UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Stratosphere Corporation
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
863106 308
(CUSIP Number)
Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 14, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d- 1(g), check the
following box / /.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 863106 308
1 NAME OF REPORTING PERSON
Carl C. Icahn
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
8 SHARED VOTING POWER
1,818,610
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
1,818,610
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,818,610
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
89.6%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
SCHEDULE 13D
CUSIP No. 863106 308
1 NAME OF REPORTING PERSON
Nevar LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
985,280
8 SHARED VOTING POWER
9 SOLE DISPOSITIVE POWER
985,280
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
985,280
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.5%
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
SCHEDULE 13D
CUSIP No. 863106 308
1 NAME OF REPORTING PERSON
Nybor Limited Partnership
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
833,320
8 SHARED VOTING POWER
9 SOLE DISPOSITIVE POWER
833,320
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
833,320
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.1%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 863106 308
1 NAME OF REPORTING PERSON
Barberry Corp.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
8 SHARED VOTING POWER
833,320
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
833,320
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
833,320
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.1%
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
SCHEDULE 13D
CUSIP No. 863106 308
1 NAME OF REPORTING PERSON
American Real Estate Holdings L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
8 SHARED VOTING POWER
985,280
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
985,280
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
985,280
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.5%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 863106 308
1 NAME OF REPORTING PERSON
American Property Investors, Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
8 SHARED VOTING POWER
985,280
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
985,280
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
985,280
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.5%
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
Item 1. Security and Issuer
This statement relates to common stock, par value $.01 per
share ("Shares"), of Stratosphere Corporation, a Nevada
corporation (the "Issuer"). The address of the Issuer's
principal executive offices is 2000 Las Vegas Boulevard South,
Las Vegas, Nevada 89104.
Item 2. Identity and Background
The persons filing this statement are Nevar LLC, a New York
limited liability company ("Nevar"), Nybor Limited
Partnership, a Delaware limited partnership ("Nybor"),
Barberry Corp., a Delaware corporation ("Barberry"), American
Property Investors, Inc., a Delaware corporation ("API"),
American Real Estate Holdings L.P., a Delaware limited
partnership ("AREH", and collectively with Nevar, Nybor,
Barberry and API, the "Icahn Entities"), and Carl C. Icahn, a
citizen of the United States of America, all having 100 South
Bedford Road, Mt. Kisco, New York 10549 as their principal
business address, except for API, AREH and Mr. Icahn whose
principal business addresses are each 767 Fifth Avenue, New
York, New York 10153.
Nevar is wholly-owned by Mr. Icahn. Barberry is the sole
general partner of Nybor. Barberry is wholly-owned by Mr.
Icahn. API is the sole general partner of AREH. API is
wholly-owned by Mr. Icahn. Mr. Icahn is(i) the sole director
and the Chairman of the Board, President and Secretary of
Barberry, (ii) the sole member of Nevar and (iii) a director
and the Chairman of the Board of API. As a result of Mr.
Icahn's ownership of and position(s) with Nevar, Barberry and
API, Mr. Icahn is in a position to directly and indirectly
determine the investment and voting decisions made by the
Icahn Entities. The name, position and business address of
each director and executive officer (other than Mr. Icahn) of
API is set forth on Schedule I attached hereto.
Nevar is principally engaged in the business of investing in
and holding securities of the Issuer. Nybor is principally
engaged in the business of investing in and holding securities
and interests of partnerships holding real property. Barberry
is principally engaged in the business of acting as the
general partner of Nybor and investing in and holding
securities of various entities. AREH is principally engaged in
the business of investing in and holding securities. API is
principally engaged in the business of acting as the general
partner of AREH and investing in and holding securities of
various entities. Mr. Icahn's principal occupation is acting
as President and a director of Starfire Holding Corporation, a
Delaware corporation ("Starfire"), and as the Chairman of the
Board and a director of various of Starfire's subsidiaries,
including ACF Industries, Incorporated, a New Jersey
corporation ("ACF"). Starfire, whose principal business
address is 100 South Bedford Road, Mount Kisco, New York
10549, is primarily engaged in the business of holding, either
directly or through its subsidiaries, a majority of the common
stock of ACF. ACF, whose principal business address is 620
North Second Street, St. Charles, Missouri 63301, is primarily
engaged in the business of leasing, selling and manufacturing
railroad freight and tank cars.
Neither Nevar, Nybor, Barberry, AREH, API or Mr. Icahn, nor
any director, general partner, member or executive officer of
any of the Icahn Entities, has during the past five years been
<PAGE>
(i)convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Each of Nevar and Nybor acquired its Shares pursuant to the
terms and provisions of a Restated Second Amended Plan of
Reorganization dated February 26, 1998 (the "Plan of
Reorganization") filed in the United States Bankruptcy Court
for the District of Nevada (Case Nos. 97-20554-GWZ and
97-20555-GWZ) by the Issuer and its wholly-owned subsidiary,
Stratosphere Gaming Corp., a Nevada corporation, pursuant to
Chapter 11 of Title 11 of the United States Code. On October
14, 1998 (the "Effective Date"), the effective date of the
Plan of Reorganization, all issued and outstanding (i) equity
securities of the Issuer were canceled and (ii) 14.25%
Guaranteed First Mortgage Notes due May 15, 2002 of the Issuer
("Stratosphere Bonds") were converted into 10 Shares for each
$1,000 in principal face amount of Stratosphere Bonds. As of
the Effective Date, Nevar held Stratosphere Bonds with an
aggregate principal face amount of $98,528,000. As a result,
Nevar's Stratosphere Bonds were converted into 985,280 Shares
pursuant to the Plan of Reorganization. The aggregate purchase
price paid by Nevar for its Stratosphere Bonds was
$60,749,950. These funds were derived from the general working
capital of Nevar, which was contributed to Nevar by Mr. Icahn.
As of the Effective Date, Nybor held Stratosphere Bonds with
an aggregate principal face amount of $83,332,000. As a
result, Nybor's Stratosphere Bonds were converted into 833,320
Shares pursuant to the Plan of Reorganization. Stratosphere
Bonds with an aggregate principal face amount of $46,550,000
were contributed to Nybor on April 29, 1998 by High River
Limited Partnership, a Delaware limited partnership ("High
River") of which Mr. Icahn is indirectly the sole owner, in
return for a limited partnership interest in Nybor.(FN 1) The
aggregate purchase price paid by Nybor for the balance of its
remaining Stratosphere Bonds with an aggregate principal face
amount of $36,782,000 was $15,171,000. These funds were
derived from the general working capital of Nybor, which was
contributed by its partners.
(FN 1) As a result of such contribution, High River became the sole limited
partner of Nybor. Through a series of transactions involving Icahn-owned
entities, Starfire, High River's indirect parent corporation, was dividended
what had been High River's entire limited partnership interest in Nybor. As a
result, Starfire became the sole limited partner of Nybor.
<PAGE>
Item 4. Purpose of Transaction
The purpose of each of the acquisitions by Mr. Icahn and the
Icahn Entities of Stratosphere Bonds was ultimately to (i)
acquire a significant equity position in the Issuer for
investment purposes, based upon the opinion of Mr. Icahn and
the Icahn Entities that there may be underlying value in the
Issuer and its properties and (ii) control the management,
policies, actions and affairs of the Issuer.
As more fully described in Item 6, except as otherwise
provided in the (i) Repurchase Agreement dated as of June 5,
1998 (the "Repurchase Agreement") by and between Nevar and
AREH and (ii) Letter Agreement dated June 5, 1998 by and among
Nevar, Nybor, AREH and Mr. Icahn, copies of which are included
in Exhibit B attached hereto, Mr. Icahn and the Icahn Entities
do not presently have any plans or proposals which relate to
or would result in the acquisition or disposal of any Shares.
Depending on market conditions and other factors, Mr. Icahn
and the Icahn Entities may acquire additional Shares as they
deem appropriate, whether in open market purchases, privately
negotiated transactions or otherwise. Mr. Icahn and the Icahn
Entities reserve the right to dispose of some or all of their
Shares in the open market, in privately negotiated
transactions to third parties or otherwise.
Item 5. Interest in Securities of the Issuer
(a) Based upon the terms and provisions of the Plan of
Reorganization, as of the close of business on October 26,
1998, Mr. Icahn and the Icahn Entities beneficially owned in
the aggregate 1,818,610 Shares constituting approximately
89.6% of the 2,030,000 outstanding Shares, as shown in Item 3.
Barberry may, by virtue of its general partner interest in
Nybor, be deemed to own beneficially the 833,320 Shares as to
which Nybor possesses direct beneficial ownership. Barberry
disclaims beneficial ownership of such Shares for all other
purposes. AREH may, by virtue of the Repurchase Agreement, be
deemed to beneficially own the 985,280 Shares as to which
Nevar possesses direct beneficial ownership. AREH disclaims
beneficial ownership of such Shares for all other purposes.
API may, by virtue of its general partner interest in AREH, be
deemed to beneficially own the 985,280 Shares as to which
Nevar possesses direct beneficial ownership. API disclaims
beneficial ownership of such Shares for all other purposes.
Mr. Icahn may, by virtue of his ownership of and position(s)
with Nevar, Barberry and API, be deemed to beneficially own
the (i) 985,280 Shares as to which Nevar possesses direct
beneficial ownership and (ii) 833,320 Shares as to which Nybor
possesses direct beneficial ownership. Mr. Icahn disclaims
beneficial ownership of such Shares for all other purposes.
(b) Nevar has the sole power to vote or to direct the vote and to
dispose or to direct the disposition of 985,280 Shares. Nybor
has the sole power to vote or to direct the vote and to
dispose or to direct the disposition of 833,320 Shares.
Barberry may, by virtue of its general partner interest in
Nybor, be deemed to share with Nybor the power to vote or to
direct the vote and to dispose or to direct the disposition of
the 833,320 Shares as to which Nybor possesses direct
beneficial ownership. AREH may, by virtue of the Repurchase
Agreement, be deemed to share with Nevar the power to vote or
to direct the vote and to dispose or to direct the disposition
of the 985,280 Shares as to which Nevar possesses direct
beneficial ownership. API may, by virtue of its general
partner interest in AREH, be deemed to share with Nevar the
power to vote or to direct the vote and to dispose or to
<PAGE>
direct the disposition of the 985,280 Shares as to which Nevar
possesses direct beneficial ownership. Mr. Icahn may, by
virtue of his ownership of and position(s) with Nevar,
Barberry and API, be deemed to share with (i) Nevar the power
to vote or to direct the vote and to dispose or to direct the
disposition of the 985,280 Shares as to which Nevar possesses
direct beneficial ownership and (ii) Nybor the power to vote
or to direct the vote and to dispose or to direct the
disposition of the 833,320 Shares as to which Nybor possesses
direct beneficial ownership.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer
The Issuer owns and operates the Stratosphere Tower, Casino
and Hotel. Under the gaming laws (the "Gaming Laws") of the
State of Nevada and the City of Las Vegas, any individual or
entity who or which operates a casino in the City of Las Vegas
must be licensed. As of June 5, 1998, AREH (which owned
Stratosphere Bonds on such date) did not have the licenses
(the "Gaming Licenses") required under the Gaming Laws. AREH,
anticipating that it would not obtain the Gaming Licenses
prior to the Effective Date, entered into the Repurchase
Agreement with Nevar (which, as a result of having initiated
the process for obtaining the Gaming Licenses earlier than
AREH, expected to obtain the Gaming Licenses prior to the
Effective Date).
Under the Repurchase Agreement, AREH, as a result of Nevar
having obtained the Gaming Licenses prior to the Effective
Date, sold all of its Stratosphere Bonds (the "Subject
Bonds"), having an aggregate principal face amount of
$98,528,000, to Nevar on the Effective Date for an amount
equal to AREH's purchase price. Under the Plan of
Reorganization, the Subject Bonds were converted into 985,280
Shares (the "Subject Shares"). The Repurchase Agreement
further provides, among other things, that if AREH obtains the
Gaming Licenses prior to the date which is 18 months after the
Effective Date (the "Termination Date"), then Nevar will sell
back to AREH, and AREH will purchase from Nevar at the same
price, all of the Subject Shares and/or any and all proceeds
thereof accured on or prior to the earlier of the (i) date of
repurchase of the Subject Shares by AREH (the "Repurchase
Date"), or (ii) Termination Date. If AREH does not obtain the
Gaming Licenses prior to the Termination Date, Nevar will
retain the Subject Shares and any and all proceeds thereof.
The Repurchase Agreement is subject to the terms of the Letter
Agreement. The Letter Agreement provides, among other things,
that between the Effective Date and the date which is the
earlier of the (i) Repurchase Date and (ii) Termination Date,
Nybor and any affiliate of Mr. Icahn other than Nevar (the
"Icahn Affiliates") will take certain actions to preserve the
relative interests of Nevar, on the one hand, and the Icahn
Affiliates, on the other, in the Shares as in existence on the
Effective Date through the earlier of the Repurchase Date and
the Termination Date.
<PAGE>
The discussions herein of the Repurchase Agreement and the
Letter Agreement are subject to and qualified in their
entirety by reference to their complete text as set forth in
the attached Exhibit B attached hereto and are incorporated
herein by reference.
Except as described above, to the knowledge of Mr Icahn and
the Icahn Entities, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among Mr.
Icahn and the Icahn Entities or between Mr. Icahn and the
Icahn Entities, and any other person with respect to any
securities of the Issuer, including, but not limited to,
transfer or voting of any of the securities, finder's fees,
joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the
giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits
Exhibit A: Joint Filing Agreement dated October 26, 1998 among
Carl C. Icahn, Nevar, Nybor, Barberry, AREH and API.
ExhibitB: Repurchase Agreement dated as of June 5, 1998 by
and between AREH and Nevar (including
Letter Agreement dated June 5, 1998 among AREH,
Nevar Nybor and Carl C. Icahn.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of the knowledge and
belief of each of the undersigned, each of the undersigned certifies that the
information set forth in this statement on Schedule 13D concerning the Common
Stock, par value $.01 per share, of Stratosphere Corporation, a Delaware
corporation, is true, complete and correct.
Dated: October 26, 1998.
/s/ Carl C. Icahn
CARL C. ICAHN, Individually
NEVAR LLC
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Member
NYBOR LIMITED PARTNERSHIP
By: BARBERRY CORP.
Title: General Partner
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: President
BARBERRY CORP.
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: President
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Chairman of the Board
AMERICAN REAL ESTATE HOLDINGS L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Title: General Partner
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Chairman of the Board
[Signature page to Schedule 13D relating to
the Common Stock of Stratosphere Corporation]
<PAGE>
SCHEDULE I
Other Directors and Executive Officers of
American Property Investors, Inc. ("API")
DIRECTORS:
Alfred D. Kingsley
William A. Leidesdorf
Jack G. Wasserman
OFFICERS:
John P. Saldarelli Vice President, Secretary and
Treasurer
H.J. Gerard Vice President and Controller
Martin L. Hirsch Vice President
Gail Golden Assistant Secretary
EXHIBIT A
Joint Filing Agreement
In accordance with Rule 13d-1(k)(1) under the Securities
Exchange Act of 1934, as amended, the persons named below agree to the joint
filing on behalf of each of them of a statement on Schedule 13D (including
amendments thereto) with respect to the Common Stock, par value $.01 per share,
of Stratosphere Corporation, a Delaware corporation, and further agree that this
Joint Filing Agreement be included as an Exhibit to such joint filings. In
evidence thereof, the undersigned, being duly authorized, hereby execute this
Agreement this 26th day of October 1998.
/s/ Carl C. Icahn
CARL C. ICAHN, Individually
NEVAR LLC
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Member
NYBOR LIMITED PARTNERSHIP
By: BARBERRY CORP.
Title: General Partner
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: President
BARBERRY CORP.
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: President
[Joint Filing Agreement among Carl C. Icahn, Nevar LLC, Nybor Limited
Partnership, Barberry Corp., American Real Estate Holdings L.P. and American
Property Investors, Inc.]
<PAGE>
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Chairman of the Board
AMERICAN REAL ESTATE HOLDINGS L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Title: General Partner
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Chairman of the Board
[Joint Filing Agreement among Carl C. Icahn, Nevar LLC, Nybor Limited
Partnership, Barberry Corp., American Real Estate Holdings L.P. and American
Property Investors, Inc.]
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.
<PAGE>
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. Carl C. 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.
<PAGE>
2.3 Closing shall be held at the offices of Gordon Altman Butowsky
Weitzen Shalov & Wein, 114 West 47th Street, New York, New York 10036. 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;
<PAGE>
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;
<PAGE>
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 Carl C. Icahn or any
entities which are at least 95% directly or indirectly owned by Carl C. 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 Moody's Investor's Service, Inc. and in each case maturing
within one year after
<PAGE>
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 Carl C. 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
<PAGE>
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 Gordon Altman Butowsky Weitzen Shalov & Wein, 114
West 47th Street, New York, New York 10036. 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.
<PAGE>
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.
C. AREH 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.
D. AREH 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 Carl C. 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.
<PAGE>
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 Carl C.
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:
<PAGE>
To AREH: Mr. John P. Saldarelli
American Real Estate Holdings, Limited Partnership
100 South Bedford Road
Mt. Kisco, New York 10549
Telephone: (914) 242-7707
Facsimile: (914) 242-9282
With a copy to: Rogers & Wells LLP
Attn: Craig S. Medwick, Esq.
200 Park Avenue
New York, New York 10166
Telephone: (212) 878-8168
Facsimile: (212) 878-8375
To the Company: Mr. Carl C. Icahn
Nevar LLC
100 South Bedford Road
Mt. Kisco, New York 10549
Telephone: (914) 242-7720
Facsimile: (914) 241-7497
with a copy to: Gordon Altman Butowsky Weitzen Shalov & Wein
Attn.: Marc Weitzen, Esq.
114 West 47th Street, 21st Floor
New York, New York 10036-1510
Telephone: (212) 626-0800
Facsimile: (212) 626-0799
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.
<PAGE>
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]
<PAGE>
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/John P. Saldarelli
Name: John P. Saldarelli
Title: Vice President
NEVAR LLC
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Sole Member
[Signature Page to Repurchase Agreement between AREH and Nevar LLC
with respect to Stratosphere Bonds]
<PAGE>
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.
<PAGE>
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) Carl Icahn - Chairman of the Board and President (b) Jack Wasserman
- Director (c) William Leidesdorf - Director (d) Alfred Kingsley -
Director (e) Henry Gerard - Vice President and Controller (f) John
Saldarelli - Vice President, Secretary, Treasurer, CFO (g) Martin
Hirsch - 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.;
<PAGE>
Carl C. 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.
<PAGE>
EXHIBIT C
[Letter Agreement attached hereto]
<PAGE>
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 Carl C. 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
<PAGE>
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
<PAGE>
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]
<PAGE>
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/John P. Saldarelli
Name: John P. Saldarelli
Title:Vice President
NEVAR LLC
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Sole Member
NYBOR LIMITED PARTNERSHIP
By: BARBERRY CORP.
Its: General Partner
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title:President
CARL C. ICAHN
/s/ Carl C. Icahn
_________________________________
[Signature Page to Letter Agreement between AREH, Nybor Limited Partnership,
Nevar LLC and Carl C. Icahn relating to the Stratosphere Bonds]
