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EXHIBIT 99.2
AMENDED AND RESTATED INVESTMENT AND REORGANIZATION AGREEMENT
AMONG
STRATOSPHERE CORPORATION
STRATOSPHERE GAMING CORP.
AND
GRAND CASINOS, INC.
Las Vegas, Nevada
Dated as of June 20, 1997
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
ARTICLE 2
CAPITAL STRUCTURE
Section 2.1 Capitalization 7
Section 2.2 Cancellation of Old Common Stock 7
Section 2.3 Cancellation of Original First Mortgage Notes 8
Section 2.4 Issuance of Remaining Restated Notes 8
Section 2.6 Put/Call of Class A Common Stock 8
ARTICLE 3
GRAND INVESTMENT
Section 3.1 Class B Common Stock 9
Section 3.2 Restated Notes Purchase 9
Section 3.3 Payment of Purchase Price 9
Section 3.4 Cancellation of Existing Grand Indebtedness and Other
Consideration 9
ARTICLE 4
ADDITIONAL AGREEMENTS
Section 4.1 Discharge of Old Standby Equity Commitment 10
Section 4.2 Phase II Completion Guarantee 10
Section 4.3 Completion Guarantee Repayment Obligations and
Subordination 11
Section 4.4 Construction Escrow Account 11
Section 4.5 Amendments to Budget 11
Section 4.6 Management Agreement 11
ARTICLE 5
CLOSING
Section 5.1 The Closing 11
Section 5.2 Closing Deliveries 12
Section 5.3 Actions With Respect to the Plan and the
Restructuring 14
ARTICLE 6
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CONDITIONS TO CLOSING
Section 6.1 Conditions Precedent to Grand's Obligations 14
Section 6.2 Conditions Precedent to Stratosphere's Obligations 17
Section 6.3 Alternative Transactions 18
Section 6.4 Termination Fee 19
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ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF STRATOSPHERE
Section 7.1 Due Incorporation, Etc. 19
Section 7.2 Capitalization 19
Section 7.3 No Violation of Agreements, Etc. 20
Section 7.4 Due Authorization, Execution and Delivery 20
Section 7.5 Legal Actions 20
Section 7.6 Title to and Condition of Properties 20
Section 7.7 ERISA Plans 20
Section 7.8 Employees 20
Section 7.9 Commission or Broker Fees 20
Section 7.10 Full Disclosure 20
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF GRAND
Section 8.1 Due Incorporation, Etc. 21
Section 8.2 Due Authorization Execution and Delivery 21
Section 8.3 No Violation of Agreements, Etc 21
ARTICLE 9
COVENANTS OF STRATOSPHERE AND GRAND
Section 9.1 Conduct of the Chapter 11 Cases 21
Section 9.2 Executory Contracts 22
Section 9.3 Access to Information; Delivery of Documents 22
Section 9.4 Conduct of Business Prior to Closing 22
Section 9.5 Notification of Changes 22
Section 9.6 Best Efforts 22
Section 9.7 Certain Failures of Conditions 23
ARTICLE 10
MISCELLANEOUS
Section 10.1 Assignability 23
Section 10.2 Notices 23
Section 10.3 Survival of Representations, Warranties and Agreements 24
Section 10.4 Further Assurances 24
Section 10.5 Waiver 24
Section 10.6 Amendments 24
Section 10.7 Applicable Law 24
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Section 10.8 Headings 25
Section 10.9 Counterparts 25
Section 10.10 Entire Agreement 25
Section 10.11 Time Is of the Essence 25
Section 10.12 Amended and Restated Agreement 25
Section 10.13 Effectiveness 25
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AMENDED AND RESTATED INVESTMENT AND REORGANIZATION AGREEMENT
This AMENDED AND RESTATED INVESTMENT AND REORGANIZATION AGREEMENT (this
"Agreement") is made as of the 20th day of June, 1997, by and among
STRATOSPHERE CORPORATION, a Delaware corporation ("Stratosphere"), STRATOSPHERE
GAMING CORP., a Nevada Corporation ("Gaming Corp."), and GRAND CASINOS, INC., a
Minnesota corporation ("Grand"). The parties hereto are collectively referred
to herein as the "Parties."
R E C I T A L S :
WHEREAS, Stratosphere and Grand have previously entered into that certain
Investment and Reorganization Agreement dated as of January 24, 1997 (the
"Prior Agreement") which set forth certain agreements between Grand and
Stratosphere relating to the financial restructuring of Stratosphere and Gaming
Corp., to be effectuated through a Chapter 11 bankruptcy filing by Stratosphere
and Gaming Corp. (the "Restructuring");
WHEREAS, Grand and Stratosphere have agreed to revise certain terms and
conditions of the Restructuring and to amend and restate in its entirety the
Prior Agreement in order to reflect such revised terms and conditions;
WHEREAS, Grand and Stratosphere desire to enter into this Agreement in
order to amend and restate the Prior Agreement and to set forth certain terms
and conditions of Grand's participation in the Restructuring; and
WHEREAS, Grand and Stratosphere intend that, except with respect to
Sections 6.3 and 6.4 hereof which shall be subject to separate Bankruptcy Court
review and approval, this Agreement shall be submitted for review and approval
by the Bankruptcy Court pursuant to the Plan and as part of the process of
confirmation of the Plan;
NOW, THEREFORE, in consideration of the mutual covenants and the
agreements of the parties contained herein, and subject to the conditions
specified herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, except as expressly provided herein or
unless the context otherwise requires, the following terms shall have the
following respective meanings:
"Administrative Expense Reserve" means an amount of cash reserved for use
by Stratosphere and Gaming Corp. to pay certain administrative expenses in
connection with
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the Stratosphere resort complex, which shall be subject to approval by the
Bankruptcy Court either as part of the Confirmation Hearing or upon motion by
the debtors.
"Agreement" means this Amended and Restated Investment and Reorganization
Agreement between Stratosphere and Grand.
"Alternative Transaction" shall have the meaning set forth in Section 6.3
hereof.
"Approvals" shall have the meaning set forth in Section 6.1(l) hereof.
"Bankruptcy Code" means the Bankruptcy Reform Act of 0000, Xxxxx 00,
Xxxxxx Xxxxxx Code, as now in effect or hereafter amended, 11 U.S.C. Section
Section 101 et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Nevada or such other court as may have jurisdiction over the
Chapter 11 Cases.
"Chapter 11 Cases" means the cases under Chapter 11 of the Bankruptcy Code
in which Stratosphere and Gaming Corp. are the debtors and
debtors-in-possession pending before the Bankruptcy Court, including all
adversary proceedings pending in connection therewith.
"Class A Common Stock" means the shares of common stock of Reorganized
Stratosphere which shall collectively as a class represent, in the aggregate,
ten percent (10%) of the common equity and voting power of Reorganized
Stratosphere.
"Class B Common Stock" means the shares of common stock of Reorganized
Stratosphere which shall collectively as a class represent, in the aggregate,
ninety percent (90%) of the common equity and voting power of Reorganized
Stratosphere.
"Closing" means the completion of the transactions to occur on the
Closing Date as provided herein.
"Closing Date" means the Effective Date.
"Confirmation Date" means the date upon which the Bankruptcy Court enters
its order confirming the Plan.
"Confirmation Hearing" means the duly noticed hearing held by the
Bankruptcy Court on confirmation of the Plan pursuant to Section 1128 of the
Bankruptcy Code, which hearing may be adjourned by the Bankruptcy Court from
time to time without further notice other than the announcement of the
adjourned date at the Confirmation Hearing.
"Consolidated Cash Flow" means, with respect to Reorganized Stratosphere
for any period subsequent to the Effective Date, EBITDA of Reorganized
Stratosphere,
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Reorganized Gaming Corp. and any other consolidated subsidiaries of Reorganized
Stratosphere plus or minus (i) any loss or any gain, together with any related
provision for taxes on such loss or gain, realized (in accordance with GAAP) in
connection with any sale of assets (including, without limitation, dispositions
pursuant to sale and leaseback transactions) by Reorganized Stratosphere,
Reorganized Gaming Corp. and any other consolidated subsidiaries of Reorganized
Stratosphere to the extent that such loss or gain (including any related
provision for taxes) was included in EBITDA for such period, plus (ii)
write-downs/charges resulting from the adoption of Financial Accounting
Standards Board pronouncements that do not result in the expenditure of cash or
cash equivalents (including, without limitation, SFAS 121).
"Consolidated Net Income" means, with respect to Reorganized Stratosphere
for any period subsequent to the Effective Date, the aggregate of the net
income (loss) of Reorganized Stratosphere, Reorganized Gaming Corp. and any
other consolidated subsidiaries of Reorganized Stratosphere for such period, on
a consolidated basis, determined in accordance with GAAP; provided that there
shall be excluded (i) any loss or any gain associated with the disposal of any
discontinued operation and any profit or any loss associated with the operation
of any discontinued operation, together with any related provision for taxes on
such discontinued operations; (ii) any extraordinary items, together with any
related provision for taxes on such extraordinary items; and (iii) the
cumulative effect of a change in accounting principles, together with any
related provision for taxes related to such changes in accounting principles.
"Construction Escrow Account" shall have the meaning set forth in Section
4.4 hereof.
"Construction Escrow Agent" means the company selected jointly by
Reorganized Stratosphere and Grand and approved by the Bankruptcy Court to act
as the disbursing agent for all funds held in the Construction Escrow Account
pursuant to the Construction Escrow Agreement.
"Construction Escrow Agreement" means the escrow agreement to be entered
into no later than the Effective Date by Reorganized Stratosphere, Grand, the
Indenture Trustee and the Construction Escrow Agent, which agreement shall set
forth the terms upon which, and the manner in which, funds shall be disbursed
from the Construction Escrow Account to fund completion of Phase II. The
Construction Escrow Agreement shall be substantially in the form filed with the
Bankruptcy Court as part of the Plan Supplement.
"Designated Agreements" shall have the meaning set forth in Section 9.2
hereof.
"Disclosure Statement" means the written disclosure statement that relates
to the Plan, as approved by the Bankruptcy Court pursuant to Section 1125 of
the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure statement may
be amended, modified or supplemented from time to time.
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"Distribution Record Date" means the date or dates established by the
Bankruptcy Court which shall be the record date or dates for determining the
holders of the Original First Mortgage Notes entitled to receive distributions
of Restated Notes, Class A Common Stock and Net Available Cash.
"Distributions" shall have the meaning set forth in Section 5.3(g) hereof.
"EBITDA" means, with respect to Reorganized Stratosphere for any period
subsequent to the Effective Date, Consolidated Net Income of Reorganized
Stratosphere, Reorganized Gaming Corp. and any other consolidated subsidiaries
of Reorganized Stratosphere, plus the following expenses incurred by
Reorganized Stratosphere, Reorganized Gaming Corp. and any other consolidated
subsidiaries of Reorganized Stratosphere (all determined in accordance with
GAAP) during any such period: (i) income taxes; (ii) interest (exclusive of
interest income); and (iii) depreciation and amortization; minus (iv) any
provision for income tax benefit recognized (in accordance with GAAP) during
any such period by Reorganized Stratosphere, Reorganized Gaming Corp. and any
other consolidated subsidiaries of Reorganized Stratosphere.
"Effective Date" means the last to occur of (a) the first Business Day
that is at least eleven (11) days after the Confirmation Date and on which no
stay of the Confirmation Order is in effect, and (b) the Business Day on
which all of the conditions set forth in Article 12 of the Plan shall have been
satisfied or waived.
"Effective Date Cash" means all cash and cash equivalents of Stratosphere
and Gaming Corp. on the Effective Date, excluding therefrom the sum of
$75,000,000 (consisting of $50,000,000 in proceeds from the sale of the Class B
Common Stock and $25,000,000 in proceeds from the sale of Restated Notes),
prior to distribution or reservation of any amounts under the Plan.
"GAAP" means generally accepted accounting principles, consistently
applied, (i) in accordance with the opinions, pronouncements, statements,
bulletins, guides and interpretations, as appropriate, of the Financial
Accounting Standards Board, the Accounting Principles Board and the American
Institute of Certified Public Accountants, or (ii) pursuant to such other
guidance by such entities as may be accepted and applied by a significant
segment of the accounting profession, and (iii) in each case as applicable to
the circumstances and as of the date of determination.
"Gaming Authorities" shall mean, collectively, the State of Nevada Gaming
Control Board, the State of Nevada Gaming Commission, and any other regulatory
agency having the authority to regulate the gaming activities of Stratosphere
and Grand.
"Gaming Corp." shall have the meaning set forth in the Recitals to this
Agreement.
"Grand" shall have the meaning set forth in the Preamble to this
Agreement.
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"Grand Subordinated Claim" means any and all indebtedness of Stratosphere
to Grand arising out of or evidenced by: (a) that certain Notes Completion
Guarantee in the original amount of $50,000,000 dated as of March 9, 1995; (b)
that certain Completion Guarantor Subordination Agreement dated as of March 9,
1995; (c) any and all subordinated notes issued to Grand by Stratosphere from
time to time; and (d) any other loan and security documents, including, but not
limited to debt instruments, evidencing, securing, or relating to such
obligations and claims.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the regulations promulgated thereunder.
"Indenture Trustee" means IBJ Xxxxxxxx Bank and Trust Company, as
Successor Trustee to American National Bank Association, or such other
successor trustee under the Original First Mortgage Indenture or the Restated
First Mortgage Indenture, as applicable, that has combined capital and surplus
of at least $50,000,000 as set forth in its most recent annual report.
"Independent Committee" means a committee comprised of the disinterested
non-employee members of the Board of Directors of Grand.
"Initial Capital Expense Reserve" means an amount of cash to be segregated
by Stratosphere on the Effective Date for planned capital expenditures
(excluding the construction of Phase II) during the year following the
Effective Date, which amount shall be subject to approval by the Bankruptcy
Court as part of the Confirmation Hearing.
"Interest Expense Reserve" means an amount of cash to be segregated by
Stratosphere as of the Effective Date not to exceed the lesser of (i) the
aggregate amount of the first two (2) semi-annual interest payments on the
Restated Notes and (ii) an amount equal to Effective Date Cash minus Total
Restricted Cash (excluding the Interest Expense Reserve), which amount shall be
subject to approval by the Bankruptcy Court as part of the Confirmation
Hearing.
"Management Agreement" shall have the meaning set forth in Section 4.7
hereof.
"Minimum Working Capital Reserves" shall mean an amount of cash to be
segregated by Stratosphere as of the Effective Date to satisfy working capital
requirements to operate the business of Stratosphere and Gaming Corp., which
amount shall be subject to approval by the Bankruptcy Court as part of the
Confirmation Hearing.
"Net Available Cash" means the sum of Effective Date Cash, minus Total
Restricted Cash.
"Net Income" means, with respect to any person, the net income (loss) of
such person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with
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any related provision for taxes on such gain (but not loss), realized in
connection with any asset sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) and any disposition of securities
or extinguishment of indebtedness of such person or any of its consolidated
subsidiaries, and (ii) excluding any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"New Common Stock" means the authorized shares of common stock of
Reorganized Stratosphere, which shall consist of the Class A Common Stock and
the Class B Common Stock.
"Noteholders" means the holders of Stratosphere's 14-1/4% First Mortgage
Notes due 2002 With Contingent Interest in the aggregate original principal
amount of $203,000,000.
"Old Common Stock" means the shares of common stock, $0.01 par value, of
Stratosphere issued and outstanding immediately prior to the Effective Date,
and all options, warrants and similar rights, whether contractual or otherwise,
to acquire such shares of common stock, and all shares or other securities
convertible or otherwise exchangeable into such shares of common stock.
"Old Standby Equity Commitment" means that certain Standby Equity
Commitment between Grand and Stratosphere dated March 9, 1995.
"Original First Mortgage Indenture" means that certain Indenture dated as
of March 9, 1995 by and among Stratosphere, Gaming Corp. and IBJ Xxxxxxxx Bank
and Trust Company, as Successor Trustee to American Bank National Association,
pursuant to which the Original First Mortgage Notes were issued by
Stratosphere.
"Original First Mortgage Notes" means Stratosphere's 14-1/4% First
Mortgage Notes due 2002 With Contingent Interest in the aggregate original
principal amount of $203,000,000.
"Petition Pleadings" means all Chapter 11 petitions, statements of
financial affairs, schedules of assets and liabilities, and any and all other
documents necessary to commence the Chapter 11 Cases.
"Phase II" shall mean Stratosphere's planned construction of additional
facilities, and improvements to existing facilities, at its resort complex
located in Las Vegas, Nevada, consisting of: (i) completion of construction of
a new guest room tower of approximately 1,000 bays, including the acquisition
of all necessary furniture, fixtures and equipment; (ii) completion of
recreation and swimming pool facilities; (iii) landscape and hardscape at areas
adjacent to the new guest tower, including facade upgrade of floors one through
three; (iv) landscape and fencing at site of proposed aquarium building; (v)
mechanical connection and piping from the existing Phase I central plant; (vi)
build-out
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of Kids Quest facility, consisting of at least 12,500 square feet; and (vii)
renovation of existing resort facilities, including baggage storage, gift shop
and gift kiosk remodel, Sister's Coffee Shop remodel, tower queue remodel, and
porte cochere modifications.
"Phase II Budget" means the detailed budget of the estimated costs of
completing Phase II attached to this Agreement as Exhibit A, which has been
approved by Grand and Stratosphere.
"Phase II Completion Guarantee" shall have the meaning set forth in
Section 4.2 hereof.
"Plan" shall mean the Amended Plan of Reorganization filed by Stratosphere
and Gaming Corp. relating to the Chapter 11 Cases, either as filed with the
Bankruptcy Court or as it may be amended, supplemented or modified from time to
time, including all exhibits and schedules annexed thereto or referenced
therein and/or in the supplement thereto which is filed with the Bankruptcy
Court and which contains exhibits thereto.
"Plan Distributed Cash" shall mean the cash to be paid to the holders of
allowed claims in all classes pursuant to the Plan, excluding therefrom the Net
Available Cash.
"Plan Related Documents" means, collectively, the Plan, the Disclosure
Statement, this Agreement, the Restated First Mortgage Indenture and the
Management Agreement.
"Prior Agreement" means that certain Investment and Reorganization
Agreement dated as of January 24, 1997 between Stratosphere and Grand, which
Prior Agreement is amended and restated in its entirety by this Agreement as
set forth in Section 10.12 hereof.
"Reorganized Gaming Corp." means Stratosphere Gaming Corp., a Nevada
corporation, on and after the Effective Date.
"Reorganized Stratosphere" means Stratosphere Corporation, a Delaware
corporation, on and after the Effective Date.
"Restated First Mortgage Indenture" means the Amended and Restated
Indenture to be entered into by Reorganized Stratosphere, Reorganized Gaming
Corp., and the Indenture Trustee, under which the Restated First Mortgage Notes
shall be issued, which indenture shall be substantially in the form of the
indenture filed with the Bankruptcy Court as part of the Plan Supplement.
"Restated Notes" means the First Mortgage Notes of Reorganized
Stratosphere in the aggregate principal amount of $135,000,000 due seven years
after issuance, which First Mortgage Notes shall bear interest, payable in
cash, at the rate of 8-1/2% per annum for the initial 2 years following
issuance and at the rate of 12-1/2% per annum thereafter, and shall be issued
and distributed pursuant to the Plan on the Distribution Date in partial
exchange and substitution for the Original First Mortgage Notes and on a date
subsequent to the Effective Date in exchange for $25,000,000 in cash, and shall
be governed by the terms of the Restated First Mortgage Indenture contained in
the Plan Supplement.
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"Restricted Account" shall mean an interest bearing deposit account
established by Reorganized Stratosphere following the Effective Date into
which, in accordance with the Plan, all cash generated by the operations of
Reorganized Stratosphere following the Effective Date in excess of the cash
requirements necessary to operate the business, up to an aggregate amount equal
to the outstanding principal balance of the Restated Notes from time to time,
shall be deposited.
"Restricted Gaming Reserve" shall mean cash in the aggregate amount of
$7,000,000, to be segregate by Stratosphere or Gaming Corp., as the case may
be, as of the Effective Date to satisfy bankroll requirements.
"Restructuring" shall have the meaning set forth in the Recitals to this
Agreement.
"SEC" means the United States Securities and Exchange Commission and any
successor agency thereto.
"Securities Act" means the Securities Act of 1933, as amended, and the
regulations promulgated thereunder.
"Securities Litigation Claims" shall have the meaning set forth in the
Plan.
"Stratosphere" shall have the meaning set forth in the Preamble to this
Agreement.
"Termination Fee" shall have the meaning set forth in Section 6.4 hereof.
"Total Restricted Cash" means the aggregate of the Administrative Expense
Reserve, the Initial Capital Expense Reserve, the Minimum Working Capital
Reserve, the Plan Distributed Cash, the Interest Expense Reserve, the
Restricted Gaming Reserve and any other restricted cash amounts.
"Trailing Cash Flow Valuation" shall have the meaning set forth in Section
2.6(b) hereof.
In addition to the foregoing definitions, capitalized terms used as
defined terms but not defined herein shall have the respective meanings
provided in the Plan.
ARTICLE 2
CAPITAL STRUCTURE
Section 2.1 Capitalization. Upon consummation of the Plan, the
capitalization of Stratosphere shall be as follows:
(a) Class A Common. There shall be 4,000,000 shares of Class A Common Stock
issued and outstanding, all of which shares shall, in accordance with the Plan,
be issued to the Noteholders pro rata in accordance with their holding of
Original First Mortgage Notes on the Distribution Record Date. The Class A
Common Stock shall collectively,
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as a class, represent ten percent (10%) of the common equity and voting power
of Reorganized Stratosphere.
(b) Class B Common. There shall be 36,000,000 shares of Class B
Common Stock issued and outstanding, all of which shares shall, in
accordance with the Plan, be issued to Grand. Grand shall pay
$50,000,000 in cash for the Class B Common Stock, as described in
Article 3 of this Agreement. The issued and outstanding shares of
Class B Common Stock shall collectively, as a class, represent ninety
percent (90%) of the common equity and voting power of Reorganized
Stratosphere.
(c) Restated Notes. Reorganized Stratosphere will issue
$135,000,000 principal amount of Restated Notes, as follows: (i)
$110,000,000 principal amount of the Restated Notes shall, in
accordance with the Plan, be issued on the Effective Date to the
Noteholders pro rata in accordance with their holdings of Original
First Mortgage Notes on the Distribution Record Date; and (ii)
$25,000,000 principal amount of the Restated Notes shall, in
accordance with the plan, be sold for cash at par as described in
Section 2.4 of this Agreement.
Section 2.2 Cancellation of Old Common Stock. On the Effective
Date, the Old Common Stock shall be canceled and extinguished, and the
holders of the Old Common Stock shall not receive any equity or other interest
in Reorganized Stratosphere or any other consideration in exchange for
cancellation of the Old Common Stock.
Section 2.3 Cancellation of Original First Mortgage Notes. On the
Effective Date, the Original First Mortgage Notes shall be canceled and
extinguished in exchange for the Class A Common Stock, the Net Available Cash
and $110,000,000 aggregate principal amount of Restated Notes. Other than the
shares of Class A Common Stock, the Net Available Cash and $110,000,000
aggregate principal amount of Restated Notes to be issued pursuant to the Plan,
the holders of the Original First Mortgage Notes shall not receive any equity
or other interest in Reorganized Stratosphere or any other consideration in
exchange for cancellation of the Original First Mortgage Notes.
Section 2.4 Issuance of Remaining Restated Notes. The portion of the
Restated Notes not issued to holders of the Original First Mortgage Notes in
exchange for cancellation of the Original First Mortgage Notes, which portion
of the Restated Notes shall have an aggregate face amount of $25,000,000, shall
be sold at par as soon as practicable following the Effective Date, as follows:
(i) first, such Restated Notes will be offered to the holders of the Original
First Mortgage Notes as of the Distribution Record Date pro rata in accordance
with their respective holdings of Original First Mortgage Notes; (ii) second,
the unpurchased portion of such Restated Notes, if any, will be offered to
those holders of Original First Mortgage Notes making purchases of Restated
Notes pursuant to the preceding clause (i), pro rata in accordance with their
purchase of such remaining Restated Notes; and (iii) third, the unpurchased
portion of such Restated Notes, if any, will be purchased by Grand.
Notwithstanding the foregoing, the offer and sale of any such Restated Notes to
the holders of Original First Mortgage Notes shall be structured and conducted
so as to qualify for an exemption from the registration
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requirements of the Securities Act, and such offer and sale of Restated Notes
will be limited, to the extent appropriate, to those holders of Original First
Mortgage Notes that may be eligible and qualified to purchase Restated Notes
pursuant to such exception. Reorganized Stratosphere shall deposit the
proceeds of the sale of such Restated Notes into the Construction Escrow
Account immediately upon receipt.
Section 2.5 Reserve Accounts. In accordance with the Plan, and subject
to the terms and conditions set forth therein:
(a) On the Effective Date, Stratosphere shall deposit cash in amount
equal to the Interest Expense Reserve in an interest reserve account, and such
funds shall be available for interest payments during the first year following
issuance of the Restated Notes; provided, that the amount of cash so deposited
shall not exceed an amount equal to Effective Date Cash minus Total Restricted
Cash;
(b) On the Effective Date, the Net Available Cash, if any, shall be
distributed to the holders of Original Notes pro rata; and
(c) Following the Effective Date, Reorganized Stratosphere will
periodically deposit into the Restricted Account all cash generated by the
operations of Reorganized Stratosphere in excess of the Total Restricted Cash.
All interest earned on the Restricted Account will be retained, and the entire
balance of the Restricted Account will be applied to repayment of the principal
of the Restated Notes at maturity.
Section 2.6 Put/Call of Class A Common Stock.
(a) Commencing on the fifth anniversary of the Effective Date and
continuing for a period of thirty days thereafter, the holders of a majority of
the Class A Common Stock shall have the right to require Grand to purchase all,
but not less than all, of the shares of Class A Common Stock issued and
outstanding at such time, if any. Commencing on the fifth anniversary of the
Effective Date and continuing for a period of two (2) years thereafter, Grand,
or the holders of a majority of the Class B Common Stock, shall have the right
to require the holders of the Class A Common Stock to sell to Grand or its
designee all, but not less than all, of the shares of Class A Common Stock
issued and outstanding at such time.
(b) In the event that either Grand or the holders of the Class A
Common Stock shall exercise their respective rights pursuant to clause
(a) of this Section 2.6, the purchase and sale of Class A Common Stock shall be
at a price per share equal to the quotient of (i) ten percent (10%) of the
Trailing Cash Flow Valuation of Reorganized Stratosphere, divided by (ii) the
number of shares of Class A Common Stock issued and outstanding as of the
effective date of such purchase and sale. For purposes hereof, the phrase
"Trailing Cash Flow Valuation" shall mean an amount equal to seven (7) times
the Consolidated Cash Flow of Reorganized Stratosphere for the four fiscal
quarter periods ending on the last day of the fiscal quarter immediately
preceding the date of determination minus the aggregate amount of long-term
debt (net of cash in excess of restricted amounts, excluding the Interest
Expense Reserve) and capital lease obligations of Reorganized Stratosphere (on
a consolidated basis) as of the date of determination.
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(c) In the event that either Grand or the holders of the Class A Common
Stock shall exercise their respective rights pursuant to clause (a) of this
Section 2.6, Grand may, at its election and in its sole discretion, pay the
purchase price for such shares of Class A Common Stock either (i) in cash, (ii)
by delivery of common stock of Grand having a fair market value, based on the
average reported closing price of such Grand common stock over the ten trading
days immediately prior to the effective date of such transaction, equal to
104.167% of the purchase price for such shares of Class A Common Stock as
determined in accordance with clause (b) of this Section 2.6, or (iii) through
a combination of cash and Grand common stock as set forth in clauses (i) and
(ii) above.
ARTICLE 3
GRAND INVESTMENT
Section 3.1 Class B Common Stock.
(a) Subject to the terms and conditions of this Agreement, on the
Effective Date, Grand shall purchase 36,000,000 shares of Class B Common Stock,
which shall constitute all of the issued and outstanding Class B Common Stock
as of the Effective Date, for an aggregate purchase price of $50,000,000.
Subject to the terms and conditions of this Agreement and further subject to
compliance with applicable laws and regulations, no later than the Closing
Date, Grand shall remit $50,000,000 to the Construction Escrow Account, which
shall represent the purchase price for the shares of Class B Common Stock to be
purchased by Grand pursuant to this Section 3.1(a). Grand may at its sole
discretion deposit such purchase price in the Construction Escrow Account prior
to the Closing Date, and such deposited amounts shall be used to commence the
construction of Phase II in accordance with the Construction Escrow Agreement.
Section 3.2 Restated Notes Purchase. Subject to the terms and conditions
of this Agreement, Grand shall purchase at par any and all Restated Notes that
are not purchased by holders of Original First Mortgage Notes in accordance
with Section 2.4 hereof, up to an aggregate principal face amount and purchase
price of $25,000,000. Grand shall not be required to place any funds in escrow
or post any bond or other security in respect of its obligation to purchase
such Restated Notes.
Section 3.3 Payment of Purchase Price. The purchase price for all shares
of Class B Common Stock and any Restated Notes purchased by Grand pursuant to
Section 3.1 or 3.2 hereof shall be paid by wire transfer of immediately
available funds to the Construction Escrow Account. The terms and manner in
which funds may be released from the Construction Escrow Account shall be set
forth in the Construction Escrow Agreement which shall be in form and substance
reasonably acceptable to Grand and Stratosphere and which otherwise shall be
consistent with the description set forth in Section 4.4 of this Agreement.
Section 3.4 Cancellation of Existing Grand Indebtedness and Other
Consideration. As additional consideration for the Class B Common Stock to be
issued to Grand on the Effective Date, (i) Grand shall
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agree to purchase all unpurchased Restated Notes as set forth in Section 3.2,
and (ii) Grand shall provide the Phase II Completion Guarantee as described in
Section 4.2. In addition, to facilitate the Restructuring, Grand shall consent
and agree to the subordination of the Grand Subordinated Claims in the manner
provided in the Plan.
ARTICLE 4
ADDITIONAL AGREEMENTS
Section 4.1 Discharge of Old Standby Equity Commitment. No later than
the Confirmation Date, the Old Standby Equity Commitment shall be rejected and
terminated and all obligations and liabilities (if any) of Grand thereunder
shall be permanently released and discharged in full, and Grand thereafter
shall have no further liability or obligation to make any further advances to
or investments in Stratosphere, other than in connection with the sale of the
Restated Notes as described in Article 3 and pursuant to the Phase II
Completion Guarantee as described in Section 4.2 hereof. Grand shall waive any
claim for damages arising out of or relating to the rejection and termination
of the Old Standby Equity Commitment.
Section 4.2 Phase II Completion Guarantee. On the Closing Date, Grand
shall enter into a guarantee agreement (the "Phase II Completion Guarantee") in
favor of the holders of the Restated Notes pursuant to which Grand shall
guarantee the payment of all costs necessary for the completion of Phase II, up
to a maximum of $25,000,000 in the aggregate (subject to the second sentence of
this Section 4.2), over and above the proceeds of the sale of the Class B
Common Stock and the Restated Notes deposited in the Construction Escrow
Account. So long as Grand does not make or cause to be made any material
changes to the plans or specifications for Phase II which result in increases
in the total amount of the Phase II Budget, Grand's obligations under the Phase
II Completion Guarantee shall be limited to $25,000,000 in the aggregate;
provided, that such $25,000,000 limitation shall be increased by the amount of
any increases in the total amount of the Phase II Budget that may be made or
caused to have been made by Grand. The obligations of Grand under the Phase II
Completion Guarantee shall consist of the following: (a) to cause all costs of
constructing and completing Phase II, including, without limitation, the costs
of all labor, materials, supplies, equipment, permits and consulting costs,
including but not limited to fees of architects and engineers, related thereto,
to be paid and satisfied as the same shall become due; (b) to cause any and all
costs and cost overruns of constructing and completing Phase II that are not
paid by Stratosphere or Gaming Corp. to be paid, funded and satisfied; and (c)
to cause all costs relating to Phase II and any related real property,
including without limitation the payment of taxes, assessments, utilities,
insurance and maintenance expenses, to be funded, paid and satisfied prior to
delinquency. Notwithstanding the foregoing, Grand shall only be liable under
the Phase II Completion Guarantee to the extent that there are not sufficient
funds on deposit in the Construction Escrow Account to finance completion of
Phase II. The Phase II Completion Guarantee shall be in form and substance
consistent with this Agreement and reasonably acceptable to Grand and shall
specifically provide that in no event shall Grand incur, directly or
indirectly, any obligation, contingent or otherwise, for payment of the
principal amount of the Restated Notes. Grand's obligations under the
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Phase II Completion Guarantee shall be suspended during any force majeure event
which makes it physically impossible or unlawful to complete Phase II,
including without limitation: strikes, lockouts or other labor trouble; fire or
other casualty; governmental preemption in connection with a national
emergency; breakdown, accident or other acts of God; acts of war, insurrection,
civil strife and commotion; and any statute, rule, order or regulation of any
legislature or governmental agency or any department or subdivision thereof.
The Phase II Completion Guarantee shall provide that, if and to the extent that
there are not sufficient funds on deposit in the Construction Escrow Account to
finance the completion of Phase II, Grand shall pay into the Construction
Escrow Account, within five (5) business days after receipt of notice thereof,
an amount equal to any costs incurred in connection with the completion of
Phase II which are expended for items included in the Phase II Budget.
Section 4.3 Completion Guarantee Repayment Obligations and Subordination.
Funds made available by Grand under the Phase II Completion Guarantee shall
constitute loans to Reorganized Stratosphere and shall (i) be evidenced by
promissory notes bearing interest at the same rate as the Restated Notes, (ii)
be subordinated to the full payment in cash or in kind, as applicable, of all
principal, premium (if any), interest and other payments under the Restated
Notes, and (iii) mature after the maturity of the Restated Notes. Stratosphere
may repay the principal of such subordinated loans at any time subsequent to
the repayment in full of the Restated Notes, provided that Stratosphere shall
repay the principal of such subordinated loans not later than one year
following repayment in full of the Restated Notes. Interest on such
subordinated loans may be paid only if no event of default shall exist with
respect to the Restated Notes. Payments of interest and principal on such
subordinated loans shall otherwise be payable to Grand to the extent permitted
by the terms of the Restated First Mortgage Indenture.
Section 4.4 Construction Escrow Account. Reorganized Stratosphere shall
establish an escrow account (the "Construction Escrow Account") and shall
deposit in the Construction Escrow Account, immediately upon receipt, all
proceeds of the sale of the Class B Common Stock and the Restated Notes which
shall equal not less than $75,000,000 in the aggregate. The funds held in the
Construction Escrow Account shall be beneficially owned by Reorganized
Stratosphere, and Reorganized Stratosphere shall grant to the Indenture
Trustee, for the benefit of the holders of the Restated First Mortgage Notes, a
security interest in all of Reorganized Stratosphere's right, title and
interest in the Construction Escrow Account. Reorganized Stratosphere, Grand,
the Indenture Trustee and the Construction Escrow Agent shall enter into the
Construction Escrow Agreement which shall set forth the terms upon which, and
the manner in which, funds shall be disbursed from the Construction Escrow
Account to fund completion of Phase II. The terms of the Construction Escrow
Account shall provide for operation thereof in a manner consistent with
customary construction terms and escrow financing arrangements. The
Construction Escrow Agent shall be a party reasonably acceptable to each of
Grand and Reorganized Stratosphere.
Section 4.5 Amendments to Budget. Any amendments to the Phase II Budget
must be approved in writing by Grand and the Construction Escrow Agent.
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Section 4.6 Management Agreement. Effective on the Closing Date,
Reorganized Stratosphere and Grand shall enter into a management agreement (the
"Management Agreement") pursuant to which Grand shall manage the construction
of Phase II and the day-to-day operations of Reorganized Stratosphere. The
Management Agreement shall have an initial two-year term commencing on the
Closing Date. Grand shall receive a management fee in an amount to be
determined by the Bankruptcy Court as part of confirmation of the Plan;
provided, however, that Reorganized Stratosphere may not make any payments of
management fees to Grand during the continuance of a default in the payment of
principal, premium (if any) or interest under the Restated Notes; provided,
further, that any such unpaid management fees shall be paid by Reorganized
Stratosphere to Grand immediately upon the cure of such payment default.
During the term of the Management Agreement, no other fees, charges, payments
or expense reimbursement shall be paid by Reorganized Stratosphere to Grand in
respect of the services which are the subject of the Management Agreement.
ARTICLE 5
CLOSING
Section 5.1 The Closing. Subject to the terms and conditions of the
Agreement, on the Closing Date: (i) all of the Old Common Stock shall be
extinguished and canceled; (ii) Grand shall pay to Reorganized Stratosphere the
purchase price for the Class B Common Stock to be purchased by Grand pursuant
to Section 3.1 hereof, and Grand shall receive from Reorganized Stratosphere
the certificates representing such shares of Class B Common Stock; (iii) the
shares of Class A Common Stock and a portion of the Restated Notes having an
aggregate face amount of $110,000,000 shall be issued to the holders of the
Original First Mortgage Notes pursuant to the Plan as described in Article 2 of
this Agreement; and (iv) a notice of effectiveness of the Plan shall be filed
and served. The Closing shall occur at the offices of Xxxxxx & Silver, Ltd.,
Fourteenth Floor, 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxx Xxxxx, Xxxxxx 00000, or at
such other place as the parties mutually agree, on such date and at such time
as the parties may agree.
Section 5.2 Closing Deliveries.
(a) At the Closing, simultaneous with or prior to the delivery by
Reorganized Stratosphere to Grand of the Class B Common Stock to be acquired by
Grand pursuant to Section 3.1, Grand shall deliver to Reorganized Stratosphere
the following:
(i) a certificate, dated the Closing Date, from an officer of
Grand to the effect that the conditions set forth in Section 6.2
which have not been waived in writing by Stratosphere have been
satisfied; and
(ii) such other documents as may be reasonably requested by
Stratosphere.
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(b) At the Closing, simultaneous with or prior to the delivery by
Grand of the purchase price for the Class B Common Stock to be acquired by Grand
pursuant to Section 3.1, Reorganized Stratosphere shall deliver to Grand the
following:
(i) duly executed certificates evidencing all Class B Common
Stock to be acquired by Grand pursuant to Section 3.1 of this
Agreement;
(ii) the Plan and Confirmation Order, which order shall be
certified by the clerk of the Bankruptcy Court;
(iii) evidence of the filing with the SEC and any applicable
state securities regulatory authorities of any documents or other
filings required pursuant to the Securities Act and any applicable
state securities or blue sky laws with respect to the issuance of the
Class A Common Stock, the Class B Common Stock, the Restated Notes
and any other securities of Reorganized Stratosphere offered under
the Plan;
(iv) a certificate, dated as of the Closing Date, from an
officer of Reorganized Stratosphere to the effect that the conditions
set forth in Section 6.1 which have not been waived in writing by
Grand have been satisfied;
(v) the legal opinion of Xxxxxx & Silver, Ltd., counsel to
Stratosphere, addressed to Grand and dated the Closing Date, and
subject to customary qualifications and assumptions, as to matters
customary for transactions of the type contemplated hereby and as to
such other matters as Grand may reasonably request, including but not
limited to the following: (a) that the Class B Common Stock issued
to Grand on the Closing Date is duly authorized, fully paid and
nonassessable; (b) that this Agreement and the other agreements
executed and delivered by Stratosphere to Grand pursuant to the Plan
are duly authorized and enforceable; (c) that the transactions
contemplated by this Agreement, and the issuance of the Class B
Common Stock to Grand, are not in violation of any applicable laws
(including the Securities Act); and (d) such other matters as may be
reasonably requested by Grand; provided, that Xxxxxx & Silver, Ltd.
may rely upon the opinion of Xxxxxx Xxxxxxx Xxxxxx & Brand (or such
other securities counsel as may be retained by Stratosphere and
approved by the Bankruptcy Court) as to any matters related to
federal and/or state securities law; and
(vi) such other documents as may be reasonably requested by
Grand.
Section 5.3 Actions With Respect to the Plan and the Restructuring.
Stratosphere shall:
(a) As promptly as practicable after the date hereof, prepare, in
accordance with applicable law and with the reasonable cooperation of Grand, a
disclosure statement, including the forms of any and all documents required to
be filed as exhibits thereto (the "Disclosure Statement") and all related
documents, in each case consistent
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with the terms hereof (including those contained in the Plan) and otherwise
acceptable to Grand, necessary for the solicitation of acceptances of the Plan
under the Bankruptcy Code;
(b) At the earliest practicable date, make all filings with applicable
governmental authorities as may be required by applicable law on a timely
basis, including, without limitation, the registration or qualification under
any applicable state securities and "blue sky" laws, of the Class A Common
Stock, the Class B Common Stock, the Restated Notes and any other securities of
Reorganized Stratosphere offered under the Plan;
(c) File with the Bankruptcy Court the Disclosure Statement in the
Chapter 11 Cases under the Bankruptcy Code, and file the appropriate pleadings
to obtain hearing dates for the approval of the Disclosure Statement and the
Plan in each case as promptly as possible;
(d) Request the earliest practicable date for consideration and
approval of the Disclosure Statement, time for acceptance or rejection of the
Plan by impaired creditors, and confirmation of the Plan and use its best
efforts to obtain confirmation of the Plan as promptly as practicable following
the Petition Date;
(e) Use its best efforts to obtain confirmation of the Plan, with only
such changes or modifications thereto as are acceptable to Grand, and use its
best efforts to obtain the dismissal of all appeals, applications and motions
for reconsideration with respect to the Disclosure Statement, Plan, other order
or ruling or order confirming the Plan, as promptly as practicable;
(f) Use its best efforts to obtain all necessary approvals to
consummation of the Restructuring from all Gaming Authorities and to comply
with all applicable orders, rules, and regulations thereof;
(g) Subject to the terms and conditions of the confirmed Plan, use its
best efforts to cause the distributions to be made as contemplated by the
confirmed Plan (the "Distributions") as promptly as practicable following the
Confirmation Date; and
(h) To facilitate the submission of Alternative Transaction Proposals
pursuant to Section 6.3 hereof, Stratosphere shall establish and maintain a due
diligence room which shall contain such documents and other information
necessary and appropriate to facilitate the efforts of third parties to
formulate Alternative Transaction Proposals.
ARTICLE 6
CONDITIONS TO CLOSING
Section 6.1 Conditions Precedent to Grand's Obligations. The Closing and
Grand's obligations hereunder, including Grand's obligation to purchase any
Class B
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Common Stock or Restated Notes, shall be subject to the satisfaction, in all
material respects, as of the Closing Date, of each of the following conditions:
(a) Compliance by Stratosphere. Stratosphere shall have performed and
complied with all of its material covenants and other material obligations under
this Agreement, the Restructuring Agreement and the Plan Related Documents.
Stratosphere shall not be in default of its obligations under this Agreement or
any of the Plan Related Documents.
(b) Proceedings Relating to the Chapter 11 Cases. In connection with
the proceedings in the Chapter 11 Cases:
(i) There shall not have been timely filed with the Bankruptcy
Court in the Chapter 11 Cases any Claims for environmental expenses or
liabilities in excess of $1,000,000 in the aggregate (unless settled prior
to the Confirmation Date for an amount not exceeding $1,000,000 in the
aggregate).
(ii) No Trustee (as such term is defined under the Bankruptcy
Code) shall have been appointed in the Chapter 11 Cases.
(iii) The Chapter 11 Cases shall not have been converted to a
liquidation case under Chapter 7 of the Bankruptcy Code.
(iv) Stratosphere shall have sufficient cash on the Closing Date
to make all cash payments required to be made on the Closing Date pursuant
to the Plan.
(v) All claims of creditors, secured or unsecured, and equity
holders shall be treated consistent with the terms of the Plan or as
otherwise satisfactory to Grand.
(vi) The Bankruptcy Court shall have entered an order approving
Sections 6.3 and 6.4 of this Agreement.
(c) Plan. A Confirmation Order and any other orders by the Bankruptcy
Court necessary to confirm the Plan or implement the Confirmation Order and
approve the Plan Related Documents, any documents related hereto and the
transactions contemplated hereby shall be entered, each of which order or orders
shall be a final order acceptable in form and substance to Grand and its counsel
in all material respects. The Plan Related Documents and all other documents
contained in the Plan Supplement shall be in the form approved by Grand for
filing by Stratosphere, with such modifications or amendments as are consistent
with this Agreement and the Plan and are acceptable in form and substance to
Grand. The Plan shall provide for the satisfaction or extinguishment of all
claims against Stratosphere in a manner satisfactory to Grand.
(d) Rejection of Old Standby Equity Commitment. All obligations under
and in connection with the Old Standby Equity Commitment shall be rejected and
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permanently discharged and released in full pursuant to the Plan and the
Confirmation Order.
(e) Waivers, Consents and Opinions. Grand shall have received all
necessary waivers, consents, approvals and opinions required under its existing
debt instruments to permit Grand's consummation of the Restructuring as
described herein.
(f) Fairness Opinion. Grand shall have received a favorable opinion from
a nationally recognized investment banking firm, which opinion shall be in form
and substance reasonably acceptable to Grand's board of directors and to the
Independent Committee, concerning the fairness to Grand and its shareholders
from a financial point of view of the transactions contemplated by this
Agreement.
(g) Capitalization. As of the Closing Date, no shares of common stock or
other capital stock, options, warrants or other similar rights of Reorganized
Stratosphere shall be issued and outstanding or reserved for issuance, other
than the shares of Class A Common Stock to be issued to holders of Original
First Mortgage Notes in accordance with the Plan and the shares of Class B
Common Stock to be issued to Grand pursuant to the Plan as described in Section
3.1. When issued in accordance with this Agreement and the Plan, all
outstanding shares of Class A Common Stock and Class B Common Stock shall have
been duly and validly issued and shall be fully paid and nonassessable.
(h) No Prohibition of Transaction. There shall not be in force any order,
decree or ruling by any court or governmental body having jurisdiction, or any
threatened or pending complaint of a governmental body or any person praying
for an order, decree or ruling of a court restraining or enjoining the
consummation of or rendering illegal the transactions contemplated by this
Agreement, and there shall not be in force any such order or decree (including
any injunction or temporary restraining order granted pursuant to a complaint
filed under the federal antitrust laws); provided, however, that nothing in
this Agreement shall require Stratosphere or Grand to seek a stay pending
appeal of any such injunction, decree or order other than a temporary
restraining order.
(i) Material Adverse Change. There shall not have occurred, directly or
indirectly, after the date hereof and before the Closing Date any material
adverse change in Stratosphere's condition (financial or otherwise), business,
assets, liabilities, properties, prospects, results of operations or relations
with employees or suppliers.
(j) HSR Act. Stratosphere shall have complied with the HSR Act, if such
compliance is required. Neither the United States Department of Justice nor
the Federal Trade Commission shall have threatened or taken any action to
prohibit or enjoin the transactions contemplated by this Agreement which has
not been terminated or withdrawn.
(k) Securities Filings. Stratosphere shall have obtained all necessary
approvals and qualifications under applicable state securities and "blue sky"
laws to the
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issuance of the Class A Common Stock, the Class B Common Stock and/or the
Restated Notes as contemplated hereby and by the Plan, and neither the SEC nor
any similar securities commission or regulatory authority of any state or other
jurisdiction shall have issued any order which would have the effect of
preventing the issuance or the trading of the Class A Common Stock, the Class B
Common Stock and/or the Restated Notes.
(l) Regulatory Approvals. Stratosphere shall have received all regulatory
approvals, including without limitation all approvals by the Gaming
Authorities, which shall have become final and nonappealable or any period of
objection by regulatory authorities shall have expired, as applicable, and all
other material approvals, permits, authorizations, consents, licenses and
agreements from other third parties that are necessary or appropriate to permit
the transactions contemplated hereby and by the Plan and any related agreements
and to permit Stratosphere to carry on its business after the Closing Date in a
manner consistent in all material respects with the manner in which it was
carried on prior to the Closing Date (collectively, the "Approvals"), which
Approvals shall not contain any condition or restriction that materially
impairs Stratosphere's ability to carry on its business in such manner.
(m) Filings and Service. None of the Plan Related Documents shall have
been modified in any respect or withdrawn without the prior consent of Grand.
(n) Force Majeure. Since the date hereof, there shall have occurred no
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions or
other adverse change in the financing markets that impairs (or could reasonably
be expected to impair) in any material respect Stratosphere's ability to carry
on its business in a manner consistent in all material respects with prior
practice, or impairs (or could reasonably be expected to impair) in any
material respect Grand's ability to realize the intended benefits and value of
this Agreement or any related agreement.
(o) Representations and Warranties. All representations and warranties of
Stratosphere and Reorganized Stratosphere set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
as of the Effective Date.
The foregoing conditions contained in this Section 6.1 are intended solely for
the benefit of Grand. Grand shall at all times have the right to waive any
condition. All approvals given by Grand under this Section 6.1 shall be in
writing. The waiver by Grand of any condition shall not relieve any other
party of any liability or obligation with respect to any covenant or agreement
set forth herein.
Section 6.2 Conditions Precedent to Stratosphere's Obligations. The
Closing and the obligations of Stratosphere and Reorganized Stratosphere
hereunder shall be subject to the satisfaction, in all material respects, as of
the Closing Date, of each of the following conditions:
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(a) Compliance by Grand. The representations and warranties made by Grand
in this Agreement shall be true and accurate in all material respects on the
date hereof and on and as of the Closing Date with same effect as though such
representations and warranties had been given on and as of the Closing Date.
Grand shall have performed or complied in all material respects with all of its
covenants and other obligations under this Agreement and under the Plan which
are to be performed or complied with by it prior to or on the Closing Date.
(b) Proceedings Relating to the Chapter 11 Cases. A Confirmation Order
and any other orders by the Bankruptcy Court necessary to confirm the Plan and
approve this Agreement, any documents related hereto and the transactions
contemplated hereby shall be entered, each of which order or orders shall be a
Final Order reasonably acceptable in form and substance to Stratosphere and its
counsel.
(c) Proceedings Relating to the Closing. All agreements, documents and
instruments contemplated by this Agreement to be executed and delivered by
Grand shall have been duly executed by Grand and be ready for delivery upon
consummation of the transactions contemplated by this Agreement, and Grand
shall have paid the purchase price for the Class B Common Stock to be purchased
by Grand pursuant to Section 3.1.
(d) No Prohibition of Transaction. There shall not be in force any order,
decree or ruling by any court or governmental body having jurisdiction, or any
threatened or pending complaint of a governmental body or any person praying
for an order, decree or ruling of a court restraining or enjoining the
consummation of or rendering illegal the transactions contemplated by this
Agreement, and there shall not be in force any such order or decree (including
any injunction or temporary restraining order granted pursuant to a complaint
filed under the federal antitrust laws); provided, however, that nothing in
this Agreement shall require Stratosphere or Grand to seek a stay pending
appeal of any such injunction, decree or order other than a temporary
restraining order.
(e) Regulatory Approvals. Grand shall have received all Approvals, which
Approvals shall have become final and nonappealable or any period of objection
by regulatory authorities shall have expired, as applicable.
The foregoing conditions contained in this Section 6.2 are intended solely for
the benefit of Stratosphere and Reorganized Stratosphere. Stratosphere and
Reorganized Stratosphere shall at all times have the right to waive any
condition. All approvals given by Stratosphere or Reorganized Stratosphere
under this Section 6.2 shall be in writing. The waiver by Stratosphere or
Reorganized Stratosphere of any condition shall not relieve Grand of any
liability or obligation of Grand with respect to any representation, warranty,
covenant, or agreement set forth herein.
Section 6.3 Alternative Transactions.
(a) During the ninety (90) day period commencing upon the date the Plan
and this Agreement are filed with the Bankruptcy Court (the "Proposal Period"),
Stratosphere shall actively solicit or initiate inquiries or proposals from,
and engage in
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discussions or negotiations with, and provide information to, any person
regarding an investment in and financial restructuring of Stratosphere in lieu
of the transactions contemplated by this Agreement (each an "Alternative
Transaction Proposal"). Stratosphere shall notify Grand in writing within two
(2) business days of the receipt of any Alternative Transaction Proposal,
whether written or oral, which notice shall identify the parties to, and set
forth in reasonable detail the terms and conditions of, such Alternative
Transaction Proposal. Subject to the provisions of Section 6.4 below,
Stratosphere may accept any such Alternative Transaction Proposal received
during the Proposal Period as hereinafter provided, if and only if: (i) such
Alternative Transaction Proposal provides for economic terms and conditions
more favorable to Stratosphere than those provided by the Restructuring as
described in this Agreement and the Plan; (ii) such Alternative Transaction
Proposal is in writing and in form and content sufficient to constitute a
legally binding and enforceable agreement of the party making such Alternative
Transaction Proposal upon acceptance by Stratosphere; (iii) such Alternative
Transaction Proposal is not subject to receipt of third-party financing by, or
completion of due diligence to the satisfaction of, the party making such
Alternative Transaction Proposal, or to other conditions materially different
than those provided hereunder; (iv) Stratosphere notifies Grand in writing
within ten (10) days of receipt of such Alternative Transaction Proposal that
Stratosphere intends to accept such Alternative Transaction; (v) such
Alternative Transaction Proposal is accompanied by a cash deposit of at least
$2,000,000, which deposit shall be held by Stratosphere pending the acceptance
or rejection of such proposal pursuant to this Section 6.3; and (vi) Grand does
not, within ten (10) days after receipt of notice that Stratosphere intends to
accept such Alternative Transaction Proposal (the "Acceptance Notice"), submit
to Stratosphere in writing a competing restructuring proposal that provides for
economic terms and conditions more favorable to Stratosphere than the terms and
conditions of such Alternative Transaction Proposal, which competing
restructuring proposal, if made by a third party as an Alternative Transaction
Proposal, would meet the requirements of (ii) and (iii) above (a "Grand
Competing Proposal"); provided, that Stratosphere may extend the Proposal
Period by up to thirty (30) days if, at the expiration of the initial Proposal
Period, Stratosphere shall be actively engaged in negotiations that
Stratosphere's board of directors reasonably and in good faith believes will
result in the submission of an Alternative Transaction Proposal and
Stratosphere notifies Grand in writing of such extension not less than ten (10)
days prior to the expiration of such initial Proposal Period. If Grand makes a
Grand Competing Proposal as provided above, such Grand Competing Proposal shall
be deemed accepted by Stratosphere, subject to the provisions of this Section
6.3(a) and subject further to the right to submit or receive higher and better
proposals as part of the Confirmation Hearing, and the terms and conditions of
such Grand Competing Proposal shall be implemented through the Plan as
contemplated herein, with appropriate amendments to reflect such terms and
conditions. If Grand does not submit a Grand Competing Proposal within the ten
(10) day period provided above, Stratosphere may accept the Alternative
Transaction Proposal which was the subject of the Acceptance Notice, but only
if such Alternative Transaction Proposal is accepted in writing, with a copy of
such acceptance provided to Grand as notice of such acceptance, within three
(3) days after the expiration of such ten (10) day period. Any material change
in the terms and conditions of an Alternative Transaction Proposal delivered to
Grand shall be deemed to constitute the receipt of a new Alternative
Transaction Proposal which may be accepted
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only upon compliance with all of the provisions of this Section 6.3(a). Upon
acceptance by Stratosphere of an Alternative Transaction Proposal in accordance
with this Section 6.3(a), this Agreement, subject to the provisions of Section
6.4 below, shall terminate. For purposes of this Section 6.3, a restructuring
proposal shall be deemed to contain economic terms and conditions more
favorable to Stratosphere only if the board of directors of Stratosphere
(excluding any directors affiliated with Grand or any directors who are
otherwise not disinterested with respect to such determination) determines in
good faith, based on the advice of an independent financial advisor, that such
proposal provides for aggregate consideration to Stratosphere, Gaming Corp. and
their respective creditors in an amount greater than would be provided by the
proposal to which such proposal is being compared. Any dispute among
Stratosphere, Grand and/or any third party regarding the relative economics of
any competing proposals shall be submitted by Stratosphere to the Bankruptcy
Court for prompt resolution. If an Alternative Transaction Proposal is
accepted by Stratosphere in accordance with the terms hereof, the Plan shall be
modified accordingly to reflect the terms and conditions thereof.
(b) Other than as expressly permitted by Section 6.3(a), Stratosphere may
not accept, consider, entertain or negotiate, or enter into or consummate any
agreement in furtherance of, any Alternative Transaction Proposal.
Section 6.4 Termination Fee. If this Agreement is terminated pursuant to
Section 6.3, or if a competing plan of reorganization supported by a party
other than Grand (excluding affiliates of Grand) is confirmed by the Bankruptcy
Court and Grand has not breached any of its obligations under this Agreement in
any material respect, then Stratosphere shall pay to Grand a termination fee in
the amount of $2,000,000, subject to approval by the Bankruptcy Court prior to
the actual payment thereof after a review of the reasonableness of Grand's
out-of-pocket fees, costs and expenses (including, without limitation, all
legal and professional fees and costs) incurred in connection with the
Restructuring (the "Termination Fee"). Within 15 days following the execution
of this Agreement, Stratosphere shall request that the Bankruptcy Court approve
the provisions of Sections 6.3 and 6.4 of this Agreement. Stratosphere and
Gaming Corp. shall not be entitled to accept an Alternative Transaction
Proposal except in accordance with Sections 6.3 and 6.4 of this Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF STRATOSPHERE
As an inducement to Grand to enter into this Agreement, Stratosphere
hereby represents and warrants to Grand, as follows:
Section 7.1 Due Incorporation, Etc. Stratosphere is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own or lease and operate
its properties and to carry on its business as now conducted except where the
failure to be so organized, existing and in good standing, or to have such
power and authority would not individually or in the aggregate have a material
adverse effect on the business or financial condition of
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Stratosphere. Stratosphere is duly qualified or licensed to do business as a
foreign corporation in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or license necessary, except for such jurisdictions
where the failure so to qualify or be licensed would not have a material
adverse effect on the business or financial condition of Stratosphere.
Section 7.2 Capitalization. Immediately following the Closing, the only
shares of capital stock of Reorganized Stratosphere which shall be issued and
outstanding or reserved for issuance shall be the shares of Class A Common
Stock to be issued to holders of Original First Mortgage Notes in accordance
with the Plan and the shares of Class B Common Stock to be issued to Grand
pursuant to the Plan as described in Section 3.1. Immediately following the
Closing, there shall not be any subscriptions, options, warrants, calls,
rights, convertible securities or other agreements or commitments of any
character obligating Reorganized Stratosphere to issue, transfer or sell any
of its securities, nor will there be any rights to receive dividends or other
distributions in respect of any such securities.
Section 7.3 No Violation of Agreements, Etc. Subject to entry of the
Confirmation Order, the execution, delivery and performance of this Agreement
by Stratosphere, and of the agreements and other documents herein contemplated
to be executed by Stratosphere, and the consummation of the transactions
contemplated hereby and thereby, will not result in any violation of, or
constitute a default by Stratosphere under, or be in conflict with any term of,
its existing charter documents or bylaws, or any material contract, agreement,
instrument, judgment, decree, order, rule, statute or regulation to which
Stratosphere is a party or which is otherwise applicable to Stratosphere,
except as may be otherwise rejected or modified by a Bankruptcy Court order.
Section 7.4 Due Authorization, Execution and Delivery. This Agreement
has been, and the agreements and other documents herein contemplated to be
executed by Stratosphere will have been by the Closing Date, duly authorized by
all necessary corporate action on the part of Stratosphere. This Agreement has
been duly executed and delivered by a duly authorized signatory of Stratosphere
and constitutes, and such agreements and other documents will at the Closing
constitute, valid and binding obligations of Stratosphere, enforceable against
Stratosphere in accordance with their respective terms.
Section 7.5 Legal Actions. Except for matters raised in connection with
the Chapter 11 Cases of which Grand has received notice, as of the date of this
Agreement, there are no legal or governmental actions, claims, suits,
proceedings or investigations pending against Stratosphere which have not been
disclosed or referred to in the Plan or any schedules thereto that would
prevent the transactions contemplated by this Agreement and, to the best
knowledge of Stratosphere, no such proceedings are threatened or contemplated
by governmental authorities or others.
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Section 7.6 Title to and Condition of Properties. Except (i) such
defects of title or liens as are immaterial in the aggregate to the business of
Stratosphere, (ii) liens arising under the Restated First Mortgage Indenture
and (iii) as contemplated or created by the Plan, as of the Closing Date,
Stratosphere will have good and marketable title to all the real properties
and other assets (tangible, intangible or mixed) it purports to own, free and
clear of all liens, and will enjoy peaceful and undisturbed possession under
all leases to which it is a party as lessee, except for such leases that, in
the aggregate, are immaterial to the business of Stratosphere .
Section 7.7 ERISA Plans. Except as set forth in Schedule 7.7,
Stratosphere is not a party to or participant in any defined benefit plan or
defined contribution plan governed by the Employee Retirement Income Security
Act of 1974, as amended, and any liabilities of Stratosphere under any such
plan now or heretofore in effect are fully funded or otherwise adequately
provided for.
Section 7.8 Employees. Except for the agreement with the local
culinary union, none of the employees of Stratosphere are unionized. There are
no pending, unresolved labor grievances or employment discrimination claims of
which Stratosphere has received actual notice to which Stratosphere is a party
involving the operation of its business or assets, which if resolved adversely
to Stratosphere would, either individually or in the aggregate, have a material
adverse effect on the business, operations or financial condition of
Stratosphere.
Section 7.9 Commission or Broker Fees. Stratosphere has dealt with no
person entitled to any commission, finder's fee or other broker's, finder's or
intermediary's compensation in connection with the transactions contemplated by
this Agreement.
Section 7.10 Full Disclosure. Neither (i) the Disclosure Statement as
filed by Stratosphere in the Chapter 11 Cases, nor (ii) any further or amended
Disclosure Statement, as of the date filed with the Bankruptcy Court, nor (iii)
the final Disclosure Statement in the form distributed to creditors of
Stratosphere in connection with final approval of the Plan, as of the date so
distributed and as of the Closing Date, nor (iv) this Agreement nor any
document contemplated hereby or thereby or furnished by or on behalf of
Stratosphere in connection with the negotiation and the sale of the Class A
Common Stock, the Class B Common Stock, and/or the Restated Notes, nor (v) any
documents or filings filed with the SEC or any state securities or "blue sky"
regulatory agency, as of the date filed and as of the Closing Date:
(a) will contain any untrue statement of a material fact or will omit
to state any material fact necessary to make the statements contained therein
or herein, in light of the circumstances under which they were made, not
misleading; or
(b) will fail to comply with the requirements of Section 1125(e) of the
Bankruptcy Code.
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ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF GRAND
As an inducement to Stratosphere to enter into this Agreement, Grand
hereby represents and warrants to Stratosphere, as follows:
Section 8.1 Due Incorporation, Etc. Grand is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota and has all requisite power and authority to own or lease and operate
its properties and to carry on its business as presently conducted.
Section 8.2 Due Authorization Execution and Delivery. This Agreement and
the transactions contemplated hereunder have been duly authorized by all
necessary corporate action on the part of Grand. This Agreement and, subject
to the satisfaction of all conditions to Grand's obligations herein contained,
the performance by Grand of its obligations hereunder have been approved by the
Independent Committee. This Agreement has been duly executed and delivered by
a duly authorized signatory of Grand and constitutes the valid and binding
obligation of Grand, enforceable in accordance with its terms, except as
enforcement may be affected by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally.
Section 8.3 No Violation of Agreements, Etc. Subject to entry of the
Confirmation Order and to the satisfaction of all conditions to Grand's
obligations hereunder, the execution, delivery and performance of this
Agreement by Grand, and of the agreements and other documents herein
contemplated to be executed by Grand, and the consummation of the transactions
contemplated hereby and thereby, will not result in any violation of, or
constitute a default by Grand under, or be in conflict with any term of, its
existing charter documents or bylaws, or any material contract, agreement,
instrument, judgment, decree, order, rule, statute or regulation to which Grand
is a party or which is otherwise applicable to Grand.
ARTICLE 9
COVENANTS OF STRATOSPHERE AND GRAND
Section 9.1 Conduct of the Chapter 11 Cases. Stratosphere shall consult
with Grand on all aspects of Stratosphere's participation in the Chapter 11
Cases, including without limitation the preparation of the Plan and all other
matters described in Section 5.3 of this Agreement. Grand shall reasonably
cooperate with Stratosphere in the preparation of the Plan and the prosecution
of the Chapter 11 Cases.
Section 9.2 Executory Contracts. Grand and Stratosphere agree that
those contracts set forth on Schedule 9.2 hereto (the "Designated Agreements")
shall be accepted and assumed in the Chapter 11 Cases. Stratosphere shall not
reject or accept and assume any other executory contracts or agreements in the
Chapter 11 Cases without the prior written consent of Grand.
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Section 9.3 Access to Information; Delivery of Documents. Through the
Closing Date, subject to the terms of any applicable confidentially agreement
between Stratosphere and Grand, Stratosphere shall allow the designated
officers, attorneys, accountants and other representatives of Grand access at
reasonable times and upon prior notice by Grand to all records and files,
correspondence, audits and properties, as well as to all information relating
to commitments, contracts, titles and financial condition, or otherwise
pertaining to the business and affairs of Stratosphere. Stratosphere shall
deliver promptly to Grand copies of all filings in connection with the Chapter
11 Cases and all orders from the Bankruptcy Court received in connection
therewith.
Section 9.4 Conduct of Business Prior to Closing. Stratosphere agrees
that, prior to the Closing Date, unless Grand otherwise agrees in writing or as
otherwise expressly contemplated or permitted by this Agreement:
(a) Stratosphere shall not directly or indirectly, do or permit to occur
any of the following: (i) issue, sell, pledge, dispose of or encumber any
additional shares of, or any options, warrants, conversion privileges or rights
of any kind to acquire any shares of, any of its capital stock; (ii) amend or
propose to amend its articles of incorporation; (iii) split, combine or
reclassify any outstanding shares of its capital stock, or declare, set aside
or pay any dividend or other distribution payable in cash, stock, property or
otherwise with respect to shares of Old Common Stock; (iv) redeem, purchase or
acquire or offer to acquire any shares of its capital stock; (v) acquire (by
merger, exchange, consolidation, acquisition of stock or assets or otherwise)
any corporation, partnership, joint venture or other business organization or
division or material assets thereof; (vi) incur any indebtedness for borrowed
money or issue any debt securities; (vii) engage, solicit or initiate inquiries
or proposals from, or engage in discussions or negotiations with, or accept,
agree to or enter into or consummate any agreement in furtherance of, any
Alternative Transaction Proposal, except as specifically permitted by Section
6.3 of this Agreement; or (viii) enter into or propose to enter into, or modify
or propose to modify, any agreement, arrangement or understanding with respect
to any of the matters set forth in this Section 9.4(a);
(b) Stratosphere shall maintain its good standing under the laws of its
state of incorporation and shall notify Grand of any governmental or third
party complaints, investigations or hearings (or communications indicating that
the same may be contemplated); and
(c) Stratosphere shall not take any action other than in the ordinary
course of business as previously conducted or enter into any material
agreement, contract or commitment, except as contemplated in the Plan.
Section 9.5 Notification of Changes. Stratosphere shall promptly notify
Grand, and Grand shall promptly notify Stratosphere, of the existence or
happening of any fact, event or occurrence prior to the Closing Date of which
Stratosphere or Grand, as applicable, has knowledge which materially alters the
accuracy or completeness of any representation or warranty, or which
constitutes a material breach or renders impractical the performance of any
covenant or agreement, of such party contained in this Agreement.
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Section 9.6 Best Efforts. Stratosphere shall use its best efforts to
satisfy or cause to be satisfied all of the conditions precedent to its or
Grand's obligations hereunder which are to be satisfied or performed by
Stratosphere. Grand shall use its best efforts to satisfy or cause to be
satisfied all of the conditions precedent to its or Stratosphere's obligations
hereunder which are to be satisfied or performed by Grand. The parties hereto
shall cooperate with each other in obtaining any consents or agreements of
third parties necessary for the performance by them of their obligations under
this Agreement and the consummation of the transactions contemplated hereby.
Whenever the consent or approval of a party is required hereunder, such consent
or approval shall not be unreasonably withheld.
Section 9.7 Certain Failures of Conditions. If the failure of any
condition of the obligation of a party hereunder is primarily attributable to
the action or omission from and after the date hereof of such party, then such
condition shall be deemed to have been satisfied and the failure of such
condition shall not excuse the performance of such party of its obligations
hereunder.
ARTICLE 10
MISCELLANEOUS
Section 10.1 Assignability. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. Except as otherwise provided herein, Grand may assign all or part of
its rights hereunder to any of its Affiliates. This Agreement is not
assignable by Stratosphere, by operation of law or otherwise (except to
Reorganized Stratosphere) without the prior written consent of Grand, except to
the Indenture Trustee as collateral for the Original First Mortgage Notes. Any
assignment or attempted assignment of all or any portion of this Agreement
which is not expressly permitted hereby shall be null and void and of no force
or effect.
Section 10.2 Notices. Any notice by either party to the other hereunder
shall be deemed sufficiently given if in writing either served by personal
delivery or sent by overnight courier guaranteeing next-day delivery or by
telecopy, addressed (until further written notice of change of address), if to
Stratosphere, to:
STRATOSPHERE CORPORATION
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
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with a copy to:
XXXXXX & SILVER, LTD.
0000 Xxxxxx Xxxxxx Xxxxxxx, 00xx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
and if to Grand:
GRAND CASINOS, INC.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
SQUIRE, XXXXXXX & XXXXXXX L.L.P.
Two Renaissance Square
00 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Xxxxxxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Notice given by personal delivery shall be effective upon delivery. Notice
transmitted by overnight courier guaranteeing next-day delivery shall be
effective on the business day following timely delivery to such courier.
Notice transmitted by telecopy shall be effective when receipt is acknowledged.
Section 10.3 Survival of Representations, Warranties and Agreements. All
of Stratosphere's, Reorganized Stratosphere's and Grand's representations and
warranties hereunder shall survive the execution and delivery of this
Agreement, any investigation by Grand or Stratosphere, as the case may be, and
the issuance to Grand, and the purchase and sale by Grand, of the Class B
Common Stock and any Restated Notes.
Section 10.4 Further Assurances. Following the Closing, the parties
shall take such actions and execute and deliver such instruments as may be
reasonably requested (at the expense of the requesting party) to further
perfect, evidence or consummate the transactions contemplated by this Agreement
and the Plan.
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Section 10.5 Waiver. A waiver on the part of either of the parties
hereto of any term, provision or condition of this Agreement or breach thereof
shall not constitute a precedent, nor bind either party hereto to a waiver of
any other term, provision or condition of this Agreement or any other or
succeeding breach of the same or any other term, provision or condition
thereof.
Section 10.6 Amendments. This Agreement shall not be modified, amended
or otherwise changed without the written agreement of Stratosphere and Grand.
Section 10.7 Applicable Law. This Agreement shall be governed by the
laws of the State of Nevada (without reference to the provisions thereof
relating to conflicts of laws) and applicable federal bankruptcy law and any
questions arising hereunder shall be construed or determined in accordance with
such laws. The parties hereby agree to retain jurisdiction in the Bankruptcy
Court with respect to questions arising under this Agreement.
Section 10.8 Headings. The table of contents and the headings at the
beginning of the articles, sections and subsections of this Agreement are
solely for the convenience of the parties and are not a part of this Agreement.
Section 10.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 10.10 Entire Agreement. This Agreement (including all Schedules
hereto) contains the entire understanding between the parties relating to its
subject matter and supersedes all prior agreements, understandings,
representations and statements, oral or written.
Section 10.11 Time Is of the Essence. Time is of the essence of this
Agreement.
Section 10.12 Amended and Restated Agreement. This Agreement amends and
restates in its entirety the Prior Agreement, and this Agreement shall, from
and after the date of execution hereof, supersede the Prior Agreement in all
respects. The parties hereto acknowledge and agree that all references to the
Prior Agreement in any other document, instrument or agreement shall, from and
after the date of execution hereof, be deemed to refer to this Agreement.
Section 10.13 Effectiveness. This Agreement shall be effective
immediately upon execution by Grand and Stratosphere, subject, however, to
receipt of any approval from the Gaming Authorities which may be required as a
pre-condition to such effectiveness.
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IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Investment and Reorganization Agreement to be executed as of the date first
above written.
STRATOSPHERE CORPORATION, a
Delaware
corporation
By /s/ Xxxxxx X. Xxxxxx
--------------------------------
Its Executive Vice President and General
Counsel
STRATOSPHERE GAMING CORP., a
Nevada
corporation
By /s/ Xxxxxx X. Xxxxxx
----------------------------
Its Secretary
GRAND CASINOS, INC., a Minnesota
corporation
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, Vice President
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