EXHIBIT B
REPURCHASE AGREEMENT
This Repurchase Agreement (the "Agreement") is made as of the 5th day
of June, 1998, by and between American Real Estate Holdings Limited Partnership
("AREH"), a Delaware limited partnership, and Nevar LLC (the "Company"), a New
York limited liability company.
RECITALS:
WHEREAS, AREH and Nybor Limited Partnership, an affiliate of the
Company ("Nybor"), are the owners of certain Guaranteed First Mortgage Notes of
Stratosphere Corp. (Stratosphere Corp., together with its subsidiaries and any
successors or assigns of any thereof are referred to collectively herein as
"Stratosphere Corp.");
WHEREAS, Stratosphere Corp. and its wholly-owned subsidiary,
Stratosphere Gaming Corp., filed voluntary petitions for reorganization under
Chapter 11 of the United States Bankruptcy Code, on January 27, 1997;
WHEREAS, Stratosphere Corp., as debtor in possession of its bankruptcy
estate, filed a Second Amended Plan of Reorganization which, as proposed, would
provide holders of the Stratosphere Bonds with 100% of the post-reorganization
equity in Stratosphere Corp.;
WHEREAS, if the Second Amended Plan of Reorganization of Stratosphere
Corp. is approved as submitted to the bankruptcy court, AREH and Nybor would
hold, in the aggregate, a controlling interest in post-reorganization
Stratosphere Corp.;
WHEREAS, AREH and Nybor intend to enter into arrangements with respect
to the ownership and operation of Stratosphere Corp.;
WHEREAS, AREH, Nybor and the Company are currently attempting to obtain
certain licenses which will permit them to own, operate and manage the
Stratosphere Tower, Casino and Hotel, presently owned by Stratosphere Corp.,
upon their anticipated attainment of a controlling interest in Stratosphere
Corp.;
WHEREAS, if the Company obtains such licenses necessary to own, operate
and manage the Stratosphere Tower, Casino and Hotel prior to Stratosphere
Corp.'s reorganization under Chapter 11 of the United States Bankruptcy Code and
before AREH can obtain such licenses, AREH wishes to sell its Stratosphere Bonds
(as hereinafter defined) to the Company;
WHEREAS, if the above-referenced sale of Stratosphere Bonds occurs,
AREH plans to repurchase from the Company the Stratosphere Bonds formerly held
by it if and when it also obtains the licenses necessary to own, operate and
manage the Stratosphere Tower, Casino and Hotel; and
WHEREAS, AREH and the Company wish to express their agreement on
certain other related terms, as set forth herein.
NOW THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth in this Agreement and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties to
this Agreement, intending themselves and their respective successors and assigns
to be legally bound, agree as follows:
I. THE SALE TRANSACTION
AREH agrees to sell and transfer to the Company, and the Company agrees
to buy from AREH, on the Closing Date (as hereinafter defined), all Stratosphere
Bonds (as defined on Exhibit A, attached hereto and made a part hereof) which
are held by AREH at the time of the Closing (as hereinafter defined), including
the right to receive any Proceeds (as defined on Exhibit A) thereon received
after the Closing (such Stratosphere Bonds together with such Proceeds are
referred to herein collectively as the "AREH Bonds"), for cash consideration
(the "Purchase Price") in the amount of Forty-Two Million Eight Hundred Ten
Thousand Nine Hundred Fifty Dollars (US $42,810,950.00), which amount shall be
(i) reduced by the product of such amount and a fraction (A) the numerator of
which is the principal amount of Stratosphere Bonds sold by AREH between the
execution of this Agreement and the Closing Date pursuant to Section 6.1(C) of
this Agreement, and (B) the denominator of which is the principal amount of
Stratosphere Bonds held by AREH at the time of the execution of this Agreement
and (ii) increased by the aggregate amount paid by AREH for Stratosphere Bonds
purchased after the execution of this Agreement and which are still held at the
time of the Closing.
II. CLOSING
2.1 The consummation of the transaction contemplated in Article I of
this Agreement (the "Closing") shall occur immediately prior to the effective
date of the Second Plan of Reorganization of Stratosphere Corp. under Chapter 11
of the United States Bankruptcy Code (the "Closing Date"), under consideration
as of the date hereof (and as amended after the date hereof, to the extent that
any such amendments have been deemed acceptable by the Company and AREH), if but
only if, prior thereto, the Company has obtained Licensing (as hereinafter
defined) and AREH has not yet obtained Licensing.
2.2 Closing shall not occur, and this Agreement shall be automatically
terminated without further action by the parties hereto, if any of the following
events occur before the Closing Date:
A. AREH obtains Licensing before, or at the same time
as the Company obtains Licensing;
B. AREH obtains Licensing before, or at the same time
as, the Plan of Reorganization of Stratosphere Corp.
becomes effective; OR
C. Xxxx X. Icahn, the Company's sole member, fails to
obtain Licensing prior to the date which is eighteen
(18) months after the execution of this Agreement.
2.3 Closing shall be held at the offices of Xxxxxx Xxxxxx Butowsky
Xxxxxxx Xxxxxx & Xxxx, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
Company shall provide AREH with written notice of the Closing Date and the time
of the Closing at least three (3) days prior to the Closing Date.
A. At Closing, AREH shall deliver to the Company:
(1) the AREH Bonds;
(2) duly executed instruments transferring sole
ownership of the AREH Bonds to the Company; and
(3) such other and further documents and instruments
as the Company shall reasonably request prior to
the Closing Date.
B. At Closing, the Company shall deliver to AREH:
(1) the Purchase Price; and
(2) such other and further documents and instruments
as AREH shall reasonably request prior to the
Closing Date.
III. REPRESENTATIONS OF THE PARTIES
3.1 AREH represents to the Company and its successors and assigns that:
A. AREH is a limited partnership duly organized, validly
existing, and in good standing under the laws of the State of Delaware with full
power and authority necessary to own, sell and reacquire the AREH Bonds pursuant
to this Agreement;
B. AREH has full power and authority necessary to execute and
deliver, and perform all obligations pursuant to, this Agreement;
C. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, have been duly and validly
authorized by the General Partner of AREH and no other approval or proceedings
by AREH, its partners or any other entity (other than approvals or proceedings
necessary for AREH to obtain Licensing) is necessary to authorize this Agreement
or the consummation of the transactions contemplated hereby;
D. This Agreement has been duly and validly executed and
delivered by AREH, and constitutes the valid and binding agreement of AREH,
enforceable against AREH in accordance with its terms;
E. The execution and delivery by AREH of this Agreement will
not: (i) conflict with, or constitute a breach of, or a default under, any
applicable law, rule, judgment, order, writ, injunction, or decree of any court,
or rule or regulation of any administrative agency or other governmental
authority to which AREH is subject; (ii) violate any provision of the
Certificate of Limited Partnership or the Agreement of Limited Partnership of
AREH; (iii) violate any provision of, result in the breach of, or entitle any
party to accelerate or terminate (whether after the giving of notice or lapse of
time or both) an obligation under any mortgage, lien, lease, contract, license,
instrument, or any other agreement to which AREH is a party; or (iv) result in
the creation or imposition of any lien, charge, pledge, security interest or
other encumbrance upon the AREH Bonds; and
F. All negotiations relative to this Agreement have been
carried on by it directly without the intervention of any broker, finder or
third party other than attorneys, accountants or other professionals retained to
represent it and compensable by other than a brokerage or finders fee or
commission.
3.2 The Company represents to AREH and its successors and assigns
that:
A. The Company is a limited liability company duly organized,
validly existing, and in good standing under the laws of the State of New York
with full power and authority necessary to acquire, own and resell the AREH
Bonds pursuant to this Agreement;
B. The Company has full power and authority necessary to
execute and deliver, and perform all obligations pursuant to, this Agreement;
C. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, have been duly and validly
authorized by the Company and the sole member of the Company, and no other
approval or proceedings by the Company, its member or any other entity (other
than approvals or proceedings necessary for the Company to obtain Licensing) is
necessary to authorize this Agreement or the consummation of the transactions
contemplated hereby;
D. This Agreement has been duly and validly executed and
delivered by the Company, and constitutes the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms;
E. The execution and delivery by the Company of this Agreement
will not: (i) conflict with, or constitute a breach of, or a default under, any
applicable law, rule, judgment, order, writ, injunction, or decree of any court,
or rule or regulation of any administrative agency or other governmental
authority to which the Company is subject; (ii) violate any provision of the
Articles of Organization or the Operating Agreement of the Company; (iii)
violate any provision of, result in the breach of, or entitle any party to
accelerate or terminate (whether after the giving of notice or lapse of time or
both), an obligation under, any mortgage, lien, lease, contract, license,
instrument, or any other agreement to which the Company is a party; or (iv)
result in the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon the AREH Bonds;
F. All negotiations relative to this Agreement have been
carried on by it directly without the intervention of any broker, finder or
third party other than attorneys, accountants or other professionals retained to
represent it and compensable by other than a brokerage or finders fee or
commission; and
G. If the Company were to borrow the Purchase Price as of the
date of the execution of this Agreement, the approximate cost of such funds to
the Company would be the rate of Interest (as defined on Exhibit A).
IV. ACTIONS BY THE COMPANY
4.1 Notwithstanding any terms or provisions to the contrary in Section
4.2 of this Agreement, after the Closing and prior to the Repurchase Closing, if
any, the Company shall have full and complete authority to take any and all
action with respect to all Stratosphere Bonds held by it and any and all action
with respect to its investment in Stratosphere Corp.
4.2 Except as provided in Section 4.1 of this Agreement, the Company
shall generally limit its activities to the following during the term of this
Agreement:
A. Accepting funds ("Icahn Advance") from Xxxx X. Icahn or any
entities which are at least 95% directly or indirectly owned by Xxxx X. Icahn
(collectively, "Icahn Affiliates", which term shall not include Nevar or
Stratosphere Corp. or the successors or assigns of any thereof), to be used by
the Company pursuant to Section 4.1 in respect of the AREH Bonds, or to pay any
amounts necessary to exercise any options, warrants or other similar rights and
interests issued or distributed by Stratosphere Corp. in respect of the
ownership of the AREH Bonds ("Options"), and repaying such funds;
B. Incurring indebtedness from any person other than an Icahn
Affiliate ("Third Party Loans") and repaying such indebtedness;
C. Loaning funds or other assets owned by the Company, other
than securities issued by Stratosphere Corp., to any Icahn Affiliate ("Company
Loan");
D. Incurring and paying expenses in connection with any of the
activities described in Section 4.1 or Section 4.2; and
E. Investing cash on hand not utilized as described in Section
4.1 or Section 4.2(A) through Section 4.2(D) in (i) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof, (ii) time deposits and certificates of
deposit and commercial paper issued by any domestic commercial bank of
recognized standing having capital and surplus in excess of $100,000,000 (an
"Approved Bank"), (iii) commercial paper issued by any person incorporated under
the laws of the United States, or any State thereof, rated at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Xxxxx'x Investor's Service, Inc. and in each case maturing
within one year after
the date of acquisition, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the type described in clauses (i)
through (iii) of this Section 4.2(F) entered into with any Approved Bank or
nationally recognized securities dealer, (v) money market funds which have net
assets of at least $100 million, substantially all of whose assets comprise
securities of the types described in clauses (i) - (iv) above, and (vi) free
credit balance obligations of nationally recognized securities dealers.
4.3 Any Icahn Advance or Company Loan shall accrue Interest (as such
term is defined on Exhibit A) from the date such amount is received by or
disbursed by the Company, as the case may be, until (i) in the case of an Icahn
Advance, the Repurchase Date, and (ii) in the case of a Company Loan, the time
of repayment of such Company Loan. All Company Loans and Third Party Loans shall
be required to be repaid no later than at the time of the Repurchase Closing (as
hereinafter defined).
4.4 Pursuant to the terms of a certain Letter Agreement, of even date
herewith, among the parties hereto, Nybor and Xxxx X. Icahn, on behalf of all
other Icahn Affiliates (the "Letter Agreement"), the Company will sell AREH
Bonds and exercise Options on a proportional basis with Nybor and the Icahn
Affiliates. To the extent of any conflict between the terms and provisions of
Article IV of this Agreement and the Letter Agreement, the terms and provisions
of the Letter Agreement shall be determinative.
4.5 No term or provision in this Agreement shall limit or restrict the
right of any Icahn Affiliate to purchase or acquire Stratosphere Bonds (other
than as required under Section 4.4 in connection with the exercise of Options).
V. THE REPURCHASE TRANSACTION
5.1 If, prior to the date which is eighteen (18) months after the
Closing Date (i) AREH obtains Licensing, (ii) AREH is no longer required to
obtain or maintain Licensing in order to own the AREH Bonds, or (iii) all of the
AREH Bonds have been converted into Proceeds which are cash or cash equivalents,
by way of sale or otherwise, AREH shall be required promptly to repurchase all
of the AREH Bonds, and the Company shall be required to promptly resell such
AREH Bonds to AREH (the date of repurchase hereinafter referred to as the
"Repurchase Date"), for cash consideration (the "Repurchase Price") equal to:
A. the Purchase Price; plus
B. Interest on the Purchase Price calculated from the
Closing Date to the Repurchase Date; plus
C. the sum of all Icahn Advances to the extent not
included in the Purchase Price; plus
D. the aggregate of all Interest accrued on Icahn
Advances referred to in (C) above; plus
E. all amounts owed at the time of the Repurchase
Closing with respect to Third Party Loans in respect
of AREH Bonds, taking into account repayments of
Third-Party Loans in respect of AREH Bonds up to the
time of the Repurchase Closing; less
F. all amounts owed at the time of the Repurchase
Closing with respect to Company Loans, taking into
account repayments of Company Loans up to the time of
the Repurchase Closing.
5.2 AREH shall not be required to repurchase, and the Company shall not
be required to resell the AREH Bonds under Section 5.1 of this Agreement, if, as
of the date which is eighteen (18) months after the Closing Date, (i) AREH is
required to obtain Licensing in order to own the AREH Bonds and (ii) AREH has
not yet obtained Licensing.
5.3 The repurchase of the AREH Bonds (the "Repurchase Closing") shall
take place at the offices of Xxxxxx Xxxxxx Butowsky Xxxxxxx Shalov & Xxxx, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. AREH shall provide the Company with
written notice of the Repurchase Date and the time of the Repurchase Closing at
least three (3) days prior to the Repurchase Date.
A. At the Repurchase Closing, the Company shall deliver
to AREH:
(1) the AREH Bonds;
(2) duly executed instruments transferring sole
ownership of the AREH Bonds to AREH; and
(3) such other and further documents and instruments
as AREH shall reasonably request of the Company prior
to the Repurchase Date.
B. At the Repurchase Closing, AREH shall deliver to the
Company:
(1) the Repurchase Price; and
(2) such other and further documents and instruments
as the Company shall reasonably request of AREH prior
to the Repurchase Date.
5.4 Any disputes or discrepancies regarding calculation of the
Repurchase Price shall be referred to an independent firm of certified public
accountants mutually acceptable to the parties hereto. Any conclusion or
decision of such firm shall be binding on the parties and their successors and
assigns absent manifest error.
VI. COVENANTS OF THE PARTIES
6.1 AREH covenants to the Company that:
A. At Closing, AREH shall vest good and marketable title to
the AREH Bonds in the Company, free and clear of liens, claims and encumbrances.
B. AREH will make all reasonable efforts to obtain all state
and local licenses, permits and approvals (as listed on Exhibit B, attached
hereto and made a part hereof) essential to its legal ownership, operation and
management of the Stratosphere Tower, Casino and Hotel in Las Vegas, Nevada
("Licensing"), prior to the date which is eighteen (18) months after the
execution of this Agreement or, if Closing occurs prior to such date, prior to
the date which is eighteen (18) months after the Closing Date. If, between the
date of the execution of this Agreement and the Closing Date, or, if prior to
the date which is eighteen (18) months after the Closing Date, AREH is no longer
obligated to obtain or maintain Licensing, then AREH's obligations under this
Section 6.1(B) shall terminate unless the Company reasonably determines that
AREH's failure to obtain or maintain Licensing would adversely affect the Icahn
Affiliates.
X. XXXX shall not dispose of any Stratosphere Bonds or
alienate any interest therein or arising therefrom between the execution of this
Agreement and the Closing Date. Notwithstanding the foregoing, if any Icahn
Affiliate sells any Stratosphere Bonds between the date of the execution of this
Agreement and the Closing Date, AREH may, prior to the Closing Date, sell
Stratosphere Bonds having a principal amount equal to the product of the
aggregate principal amount of Stratosphere Bonds held by AREH prior to such sale
and a fraction (i) the numerator of which is the principal amount of
Stratosphere Bonds sold by Icahn Affiliates in such sale, and (ii) the
denominator of which is the aggregate principal amount of Stratosphere Bonds
held by Icahn Affiliates immediately prior to such sale.
X. XXXX shall indemnify, defend and hold the Company harmless
from and against any and all liability (whether accrued, absolute, contingent or
otherwise) loss, damage, expense (including reasonable attorneys' fees) or
deficiency resulting from any misrepresentation, breach of covenant or warranty
or nonfulfillment of any agreement on the part of AREH under this Agreement.
6.2 The Company covenants to AREH that:
A. The Company will make all reasonable efforts to obtain
Licensing, and to assist each of AREH and Xxxx X. Icahn in obtaining Licensing,
prior to the date which is eighteen (18) months after the execution of this
Agreement or, if Closing occurs prior to such date, to assist AREH in obtaining
Licensing prior to the date which is eighteen (18) months after the Closing
Date.
B. At the Repurchase Closing, the Company shall vest good and
marketable title to the AREH Bonds in AREH, free and clear of liens, claims and
encumbrances.
C. The Company shall indemnify, defend and hold AREH harmless
from and against any and all liability (whether accrued, absolute, contingent or
otherwise) loss, damage, expense (including reasonable attorneys' fees) or
deficiency resulting from any misrepresentation, breach of covenant or warranty
or nonfulfillment of any agreement on the part of the Company under this
Agreement.
6.3 Notwithstanding any term or provision to the contrary in this
Agreement, the Company shall have no obligation to initiate, participate in or
facilitate the reorganization of Stratosphere Corp. under Chapter 11 of the
United States Bankruptcy Code.
VII. MISCELLANEOUS
7.1 Notwithstanding any terms or provisions to the contrary in this
Agreement, this Agreement and all rights, duties and obligations of the parties
pursuant hereto are wholly contingent upon the execution of the Letter Agreement
in the form attached hereto as Exhibit C.
7.2 This Agreement, including all exhibits hereto, contains the entire
agreement between the parties hereto and supersedes any and all prior
agreements, arrangements or understandings between the parties relating to the
subject matter hereof. No oral understandings, statements, promises or
inducements contrary to the terms of this Agreement exist. No representations,
warranties, covenants or conditions, express or implied, whether by statute or
otherwise, other than as set forth herein, have been made by either of the
parties.
7.3 No waiver of any term, provision, or condition of this Agreement
whether by conduct or otherwise, in any one or more instances shall be deemed to
be, or construed as, a further or continuing waiver of the same or any other
term, provision or condition of this Agreement.
7.4 All representations, warranties, covenants, and agreements made by
each party to this Agreement shall survive the execution of this Agreement
unless or except as stated otherwise, and each party hereto, and their
successors and assigns, shall be entitled to rely upon the representations and
warranties of the other party, notwithstanding any investigation conducted
before or after execution of this Agreement, or the decision of any party to
complete this transaction.
7.5 This Agreement shall be governed in all respects in accordance with
the laws of the State of New York without reference to that state's conflict of
laws provisions.
7.6 This Agreement will be binding upon the respective legal
representatives, successors and permitted assigns of the parties hereto. No
party hereto may assign the interests or delegate the duties of such party under
this Agreement to any other person without the prior written consent of the
other party. Notwithstanding the foregoing, the Company may assign all or any
lesser number of the AREH Bonds, and any and all rights, interests, duties and
obligations of the Company under this Agreement to any Affiliate of Xxxx X.
Icahn, provided that the transferee assumes all duties and obligations of the
Company under this Agreement.
7.7 All notices required or permitted hereunder shall be in writing and
shall be deemed to be properly given to a party hereto when received by such
party:
To AREH: Xx. Xxxx X. Xxxxxxxxxx
American Real Estate Holdings, Limited Partnership
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx & Xxxxx LLP
Attn: Xxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Company: Xx. Xxxx X. Icahn
Nevar LLC
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Xxxxxx Butowsky Xxxxxxx Xxxxxx & Xxxx
Attn.: Xxxx Xxxxxxx, Esq.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
7.8 This Agreement may not be released, discharged, abandoned, changed
or modified in any manner, except by an instrument in writing signed on behalf
of each of the parties hereto by their duly authorized officers or
representatives.
7.9 Nothing in this Agreement shall be deemed to create any rights in
persons not parties hereto, other than the permitted successors and assigns of
the parties hereto.
7.10 The parties hereto and any successors and assigns thereof shall
each pay their own expenses in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby. Notwithstanding the foregoing, each of the
parties hereto or the successors and assigns thereof shall each pay half of any
fees of an independent firm of certified public accountants appointed pursuant
to Section 5.4 hereof.
7.11 The section headings in this Agreement are for reference purposes
only and shall not affect the meaning and interpretation of this Agreement.
7.12 Each of the parties hereto shall prepare, execute and deliver any
documents and/or instruments, in addition to those required by this Agreement,
reasonably necessary to carry out or implement any term or provision of this
Agreement when reasonably requested to do so by the other party to this
Agreement.
7.13 If any term or provision of this Agreement shall be declared
invalid or illegal for any reason whatsoever, such term or provision shall be
reformed in accordance with the intentions of the parties to the fullest extent
possible, to render such term or provision valid and enforceable.
7.14 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all counterparts together shall
constitute one Agreement. Facsimile transmission of an executed counterpart
hereof by a party shall be deemed delivery by such party of such counterpart by
the party or parties receiving it.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties to this Agreement have
executed the same as of this 5th day of June 1998.
AMERICAN REAL ESTATE HOLDINGS
LIMITED PARTNERSHIP
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
NEVAR LLC
By: /s/ Xxxx X. Icahn
Name: Xxxx X. Icahn
Title: Sole Member
[Signature Page to Repurchase Agreement between AREH and Nevar LLC
with respect to Stratosphere Bonds]
EXHIBIT A
For the purposes of this Agreement:
"Interest" shall mean interest per annum of one hundred fifty (150) basis points
over the prime rate announced in New York City by Citibank, N.A. from time to
time.
"Proceeds" shall mean any and all cash, property, securities, rights or other
proceeds which the holder of Stratosphere Bonds receives in respect thereof or
in exchange therefor, whether or not in connection with a reorganization of
Stratosphere Corp. under Chapter 11 of the United States Bankruptcy Code and/or
in connection with any recapitalization of Stratosphere Corp., including,
without limitation, proceeds of the repayment of any Company Loan described in
Section 4.2(C) of this Agreement and any Interest thereon, and excluding (i) any
amounts received by AREH with respect to sales permitted pursuant to Section
6.1(C) of this Agreement, and (ii) any amounts used to repay Third Party Loans.
"Stratosphere Bonds" shall mean the Guaranteed First Mortgage Notes of
Stratosphere Corp., bearing interest at 14.25% per annum, due and payable May
15, 2002, and all Proceeds thereof.
EXHIBIT B
Each of the following shall be deemed to have obtained Licensing within
the meaning of this Agreement upon the procurement from the Nevada Gaming
Commission and the City of Las Vegas of the licenses, certifications, permits
and/or approvals listed below their names:
AREH:
1. Registration as a holding company entitled to own the securities of
Stratosphere Corp.;
2. Approval of the acquisition of control over Stratosphere Corp., as a
result of the repurchase
of 27.6% of the equity of Stratosphere Corp. from Nevar;
3. Approval as a shareholder and "controlling" shareholder (more than 10%
of equity) of Stratosphere Corp.
AREH acknowledges that its general partner and its principal limited
partner will be required to obtain the following licenses, certifications,
permits and/or approvals from the Nevada Gaming Commission and the City of Las
Vegas before AREH will be granted the above-referenced Licensing by the Nevada
Gaming Commission and the City of Las Vegas:
American Real Estate Partners, L.P. (principal limited partner of AREH),
("AREP")
1. Registration as a publicly traded limited partnership;
2. Registration as a holding company of AREH and a finding of suitability
of as a limited partner of AREH.
American Property Investors, Inc. (general partner of AREH and AREP), ("API")
1. Licensing to permit API to be the general partner of AREH and AREP;
2. Registration as a holding company entitled to own 1% of the equity in
AREH and AREP
3. Licensing of the following API officers and directors:
(a) Xxxx Xxxxx - Chairman of the Board and President (b) Xxxx Xxxxxxxxx
- Director (c) Xxxxxxx Xxxxxxxxxx - Director (d) Xxxxxx Xxxxxxxx -
Director (e) Xxxxx Xxxxxx - Vice President and Controller (f) Xxxx
Xxxxxxxxxx - Vice President, Secretary, Treasurer, CFO (g) Xxxxxx
Xxxxxx - Vice President;
4. Approval of a shelf registration for a continuous or delayed public offering.
The Company:
1. Registration as a holding company entitled to own the securities of
Stratosphere Corp.;
2. Approval of the acquisition of control over Stratosphere Corp., as a
result of the purchase of
27.6% of the equity of Stratosphere Corp. from AREH;
3. Approval as a shareholder and "controlling" shareholder (more than 10%
of equity) of Stratosphere Corp.;
Xxxx X. Icahn:
1. Licensing as a controlling person of AREH on the basis of his indirect
beneficial ownership of 70% of the equity of AREH and his control of
AREH;
2. Licensing as the sole member of the Company.
EXHIBIT C
[Letter Agreement attached hereto]
LETTER AGREEMENT
This Letter Agreement (the "Agreement") is made this 5th day of June,
1998, by and between American Real Estate Holdings Limited Partnership ("AREH"),
a Delaware limited partnership, Nevar LLC, a New York limited liability company
("Nevar"), Nybor Limited Partnership, a Delaware limited partnership ("Nybor")
and Xxxx X. Icahn, an individual ("Icahn").
RECITALS:
WHEREAS, AREH and Nevar entered into a certain Repurchase Agreement of
even date herewith between AREH and Nevar (the "Repurchase Agreement");
WHEREAS, as of the date hereof Nybor owns Stratosphere Bonds;
WHEREAS, Section 4.4 of such Repurchase Agreement contemplates that
Nevar and other entities at least 95% directly or indirectly owned by Icahn
("Icahn Affiliates", which term shall include Nybor but shall not include Nevar
or Stratosphere Corp. and/or the successors or assigns of any thereof) will,
should they at any time during the term of the Repurchase Agreement own any
Stratosphere Bonds, act in accordance with this Agreement with respect to the
disposition of Stratosphere Bonds during the term of the Repurchase Agreement;
and
WHEREAS, the execution of the Repurchase Agreement is contingent upon
the execution of this Agreement.
NOW THEREFORE, in consideration of good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree on behalf of themselves and their successors and assigns
that:
1. Any capitalized terms not defined herein shall have the meaning
ascribed to them in the Repurchase Agreement.
2. If, between the Closing Date and the Repurchase Closing, Nevar, on the
one hand, or any Icahn Affiliate, on the other, sells Stratosphere
Bonds or exercises Options, then, within a reasonable time thereafter,
an Icahn Affiliate, on the one hand, or Nevar on the other,
respectively, shall sell Stratosphere Bonds or exercise Options, as the
case may be, so that Nevar, on the one hand, and Icahn Affiliates, on
the other hand, sold Stratosphere Bonds in proportion to their relative
holdings of Stratosphere Bonds immediately prior to the sale which
invoked this Section 2 and exercised Options in proportion to their
relative holdings of Options immediately prior to the exercise which
invoked this Section 2. For purposes of this Section 2, (i)
Stratosphere Bonds shall include interests in Stratosphere Corporation
acquired after the Closing Date of the same class as Stratosphere
Bonds, and (ii) sales or transfers of Stratosphere Bonds between
Icahn Affiliates shall not be taken into account and shall not
constitute a sale. The Repurchase Price set forth in the Repurchase
Agreement shall be adjusted properly to take into account (i) an
allocation
between the Icahn Affiliates, on the one hand, and Nevar, on the other,
of the amount received with respect to sales of Stratosphere Bonds
between the Closing Date and the Repurchase Date, so that the Icahn
Affiliates, on the one hand, and Nevar, on the other, receive the same
average price for Stratosphere Bonds sold during such period, and (ii)
an allocation of Expenses (as hereinafter defined) incurred between the
Closing Date and the Repurchase Date in proportion to the relative time
weighted average of Stratosphere Bonds held by Nevar, on the one hand,
and the Icahn Affiliates, on the other.
3. For the purposes of this Agreement, "Expenses" shall mean any and all
expenses paid or incurred by Nevar or an Icahn Affiliate with respect
to actions authorized under Section 4.1 of the Repurchase Agreement
including interest paid or accrued with respect to any Third Party Loan
to the extent incurred to fund such expenses and excluding any amount
expended to purchase additional Stratosphere Bonds, whether through
exercise of an Option or otherwise, and interest paid or accrued on
Third Party Loans to the extent incurred to fund such purchase.
4. Icahn agrees to cause the Icahn Affiliates to perform this Agreement in
accordance with its terms.
5. This Agreement shall be governed in all respects in accordance with the
laws of the State of New York without reference to its conflicts of
laws provisions.
6. No waiver of any term, provision, or condition of this Agreement
whether by conduct or otherwise, in any one or more instances shall be
deemed to be, or construed as, a further or continuing waiver of the
same or any other term, provision or condition of this Agreement.
7. This Agreement will be binding upon the respective legal
representatives, successors and permitted assigns of the parties
hereto. No party hereto may assign the interests or delegate the duties
of such party under this Agreement to any other person without the
prior written consent of the other party. Notwithstanding the
foregoing, any Icahn Affiliate may assign all its rights, interests,
duties and obligations under this Agreement to any other Icahn
Affiliate, provided that the transferee assumes all duties and
obligations of the its transferor hereunder.
8. This Agreement may not be released, discharged, abandoned, changed or
modified in any manner, except by an instrument in writing signed on
behalf of each of the parties hereto by their duly authorized officers
or representatives.
9. The section headings in this Agreement are for reference purposes only
and shall not affect the meaning and interpretation of this Agreement.
10. Each of the parties hereto shall prepare, execute and deliver any
documents and/or instruments, in addition to those required by this
Agreement, reasonably necessary to carry
out or implement any term or provision of this Agreement when
reasonably requested to do so by the other party to this Agreement.
11. If any term or provision of this Agreement shall be declared invalid or
illegal for any reason whatsoever, such term or provision shall be
reformed in accordance with the intentions of the parties to the
fullest extent possible, to render such term or provision valid and
enforceable.
12. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all counterparts together shall
constitute one Agreement. Facsimile transmission of an executed
counterpart hereof by a party shall be deemed delivery by such party of
such counterpart by the party or parties receiving it.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties to this Agreement have
executed the same as of this 5th day of June 1998.
AMERICAN REAL ESTATE HOLDINGS
LIMITED PARTNERSHIP
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title:Vice President
NEVAR LLC
By: /s/ Xxxx X. Icahn
Name: Xxxx X. Icahn
Title: Sole Member
NYBOR LIMITED PARTNERSHIP
By: BARBERRY CORP.
Its: General Partner
By: /s/ Xxxx X. Icahn
Name: Xxxx X. Icahn
Title:President
XXXX X. ICAHN
/s/ Xxxx X. Icahn
_________________________________
[Signature Page to Letter Agreement between AREH, Nybor Limited Partnership,
Nevar LLC and Xxxx X. Icahn relating to the Stratosphere Bonds]
