which Icahn Management contributed substantially all of its assets
and liabilities, other than certain rights in respect of deferred fees, to
Icahn
Capital Management in exchange for 100% of the general partnership interests
in
Icahn Capital Management;
WHEREAS,
Icahn Management has provided, and from and after the consummation of the
transactions contemplated by this Agreement, Icahn Capital Management will
provide, certain management and administrative services to certain of the Funds,
in exchange for a management fee;
WHEREAS,
Icahn Management desires to contribute to Icahn Partners Holding, and the
Issuer, IPH GP LLC and Icahn Partners Holding desire Icahn Partners Holding
to
receive, 100% of Icahn Management’s general partnership interests in Icahn
Capital Management (the “Icahn
Capital Management Partnership Interests”
and
collectively with the Onshore Partnership Interests and the Offshore Partnership
Interests, the “Partnership
Interests”)
on the
terms and subject to the conditions of this Agreement;
WHEREAS,
American Property Investors, Inc., a Delaware corporation (“API”),
currently holds a 1% general partnership interest in each of the Issuer and
American Real Estate Holdings Limited Partnership, a Delaware limited
partnership (“AREH”);
and
WHEREAS,
in connection with the transactions contemplated hereby, API shall make a
capital contribution to each of the Issuer and AREH in order to maintain such
1%
general partnership interest;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
in
this Agreement, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
EXCHANGE
AND CONTRIBUTION OF PARTNERSHIP INTERESTS
1.1 Exchange
and Contribution of Partnership Interests.
On the
terms and subject to the conditions of this Agreement, at the Closing, the
Contributors shall contribute, assign, transfer, convey and deliver to Icahn
Partners Holding the Partnership Interests, in each case, free and clear of
all
Encumbrances.
1.2 Consideration.
The
aggregate consideration (the “Aggregate
Consideration”)
to be
contributed, assigned, transferred, conveyed and delivered to the Contributors
in exchange for the contribution of the Partnership Interests shall equal (a)
8,632,679 AREP Units (the “Closing
Date Consideration”)
to be
delivered to the Contributors at the Closing, plus (b) the amount of AREP Units,
if any, that may become deliverable after the Closing, to be determined pursuant
to and upon the terms and subject to the conditions of Section 1.3 below (the
“Earn-out
Consideration”).
The
Aggregate Consideration shall be allocated among the Contributors as set forth
in Schedule
1.2.
1.3 Earn-out.
(a)After-Tax
Earnings Statement.
(i) No
later
than 15 days after completion of the audited financial statements of the Issuer
for each Fiscal Year during the Earn-out Period, the Issuer shall, or shall
cause its accountants to, prepare and deliver to the Contributors a statement
setting forth the After-Tax Earnings for such Fiscal Year (the “After-Tax
Earnings Statement”),
together with supporting documentation containing reasonable detail of the
calculation thereof.
(ii) The
Contributors shall have 20 days from the date of the Contributors’ receipt of
the After-Tax Earnings Statement to notify the Issuer of any good faith dispute
with respect to any item contained in the After-Tax Earnings Statement, which
notice shall set forth in reasonable detail the basis for such dispute. In
the
event that the Contributors shall so notify the Issuer of any such dispute
on or
before the last day of such 20 day period, the Contributors and the Issuer
and
their respective accountants shall cooperate in good faith to resolve such
dispute as promptly as possible. If the Contributors fail to notify the Issuer
of any such good faith dispute on or before the last day of such 20 day period,
the After-Tax Earnings Statement for that Fiscal Year shall be deemed to be
final and shall be binding on the parties (the “Final
After-Tax Earnings Statement”).
If
the Contributors and the Issuer fail to reach an agreement with respect to
any
matters relating to the After-Tax Earnings Statement with respect to which
the
Contributors have duly notified the Issuer of a dispute within 45 days from
the
date on which the Contributors provide written notice of such dispute, then
all
disagreements shall be resolved by the Independent Auditor. The costs of the
Independent Auditor shall be borne by the party whose aggregate estimate of
the
disputed amount or amounts, as the case may be, differs most greatly from the
final determination of the Independent Auditor.
(iii) The
Independent Auditor shall, acting as an expert and not as an arbitrator,
determine on the basis of GAAP (and the exceptions to GAAP set forth in the
definition of “After-Tax Earnings” below, including, without limitation, the
exclusion from expenses allocable to Hedge Fund Earnings of base salary and
other compensation payable to Icahn) and only with respect to the differences
so
submitted by the Issuer and the Contributors, whether and to what extent the
After-Tax Earnings Statement requires adjustment. The Issuer and the
Contributors shall use commercially reasonable efforts to cause the Independent
Auditor to make a final determination of the adjustments to the After-Tax
Earnings Statement within 60 days from the date of its receipt of the
information relating to the disagreements between the parties.
(iv) The
After-Tax Earnings Statement, as modified by resolution of any disputes by
the
Issuer and the Contributors or by the determination of the Independent Auditor,
shall be the Final After-Tax Earnings Statement, absent manifest
error.
(b) Earn-out
Calculation.
The
Earn-out Amounts shall be calculated as follows:
(i) The
Earn-out Amount payable in respect of the 2007 After-Tax Earnings (the
“2007
Earn-out Amount”)
shall
be determined as follows: if 2007 After-Tax Earnings are (A) less than $170
Million, then the 2007 Earn-out Amount shall be zero; (B) equal to or greater
than $170 Million, but less than $200 Million, then the 2007 Earn-out Amount
shall be $24 Million; (C) equal to or greater than $200 Million, but less than
$229 Million, then the 2007 Earn-out Amount shall be $92 Million; (D) equal
to
or greater than $229 Million, but less than $259 Million, then the 2007 Earn-out
Amount shall be $110 Million; (E) equal to or greater than $259 Million, but
less than $289 Million, then the 2007 Earn-out Amount shall be $115 Million
and
(F) $289 Million or greater, then the 2007 Earn-out Amount shall be $120
Million. For the avoidance of doubt, in no event shall the 2007 Earn-out Amount
exceed $120 Million.
(ii) The
Earn-out Amount payable in respect of the 2008 After-Tax Earnings (the
“2008
Earn-out Amount”)
shall
be determined as follows: if 2008 After-Tax Earnings are (A) less than $206
Million, then the 2008 Earn-out Amount shall be zero; (B) equal to or greater
than $206 Million, but less than $281 Million, then the 2008 Earn-out Amount
shall be $30 Million; (C) equal to or greater than $281 Million, but less than
$362 Million, then the 2008 Earn-out Amount shall be $131 Million; (D) equal
to
or greater than $362 Million, but less than $448 Million, then the 2008 Earn-out
Amount shall be $155 Million; (E) equal to or greater than $448 Million, but
less than $540 Million, then the 2008 Earn-out Amount shall be $160 Million
and
(F) $540 Million or greater, then the 2008 Earn-out Amount shall be $165
Million. For the avoidance of doubt, in no event shall the 2008 Earn-out Amount
exceed $165 Million.
(iii) The
Earn-out Amount payable in respect of the 2009 After-Tax Earnings (the
“2009
Earn-out Amount”)
shall
be determined as follows: if 2009 After-Tax Earnings are (A) less than $250
Million, then the 2009 Earn-out Amount shall be zero; (B) equal to or greater
than $250 Million, but less than $353 Million, then the 2009 Earn-out Amount
shall be $44 Million; (C) equal to or greater than $353 Million, but less than
$469 Million, then the 2009 Earn-out Amount shall be $178 Million; (D) equal
to
or greater than $469 Million, but less than $599 Million, then the 2009 Earn-out
Amount shall be $209 Million; (E) equal to or greater than $599 Million, but
less than $746 Million, then the 2009 Earn-out Amount shall be $216 Million
and
(F) $746 Million or greater, then the 2009 Earn-out Amount shall be $223
Million. For the avoidance of doubt, in no event shall the 2009 Earn-out Amount
exceed $223 Million.
(iv) The
Earn-out Amount payable in respect of the 2010 After-Tax Earnings (the
“2010
Earn-out Amount”)
shall
be determined as follows: if 2010 After-Tax Earnings are (A) less than $297
Million, then the 2010 Earn-out Amount shall be zero; (B) equal to or greater
than $297 Million, but less than $433 Million, then the 2010 Earn-out Amount
shall be $57 Million; (C) equal to or greater than $433 Million, but less than
$593 Million, then the 2010 Earn-out Amount shall be $224 Million; (D) equal
to
or greater than $593 Million, but less than $782 Million, then the 2010 Earn-out
Amount shall be $263 Million; (E) equal to or greater than $782 Million, but
less than $1.004 Billion, then the 2010 Earn-out Amount shall be $272 Million
and (F) $1.004 Billion or greater, then the 2010 Earn-out Amount shall be $279
Million. For the avoidance of doubt, in no event shall the 2010 Earn-out Amount
exceed $279 Million.
(v) The
Earn-out Amount payable in respect of the 2011 After-Tax Earnings (the
“2011
Earn-out Amount”)
shall
be determined as follows: if 2011 After-Tax Earnings are (A) less than $348
Million, then the 2011 Earn-out Amount shall be zero; (B) equal to or greater
than $348 Million, but less than $522 Million, then the 2011 Earn-out Amount
shall be $70 Million; (C) equal to or greater than $522 Million, but less than
$737 Million, then the 2011 Earn-out Amount shall be $270 Million; (D) equal
to
or greater than $737 Million, but less than $1.002 Billion, then the 2011
Earn-out Amount shall be $316 Million; (E) equal to or greater than $1.002
Billion, but less than $1.327 Billion, then the 2011 Earn-out Amount shall
be
$326 Million and (F) $1.327 Billion or greater, then the 2011 Earn-out Amount
shall be $334 Million. For the avoidance of doubt, in no event shall the 2010
Earn-out Amount exceed $334 Million.
(vi) If,
following the determination of the Final After-Tax Earnings Statement for Fiscal
Year 2011, the Aggregate Earn-out Amount is less than $1.121 Billion, then
the
Contributors shall receive an additional Earn-out Amount pursuant to this
Section 1.3(b)(vi) (such amount, the “Catch-up
Earn-out Amount”),
determined as follows: if the Aggregate After-Tax Earnings are (A) less than
$1.271 Billion, then the Catch-up Earn-out Amount shall be zero; (B) equal
to or
greater than $1.271 Billion, but less than $1.789 Billion, then the Catch-up
Earn-out Amount shall be the amount, if any, by which $225 Million exceeds
the
Aggregate Earn-out Amount; (C) equal to or greater than $1.789 Billion, but
less
than $2.390 Billion, then the Catch-up Earn-out Amount shall be the amount,
if
any, by which $895 Million exceeds the Aggregate Earn-out Amount; (D) equal
to
or greater than $2.390 Billion, but less than $3.090 Billion, then the Catch-up
Earn-out Amount shall be the amount, if any, by which $1.053 Billion exceeds
the
Aggregate Earn-out Amount; (E) equal to or greater than $3.090 Billion, but
less
than $3.906 Billion, then the Catch-up Earn-out Amount shall be the amount,
if
any, by which $1.088 Billion exceeds the Aggregate Earn-out Amount and (F)
$3.906 Billion or greater, then the Catch-up Earn-out Amount shall be the
amount, if any, by which $1.121 Billion exceeds the Aggregate Earn-out Amount.
For the avoidance of doubt, in no event shall the sum of the Aggregate Earn-out
Amount and Catch-up Earn-out Amount exceed $1.121 Billion.
(c) Issuance
of AREP Units.
Subject
to the offset right of the Issuer set forth in Section 1.3(d), upon completion
of the Final After-Tax Earnings Statement for the relevant Fiscal Year (whether
by expiration of the Contributors’ 20 day dispute notice period, final agreement
between the Contributors and
the
Issuer or final determination of all outstanding matters by the Independent
Auditor, if it is determined that the Contributors are entitled to receive
an
Earn-out Amount with respect to such Fiscal Year or the Catch-up Earn-out
Amount, as applicable, the Issuer shall deliver to the Contributors, within 5
Business Days after completion of the Final After-Tax Earnings Statement for
such Fiscal Year, certificates issued in the names of the Contributors
evidencing a number of AREP Units equal to such Earn-out Amount divided by
the
20-Day Volume-Weighted Average Price. The AREP Units shall be allocated among
the Contributors in accordance with the allocation percentages set forth in
Schedule
1.2.
(d) Offset
Right.
The
Issuer shall
have the right to offset against any amounts payable under this Section 1.3
to
the Contributors any and all amounts payable by the Contributors in respect
of
the Contributors’ obligations to the Issuer pursuant to Article VIII
hereof.
(e) Acknowledgement
re: Icahn.
The
parties hereto acknowledge and agree that, subject to Section 1.3(d), the
Earn-out Amounts, if any, shall be payable to the Contributors whether or not
Icahn is then employed by the Issuer or any of its Subsidiaries.
(f) Transfer
Restriction.
The
Contributors agree that they shall not transfer,
sell, assign, pledge, encumber, hypothecate or otherwise dispose of their
respective rights to receive any amounts payable under this Section
1.3.
1.4 Tax
Treatment.
The
Contributors and the Issuer agree and acknowledge that, except as to the part
of
any Earn-out Consideration that is treated as interest, the contribution of
Partnership Interests to the Issuer in exchange for the Aggregate Consideration
is intended to qualify as a nonrecognition transaction within the meaning of
Code Section 721(a) and, except to the extent that any Earn-out Consideration
is
treated as interest, no party, on a Tax Return or otherwise, shall take any
position inconsistent with such treatment.
ARTICLE
II
CLOSING
2.1 Closing.
The
closing of the contribution and exchange of the Partnership Interests and the
Closing Date Consideration (the “Closing”)
shall
occur simultaneously with the execution and delivery of this Agreement at the
offices of Proskauer Rose LLP located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
The
date on which the Closing occurs is herein referred to as the “Closing
Date.”
The
Closing will be effective as of 11:59 p.m. (Eastern Time) on the
Closing Date.
2.2 The
Contributors’ Closing Deliveries.
At the
Closing, the Contributors and Icahn, as the case may be, shall deliver to the
Issuer the items listed below:
(a) the
Management Contribution Agreement, dated as of the Closing Date and duly
executed by the parties thereto, together with evidence of the consummation
of
the transactions contemplated thereby, in form and substance reasonably
satisfactory to the Issuer;
(b) an
amendment to the Limited Partnership Agreement of Onshore GP in the form
attached hereto as Exhibit
A,
dated
as of the Closing Date and duly executed by the partners of Onshore
GP;
(c) an
amendment to the Limited Partnership Agreement of Offshore GP in the form
attached hereto as Exhibit
B,
dated
as of the Closing Date and duly executed by the partners of Offshore
GP;
(d) for
each
of the Funds, (i) revisions, amendments, supplements or restatements if and
to
the extent necessary to reflect and account for the transactions contemplated
by
this Agreement, to each of the following documents: (A) the limited partnership
agreement of such Fund; (B) the confidential offering memorandum or
supplementary disclosure, as applicable, of such Fund; (C) any subscription
agreement of such Fund and (D) the applicable Management Agreement by and
between such Fund and Icahn Management, as amended to reflect the assignment
of
such Management Agreement to Icahn Capital Management and (ii) evidence of
the
requisite Consent of the general partner, limited partners, board of directors,
board of managers and any similar governing body of such Fund to the matters
contemplated by clause (i) above or evidence reasonably satisfactory to the
Issuer that such Consent is not required;
(e) the
Agreement in the form attached hereto as Exhibit
C
(the
“Covered
Affiliate Agreement”),
dated
as of the Closing Date and duly executed by Onshore GP, Offshore Master Fund
I,
Offshore Master Fund II and Offshore Master Fund III;
(f) an
Employment Agreement, dated as of the Closing Date, by and among the Issuer,
Icahn Capital Management and Icahn, duly executed by Icahn and Icahn Capital
Management and in form reasonably satisfactory to the Issuer (the “Icahn
Employment Agreement”);
(g) amendments,
dated as of the Closing Date, to the Employment Agreements with the following
persons: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, R. ▇▇▇▇▇▇ ▇▇▇▇, Mayu Sris and ▇▇▇▇▇ ▇▇▇, each such
amendment duly executed by such individual and Icahn Capital Management and
in
form reasonably satisfactory to the Issuer (collectively, the “Employment
Agreement Amendments”);
(h) an
Employment Agreement, dated as of the Closing Date, between Icahn Capital
Management and ▇▇▇▇▇ ▇▇▇▇▇, such agreement duly executed by such individual
and Icahn Capital Management, in form reasonably satisfactory to the Issuer
(collectively with the Icahn Employment Agreement and the Employment Agreement
Amendments, the “Employment
Agreements”);
(i) agreement
re: consent to assignment of certain employment agreements to AREH in the form
attached hereto as Exhibit
D
(the
“Consent
to Assignment”),
dated
as of the Closing Date and duly executed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇;
(j) a
Non-Competition, in the form attached hereto as Exhibit
E
(the
“Non-Competition
Agreement”),
dated
as of the Closing Date and duly executed by Icahn;
(k) Amendment
No. 1 to the Registration Rights Agreement, dated as of June 30, 2005, by and
among the Issuer and the Holders (as defined therein) in the form attached
hereto as Exhibit
F
(the
“Registration
Rights Agreement Amendment”),
dated
as of the Closing Date and duly executed by the Contributors and the
Holders;
(l) a
Shared
Services Agreement among Icahn & Co. LLC, AREH and the Issuer, in form and
substance reasonably satisfactory to the Issuer (the “Shared
Services Agreement”),
dated
as of the Closing Date and duly executed by Icahn & Co. LLC;
(m) An
Amended and Restated License Agreement between Icahn Associates LLC and AREH,
in
form and substance reasonably satisfactory to the Issuer (the “License
Agreement”),
dated
as of the Closing Date and duly executed by Icahn Associates LLC;
(n) a
Contribution Agreement, in the form attached hereto as Exhibit
G
(the
“Contribution
Agreement”),
dated
as of the Closing Date and duly executed by the Contributors and Offshore
GP;
(o) all
Consents required for the Contributors and Icahn to consummate the transactions
contemplated by this Agreement, each in form and substance reasonably
satisfactory to the Issuer;
(p) an
opinion in the form attached hereto as Exhibit
H
from
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, counsel to the Contributors, dated as of the Closing
Date;
(q) an
opinion in the form attached hereto as Exhibit
I
from
Walkers SPV Limited, Cayman counsel to the Contributors, dated as of the Closing
Date;
(r) a
certificate of non-foreign status as provided for in Treasury Regulations
Section 1.1445-2(b)(2), duly executed by the Contributors; and
(s) such
other documents as the Issuer may reasonably request.
2.3 The
Issuer’s Closing Deliveries.
At the
Closing, the Issuer shall deliver, or cause to be delivered, the items listed
below to the Contributors and Icahn, as the case may be:
(a) certificates
evidencing the Closing Date Consideration issued in the names of the
Contributors as set forth in Schedule
1.2,
free
and clear of all Encumbrances;
(b) the
Icahn
Employment Agreement, duly executed by the Issuer;
(c) the
Consent to Assignment, duly executed by AREH;
(d) the
Covered Affiliate Agreement, duly executed by the Issuer;
(e) the
Non-Competition Agreement, duly executed by the Issuer;
(f) the
Registration Rights Agreement Amendment, duly executed by the
Issuer;
(g) the
Shared Services Agreement, duly executed by AREH and the Issuer;
(h) the
License Agreement, duly executed by AREH;
(i) the
Contribution Agreement, duly executed by the Issuer and its Subsidiaries party
thereto;
(j) evidence
that the NYSE has approved the AREP Units comprising the Aggregate Consideration
for listing, subject only to official notice of issuance, in form and substance
reasonably acceptable to the Contributors;
(k) all
Consents required for the Issuer to consummate the transactions contemplated
by
this Agreement, each in form and substance reasonably satisfactory to the
Contributors;
(l) copies
of
all documents set forth in Schedule
2.3(l);
(m) an
opinion in the form attached hereto as Exhibit
J
from
Proskauer Rose LLP, counsel to the Issuer, dated as of the Closing Date;
and
(n) such
other documents as the Contributors may reasonably request.
2.4 Tax
Opinion.
At the
Closing, the Issuer shall receive a tax opinion in the form attached hereto
as
Exhibit
K
from
Proskauer Rose LLP, counsel to the Issuer, dated as of the Closing
Date.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE
CONTRIBUTORS AND ICAHN
As
an
inducement to the Issuer to enter into this Agreement, the Contributors and
Icahn jointly and severally make the following representations and warranties,
except as set forth in the Contributors’ Disclosure Schedules (it being agreed
that any exceptions to such representations and warranties shall clearly
identify the sections of this Agreement to which they apply, provided that
any
item disclosed on one schedule shall be deemed to be disclosed on every other
schedule to which the relevance of such disclosure is readily
apparent).
3.1 Organization
and Qualification of the Contributors and the Partnerships;
Status.
(a) Each
Contributor and each Partnership is duly organized, validly existing and in
good
standing under the Laws of the state or jurisdiction in which it is incorporated
or organized, as the case may be, with all requisite power and authority to
own,
lease and operate its properties and to carry on its business as they are now
being, or are presently contemplated to be, owned, leased, operated and
conducted. Each Contributor and each Partnership is licensed or qualified to
do
business and in good standing (where the concept of “good standing” is
applicable) as a foreign corporation or other organization in each jurisdiction
where the nature of the properties owned, leased or operated by it and the
business now being conducted or presently contemplated to be conducted by it
require such licensing or qualification (except where the failure to be so
licensed or qualified or be in good standing will not individually or in the
aggregate adversely affect the validity or enforceability of this Agreement
or
have a Material Adverse Effect on such Contributor or such Partnership, as
applicable).
(b) The
Contributors have delivered to the Issuer true, correct and complete copies
of
the Organizational Documents of the Contributors and the Partnerships, which
Organizational Documents are in full force and effect.
3.2 Authority.
(a) The
Contributors.
(i) Each
Contributor
has the
right, authority and power under its Organizational Documents and applicable
Laws to enter into this Agreement and each Ancillary Document to which it is
a
party and to carry out the transactions contemplated hereby and
thereby.
(ii) The
execution, delivery and performance by each Contributor of this Agreement and
each Ancillary Document to which it is a party have been duly authorized by
all
necessary action of such Contributor and, to the extent required by each
Contributor’s respective Organizational Documents or applicable Laws, the
shareholders or partners thereof, and no other action on the part of such
Contributor is required in connection therewith.
(iii) This
Agreement and each Ancillary Document executed and delivered by each
Contributor, constitutes a legal, valid and binding obligation of such
Contributor that is a party thereto, enforceable against such Contributor in
accordance with its terms, except as enforceability may be restricted, limited
or delayed by applicable bankruptcy or similar Laws affecting creditors’ rights
generally.
(b) Icahn.
(i) Icahn
has
the legal capacity and the right, authority and power under applicable Laws
to
enter into this Agreement and each Ancillary Document to which he is a party
and
to carry out the transactions contemplated hereby and thereby.
(ii) This
Agreement and each Ancillary Document executed and delivered by Icahn,
constitutes a legal, valid and binding obligation of Icahn, enforceable against
him in accordance with its terms, except as enforceability may be restricted,
limited or delayed by applicable bankruptcy or similar Laws affecting creditors’
rights generally.
3.3 No
Conflicts.
(a) The
execution, delivery and performance by each Contributor of this Agreement and
the Ancillary Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby:
(i) do
not
and will not violate any provision of its Organizational Documents or the
Organizational Documents of the Partnerships or the Funds;
(ii) do
not
and will not violate any Law applicable to such Contributor or its assets or
employees, the Partnerships or their respective assets or employees or the
Funds
or their respective assets or employees, or require any Contributor, any
Partnership or any Fund to obtain any Consent that has not been obtained (all
such required Consents that have been obtained are set forth in Schedule
3.3(a)
of the
Contributors’ Disclosure Schedules); and
(iii) do
not
and will not result in a breach of, constitute a default under, result in an
adverse change under, accelerate any obligation under or give rise to a right
of
termination of, any Contract, Encumbrance, License, Order or arbitration award
to which any Contributor or any Partnership is a party or by which any of their
assets are bound or affected, or result in the creation or imposition of any
material Encumbrance on any of their assets or of any Person’s interests in any
Contributor or any Partnership.
(b) The
execution, delivery and performance by Icahn of this Agreement and the Ancillary
Documents to which he is a party and the consummation of the transactions
contemplated hereby and thereby:
(i) do
not
and will not violate any Law applicable to Icahn or by which his assets are
bound or require him to obtain any Consent that has not been obtained by him
(all such required Consents that have been obtained are set forth in
Schedule
3.3(b)
of the
Contributors’ Disclosure Schedules); and
(ii) do
not
and will not result in a breach of, constitute a default under, result in an
adverse change under, accelerate any obligation under or give rise to a right
of
termination of, any Contract, Encumbrance, License, Order, determination or
arbitration award to which Icahn is a party or by which his assets are bound
or
affected, or result in the creation or imposition of any material Encumbrance
on
his assets or his direct or indirect ownership interests in the
Contributors.
3.4 Ownership
Interests.
(a) CCI
Onshore is the sole general partner of Onshore GP. Each of the partners of
Onshore GP is set forth in the limited partnership agreement of Onshore GP
as
amended through the date hereof. CCI Onshore is the sole record and beneficial
owner of the Onshore Partnership Interests, free and clear of all Encumbrances,
and will transfer and deliver to the Issuer at the Closing valid title to all
such Onshore Partnership Interests, free and clear of any
Encumbrance.
(b) CCI
Offshore is the sole general partner of Offshore GP. Each of the partners of
Offshore GP is set forth in the limited partnership agreement of Offshore GP
as
amended through the date hereof. CCI Offshore is the sole record and beneficial
owner of the Offshore Partnership Interests, free and clear of all Encumbrances,
and will transfer and deliver to the Issuer at the Closing valid title to all
such Offshore Partnership Interests, free and clear of any
Encumbrance.
(c) Icahn
Management is the sole general partner of Icahn Capital Management. Each of
the
partners of Icahn Capital Management is set forth in the limited partnership
agreement of Icahn Capital Management. Icahn Management is the sole record
and
beneficial owner of the Icahn Capital Management Partnership Interests, free
and
clear of all Encumbrances, and will transfer and deliver to the Issuer at the
Closing valid title to such Icahn Capital Management Partnership Interests,
free
and clear of any Encumbrance.
(d) The
Partnership Interests are duly authorized and validly issued under the
respective Organizational Documents and applicable Laws.
(e) Except
for the rights under the Employment Agreements, no Person holds any option,
warrant, convertible security or other right to acquire any interest in any
Contributor, Offshore GP, Onshore GP, Icahn Management or Icahn Capital
Management or any general partnership interest in any Master Fund. Except as
set
forth in Schedule
3.4(e)
of the
Contributors’ Disclosure Schedules, the Partnership Interests conveyed hereby
will not result in the holder(s) thereof, Onshore GP, Offshore GP or Icahn
Capital Management having any obligation, contingent or otherwise, to
repurchase, redeem or otherwise acquire any ownership interest in Onshore GP,
Offshore GP, Icahn Capital Management or to make any material investment (in
the
form of a loan, capital contribution or otherwise) in any Partnership or any
other Person.
There
are no voting trusts, proxies or other agreements or understandings with respect
to the voting of any securities of Onshore GP, Offshore GP or Icahn Capital
Management or giving any person any rights with respect to any future issuance
of securities by Offshore GP, Onshore GP or Icahn Capital
Management.
3.5 Assets
Under Management.
(a) The
aggregate dollar amount of assets under management by Onshore GP and Offshore
GP
as of July 31, 2007 is set forth in Schedule
3.5(a)
of the
Contributors’ Disclosure Schedules. Set
forth
in Schedule
3.5(a)
of the
Contributors’ Disclosure Schedules is
a list
as of July 31, 2007 of all Management Agreements, setting forth with respect
to
each such Management Agreement:
(i) the
name
of the Client under such Management Agreement;
(ii) the
amount of assets under management for each Client pursuant to such Management
Agreement as of July 31, 2007;
(iii) a
list of
all Contracts under which any fees or other payments payable by any of the
Partnerships to any sub-advisers, solicitors, placement agents or other third
parties or to any employees of the Icahn Group in connection with such
Management Agreement and/or the Icahn Group’s relationship with such
Client;
(iv) an
accurate statement as to whether or not Consent is required under the terms
of
such Management Agreement in connection with the termination of Icahn Management
or the assignment of such Management Agreement to Icahn Capital
Management.
(b) Except
as
set forth in Schedule
3.5(b)
of the
Contributors’ Disclosure Schedules, there are no Contracts pursuant to which any
member of the Icahn Group or any of their respective Affiliates has undertaken
or agreed to cap, waive, offset, reimburse or otherwise reduce any or all fees
or charges payable by or with respect to any of the Clients or investors in
such
Clients set forth in Schedule
3.5(a)
of the
Contributors’ Disclosure Schedules or pursuant to any of the Contracts set forth
in Schedule
3.5(a)
of the
Contributors’ Disclosure Schedules.
(c) None
of
the assets of any of the Clients are “plan assets” within the meaning of Section
3(42) of ERISA.
(d) Except
as
set forth in Schedule
3.5(d)
of the
Contributors’ Disclosure Schedules, no exemptive Orders, “no-action” letters or
similar exemptions or regulatory relief have been obtained, nor are any requests
pending therefor, by any member of the Icahn Group.
(e) Since
January 1, 2004, each Partnership that has distributed or marketed its services
or interests, as appropriate, by or through any intermediary, or which has
delegated or appointed any solicitor, placement agent or other third party,
or
which has delegated or outsourced the conduct of any part of its services to
any
third party, has undertaken reasonable efforts to perform due diligence and
ongoing monitoring in relation to the delegation to or appointment and
activities of the intermediary, placement agents or third party, as applicable,
to determine that those activities are conducted in all material respects in
accordance with applicable Laws affecting the Icahn Group.
(f) To
the
Knowledge of the Contributors, no intermediary, placement agent, delegate or
appointee has unlawfully marketed any of the services of any Partnership or
unlawfully marketed or sold any interest in any Fund in any manner that would
result in a material violation of applicable Laws and as of the date hereof
there are no material outstanding claims against any member of the Icahn Group
with respect to such marketing or sale.
(g) Since
January 1, 2004, to the Knowledge of the Contributors, there has existed no
material unremedied accounting or pricing error or similar condition with
respect to any Fund or Client account.
(h) To
the
Knowledge of the Contributors, no Fund or account managed or advised by any
member of the Icahn Group has violated any material investment policy or
restriction set forth in any Management Agreement, offering memorandum,
prospectus or other governing document.
3.6 Funds.
(a) Each
Fund
has been duly organized and is validly existing and in good standing under
the
Laws of the jurisdiction of its organization and has all requisite corporate,
partnership, limited liability company or similar power and authority. Each
Fund
has duly complied in all material respects with all applicable Laws. Each Fund
possesses all material Licenses necessary to entitle it to use its name, to
own,
lease or otherwise hold its properties and assets and to carry on its business
as it is currently conducted and proposed to be conducted. Each Fund is duly
qualified, licensed or registered to do business in each jurisdiction where
it
is required to do so under applicable Laws other than where any failure to
be so
qualified, individually or in the aggregate, has not had or resulted in and
could not reasonably be expected to have or result in a Material Adverse Effect
on such Fund. All outstanding shares, units or other interests of each Fund
have
been issued and sold in material compliance with applicable Laws, including
all
applicable federal and state securities Laws. No Fund is, or at any time since
its inception was, required to register as an investment company under the
Investment Company Act.
(b) As
to
each Fund, there has been in full force and effect a Management Agreement at
all
times that any member of the Icahn Group was performing Management Services
for
such Fund, and each such Management Agreement pursuant to which any member
of
the Icahn Group has received compensation respecting its activities in
connection with any of the Funds was duly approved in accordance with applicable
Laws.
(c) There
are
no material consent judgments of a Governmental Entity or Orders on or with
regard to any of the Funds. All material notifications to Governmental Entities
and other bodies required by applicable Laws have been made to permit such
activities as are carried out by the Funds and all Consents required by
applicable Laws have been obtained in relation to the Funds.
(d) The
Contributors have delivered to the Issuer true, correct and complete copies
of
the current confidential offering memoranda of Icahn Partners LP, Icahn Fund
Ltd., Icahn Cayman Partners L.P., Icahn Fund II Ltd., and Icahn Fund III Ltd.
Each such confidential offering memorandum has at all times since the original
offering of shares or other ownership interests in such Fund (as applicable)
complied in all material respects with all applicable Laws, and has not
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading, in each such case, at all such times as any such confidential
offering memorandum was delivered to investors or potential investors in such
Fund. All
of
the outstanding shares or other ownership interests of each Fund are duly
authorized and validly issued.
(e) The
Contributors have made available to the Issuer true, correct and complete copies
of the audited financial statements, prepared in accordance with GAAP, of Icahn
Partners LP, Icahn Fund Ltd. and Icahn Partners Master Fund LP for the last
three fiscal years (or
such
shorter period as such Fund has been in existence) (each hereinafter referred
to
as a “Fund
Financial Statement”).
Each
of the Fund Financial Statements presents fairly in all material respects the
financial position of the relevant Fund at the respective date of such Fund
Financial Statement and the results of operations and cash flows for the
respective periods then ended in accordance with GAAP applied on a consistent
basis (except as otherwise noted therein).
3.7 Investment
Company Act; Investment Advisers Act.
No
Contributor, Partnership or Fund is registered, is required to register or
at
any time since its inception did register or was required to register as an
investment company under the Investment Company Act or as an investment adviser
under the Investment Advisers Act.
3.8 Financial
Statements.
(a) True,
correct and complete copies of the following financial statements for each
of
the Partnerships other than Icahn Capital Management (collectively, the
“Financial
Statements”)
have
been delivered or made available to the Issuer: (i) an audited statement of
financial condition for each of December 31, 2006 (except those noted in
Schedule
3.8(b)
of the
Contributors’ Disclosure Schedules) and December 31, 2005 (including any notes
thereto) and audited statements of changes in partners’ capital, income and cash
flows for each of the two years then ended (except those noted in Schedule
3.8(b)), together with a copy of the auditor’s report thereon and (ii) unaudited
statements of financial condition for March 31, 2007 and unaudited
statements of changes in partner’s capital, income and cash flows for the three
month period then ended.
(b) The
Financial Statements as of and for the years ended December 31, 2006 and
December 31, 2005 (except those noted in Schedule 3.8(b)) have been prepared
from, and are in accordance with, the books and records of the respective
Partnerships and fairly present, in all material respects, the financial
position and results of operations of the respective Partnerships as at and
for
the periods indicated therein, in each case, in accordance with GAAP and in
accordance with accounting practices commonly adopted by companies carrying
on
businesses similar to those carried on by the Partnerships. The Financial
Statements: (i) are complete and accurate in all material respects and in
particular include full provision for bad and doubtful debts relating to any
period ending on or before the date to which they are made up; (ii) fairly
present in all material respects the financial position and the results of
operations and cash flows of each respective Partnership at each accounting
reference date to which the Financial Statements relate; and (iii) except as
the
Financial Statements expressly disclose, are not affected by any unusual or
non-recurring items. The Financial Statements (except those noted in
Schedule
3.8(b)
of the
Contributors’ Disclosure Schedules) have been audited by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. The
accounting records of the respective Partnerships have been kept on a proper
and
consistent basis and no change in the methods or bases of valuation or
accountancy treatment having been made for at least three years prior to the
accounts date or since, are up-to-date and in all material respects contain
complete and accurate details of the business activities of the respective
Partnerships.
(c) Each
Partnership maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with the general or specific authorization of the management of such
Partnership; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
the
general or specific authorization of the management of such Partnership and
(iv)
the recorded accountability for assets is compared with the existing assets
at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.9 No
Adverse Effects; Absence of Certain Changes.
Except
as set forth in Schedule
3.9
of the
Contributors’ Disclosure Schedules and other than any Material Adverse Effect
arising from or relating to investments, investment decisions or investment
performance (provided that such investments and investment decisions have been
made in all material respects in accordance with applicable legal and
contractual obligations), since December 31, 2006 through the date hereof,
(i)
no Contributor, Partnership or Fund has suffered (and there has not otherwise
existed) at any time any condition, circumstance, event or occurrence which,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect on such Contributor, such Partnership or such
Fund, (ii) the Contributors, the Partnerships and the Funds have conducted
their
respective businesses in all material respects only in the ordinary course
of
business consistent with past practice and (iii) except as contemplated by
this
Agreement and exclusive of any payments specifically required under the terms
of
the applicable partnership agreement or other Organizational Document, there
has
not been any of the items specified below with respect to any of the
Contributors, any of the Partnerships or any of the Funds:
(a) any
dividend, distribution or payment declared or made in respect of its shares,
partnership interests or membership interests, as applicable, by way of
dividend, distribution, purchase or redemption of shares, interests or other
securities or otherwise;
(b) any
repurchase, redemption or other acquisition, directly or indirectly by any
Contributor or any Partnership, of any shares, partnership interests or
membership interests, as applicable, or any securities convertible into or
exchangeable for any thereof, of such Contributor or such
Partnership;
(c) any
increase in the compensation payable or to become payable to any director,
officer, employee, independent consultant or agent, except for automatic
increases under employment agreements, increases for non-officer employees
made
in the ordinary course of business, nor any other change in any employment
or
consulting arrangement except in the ordinary course of business;
(d) any
transfer, disposal, mortgage, pledge or other Encumbrance on any of its material
assets that are necessary for the conduct of its business, except for Permitted
Encumbrances and Encumbrances incurred in the ordinary course of
business;
(e) other
than in the ordinary course of business and other than any Management Agreements
and Contracts relating to investments or brokerage arrangements or Contracts,
any change or amendment to any material Contract by which any Contributor or
any
Partnership or their respective assets is bound or to which any Contributor
or
any Partnership or such assets
are
subject;
(f) any
change in accounting principles, practices or methods of any Contributor or
any
Partnership, except for any change required by reason of a change in
GAAP;
(g) other
than in the ordinary course of business or with respect to investments, any
waiver or release of any claim or right or cancellation of any debt
held;
(h) any
initiation, receipt or settlement of any material Proceeding or action affecting
the business of any Contributor or any Partnership;
(i) settlement
or compromise of any material Tax Liability or agreement to any adjustment
of
any material Tax attribute or election with respect to Taxes;
(j) any
payments to any Affiliate of any Contributor or any Partnership
other
than as required under the terms of a Contract set forth in Schedule
3.9(j)
of the
Contributors’ Disclosure Schedules;
(k) with
respect to the Funds, any change in the investment policies of the Funds, other
than as required by fiduciary duties or applicable Laws; or
(l) any
agreement, whether written or oral, fixed or contingent, by any Contributor
or
any Partnership to do any of the foregoing.
3.10 Title
to Properties.
Each
Contributor and each Partnership has good title to, or in the case of leased
property and assets has valid leasehold interests in, all property and assets
of
such Contributor or such Partnership (whether real, personal, tangible or
intangible) reflected on its respective balance sheet included in the Financial
Statements or acquired after June 30, 2007, except for properties and assets
sold since June 30, 2007 in the ordinary course of business or where the failure
to have such good title or valid leasehold interests could not, individually
or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
None
of the owned property or assets of any Contributor or any Partnership is subject
to any Encumbrance, other than Permitted Encumbrances.
3.11 Litigation.
Except
as set forth in Schedule
3.11
of the
Contributors’ Disclosure Schedules, there
is
no litigation or other Proceeding, at law or in equity, by or before any
arbitrator or any Governmental Entity, in which any member of the Icahn Group
is
a party (or which is pending against) or with which any of them has been
threatened in writing, in connection with the business, affairs, properties
or
assets of any Partnership (including any of the foregoing to which any Fund
is a
party to and relating to services provided by any Partnership to or in respect
of such Person), or which questions the validity or enforceability of
performance of this Agreement or any Ancillary Document or the transactions
contemplated hereby or thereby. None of the members of the Icahn Group or any
Person who is "associated with" the Icahn Group (provided that the
representation given in this sentence with respect to ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇ shall be limited to the Knowledge of the Contributors) for purposes
of
the Investment Advisers Act has, during the ten years prior to the date of
this
Agreement, been convicted of any crime (other than a misdemeanor traffic
violation or similar misdemeanor) or is, or has been during such period subject
to, any disqualification that, in either case, would be a basis for denial,
suspension or revocation of registration of an investment adviser under Section
203(e) of the Investment Advisers Act or Rule 206(4)-4(b)
thereunder.
3.12 Claims
Against Officers and Directors.
There
is no pending or, to the Contributors’ Knowledge, written threatened claim
against any member of the Icahn Group or against any other Person, which could
give rise to any claim for indemnification against any Partnership or cause
any
Partnership to incur any material Liability or otherwise suffer or incur any
material Damages.
3.13 Insurance.
(a) The
Contributors have made available to the Issuer copies of all material insurance
policies and fidelity bonds relating to the assets, business, operations,
employees, officers or directors of the Contributors, the Partnerships and
the
Funds effective as of the Closing.
(b) All
insurance policies of the Contributors, the Partnerships and the Funds are
in
full force and effect. There are no material claims by any Contributor, any
Partnership or any Fund pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds or in respect of which such underwriters have reserved their
rights. The Contributors, the Partnerships and the Funds have paid all premiums
due under all such policies.
3.14 Compliance
with Laws.
(a) Except
as
set forth in Schedule
3.14(a)
of the
Contributors’ Disclosure Schedules, each member of the Icahn Group in respect of
the Partnerships (i) has operated its respective business in material compliance
with all applicable Laws, including all applicable federal and state securities
Laws, and (ii) is in material compliance and, at all times has been in material
compliance, in all respects with all applicable Laws, including all applicable
federal and state securities Laws, relating to such member of the Icahn Group
or
their respective assets, properties or businesses. Except as set forth in
Schedule
3.14(a)
of the
Contributors’ Disclosure Schedules, no investigation or review by any
Governmental Entity is pending or threatened, nor has any such Governmental
Entity indicated orally or in writing to any member of the Icahn Group an
intention to conduct an investigation or review of, or with respect to, any
member of the Icahn Group.
(b) No
member
of the Icahn Group (i) is in default with respect to any Order issued by any
Governmental Entity relating to the business of any such member or (ii) has
been
or is charged with or has been threatened in writing with or under investigation
with respect to, any violation of any applicable Laws relating to the business
of such member or the transactions contemplated hereby or by any Ancillary
Document.
(c) Each
member of the Icahn Group is in compliance in all material respects with
applicable Laws relating to (i) the use of corporate funds for contributions,
payments, gifts or entertainment and (ii) the making of expenditures relating
to
political activity to government officials or others, and no member of the
Icahn
Group has established or maintained any unlawful or unrecorded funds in a manner
contrary to applicable Law in any material respect.
(d) The
Icahn
Group has adopted and implemented compliance policies and procedures reasonably
designed to prevent violation by it and its employees of the federal securities
laws, a complete and correct copy of which has been delivered to the Issuer.
The
Icahn Group has identified no material violations of such policies by the Icahn
Group or by any of its officers, directors or employees.
3.15 Undisclosed
Liabilities.
Except
as set forth in Schedule
3.15
of the
Contributors’ Disclosure Schedules or as have arisen or may exist, arise from or
relate to investments, investment decisions or investment performance (provided
that such investments or investment decisions have been made in all material
respects in accordance with applicable legal and contractual obligations),
no
Partnership has any Liability other than Liabilities (a) included or reflected
in its respective Financial Statements and adequately reserved against therein
or (b) arising subsequent to June 30, 2007, in the ordinary course of business
consistent with past practice (including as to amount and nature), and, in
any
case, not as a result of a breach or default of any Contract or any applicable
Law by any member of the Icahn Group.
3.16 Transactions
with Interested Persons.
Except
as contemplated by this Agreement, as approved by the Investor Committee (as
defined in the Funds’ confidential offering memoranda), as set forth in
Schedule
3.16
of the
Contributors’ Disclosure Schedules, or as described in the Funds’ confidential
offering memoranda, since January 1, 2004, no Contributor, Partnership or Fund
has been a party to any material transaction or material Contract with any
employee of any Contributor, any Partnership or any Fund, any of the respective
immediate family members of any of the foregoing Persons or any Affiliate of
any
of the foregoing Persons.
3.17 Intellectual
Property.
(a) None
of
the Contributors or Partnerships has received any written notice from any Person
that it does not own, or possess adequate rights to use, all material patents,
trade names, trademarks, copyrights, inventions, processes, designs, formulae,
trade secrets, know-how and other intellectual property rights necessary for,
used or held for use in the conduct of its respective business. Set forth in
Schedule
3.17(a)
of the
Contributors’ Disclosure Schedules is a list of all material registrations and
applications for registration for trademarks owned by the Contributors and
the
Partnerships, and all such registrations, filings or issuances remain in full
force and effect.
(b) All
licenses or other Contracts under which any Contributor, any Partnership or
any
Fund has been granted, or been restricted with respect to, rights in any
intellectual property that are material to the business or operations of such
Contributor, such Partnership or such Fund are set forth in Schedule
3.17(b)
of the
Contributors’ Disclosure Schedules. All said licenses or other Contracts are in
full force and effect and, to the Knowledge of the Contributors, there is no
default by any party thereto. To the Knowledge of the Contributors, the
licensors under said licenses and other Contracts have and had all requisite
power and authority to grant the rights purported to be conferred thereby.
(c) No
Contributor or Partnership has granted rights to any Person other than another
Contributor or Partnership in any material intellectual property rights owned
by
any Contributor or any Partnership.
3.18 Anti-Money
Laundering.
Each
Contributor, each Partnership and each Fund has established anti-money
laundering policies and procedures to the extent required under applicable
Laws,
and has at all times operated its business and provided its services in all
material respects in accordance with the requirements of such policies and
procedures.
3.19 Employees,
Labor Matters, etc. Except
as
set forth in Schedule
3.19
of the
Contributors’ Disclosure Schedules, (a) no Contributor or Partnership is a party
to or bound by any collective bargaining agreement, and there are no labor
unions, works councils or other organizations representing, purporting to
represent or, to the Knowledge of the Contributors, attempting to represent
any
employee of any Contributor or any Partnership; (b) no strike, slowdown,
picketing, work stoppage, concerted refusal to work overtime or other similar
labor activity has occurred, been threatened in writing or, to the Knowledge
of
the Contributors, is anticipated with respect to any employee of any Contributor
or any Partnership; (c) there are no labor disputes currently subject to any
grievance procedure, arbitration or litigation and there is no representation
petition pending, threatened in writing or, to the Knowledge of the
Contributors, anticipated with respect to any employee of any Contributor or
any
Partnership and there is no action pending or, to the Knowledge of the
Contributors, threatened by any labor unions, work councils or other
organizations representing, purporting to represent or attempting to represent
any employee of any entity in which any of the Contributors or any of the
Partnerships have invested or are contemplating investing that could have a
Material Adverse Effect on the business, operations or prospects of the
Contributors, the Partnerships, the Funds or the Issuer; (d) to the Knowledge
of
the Contributors, no Contributor or Partnership is, and no Contributor or
Partnership has been, engaged in any unfair labor practice within the meaning
of
the National Labor Relations Act; (e) the Contributors and the Partnerships
are
in compliance in all material respects with all applicable Laws relating to
employment and employment practices, workers’ compensation, terms and conditions
of employment, worker safety, wages and hours, civil rights, discrimination,
immigration, collective bargaining and the Worker Adjustment and Retraining
Notification Act; (f) there have been no claims of harassment, discrimination,
retaliatory act or similar actions against any employee, officer or director
of
any Contributor or any Partnership at any time during the past four years and,
to the Knowledge of the Contributors, no facts exist that could reasonably
be
expected to give rise to such claims or actions and (g) no Contributor or
Partnership and, to the Knowledge of the Contributors, no employee, agent or
representative of any such entity (i) is in possession of or has or is using
information, data or other property in violation of the ownership rights or
property interests of any other Person, including any prior employer of any
such
employee, agent or representative or (ii) has taken any action in violation
of
any obligations or restrictions with respect to which any such employee, agent
or representative may be subject.
3.20 Employee
Benefit Plans.
(a) Set
forth
in Schedule
3.20(a)
of the
Contributors’ Disclosure Schedules is a true and complete list of all “employee
benefit plans” within the meaning of Section 3(3) of ERISA, all medical, dental,
life insurance, equity, bonus or other incentive compensation, disability,
salary continuation, severance, retention, retirement, pension, deferred
compensation, vacation, sick pay or paid time off plans or policies and any
other plans, agreements (including, but not limited to, employment and
consulting agreements), programs, policies, trust funds or arrangements (whether
written or unwritten, insured or self-insured) (i) established, maintained,
sponsored or contributed to (or with respect to which any obligation to
contribute has been undertaken) by the Contributors, the Partnerships or any
ERISA Affiliate on behalf of any employee, officer, director or other service
provider of the Contributors or the Partnerships (whether current, former or
retired) or their beneficiaries (“Covered
Employees”)
or
(ii) with respect to which the Contributors or the Partnerships have any
Liability on behalf of any Covered Employee (each a “Plan”
and,
collectively, the “Plans”).
There
are no Plans established, maintained, sponsored or contributed to by any of
the
Funds and there have not been any Plans established, maintained, sponsored
or
contributed to by any of the Funds during the past six years, and the Funds
currently have no employees and there have not been any such employees of the
Funds during the past six years.
(b) With
respect to each Plan established, maintained or sponsored by any of the
Contributors or the Partnerships, the Contributors have delivered to the Issuer:
(i) copies of all material documents setting forth the terms of the Plan,
including all amendments thereto; (ii) the most recent annual reports (Form
Series 5500), if any, required under ERISA or the Code in connection with the
Plan; (iii) the most recent actuarial reports (if applicable) for the Plan;
(iv)
the most recent summary plan description, if any, required under ERISA with
respect to the Plan; (v) all material written Contracts relating to the Plan,
including administrative service agreements, group insurance Contracts and
trust
agreements and (vi) the most recent IRS determination or opinion letter issued
with respect to any Plan intended to be qualified under Section 401(a) of the
Code.
(c) None
of
the Contributors or the Partnerships contributes to, is required to contribute
to, or otherwise participates in or in any way, directly or indirectly, has
any
Liability with respect to, any Plan subject to Section 412 of the Code, Section
302 of ERISA or Title IV of ERISA, including, without limitation, any
“multiemployer plan” (within the meaning of Sections 3(37) or 4001(a)(3) of
ERISA or Section 414(f) of the Code) or any “single-employer plan” (within the
meaning of Section 4001(a)(15) of ERISA) which is subject to Sections 4063,
4064
or 4069 of ERISA.
(d) With
respect to each of the Plans established, maintained or sponsored by any of
the
Contributors or the Partnerships: (i) each Plan intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from
the IRS as to its qualified status and, to the Knowledge of the Contributors,
nothing has occurred, whether by action or by failure to act, that caused or
could reasonably be expected to cause the loss of such qualified status or
the
imposition of any material penalty or Tax; (ii) all payments required by each
Plan, any collective bargaining agreement or other agreement, or by applicable
Law (including, without limitation, all contributions, insurance premiums or
intercompany charges) with respect to all prior periods have been made or
provided for by the Contributors or the Partnerships in accordance with the
provisions of each of the Plans, applicable Law and generally accepted
accounting principals; (iii) no Proceeding has been instituted or threatened
or
asserted in writing or, to the Knowledge of the Contributors, is anticipated
with respect to any of the Plans (other than non-material routine claims for
benefits and appeals of such claims) or any trustee or fiduciaries thereof;
(iv)
each Plan is in substantial compliance in form and has been maintained and
operated in all material respects in accordance with its terms and applicable
Law, including, without limitation, ERISA and the Code; (v) no non-exempt
“prohibited transaction,” within the meaning of Section 4975 of the Code and
Section 406 of ERISA, has occurred or is reasonably expected to occur with
respect to the Plans which could reasonably be expected to result in any
material Liability to any of the Contributors or the Partnerships; (vi) no
Plan
is under, and the Contributors and the Partnerships have not received any notice
of, an audit or investigation by the IRS, Department of Labor or any other
Governmental Entity and no such completed audit, if any, has resulted in the
imposition of any Tax or penalty which has not been paid and (vii) no Plan
provides post-retirement health and welfare benefits to any current or former
employee of the Contributors or the Partnerships, except as required under
Section 4980B of the Code, Part 6 of Title I of ERISA or any other applicable
Law.
(e) The
consummation of the transactions contemplated by this Agreement alone, or in
combination with a termination of any Covered Employee, will not give rise
to
any Liability under any Plan, including, without limitation, Liability for
severance pay, unemployment compensation, termination pay or withdrawal
Liability, or accelerate the time of payment or vesting or increase the amount
of compensation or benefits due to any Covered Employee. No amount that could
be
received (whether in cash or property or the vesting of property), as a result
of the consummation of the transactions contemplated by this Agreement, by
any
employee, officer, director, stockholder or other service provider of the
Contributors or the Partnerships under any Plan or otherwise would not be
deductible by reason of Section 280G of the Code or subject to an excise Tax
under Section 4999 of the Code. The Contributors and the Partnerships have
no
indemnity obligations on or after the Closing Date for any Taxes imposed under
Section 4999 or 409A of the Code.
(f) None
of
the Contributors, the Partnerships, any ERISA Affiliate nor any employee,
officer, director, stockholder or other service provider of the Contributors
or
the Partnerships has made any Contract to create any additional plan, agreement
or arrangement with respect to any Covered Employee, or to modify or change
in
any material way any existing Plan.
(g) Neither
the Contributors nor the Partnerships have unfunded Liabilities pursuant to
any
Plan that is not intended to be qualified under Section 401(a) of the Code
and
is an “employee pension benefit plan” within the meaning of Section 3(2) of
ERISA, a nonqualified deferred compensation plan or an excess benefit plan.
Each
Plan that is a “nonqualified deferred compensation plan” (as defined under
Section 409A(d)(1) of the Code) has been operated and administered in good
faith
compliance with Section 409A of the Code from the period beginning January
1,
2005 through the date hereof.
(h) Any
individual who performs services for the Contributors or the Partnerships and
who is not treated as an employee for federal income Tax purposes by the
Contributors or the Partnerships is not an employee under applicable Law or
for
any purpose including, without limitation, for Tax withholding purposes or
Plan
purposes. Neither the Contributors nor the Partnerships have any Liability
by
reason of an individual who performs or performed services for the Contributors
or the Partnerships in any capacity being illegally excluded from participating
in a Plan. Each employee of the Contributors and the Partnerships has been
properly classified as “exempt” or “non-exempt” under applicable
Law.
3.21 Real
Property.
No
Contributor or Partnership owns (and no Contributor or Partnership has at any
time owned) any real property. Set forth in Schedule
3.21
of the
Contributors’ Disclosure Schedules are (a) a list of the real property currently
leased by any Contributor or any Partnership and (b) a list of the leases for
such real property (the “Leases”).
The
Contributors have made available to the Issuer true, correct and complete copies
of the Leases. Each Lease has been duly authorized and executed by the parties
thereto and is in full force and effect. No Contributor or Partnership is in
default under any Lease, nor has any event occurred which, with giving of notice
or the passage of time, or both, would give rise to such a default. After giving
effect to the Closing, each Lease set forth in Schedule
3.21
of the
Contributors’ Disclosure Schedules will be valid and effective in accordance
with its terms.
3.22 Contracts.
(a) Except
as
set forth in Schedule
3.5(a),
Schedule
3.21
or
Schedule
3.22(a),
of the
Contributors’ Disclosure Schedules and except for Contracts relating to
investments, commissions on investments or prime brokerage agreements, no
Contributor or Partnership is a party to, nor are any of its assets bound or
affected by, any:
(i) Management
Agreement with a Fund that accounts for revenue to Icahn Management of $500,000
or more on an annualized basis;
(ii) Management
Agreement with a Client other than a Fund that accounts for revenue to Icahn
Management of $250,000 or more on an annualized basis;
(iii) Contract
under which any Contributor or any Partnership is obligated, directly or
indirectly, to make any capital contribution, coinvestment, provision of seed
capital or other investment in any Person or investment in any investment
product in an amount of $500,000 or more;
(iv) Contract
with any placement agent, investment or research consultant, investment
platform, solicitor or sales agent or otherwise with respect to the referral
of
business to the Icahn Group (including, without limitation, any agreement with
respect to solicitation of prospective investors in any Fund) providing for
aggregate payments by any Partnership of $100,000 or more;
(v) license
agreement (as licensor or licensee) providing for aggregate payments of $500,000
or more;
(vi) Contract
that provides for earn-outs or other similar contingent obligations that, as
of
the date hereof, could reasonably be expected to exceed $500,000;
(vii) Contract
which contains a (A) “clawback” or similar undertaking by any Partnership
requiring the reimbursement or refund of any fees or (B) a “most favored nation”
or similar provision, in each case where the obligations of any Partnership
under such undertaking or provision is material to any member of the Icahn
Group;
(viii) Lease
providing for annual rentals of $500,000 or more;
(ix) Contract
for the purchase of materials, supplies, goods, services, equipment or other
assets providing for aggregate payments of $500,000 or more;
(x) sales
or
distribution agreement (or series of agreements with a party or related parties)
that provides for annual guaranteed payments of $100,000 or more;
(xi) joint
venture, strategic alliance, partnership or other similar Contract involving
a
sharing of profits or expenses or payments based on revenues or assets under
management of any member of the Icahn Group that accounts for revenue of
$1,000,000 or more on an annualized basis;
(xii) Contract
relating to the acquisition or disposition of any business for a purchase price
in excess of $500,000 (whether by merger, sale of stock, sale of assets or
otherwise) with any outstanding obligations as of the date hereof that are
material to any Contributor or any Partnership;
(xiii) Contract
relating to Indebtedness (whether incurred, assumed, guaranteed or secured
by
any asset), except any such Contract with an aggregate outstanding principal
amount not exceeding $500,000 and except for margin debt or other Indebtedness
incurred in connection with the purchase, sale or carrying of investments;
or
(xiv) Contract
that limits in any material respect the freedom of any Partnership to compete
in
any line of business or with any Person or in any area or that requires any
member of the Partnership to deal exclusively with any Person, in each case
that
is material to any member of any Partnership.
(b) Prior
to
the date hereof, true, correct and complete copies of each Contract required
to
be set forth in Schedule
3.5(a),
Schedule
3.21
and
Schedule
3.22(a)
of the
Contributors’ Disclosure Schedules have been delivered to, or made available for
inspection by, the Issuer. Each such Contract is in full force and effect and
constitutes a legal, valid and binding agreement, enforceable in accordance
with
its terms, against each member of the Icahn Group and, to the Knowledge of
the
Contributors, the other party thereto. No Contributor, Partnership or, to the
Knowledge of the Contributors, any other party to such Contract, is in violation
or breach of or default in any material respect under any such Contract (or
with
notice or lapse of time or both, would be in violation or breach of or default
in any material respect under any such Contract).
3.23 Taxes.
Except
as set forth in Schedule
3.23
of the
Contributors’ Disclosure Schedules:
(a) Offshore
GP, Onshore GP and Icahn Capital Management have duly and timely filed with
the
appropriate taxing authorities all federal, New York state and all other
material state and local income Tax Returns of Offshore GP, Onshore GP and
Icahn
Capital Management and all other material Tax Returns of Offshore GP, Onshore
GP
and Icahn Capital Management required to be filed through the date of this
Agreement. All such Tax Returns are true, correct and complete in all material
respects under applicable U.S. federal, state, local or foreign Tax laws, rules
or regulations. Other than the Tax Returns of Offshore GP and Onshore GP for
the
Tax period ended December 31, 2006, neither Offshore GP nor Onshore GP has
pending any request for an extension of time within which to file any U.S.
federal, state, local or foreign income Tax Return.
(b) Offshore
GP, Onshore GP and Icahn Capital Management have made available to the Issuer
(i) true, correct and complete copies of all Tax Returns as filed, and any
amendments thereto, filed by or on behalf of Offshore GP, Onshore GP, Icahn
Capital Management and the Onshore Master Fund I and any material correspondence
with any taxing authority relating thereto and (ii) accurate and complete copies
of all material notices of deficiencies, notices of proposed adjustment, notices
of assessments, revenue agent reports, closing agreements, settlement
agreements, information document requests and other similar documents, notices
or correspondence that any of Offshore GP, Onshore GP and Icahn Capital
Management has received from, sent to or entered into with the IRS, or other
taxing authority since November 1, 2004.
(c) No
issue
has been raised in writing in any prior examination or audit of the Tax Returns
of Offshore GP, Onshore GP or Icahn Capital Management that was not resolved
and
that, by application of similar principles, reasonably can be expected to result
in the assertion of a material deficiency for any other Tax period not so
examined or audited and for which the statute of limitations (taking into
account extensions) has not expired.
(d) All
Taxes
that were due and payable, without regard to whether such Taxes have been
assessed or have been shown as due on such Tax Returns (except for Taxes being
contested in good faith through appropriate Proceedings and as to which adequate
reserves have been established in accordance with GAAP) have been timely paid
by
Offshore GP, Onshore GP and Icahn Capital Management, including any Taxes owed
with respect to any completed and settled audit, examination or deficiency.
(e) No
U.S.
federal, state, local or foreign audits, claims, assessments or other
administrative or court Proceedings are presently pending with regard to any
Taxes or Tax Returns of Offshore GP, Onshore GP or Icahn Capital Management.
None of Offshore GP, Onshore GP and Icahn Capital Management has received
written notice of any such pending audits, claims, assessments or Proceedings
nor has any taxing authority (whether domestic or foreign) to the Knowledge
of
the Contributors, threatened to assert against Offshore GP, Onshore GP or Icahn
Capital Management any material deficiency or material claim for Taxes in excess
of the reserves established on the Financial Statements. There are no
outstanding waivers extending the statutory period of limitation relating to
the
payment of Taxes due from Offshore GP, Onshore GP or Icahn Capital
Management.
(f) There
are
no Encumbrances for Taxes upon any property or assets of Offshore GP, Onshore
GP
or Icahn Capital Management, except for Encumbrances for Taxes not yet due
and
payable and Encumbrances for Taxes that are being contested in good faith by
appropriate Proceedings and as to which adequate reserves have been established
in accordance with GAAP.
(g) Offshore
GP, Onshore GP and Icahn Capital Management have withheld from payments to
their
employees, independent contractors, creditors, stockholders and any other
applicable Person proper amounts for all periods and, to the extent required,
have remitted such amounts to the appropriate Governmental Entities, in
compliance in all material respects with all Tax withholding provisions of
applicable U.S. federal, state, local and foreign Laws (including income, social
security and employment Tax withholding for all types of
compensation).
(h) Offshore
GP, Onshore GP and Icahn Capital Management have no obligation to pay or to
contribute to the payment of any material Tax or any portion of a material
Tax
(or any amount calculated with reference to any portion of a material Tax)
of
any Person other than Offshore GP, Onshore GP or Icahn Capital Management ,
including under Treasury Regulations Section 1.1502-6 (or any similar provision
of state, local or foreign Law), as transferee or successor, by Contract or
otherwise.
(i) No
claim
for any Taxes has been made in writing, or otherwise to the Knowledge of the
Contributors, by any authority in a jurisdiction where Offshore GP, Onshore
GP
or Icahn Capital Management has not filed Tax Returns that Offshore GP, Onshore
GP or Icahn Capital Management is, or may be, subject to taxation by that
jurisdiction.
(j) Offshore
GP, Onshore GP and Icahn Capital Management have not engaged in a listed
transaction described in Treasury Regulation Section 301.6111-2(b).
(k) Each
of
Offshore GP, Onshore GP and Icahn Capital Management has disclosed on its
federal income Tax Returns all positions taken therein that could give rise
to a
substantial understatement of federal income Tax within the meaning of Code
Section 6662.
(l) Prior
to
the Closing Date, Offshore GP, Onshore GP and Icahn Capital Management have
not
been required to include in income any adjustment pursuant to Code Section
481
by reason of a change in accounting method initiated by any such entity and
the
IRS has not initiated or proposed any such adjustment or change in accounting
method (including any method for determining reserves for bad debts maintained
by Offshore GP, Onshore GP or Icahn Capital Management). None of Offshore GP,
Onshore GP and Icahn Capital Management has any application pending with any
Governmental Entity requesting permission to change any accounting
methods.
(m) None
of
Offshore GP, Onshore GP and Icahn Capital Management has executed any closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof, or any similar provision of state, foreign or local Law which, based
on
current facts and circumstances, could have an effect on any period after the
Closing Date.
(n) Offshore
GP, Onshore GP and Icahn Capital Management do not have any outstanding requests
for any Tax ruling from any taxing authority or has ever received a Tax
ruling.
(o) To
the
Knowledge of the Contributors, none of Offshore GP, Onshore GP and Icahn Capital
Management owns an interest in a passive foreign investment company within
the
meaning of Code Sections 1291-1297.
(p) Offshore
GP, Onshore GP and Icahn Capital Management have made adequate provisions in
accordance with GAAP, in the Financial Statements, for the payment of all Taxes
for which Offshore GP, Onshore GP or Icahn Capital Management may be liable
for
the periods covered by such financial statements that were not yet due and
payable as of the date of such statement, regardless of whether the Liability
for such Taxes is disputed. Since December 31, 2006, Offshore GP, Onshore GP
and
Icahn Capital Management have not accrued any Liability for any material Tax,
other than in the ordinary course of its activities or business.
(q) Set
forth
in Schedule
3.23(q)
of the
Contributors’ Disclosure Schedules is a list of all entities treated as
corporations for U.S. federal income tax purposes in which any Contributor
has
an interest, directly or indirectly. Each of Offshore GP, Onshore GP and Icahn
Capital Management is and has always been treated as a partnership and has
not
been treated as a corporation for U.S. federal Income Tax purposes.
3.24 Powers
of Attorney. Except
as
set forth in Schedule
3.24
of the
Contributors’ Disclosure Schedules, no Partnership, Contributor or employee of
any Contributor or any Partnership (in connection with the business of a
Contributor, Partnership or Fund) has any outstanding power of
attorney.
3.25 Finders’
Fees. No
Contributor or Partnership has incurred, become liable for or otherwise entered
into any Contract with respect to any broker’s commission, finder’s fees or
similar payment relating to or in connection with the transactions contemplated
by this Agreement or any Ancillary Document.
3.26 Trading
Policies.
(a) True,
correct and complete copies of the written trading policies (including as
regards ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ that the Contributors and the Partnerships require
relevant employees to sign have been delivered to the Issuer prior to the date
hereof. All relevant employees of each Contributor and each Partnership have
executed acknowledgements that they are bound by the provisions of such trading
policies.
(b) To
the
Knowledge of the Contributors, there have been no material violations or
allegations of material violations of such trading policies.
3.27 Delinquent
And Wrongful Acts
(a) No
Contributor or Partnership has received written notification that any
investigation or inquiry is being or since December
31, 2005 has been conducted by any Governmental Entity or other Person in
respect of the affairs of such Contributor or Partnership.
(b) No
Contributor, Partnership or, to the Knowledge of the Contributors, director,
officer, agent, employee or other person acting on behalf of any such Person
has, in the course of his actions for, or on behalf of, any Contributor or
any
Partnership (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds (iii) or made any bribe,
unlawful rebate, payoff, influence payment, kickback or other unlawful payment
to any Person.
3.28 Books
and Records.
The
books and records of the Contributors and the Partnerships are true, correct
and
complete in all material respects. The books and records of the Contributors
and
the Partnerships contain all of the documents and information required by
applicable Law and the written procedures and policies of the Contributors
and
the Partnerships. Such books and records reflect full and current reconciliation
of all financial information for each Client. All Client account statements
required by applicable Laws and the governing documents pertaining to such
Client relationships have been prepared.
3.29 Investment
Intent.
The
Contributors are acquiring the AREP Units issued hereunder for investment and
not with a view to or for distributing or reselling such AREP Units or any
part
thereof in violation of applicable securities Laws, without prejudice, however,
to such Contributor’s right to sell or otherwise dispose of all or any part of
such AREP Units pursuant to an effective registration statement under the
Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities Laws. Nothing contained herein
shall be deemed a representation or warranty by such Contributor to hold the
AREP Units for any period of time.
3.30 Access
to Information.
Each
Contributor acknowledges that it has reviewed the Issuer SEC Reports and that
it
has been afforded (a) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Issuer
concerning the terms and conditions of the issuance of the AREP Units pursuant
to the terms of this Agreement and the merits and risks of investing in the
AREP
Units; (b) access to information about the Issuer and the Issuer’s financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment and (c) the opportunity
to
obtain such additional information that the Issuer possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to such investment. No such inquiries nor
any
other investigation conducted by or on behalf of any Contributor or its
representatives or counsel shall modify, amend or affect any Contributor’s right
to rely on the truth, accuracy and completeness of the Issuer’s representations
and warranties contained in this Agreement or in any Ancillary
Document.
3.31 Investor
Status.
Each
Contributor is an “accredited investor” as defined in Rule 501(a) under the
Securities Act.
3.32 Experience
of the Contributors.
Each
Contributor has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of
the
prospective investment in the AREP Units, and has so evaluated the merits and
risks of such investment. Each Contributor is able to bear the economic risk
of
an investment in the AREP Units for an indefinite period of time and, at the
present time, is able to afford a complete loss of such investment.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE
ISSUER
As
an
inducement to the Contributors and Icahn to enter into this Agreement, the
Issuer makes the following representations and warranties, except as set forth
in the Issuer’s Disclosure Schedules (it being agreed that any exceptions to
such representations and warranties shall clearly identify the sections of
this
Agreement to which they apply).
4.1 Organization
and Qualification of the Issuer.
The
Issuer is duly organized and validly existing under the Laws of the State of
Delaware with all requisite power and authority to own, lease and operate its
properties and to carry on its business as they are now being, or are presently
contemplated to be, owned, leased, operated and conducted. The Issuer is
licensed or qualified to do business and is in good standing (where the concept
of “good standing” is applicable) as a foreign limited partnership in each
jurisdiction where the nature of the properties owned, leased or operated by
it
and the business now being conducted or presently contemplated to be conducted
by it require such licensing or qualification (except where the failure to
be so
licensed or qualified or be in good standing will not individually or in the
aggregate adversely affect the validity or enforceability of this Agreement
or
have a Material Adverse Effect on the Issuer).
4.2 Authority.
(a) The
Issuer has the right, authority and power under its Organizational Documents
and
applicable Laws to enter into this Agreement and each Ancillary Document to
which it is a party and to carry out the transactions contemplated hereby and
thereby, including, without limitation, to receive the Partnership Interests
and
issue the AREP Units to the Contributors in consideration therefor.
(b) The
execution, delivery and performance by the Issuer of this Agreement and each
Ancillary Document to which it is a party has been duly authorized by all
necessary action of the Issuer and, to the extent required by the Issuer’s
Organizational Documents or applicable Laws, the partners thereof, and by the
Special Committee and no other action on the part of the Issuer is required
in
connection therewith.
(c) This
Agreement and each Ancillary Document executed and delivered by the Issuer,
constitutes a legal, valid and binding obligation of the Issuer, enforceable
against it in accordance with its terms, except as enforceability may be
restricted, limited or delayed by applicable bankruptcy or similar laws
affecting creditors’ rights generally.
4.3 No
Conflicts.
The
execution, delivery and performance by the Issuer of this Agreement and the
Ancillary Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby:
(a) do
not
and will not violate any provision of its Organizational Documents;
(b) do
not
and will not violate any Law applicable to the Issuer, its assets or employees
or require the Issuer to obtain any Consent that has not been obtained (any
such
required Consents that have been obtained are set forth in Schedule
4.3(b)
of the
Issuer’s Disclosure Schedules); and
(c) do
not
and will not result in a breach of, constitute a default under, result in an
adverse change under, accelerate any obligation under or give rise to a right
of
termination of, any Contract, Encumbrance, License, Order, determination or
arbitration award to which the Issuer is a party or by which any of its assets
are bound or affected, or result in the creation or imposition of any
Encumbrance on any of its assets or of any Person’s interests in the Issuer, in
each case other than any such breach, default, adverse change, acceleration,
termination right or Encumbrance arising as a result of any action by Icahn
or
any of his Affiliates other than the Issuer.
4.4 Finders’
Fees.
The
Issuer has not incurred, become liable for or otherwise entered into any
Contract with respect to any broker’s commission, finder’s fees or similar
payment relating to or in connection with the transactions contemplated by
this
Agreement or any Ancillary Document.
4.5 The
AREP Units.
The
AREP Units have been duly authorized by all required action on the part of
the
Issuer. The AREP Units, when issued in accordance with this Agreement, will
be
duly issued and free and clear of all Encumbrances. Assuming the representations
and warranties of the Contributors and Icahn contained in Sections 3.29-3.32
are
true and correct, the issuance by the Issuer of the AREP Units to be issued
to
the Contributors pursuant to this Agreement is exempt from registration under
the Securities Act.
4.6 Investment
Intent.
The
Issuer is acquiring the Partnership Interests for investment and not with a
view
to or for distributing or reselling such Partnership Interests or any part
thereof in violation of applicable securities Laws, without prejudice, however,
to the Issuer’s right to sell or otherwise dispose of all or any part of such
Partnership Interests pursuant to an effective registration statement under
the
Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities Laws. Nothing contained herein
shall be deemed a representation or warranty by the Issuer to hold the
Partnership Interests for any period of time.
4.7 Tax.
(a) The
Issuer is classified as a partnership and not an association taxable as a
corporation for U.S. federal income Tax purposes.
(b) The
Issuer has timely filed all material Tax Returns required to be filed through
the date of this Agreement with respect to the income, properties or operations
of the Issuer and its Subsidiaries. All such returns are true, correct and
complete in all material respects under applicable U.S. federal, state, local,
or foreign Tax Laws.
4.8 Access
to Information.
The
Issuer acknowledges that it has reviewed the Disclosure Materials and that
it
has been afforded (a) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Contributors,
the Partnerships and the Funds concerning the terms and conditions of the
contribution and exchange of the Partnership Interests pursuant to this
Agreement and the merits and risks of investing in the Partnership Interests;
(b) access to information about the Contributors, the Partnerships and the
Funds
and their respective financial conditions, results of operations, businesses,
properties, management and prospects sufficient to enable it to evaluate its
investment and (c) the opportunity to obtain such additional information that
the Contributors or the Partnerships possess or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision
with
respect to such investment. No such inquiries nor any other investigation
conducted by or on behalf of the Issuer or its representatives or counsel shall
modify, amend or affect the Issuer’s right to rely on the truth, accuracy and
completeness of the representations and warranties of the Contributors and
Icahn
contained in this Agreement or in any Ancillary Document.
4.9 Investor
Status.
The
Issuer is an “accredited investor” as defined in Rule 501(a) under the
Securities Act.
4.10 Experience
of Investor.
The
Issuer has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of
the
prospective investment in the Partnership Interests, and has so evaluated the
merits and risks of such investment. The Issuer is able to bear the economic
risk of an investment in the Partnership Interests for an indefinite period
of
time and, at the present time, is able to afford a complete loss of such
investment.
ARTICLE
V
COVENANTS
5.1 Legending
of AREP Units.
The
Contributors agree to the imprinting, so long as is required by this Section
5.1, of the following legend on any certificate evidencing AREP Units (with
such
corrections or changes thereto as may be agreed by the Contributors and the
Issuer):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MANY
NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN
OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”
Certificates
evidencing AREP Units shall not be required to contain such legend or any other
legend (i) while a registration statement covering the resale of such AREP
Units
is effective under the Securities Act; (ii) following any sale of such AREP
Units under any such registration statement or pursuant to Rule 144 of the
Securities Act or (iii) if such AREP Units are eligible for sale under Rule
144(k) of the Securities Act. At such time as a legend is no longer required
for
any AREP Units, the Issuer will, no later than three Business Days following
the
delivery by a Contributor to the Issuer or the Issuer’s transfer agent of a
legended certificate representing such AREP Units and, if reasonably requested
by the Issuer, a legal opinion reasonably satisfactory to the Issuer regarding
the removal of such legend, deliver or cause to be delivered to such Contributor
a certificate representing such AREP Units that is free from all restrictive
and
other legends.
5.2 Access
to Information.
Other
than with respect to investigations, inquiries, requests or Proceedings
involving disputes between the Issuer, on the one hand, and the Contributors,
on
the other hand, the Issuer shall, upon the request of the Contributors, giving
reasonable notice to the Issuer, use its reasonable best efforts to cause the
Partnerships on and after the Closing Date, to the extent permitted by
applicable Laws and confidentiality obligations, to afford promptly to the
Contributors and their respective counsel, financial advisors, auditors and
other designated representatives to make available to and provide them with
reasonable access during normal business hours to their properties, books,
records and employees, to the extent reasonably related to any legal,
administrative or other Proceeding arising out of any business and operations
of
the Partnerships prior to the Closing; provided
that any
such access by any Contributor shall not unreasonably interfere with the conduct
of the business of the Issuer or its Subsidiaries.
5.3 Decisions
of the Issuer.
The
following matters shall be undertaken solely at the direction of the Audit
Committee: (a) the exercise or determination of remedies to be exercised by
the
Issuer under this Agreement or any Ancillary Document or (b) the exercise by
the
Issuer of discretion in connection with any matter under this Agreement or
any
Ancillary Document, including any waiver.
5.4 Right
to Use Icahn Name.
The
parties acknowledge that the right to use the Icahn name solely with respect
to
the activities of the Partnerships and the management of the Funds is among
the
assets of the Partnerships. In the event that the Issuer sells or otherwise
transfers, or causes its Subsidiaries to sell or otherwise transfer, the
interests in the Partnerships and the rights to manage the Funds (and any
successors to the Partnerships or the Funds), substantially as a whole, to
a
party that is not an Affiliate of the Issuer, the Issuer shall be entitled
to
transfer such right to use the Icahn name to such third-party acquirer solely
with respect to the activities of the Partnerships and management of the
Funds.
ARTICLE
VI
TAX
MATTERS
6.1 Consistent
Reporting.
Except
to the extent the Earn-out Consideration is treated as interest, the
Contributors and the Issuer will treat the contribution of Partnership Interests
to the Issuer in exchange for the Aggregate Consideration as a nonrecognition
transaction within the meaning of Code Section 721(a). No party, on a Tax Return
or otherwise, will take any position inconsistent with the treatment set forth
in this Section 6.1.
6.2 No
Change.
Before
the Closing Date, the Partnerships will not, and will not permit any of the
Funds to, make or change any Tax election, change any annual accounting period,
adopt or change any accounting method, file any amended Tax Return or claim
for
refund, enter into any closing agreement, settle any Tax claim or assessment
relating to any Partnership, surrender any right to claim a refund of Taxes,
consent to any extension or waiver of the limitation period applicable to any
Tax claim or assessment relating to any Contributor, or take any other similar
action relating to the filing of any Tax Return or the payment of any Tax
without the prior written consent of the Issuer, which consent shall not be
unreasonably withheld, conditioned or delayed.
6.3 Cooperation
on Tax Matters.
The
Issuer and the Contributors shall cooperate with each other and with each
other’s agents, including accounting firms and legal counsel, in connection with
Tax matters, including: (i) preparation and filing of Tax Returns;
(ii) examinations of Tax Returns and (iii) any administrative or judicial
Proceeding in respect of Taxes assessed or proposed to be assessed. Any
information or documents provided under this Section 6.3 shall be kept
confidential by the party receiving the information or documents, except as
may
otherwise be necessary in connection with the filing of Tax Returns, the
preparation of any financial statements in connection with any administrative
or
judicial Proceedings, or as otherwise required by Law.
6.4 704(c)
Methods.
The
Contributors will cause the general partner of the Issuer, to the extent
possible, to take such action as is necessary, including selecting methods
under
Section 704(c), to cause each AREP Unit to have the same economic and tax
characteristics to any purchaser or acquiror thereof as each other AREP Unit,
provided that the Contributors consult with the Audit Committee with respect
to
all Section 704(c) elections relating to this transaction.
ARTICLE
VII
EMPLOYEES
7.1 Service
Credit; Welfare Benefits.
(a) Each
Transferred Employee shall be given credit for all service with the
Contributors, the Partnerships and their respective predecessors under any
employee benefit plans or arrangements of the Issuer and its Affiliates,
including any such plans providing vacation, sick pay, severance and retirement
benefits maintained by the Issuer and its Affiliates in which such Transferred
Employees participate for purposes of eligibility, vesting and entitlement
to
benefits, including for severance benefits and vacation entitlement (but not
for
accrual of pension benefits), to the extent past service was recognized for
such
Transferred Employees under the comparable plans of the Contributors and the
Partnerships or any of their Affiliates immediately prior to the Closing, and
to
the same extent past service is credited under such plans or arrangements for
similarly situated employees of the Issuer and its Affiliates. Notwithstanding
the foregoing, nothing in this Section 7.1(a) shall be construed to require
crediting of service that would result in (i) duplication of benefits; (ii)
service credit for benefit accruals under a defined benefit pension plan or
(iii) service credit under a newly established plan for which prior service
is
not taken into account for employees of the Issuer and its Affiliates
generally.
(b) In
the
event of any change in the welfare benefits provided to Transferred Employees
following the Closing, the Issuer shall use commercially reasonable efforts
to
cause (i) the waiver of all limitations as to pre-existing conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Transferred Employees under any such welfare
benefit plans to the extent that such conditions, exclusions or waiting periods
would not apply in the absence of such change and (ii) for the plan year in
which the Closing Date occurs, the crediting of each Transferred Employee with
any co-payments and deductibles paid prior to any such change in satisfying
any
applicable deductible or out-of-pocket requirements after such
change.
7.2 Assumption
of Existing Arrangements.
The
Issuer shall assume and honor, or cause its Affiliates to assume and honor,
all
obligations with respect to the current and former employees of any Partnership
(including, without limitation, the Transferred Employees) pursuant to the
arrangements and terms set forth in Schedule
7.2.
7.3 No
Third-Party Beneficiaries.
Without
limiting the generality of Section 10.5, nothing in this Article VII, express
or
implied, is intended to confer any rights, benefits, remedies, obligations
or
liabilities under this Agreement upon any Person (other than the parties to
this
Agreement and their respective successors and assigns), including any current
or
former employee (including any Transferred Employee) to continued employment,
any severance or other benefits from any Contributor, any Partnership, the
Issuer or any of their respective Affiliates. In addition, (i) nothing in
this Article VII shall be treated as an amendment of any Plan and (ii) nothing
in this Article VII will prohibit the Issuer from amending, modifying or
terminating any Plan pursuant to, and in accordance with, the terms thereof.
No
person other than the parties hereto shall have any rights or claims under,
as a
result of or in respect of this Article VII or any term or provision
hereof.
ARTICLE
VIII
INDEMNIFICATION
8.1 Survival.
The
representations and warranties of the Contributors and Icahn contained in this
Agreement or in any Ancillary Document (the statements in which Ancillary
Documents shall be deemed to constitute several representations and warranties
hereunder of such party delivering such Ancillary Documents) shall survive
the
Closing until the third anniversary of the Closing Date, except for (i) the
representations and warranties made in Section 3.20 (Employee Benefit Plans)
and
Section 3.23 (Taxes), which shall survive until 30 days after the expiration
of
the applicable statute of limitations, if any, to the subject matter thereof
and
(ii) the representations and warranties made in Section 3.1 (Organization and
Qualification of the Contributors and Icahn; Status), Section
3.2 (Authority), Section 3.4 (Ownership Interests) and Section 3.25
(Finders’ Fees),
all of
which shall survive indefinitely; provided,
however,
(x) any
breach of representation or warranty in respect of which indemnity may be sought
under this Agreement shall survive the time at which it would otherwise
terminate pursuant to the preceding clause, if written notice of the inaccuracy
or breach thereof giving rise to such right of indemnity (setting forth the
basis therefor in reasonable detail) shall have been given to the party against
whom such indemnity may be sought prior to such time and (y) any representation
or warranty made falsely by a party hereto fraudulently, intentionally,
willfully or recklessly shall survive the Closing without limitation. The
representations and warranties of the Issuer contained in this Agreement and
in
the Ancillary Documents shall survive the Closing and the members of the Icahn
Group shall have the right to bring legal actions against the Issuer in respect
of breaches thereof even if there is no indemnification coverage therefor.
Covenants and other agreements contained in this Agreement which by their nature
or the terms thereof are intended, or can reasonably be construed, to survive
the Closing shall survive the execution and delivery of this Agreement, the
Closing and the consummation of the transactions contemplated hereby, without
limitation, and the members of the Icahn Group shall have the right to bring
legal actions against the Issuer in respect of breaches thereof, even if there
is no indemnification coverage therefore. Each of the Contributors agrees to
give the Issuer prompt notice of any matter which it obtains actual knowledge
and as to which any Issuer Indemnified Party would have a right to receive
indemnification hereunder. The right to indemnification, payment of damages
and
other remedies based on representations, warranties, covenants and obligations
in this Agreement shall not be affected by any investigation conducted or any
knowledge acquired (or capable of being acquired) at any time, whether before
or
after the Closing Date, with respect to the accuracy or inaccuracy of or
compliance with any such representation, warranty, covenant or
obligation.
8.2 Indemnification.
From and
after the Closing, subject to the terms and conditions of this Article VIII,
the
Contributors and Icahn, jointly and severally, shall indemnify, defend and
hold
harmless the Issuer and its Affiliates (including, without limitation, Icahn
Offshore GP, Icahn Onshore GP, Icahn Capital Management and the Master Funds)
and their respective officers, directors, employees, independent contractors,
stockholders, principals, controlling persons, partners, agents, counsel,
members, managers and representatives and each of their respective successors,
assigns and personal representatives (individually, a “Issuer
Indemnified Party”
and
collectively, the “Issuer
Indemnified Parties”)
from
and against, and will pay to any Issuer Indemnified Party the amount of, any
Damages incurred or suffered by any Issuer Indemnified Party arising out of
or
relating to: (i) any breach or inaccuracy of any representation or warranty
of
Icahn or any Contributor contained in this Agreement or any Ancillary Document
or any claim by a third party which, if true, would constitute a breach of
any
such representation or warranty; (ii) any breach of any covenant or agreement
of
Icahn or any Contributor contained in this Agreement or any Ancillary Document
or any claim by a third party which, if true, would constitute a breach of
any
such covenant or agreement; (iii) fraud by Icahn or any Contributor in
connection with the transactions contemplated hereby or by any Ancillary
Document; (iv) any actual or alleged breach of fiduciary duty by any Contributor
or Icahn to any Client or Fund investor related to the transactions contemplated
hereby or by any Ancillary Document or to the conduct of the business of the
Contributors, the Partnerships or the Funds on or prior to the Closing Date;
(v)
(x) all Liabilities for Taxes of Onshore GP, Offshore GP or Icahn Capital
Management for any Pre-Closing Tax Period or Pre-Closing Straddle Period, and
(y) all Taxes owed on account of the assets or the operation of Onshore GP,
Offshore GP or Icahn Capital Management for any Pre-Closing Tax Periods and
Pre-Closing Straddle Periods that are imposed on the Issuer or its Subsidiaries
as a result of the transactions contemplated by this Agreement (to the extent
exceeding reserves therefor); (vi) any broker’s, finder’s, financial advisor’s
or other similar fees and commissions payable by Icahn or any Contributor in
connection with the transactions contemplated by this Agreement; or (vii) any
Excluded Asset or Excluded Liability (as each such term is defined in the
Management Contribution Agreement), provided that this clause (vii) shall cease
to apply to the Retained Agreements (as defined in the Management Contribution
Agreement) after the assignment thereof to Icahn Capital Management as
contemplated thereby.
8.3 Procedures.
(a) The
party
seeking indemnification under Section 8.2 (the “Indemnified
Party”)
agrees
to: (i) give prompt notice to the party against whom indemnity is sought (the
“Indemnifying
Party”)
of the
assertion of any claim, or the commencement of any Proceeding (“Claim”),
in
respect of which indemnity may be sought under such Section and (ii) provide
the
Indemnifying Party such information with respect thereto that the Indemnifying
Party may reasonably request. The failure to so notify the Indemnifying Party
shall not relieve the Indemnifying Party of its obligations hereunder, except
to
the extent such failure shall have actually and adversely prejudiced the
Indemnifying Party. If, upon receipt of notice of a breach of this Agreement
or
any Ancillary Document by an Indemnified Party to an Indemnifying Party, the
Indemnifying Party gives prompt notice to the Indemnified Party that the breach
is capable of being remedied within 90 days, the Indemnified Party agrees not
to
commence any Proceeding with respect to such breach until the expiration of
the
90-day period.
(b) The
Indemnifying Party shall be entitled to participate in the defense of any Claim
asserted by any third party (“Third-Party
Claim”)
and,
subject to the limitations set forth in this Section 8.3, shall be entitled
to
control and appoint lead counsel for such defense at any time with counsel
of
its choice satisfactory to the Indemnified Party, in each case at the
Indemnifying Party’s sole expense, unless the nature of the claim creates an
ethical conflict or it is otherwise inadvisable, in the reasonable judgment
of
the Indemnified Party, for the same counsel to represent the Indemnified Party
and the Indemnifying Party, so long as (i) the Indemnifying Party notifies
the
Indemnified Party in writing within 15 days after the Indemnified Party has
given notice of the Third-Party Claim that the Indemnifying Party will indemnify
the Indemnified Party from and against the entirety of any Damages the
Indemnified Party may suffer resulting from, arising out of, relating to, in
the
nature of or caused by the Third Party Claim or raised in any related
Proceeding; (ii) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third-Party Claim
and fulfill its indemnification obligations hereunder; (iii) the Third-Party
Claim involves only a claim for money damages and no other relief and (iv)
the
Indemnifying Party conducts the defense of the Third-Party Claim actively and
diligently. In all other cases the Indemnified Party may defend the Third-Party
Claim with counsel of its choosing at the expense of the Indemnifying Party
and
the Indemnifying Party shall, upon request of the Indemnified Party, pay the
fees and expenses (including the fees and expenses of legal counsel) incurred
by
the Indemnified Party in defending such Third-Party Claim, as such fees and
expenses are incurred in advance of the final disposition of such Third-Party
Claim upon receipt of an undertaking by the Indemnified Party to repay such
payment if it is ultimately determined that such Indemnified Party is not
entitled to indemnification under this Article VIII, which undertaking shall
be
accepted by the Indemnifying Party without reference to the financial ability
of
such Indemnified Party to make such repayment.
(c) If
the
Indemnifying Party shall assume the control of the defense of any Third-Party
Claim in accordance with the provisions of this Section 8.3, (i) the
Indemnifying Party shall obtain the prior written consent of the Indemnified
Party (which shall not be unreasonably withheld, delayed or conditioned) before
entering into any settlement of such Third-Party Claim, if the settlement does
not release the Indemnified Party from all Liabilities with respect to such
Third-Party Claim or the settlement imposes injunctive or other equitable relief
against the Indemnified Party and (ii) the Indemnified Party shall be entitled
to participate in the defense of such Third-Party Claim and to employ separate
counsel of its choice for such purpose. The fees and expenses of such separate
counsel shall be paid by the Issuer.
In
addition, the Indemnified Party shall not settle any Third-Party Claim without
the prior written consent of the Indemnifying Party.
(d) If,
following the issuance of a final written determination, the Issuer is obligated
by any Governmental Entity in connection with an audit or action for Taxes
to
make any Tax payment with respect to a Pre-Closing Tax Period or a Pre-Closing
Straddle Period, then the Contributors shall, within 15 days of the Issuer’s
receiving a final written determination that it is obligated to pay such Tax,
pay to the Issuer the amount of such Tax.
(e) Each
party shall reasonably cooperate, and cause their respective Affiliates to
reasonably cooperate, in the defense or prosecution of any Third-Party Claim
and
shall furnish or cause to be furnished such records, information and testimony,
and attend such conferences, discovery Proceedings, hearings, trials or appeals,
as may reasonably be requested
in
connection therewith.
8.4 Limitations
of Indemnification Obligations.
(a) The
Contributors and Icahn shall have no Liability pursuant to Section 8.2(i) for
indemnification or Damages arising
from any
inaccuracy of any of the representations or warranties of the Contributors
and
Icahn (other than those in Sections 3.1, 3.2, 3.4, 3.20, 3.23, 3.25, 3.29 and
3.30) unless and until Damages arising from such inaccuracies exceed $7,000,000
(the “Threshold”),
in
which case the Contributors and Icahn shall be liable for all such Damages,
including the first $7,000,000.
(b) In
no
event shall the aggregate Liability for indemnification under Section 8.2(i)
arising from any inaccuracy of any of the representations and warranties of
the
Contributors and Icahn exceed the Aggregate Consideration (the “Cap”).
(c) Indemnity
claims (i) pursuant to clauses (ii) through (viii) of Section 8.2 or (ii) for
fraud, willful misconduct or intentional misrepresentation shall not be subject
to the Threshold or the Cap, and such claims shall be paid from the first dollar
of Liability for indemnification or Damages incurred by the Issuer Indemnified
Parties in connection therewith.
(d) The
sole
and exclusive remedy of the Issuer Indemnified Parties with respect to any
and
all claims for any breach of any representation or warranty set forth herein
or
in any Ancillary Document shall be pursuant to the indemnification provisions
set forth in this Article VIII.
8.5 Calculation
of Damages.
(a) Taxes
for
which indemnification is provided under this Article VIII shall not be (i)
increased to take account of any net Tax costs incurred by the receiving party
arising from the receipt of indemnity payments hereunder or similar payments
hereunder or (ii) reduced to take account of any net Tax benefit realized by
the
receiving parties arising from the incurrence or payment of any such Taxes.
(b) Notwithstanding
anything to the contrary in this Agreement, for purposes of the indemnification
provisions in this Article VIII, the determination of the amount of any Damages
shall be made without giving effect to any “Material Adverse Effect”
qualification or any materiality or similar qualification contained in the
representations, warranties, covenants or obligations herein.
8.6 Investigation.
It
shall be no defense to an action for breach of this Agreement that a party
hereto or its agents have (or have not) made investigations into the affairs
of
the other parties hereto or that such other parties could not have known of
the
misrepresentation or breach of warranty.
8.7 Tax
Character.
The
Contributors and the Issuer agree that any payments pursuant to this Article
VIII will be treated for federal and state income Tax purposes as adjustments
to
the Aggregate Consideration paid for the Partnership Interests, and that they
will report such payments on all Tax Returns in a manner consistent with such
characterization.
ARTICLE
IX
DEFINITIONS
9.1 Defined
Terms.
As used
in this Agreement, the following defined terms have the meanings indicated
below:
“2007
After-Tax Earnings”
means
the After-Tax Earnings for Fiscal Year 2007, as set forth in the Final After-Tax
Earnings Statement for such year.
“2008
After-Tax Earnings”
means
the After-Tax Earnings for Fiscal Year 2008, as set forth in the Final After-Tax
Earnings Statement for such year.
“2009
After-Tax Earnings”
means
the After-Tax Earnings for Fiscal Year 2009, as set forth in the Final After-Tax
Earnings Statement for such year.
“2010
After-Tax Earnings”
means
the After-Tax Earnings for Fiscal Year 2010, as set forth in the Final After-Tax
Earnings Statement for such year.
“2011
After-Tax Earnings”
means
the After-Tax Earnings for Fiscal Year 2011, as set forth in the Final After-Tax
Earnings Statement for such year.
“2007
Earn-out Amount”
has
the
meaning ascribed to it in Section 1.3(b)(i).
“2008
Earn-out Amount”
has
the
meaning ascribed to it in Section 1.3(b)(ii).
“2009
Earn-out Amount”
has
the
meaning ascribed to it in Section 1.3(b)(iii).
“2010
Earn-out Amount”
has
the
meaning ascribed to it in Section 1.3(b)(iv).
“2011
Earn-out Amount”
has
the
meaning ascribed to it in Section 1.3(b)(v).
“20-Day
Volume-Weighted Average Price”
means
the arithmetic average of the Volume-Weighted Average Price of the AREP Units
for each of the final 20 Trading Days of the Fiscal Year immediately preceding
the issuance of any AREP Units hereunder.
“Affiliate”
means,
with respect to any specified Person, any other Person that, directly or
indirectly, owns or controls, is under common ownership or control with, or
is
owned or controlled by, such specified Person.
“After-Tax
Earnings”
means,
for any Fiscal Year during the Earn-Out Period, all income of the Issuer and
any
of its Subsidiaries constituting Hedge Fund Earnings, less
all
expenses paid by the Issuer and its Subsidiaries properly allocable to the
Hedge
Fund Earnings (excluding (i) base salary and other compensation payable to
Icahn
or accrued in connection with such base salary or other compensation and (ii)
any amounts payable or accrued or expenses or deductions incurred or accrued
in
connection with the acquisition by the Issuer of the Partnership Interests),
plus or minus, as the case may be, any Income Tax expense or Income Tax benefit
(current or deferred) of the Issuer and its Subsidiaries with respect to the
Hedge Fund Earnings. The After-Tax Earnings and each item thereof shall be
determined in accordance with GAAP. After-Tax Earnings may be positive,
negative, or zero. If in a Fiscal Year during the Earn-out Period, the After-Tax
Earnings were negative, then an amount equal to the lesser of (x) the Income
Taxes included in the computation by the Issuer and its Subsidiaries of
After-Tax Earnings for such Fiscal Year, but only to the extent that such Income
Taxes are attributable to a change of Tax Laws applicable to amounts included
in
the determination of After-Tax Earnings in a year prior to the year for which
After-Tax Earnings are being computed and (y) the amount by which the After-Tax
Earnings were negative, shall be carried forward and treated as Income Taxes
payable in the succeeding Fiscal Year (a “Tax
Carryforward”).
For
the Fiscal Year ending December 31, 2007, After -Tax Earnings will be determined
based on (i) the management fees payable to Icahn Capital Management for the
fiscal quarter ending on December 31, 2007 (and management fees for the fiscal
quarter ending September 30, 2007 shall not be included in After-Tax Earnings)
and (ii) all Incentive Allocation Earnings payable in respect of such entire
Fiscal Year.
“After-Tax
Earnings Statement”
has
the
meaning ascribed to it in Section 1.3(a)(i).
“Aggregate
After-Tax Earnings”
means
the sum of the 2007 After-Tax Earnings, the 2008 After-Tax Earnings, the 2009
After-Tax Earnings, the 2010 After-Tax Earnings and the 2011 After-Tax Earnings,
provided that in determining Aggregate After-Tax Earnings, no Tax Carryforward
shall be given effect.
“Aggregate
Consideration”
has
the
meaning ascribed to it in Section 1.2.
“Aggregate
Earn-Out Amount”
means
the sum of the 2007 Earn-Out Amount, the 2008 Earn-Out Amount, the 2009 Earn-Out
Amount, the 2010 Earn-Out Amount and the 2011 Earn-Out Amount.
“Agreement”
has
the
meaning ascribed to it in the preamble.
“Ancillary
Document”
means
any agreement, certificate, instrument or other document to be executed and
delivered pursuant hereto, as contemplated hereby or in connection with the
consummation of the transactions contemplated by this Agreement and shall
include, without limitation, the Management Contribution Agreement, the
Employment Agreements, the Registration Rights Agreement and the
Release.
“API”
has
the
meaning ascribed to it in the recitals.
“AREH”
has
the
meaning ascribed to it in the recitals.
“AREP
Units”
means
the depository units representing limited partnership interests of the Issuer
that are listed and traded on the NYSE.
“Audit
Committee”
means
the Audit Committee of the Board of Directors of the general partner of the
Issuer, as the same may be constituted from time to time.
“Business
Day”
means
any day of the year other than (i) any Saturday or Sunday or (ii) any other
day on which commercial banks located in New York City are generally closed
for
business.
“Cap”
has
the
meaning ascribed to it in Section 8.4(b).
“Catch-up
Earn-out Amount”
has
the
meaning ascribed to it in Section 1.3(b)(vi).
“CCI
Administrative”
has
the
meaning ascribed to it in the recitals.
“CCI
Offshore”
has
the
meaning ascribed to it in the preamble.
“CCI
Onshore”
has
the
meaning ascribed to it in the preamble.
“Claim”
has
the
meaning ascribed to it in Section 8.3(a).
“Client”
means
any Feeder Fund or Master Fund to whom Icahn Management, Icahn Capital
Management or any other Partnership has provided, or has agreed to provide
in
the future, Management Services. For the avoidance of doubt, “Client” shall not
include investors, only investment funds.
“Closing”
has
the
meaning ascribed to it in Section 2.1.
“Closing
Date”
has
the
meaning ascribed to it in Section 2.1.
“Closing
Date Consideration”
has
the
meaning ascribed to it in Section 1.2.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Consents”
means
any consent, approval, petition, License or order of, registration, declaration
or filing with, or notice to, or waiver from, any federal, state, local, foreign
or other Governmental Entity or any Person, including any security holder,
Client, creditor or vendor which is necessary to be obtained, made or given
in
connection with the execution and delivery of this Agreement or any Ancillary
Document, the performance by a Person of its obligations under this Agreement
or
any Ancillary Document and the consummation of the transactions contemplated
by
this Agreement or any Ancillary Document.
“Consent
to Assignment”
has
the
meaning ascribed to it in Section 2.2(i).
“Contract”
means
any contract, lease, commitment, understanding, sales order, purchase order,
agreement, indenture, mortgage, note, bond, right, warrant, instrument, plan,
permit or license, whether written or oral, which is binding and
enforceable.
“Contributors”
has
the
meaning ascribed to it in the preamble.
“Contribution
Agreement”
has
the
meaning ascribed to 2.2(n)
“Contributors’
Disclosure Schedules”
means
the disclosure schedules of the Contributors and Icahn attached hereto and
delivered pursuant to Article III of this Agreement.
“Covered
Affiliate Agreement”
has
the
meaning ascribed to it in Section 2.2(e).
“Covered
Employees”
has
the
meaning ascribed to it in Section 3.20(a).
“Damages”
means
any and all damages, losses (including diminution in value), Liabilities,
Claims, demands, Proceedings, penalties, obligations, charges, deficiencies,
Taxes, interest, settlement payments, reasonable costs and expenses of every
kind whatsoever (including, without limitation, reasonable costs of
investigating, preparing or defending any such Claim or Proceeding and
reasonable legal fees and disbursements), as and when incurred by an Indemnified
Party and whether or not involving a Third-Party Claim.
“Disclosure
Materials”
means
the diligence materials relating to the Contributors, the Partnerships and
the
Funds and made available to the Issuer prior to the Closing Date in the
electronic data room maintained by counsel to the Contributors.
“Earn-out
Amount”
means
(a) the aggregate value of AREP Units that shall be issuable in respect of
the
After-Tax Earnings for a particular Fiscal Year during the Earn-out Period,
as
set forth in the Final After-Tax Earnings Statement for such Fiscal Year or
(b)
the Catch-up Earn-out Amount, as applicable.
“Earn-out
Consideration”
has
the
meaning ascribed to it in Section 1.2.
“Earn-out-Period”
means
Fiscal Years 2007, 2008, 2009, 2010 and 2011, inclusive.
“Employment
Agreement Amendments”
has
the
meaning set ascribed to in Section 2.2(g).
“Employment
Agreements”
has
the
meaning ascribed to it in Section 2.2(h).
“Encumbrance”
means
any mortgage, lien (except for any lien for Taxes not yet due and payable),
pledge, security interest, option, right of any third party, encumbrance or
other adverse claim of any kind or description.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate”
means
any entity that would be deemed a “single employer” with any Contributor or any
Partnership under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Feeder
Funds”
means,
collectively, Icahn Fund Ltd., a Cayman Islands company, Icahn Cayman Partners
L.P., a Cayman Islands limited partnership, Icahn Partners Master Fund II Feeder
LP, a Delaware limited partnership, Icahn Fund II Ltd., a Cayman Islands
company, and Icahn Fund III Ltd, a Cayman Islands company.
“Final
After-Tax Earnings Statement”
has
the
meaning ascribed to it in Section 1.3(a)(iii).
“Financial
Statements”
has
the
meaning ascribed to it in Section 3.8(a).
“Fiscal
Year”
means
the fiscal year of the Issuer and the Funds, ending on December 31 of such
year.
“Fund
Financial Statement”
has
the
meaning ascribed to it in Section 3.6(e).
“Funds”
means,
collectively, the Master Funds, the Feeder Funds and any other funds, investment
vehicles or separately managed accounts now or hereafter managed by the
Partnerships.
“GAAP”
means
U.S. generally accepted accounting principles at the time in effect, as
consistently applied.
“Governmental
Entity”
means
any court, tribunal, arbitrator, authority, regulatory or administrative agency,
commission, licensing board, official or other instrumentality of the United
States or foreign country or any state, county, city or other political
subdivision thereof or any self-regulatory authority.
“Hedge
Fund Earnings”
means
the aggregate of (i) management fees payable to Icahn Capital Management with
respect to the Funds pursuant to the Management Agreements and (ii) the
Incentive Allocation Earnings, and shall exclude any revenues or earnings
received by the Issuer as an investor in the Funds.
“Icahn”
has
the
meaning ascribed to it in the preamble.
“Icahn
Capital Management”
has
the
meaning ascribed to it in the recitals.
“Icahn
Capital Management Partnership Interests”
has
the
meaning ascribed to in the recitals.
“Icahn
Employment Agreement”
has
the
meaning set ascribed to in Section 2.2(f).
“Icahn
Group”
means
(i) the Partnerships, (ii) the Contributors, (iii) Icahn, (iv) the Funds
and (v)
all officers, partners, directors and executive or professional employees
of any
of the foregoing.
Notwithstanding the foregoing, the following individuals and entities shall
not
be considered either (a) members of the Icahn Group or (b) Persons who are
"associated with" the Icahn Group, in each case for any purposes of this
Agreement: (1) ▇▇▇▇▇▇▇ ▇▇▇▇▇; (2) ▇▇▇▇▇ ▇▇▇▇▇▇; (3) Aegis Capital Corp.;
(4)
Icahn Cayman Partners, L.P.; (5) any limited partner of Onshore Master Fund
I
(other than CCI Funding Corp., Koala Holding Limited Partnership and any
other
person who otherwise would be deemed to be a member of the Icahn Group pursuant
to item (v) above); (6) any shareholder of Icahn Fund Ltd., Icahn Fund II
Ltd.
or Icahn Fund III Ltd. (other than Icahn and his Affiliates); (7) any limited
partner of Icahn Partners Master Fund II Feeder LP (other than any person
who
otherwise would be deemed to be a member of the Icahn Group pursuant to item
(v)
above); or (8) any officers, partners, directors or executive or professional
employees of any of the foregoing (other than any person who otherwise would
be
deemed to be a member of the Icahn Group pursuant to item (v)
above).
“Icahn
Management”
has
the
meaning ascribed to it in the preamble.
“Icahn
Partners Holding”
has
the
meaning ascribed to it in the preamble.
“Incentive
Allocation”
has
the
respective meanings ascribed to it in Section 3.05(b) of the Third Amended
and
Restated Limited Partnership Agreement of Icahn Partners Master Fund LP dated
February 1, 2007 (which is also applicable to Icahn Fund Ltd.); Section 3.06(b)
of the Amended and Restated Limited Partnership Agreement of Icahn Partners
Master Fund II L.P. dated February 1, 2007 (which is also applicable to Icahn
Fund II Ltd.); Section 3.06(b) of the Amended and Restated Limited Partnership
Agreement of Icahn Partners Master Fund III L.P. dated April 1, 2007 (which
is
also applicable to Icahn Fund III Ltd.); Section 3.05(b) of the Fourth Amended
and Restated Limited Partnership Agreement of Icahn Partners LP dated February
1, 2007; and Annex I, Section (a) of the Amended and Restated Limited
Partnership Agreement of Icahn Cayman Partners L.P. dated March 1,
2007.
“Incentive
Allocation Earnings”
means,
for any Fiscal Year during the Earn-out Period, the aggregate of the Issuer’s
share of the Incentive Allocation payable to each of Offshore GP and Onshore
GP,
as reported in the audited financial statements of each Master Fund for such
Fiscal Year.
“Income
Tax”
mean
any Tax (i) measured by gross or net income of the Person on which Tax is
imposed and (ii) which would be included in such Person’s provisions for Taxes
under GAAP.
“Indebtedness”
means
(i) any obligation for borrowed money or issued in substitution for or
exchange of indebtedness for borrowed money; or (ii) any obligation
evidenced by any note, bond, debenture or other debt security.
“Indemnified
Party”
has
the
meaning ascribed to it in Section 8.3(a).
“Indemnifying
Party”
has
the
meaning ascribed to it in Section 8.3(a).
“Independent
Auditor”
means
(a) a nationally recognized public accounting firm mutually acceptable to the
Contributors and the Issuer or (b) if the Issuer and Contributors are unable
to
agree on such a firm, then Contributors shall select one firm and the Issuer
shall select one firm and those two firms shall select a third firm, in which
event, the “Independent Auditor” shall mean such third firm. In no event shall a
public accounting firm which has provided auditing, accounting, consulting
or
other professional services within the prior two years, or has been retained
to
provide any such services, to the Issuer or any of the Contributors be named
as
the Independent Auditor without the prior written consent of the Issuer and
each
of the Contributors.
“Investment
Advisers Act”
means
the Investment Advisers Act of 1940, as amended, and the rules and regulations
thereunder.
“Investment
Company Act”
means
the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
“IRS”
means
the Internal Revenue Service.
“Issuer”
has
the
meaning ascribed to it in the preamble.
“Issuer
Indemnified Party”
and
“Issuer
Indemnified Parties”
have
the meanings ascribed to them in Section 8.2.
“Issuer’s
Disclosure Schedules”
means
the disclosure schedules of the Issuer attached hereto and delivered pursuant
to
Article IV of this Agreement.
"Issuer
SEC Reports"
means
each Form 10-K, Form 10-Q, Form 8-K, registration statement under the Securities
Act and proxy or information statement, together with any amendments thereto,
required to be filed by the Issuer with the SEC since December 31,
2004.
“Knowledge
of the Contributors”
or
“the
Contributors’ Knowledge”
means
the actual knowledge, or the actual knowledge a person would have after
reasonable inquiry, of Icahn, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇.
“Law”
means
any law, principle of common law, statute, rule, regulation, ordinance, code,
requirement, Order or other pronouncement having the effect of law of the United
States or foreign country or any state, county, city or other political
subdivision thereof or of any Governmental Entity.
“Leases”
has
the
meaning ascribed to it in Section 3.21.
“Liability”
means
any liability or obligation (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due and
regardless or when or by whom asserted).
“License”
means
licenses, permits, certificates of authority, authorizations, approvals,
registrations, findings of suitability, variances, exemptions, certificates
of
occupancy, orders, franchises and similar consents granted or issued by any
Governmental Entity.
“License
Agreement”
has
the
meaning ascribed to it in Section 2.2(m).
“Management
Agreement”
means
any investment management, advisory or sub-advisory agreement under which any
Partnership provides Management Services as of any date of
determination.
“Management
Contribution Agreement”
has
the
meaning ascribed to in the recitals.
“Management
Services”
means
any services which involve (i) the management of an investment account or fund;
(ii) the giving of advice with respect to the investment and/or reinvestment
of
assets or funds or (iii) otherwise acting as an “investment adviser” within the
meaning of the Investment Advisers Act, and performing activities related or
incidental thereto.
“Master
Fund II”
has
the
meaning ascribed to it in the recitals.
“Master
Fund III”
has
the
meaning ascribed to it in the recitals.
“Master
Funds”
has
the
meaning ascribed to it in the recitals.
“Material
Adverse Effect”
as
to
any Person, means any event, occurrence, fact, condition, development, change
or
effect that, individually or in the aggregate with other events, occurrences,
facts, conditions, developments, changes or effects, has a material adverse
effect on the business, earnings, operations, assets, Liabilities, properties,
condition (financial or otherwise), results of operations or net worth of such
Person.
“Non-Competition
Agreement”
has
the
meaning ascribed to it in Section 2.2(j)
“NYSE”
means
the New York Stock Exchange.
“Offshore
GP”
has
the
meaning ascribed to it in the recitals.
“Offshore
Master Fund I”
has
the
meaning ascribed to it in the recitals.
“Offshore
Master Funds”
has
the
meaning ascribed to it in the recitals.
“Offshore
Partnership Interests”
has
the
meaning ascribed to it in the recitals.
“Onshore
GP”
has
the
meaning ascribed to it in the recitals.
“Onshore
Master Fund I”
has
the
meaning ascribed to it in the recitals.
“Onshore
Partnership Interests”
has
the
meaning ascribed to it in the recitals.
“Order”
means
any writ, judgment, decree, demand, injunction or similar order of any
Governmental Entity (in each such case, whether preliminary or
final).
“Organizational
Documents”
means,
(i) with respect to any Person that is a corporation, its articles or
certificate of incorporation or memorandum and articles of association, as
the
case may be, and bylaws; (ii) with respect to any Person that is a limited
partnership, its certificate of limited partnership and limited partnership
agreement; (iii) with respect to any Person that is a limited liability company,
its certificate of formation and limited liability company or operating
agreement; (iv) with respect to any Person that is a trust or other entity,
its
declaration or agreement of trust or constituent document and (v) with respect
to any other Person, its comparable organizational documents, in each case,
as
any such document has been amended or restated.
“Partnership
Interests”
has
the
meaning ascribed to it in the recitals.
“Partnerships”
means
Offshore GP, Onshore GP, the Master Funds, Icahn Management, Icahn Capital
Management and CCI Administrative.
“Permitted
Encumbrances”
means
(a) Encumbrances disclosed in the Financial Statements or securing Liabilities
reflected in the Financial Statements in accordance with GAAP, (b) Encumbrances
for Taxes, assessments and similar charges that are not yet due or are being
contested in
good
faith,
and (c)
Encumbrances relating to an investment of any Fund.
“Person”
means
any natural person, corporation, limited liability company, general partnership,
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental Entity.
“Plan”
and
“Plans”
have
the meanings ascribed to them in Section 3.20(a).
“Pre-Closing
Straddle Period”
means
the portion of any Straddle Period that begins before the Closing Date and
ends
on the Closing Date.
“Pre-Closing
Tax Period”
means
any taxable period that begins before the Closing Date and ends on or before
the
Closing Date.
“Principal
Market”
means
the NYSE, or in the event that the AREP Units are no longer listed on the NYSE,
the primary market or stock exchange on which the AREP Units are then listed
or
traded.
“Proceeding”
means
any action, arbitration, audit, examination, hearing, investigation, litigation,
suit or other proceeding (whether civil, criminal, administrative, investigative
or informal) commenced, brought, conducted or heard by or before or otherwise
involving, any court or other Governmental Entity or referee, trustee,
arbitrator or mediator.
“Registration
Rights Agreement Amendment”
has
the
meaning ascribed to it in Section 2.2(k).
“SEC”
means
the United States Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Shared
Services Agreement”
has
the
meaning ascribed to it in Section 2.2(l)
“Special
Committee”
means
the special committee of independent directors of the Board of Directors of
the
general partner of the Issuer, as the same may be reconstituted from time to
time.
“Straddle
Period”
means
a
taxable period that begins before the Closing Date and ends after the Closing
Date.
“Subsidiary”
means
any corporation, partnership, limited liability company, joint venture or other
entity in which a Person (a) directly or indirectly, owns or controls 50% or
more of the voting stock or other ownership interests entitled to vote
generally; (b) has the power to elect a majority of the board of directors
or similar governing body of such Person or (c) acts as the general partner
or manager, or has the legal power to direct the business or policies, of such
Person.
“Tax”
means
any and all taxes, charges, fees, levies, duties, Liabilities, impositions
or
other assessments, including, without limitation, income, gross receipts,
profits, excise, real or personal property, environmental, recapture, sales,
use, value-added, withholding, social security, retirement, employment,
unemployment, occupation, service, license, net worth, payroll, franchise,
gains, stamp, transfer and recording taxes, fees and charges, imposed by the
IRS
or any other taxing authority (whether domestic or foreign including, without
limitation, any state, county, local or foreign government or any subdivision
or
taxing agency thereof (including a United States possession)), whether computed
on a separate, consolidated, unitary, combined or any other basis and such
term
shall include any interest whether paid or received, fines, penalties or
additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies, duties, liabilities, impositions or other
assessments.
“Tax
Carryforward”
shall
have the meaning ascribed to it in the definition of After-Tax
Earnings.
“Tax
Return”
means
any report, return, document, declaration or other information or filing
required to be supplied to any taxing authority or jurisdiction (foreign or
domestic) with respect to Taxes, including attachments thereto and amendments
thereof, and including, without limitation, information returns, any documents
with respect to or accompanying payments of estimated Taxes, or with respect
to
or accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.
“Third-Party
Claim”
has
the
meaning ascribed to it in Section 8.3(b).
“Threshold”
has
the
meaning set forth in Section 8.4(a).
“Trading
Day”
means
(a) any day on which the AREP Units are listed or quoted and traded on the
Principal Market or (b) if the AREP Units are not then listed or quoted and
traded on any market or stock exchange, then any Business Day.
“Transferred
Employee”
means
an individual who immediately prior to the Closing is an employee of any
Contributor or any Partnership, and immediately following the Closing continues
to be an employee of the Issuer or its Affiliates.
“Volume-Weighted
Average Price”
means,
for the AREP Units as of any date, the dollar volume-weighted average sales
price for the AREP Units on the Principal Market during the period beginning
at
9:30:01 a.m., New York City time (or such other time as the Principal Market
publicly announces is the official open of trading), and ending at 4:00:00
p.m.,
New York City time (or such other time as the Principal Market publicly
announces is the official close of trading) as reported by Bloomberg through
its
“Volume at Price” functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of the AREP Units in the over-the-counter market
on the electronic bulletin board for such security during the period beginning
at 9:30:01 a.m., New York City time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New
York
City time (or such other time as such market publicly announces is the official
close of trading) as reported by Bloomberg, or, if no dollar volume-weighted
average sales price is reported for such security by Bloomberg for such hours,
the average of the highest closing bid price and the lowest closing ask price
of
any of the market makers for such security as reported in the “pink sheets” by
Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the
Volume-Weighted Average Price cannot be calculated for the AREP Units on a
particular date on any of the foregoing bases, the Volume-Weighted Average
Price
of the AREP Units on such date shall be the fair market value as determined
in
good faith by the Issuer, absent manifest error.
ARTICLE
X
MISCELLANEOUS
10.1 Expenses.
Each of
the parties will bear its own costs and expenses (including fees and
disbursements of counsel, consultants and accountants) incurred in connection
with this Agreement and the transactions contemplated hereby.
10.2 Entire
Agreement.
(a) This
Agreement supersedes all prior agreements between the parties with respect
to
its subject matter and constitutes (together with the Ancillary Documents)
a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. The exhibits and schedules
identified in and attached to this Agreement are incorporated herein by
reference and shall be deemed as fully a part hereof as if set forth herein
in
full.
(b) In
the
event of any inconsistency between the statements in the body of this Agreement
and those in the exhibits and schedules (other than an exception expressly
set
forth as such in the Contributors’ Disclosure Schedules or the Issuer’s
Disclosure Schedules with respect to a specifically identified representation
or
warranty), the statements in the body of this Agreement will
control.
10.3 Waiver.
Subject
to Section 5.5, any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by
or
on behalf of the party waiving such term or condition. No waiver by any party
of
any term or condition of this Agreement, in any one or more instances, shall
be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
10.4 Amendment.
This
Agreement may be amended, supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto, provided that any amendment,
supplement or modification to be executed and delivered by the Issuer in
connection with this Agreement or any Ancillary Document shall require the
approval of the Audit Committee.
10.5 No
Third-Party Beneficiaries.
The
terms and provisions of this Agreement are intended solely for the benefit
of
each party hereto and their respective successors or permitted assigns and
personal representatives, and it is not the intention of the parties to confer
third-party beneficiary rights upon any other Person, except that each
Indemnified Person shall be a third-party beneficiary of
Article VIII.
10.6 Assignment;
Binding Effect.
No
party may assign this Agreement or any right, interest or obligation hereunder.
This Agreement is binding upon, inures to the benefit of and is enforceable
by
the parties hereto and their respective successors, permitted assigns and
personal representatives.
10.7 Interpretation.
Unless
the context clearly requires otherwise:
(a) The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
(b) When
a
reference is made in this Agreement to a section, subsection, article, exhibit
or schedule, such reference shall be to a section, subsection, article, exhibit
or schedule of this Agreement unless otherwise clearly indicated to the
contrary. Any capitalized terms used in any schedule hereto and not otherwise
defined therein shall have the meanings set forth in this
Agreement.
(c) Whenever
the words “include,” “includes” or “including” are used in this Agreement they
shall be deemed to be followed by the words “without limitation” and, unless the
context otherwise requires, “neither,” “nor,” “any,” “either” and “or” shall not
be exclusive.
(d) The
words
“hereof,” “herein” and “herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not
to
any particular provision of this Agreement, and article, section, paragraph,
exhibit and schedule references are to the articles, sections, paragraphs,
exhibits and schedules of this Agreement unless otherwise
specified.
(e) The
meaning assigned to each term defined herein shall be equally applicable to
both
the singular and the plural forms of such term, and words denoting any gender
shall include all genders. Where a word or phrase is defined herein, each of
its
other grammatical forms shall have a corresponding meaning.
(f) A
reference to any party to this Agreement or any other agreement or document
shall include such party’s successors and permitted assigns.
(g) A
reference to “$,” “U.S.$,” “U.S. dollars” or “dollars,” shall mean the legal
tender of the United States of America.
(h) Any
reference to any Law means such Law as amended, modified, codified, replaced
or
reenacted, in whole or in part, and in effect from time to time, including
rules
and regulations promulgated thereunder, and reference to any section or other
provision of any Law means that provision of such Law from time to time in
effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision.
(i) Each
accounting term used herein that is not specifically defined herein shall have
the meaning given to it under GAAP.
(j) Any
reference to a party’s being satisfied with any particular item or to a party’s
determination of a particular item presumes that such standard will not be
achieved unless such party shall be satisfied or shall have made such
determination in its sole or complete discretion.
(k) The
parties are each represented by legal counsel and have participated jointly
in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any
provisions of this Agreement.
(l) The
principles of interpretation set forth in this Section 10.7 shall apply equally
to all Ancillary Documents.
10.8 Specific
Performance.
In
addition to any and all other remedies that may be available at law in the
event
of any breach of this Agreement, the parties shall be entitled to specific
performance of the agreements and obligations of the other parties hereunder
and
to such other injunctive or other equitable relief as may be granted by a court
of competent jurisdiction.
10.9 Further
Assurances.
The
parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents,
and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
transactions contemplated by this Agreement.
10.10 Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree in good faith upon a valid and enforceable
provision that is a reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement
10.11 Delays
or Omissions.
It is
agreed that no delay or omission to exercise any right, power or remedy accruing
to any party, upon any breach, default or noncompliance by any other party
under
this Agreement, shall impair any such right, power or remedy, nor shall it
be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent
or
approval of any kind or character on any party’s part of any breach, default or
noncompliance under this Agreement, or any waiver on such party’s part of any
provisions or conditions of the Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or otherwise afforded to any party,
shall
be cumulative and not alternative.
10.12 Remedies.
The
indemnification rights under Article VIII are independent of and in addition
to
such rights and remedies as the parties may have at law or in equity or
otherwise for any misrepresentation, breach of warranty or failure to fulfill
any agreement or covenant hereunder on the part of any party hereto, including
the right to seek specific performance, rescission or restitution, none of
which
rights or remedies shall be affected or diminished by Article VIII.
10.13 Governing
Law.
This
Agreement shall be governed by and construed under the laws of the State of
New
York as applied to agreements among New York residents entered into and to
be
performed entirely within New York.
10.14 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which will
be
deemed an original, but all of which together will constitute one and the same
instrument. Facsimile and .pdf counterpart signatures to this Agreement shall
be treated in all manner and respects as original counterparts and
will be considered to have the same binding legal effect as if they were
the original signed version thereof delivered in person.
10.15 Consent
to Jurisdiction.
Each
party irrevocably submits to the exclusive jurisdiction of any New York State
court in the County of New York or any courts of the United States of America
located in the Southern District of New York, and each party hereby agrees
that
all Proceedings brought by such party hereunder shall be brought in any such
court. Each party irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue
of
any such Proceeding brought in any such court, any claim that any such
Proceeding brought in such a court has been brought in an inconvenient forum
and
the right to object, with respect to any such Proceeding brought in any such
court, that such court does not have jurisdiction over such party or the other
party. In any such Proceeding, each party waives, to the fullest extent it
may
effectively do so, personal service of any summons, complaint or other process
and agrees that the service thereof may be made by any means permitted by
Section 10.16. Each party agrees that a final non-appealable judgment in any
such Proceeding brought in such a court shall be conclusive and
binding.
10.16 Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be delivered personally, by certified or registered mail,
return receipt requested, and postage prepaid or by courier or overnight
delivery, addressed as follows:
If
to
Icahn or the Contributors:
Icahn
Associates Corp.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇
with
a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If
to the
Issuer:
Special
Committee of the
Board
of
Directors of American Property Investors, Inc.
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
with
a
copy (which shall not constitute notice) to:
American
Real Estate Partners, L.P.
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
and
Proskauer
Rose LLP
▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
and
Debevoise
& ▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or
to
such other address as a party may from time to time designate in writing in
accordance with this Section 10.16. Each notice or other communication given
to
any party hereto in accordance with the provisions of this Agreement shall
be
deemed to have been received (a) on the Business Day it is sent, if sent by
personal delivery; (b) the earlier of receipt or three Business Days after
having been sent by certified or registered mail, return receipt requested
and
postage prepaid or (c) on the first Business Day after sending, if sent by
overnight delivery.
[End
of
text. Signature page follows.]
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
parties hereto as of the date first above written.
| AMERICAN REAL ESTATE PARTNERS, L.P. | ||
| |
|
|
| By: |
American
Property Investors, Inc., its general partner
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
|
||
| CCI ONSHORE CORP. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
|
||
| CCI OFFSHORE CORP. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
|
||
| ICAHN MANAGEMENT LP | ||
| |
|
|
| By: |
CCI
Manager LLC, its general partner
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
|
||
| /s/ ▇▇▇▇ ▇. Icahn | ||
|
▇▇▇▇ ▇. Icahn
|
||