[EXECUTION COPY]
This Standstill and Amendment Agreement (this "Agreement"), dated as of
October 30, 1996, is entered into by and among STRATOSPHERE GAMING CORP., a
Nevada corporation, as Lessee; STRATOSPHERE CORPORATION, a Delaware corporation,
as Guarantor; FIRST SECURITY TRUST COMPANY OF NEVADA, a Nevada trust company,
not in its individual capacity, except as expressly stated herein, but solely as
Lessor and Trustee; the persons listed on Schedule II hereto, as Lenders; BANK
OF SCOTLAND, XXXXX FARGO BANK, NATIONAL ASSOCIATION (successor by merger to
FIRST INTERSTATE BANK OF NEVADA), and SOCIETE GENERALE, as Co-Agents; CREDIT
LYONNAIS, LOS ANGELES BRANCH, as Lead Manager; and BA LEASING & CAPITAL
CORPORATION, a California corporation, as Arranger and Agent.
W I T N E S S E T H:
WHEREAS, Lessee, Guarantor, Trustee (both in its individual and trust
capacities), the Lenders and Agents are parties to a Participation Agreement
dated as of April 29, 1996 (the "Original Participation Agreement"), pursuant to
which the Lenders made term loans to the Trustee on the Advance Date (such term,
and all other capitalized terms used herein shall have the meanings ascribed to
them in Part I) in the aggregate original principal amount of $37,500,000 of
which $35,000,000 (without giving effect to any October 30, 1996 payment due
under the Loan Agreement) is currently outstanding (the "Existing Term Loans");
WHEREAS, the Trustee used the proceeds of the Loans on the Advance Date
to purchase certain equipment described on Schedule I attached hereto in an
aggregate amount of $14,627,072.37 and deposited the remaining proceeds of the
Loans into the Account;
WHEREAS, the Equipment acquired by the Trustee on the Advance Date was
immediately leased to the Lessee pursuant to the Lease;
WHEREAS, subsequent to the Advance Date withdrawals in the amount of
$18,725,828.63 were made from the Account to purchase additional items of
Equipment (described on Schedule I attached hereto) for lease to the Lessee
under the Lease;
WHEREAS, as of the date hereof there is remaining in the Account
$4,259,200 (the "Deposited Amount"), which represents proceeds from the Loans
and interest earned thereon from time to time;
WHEREAS, Lessee is not in compliance with its obligations under
Sections 5.5, 5.16(a), (b) and (c) of the Original Participation Agreement and
is in default under Sections 10.1(f) (to the extent it has admitted in writing
its inability to make the payment due November 15, 1996 under the Indenture),
10.1(j) and 10.1(m) of the Lease ("Existing Events of Default"), but otherwise
has not violated any covenant, condition, representation, warranty or agreement
contained in any Operative Document;
WHEREAS, Lessee desires that during the Standstill Period, the Lenders
refrain from exercising, or instructing, authorizing or allowing any other
Person to exercise, any right, power or remedy under the Loan Agreement, the
Lease or any other Operative Document as a result of the Existing Events of
Default; and
WHEREAS, the Lenders are willing to refrain from exercising, or
instructing, authorizing or allowing any other Person to exercise, any right,
power or remedy under the Loan Agreement, the Lease or any other Operative
Document during the Standstill Period in exchange for the consent of Lessee to
the application of the funds in the Account to the partial repayment of the
Existing Term Loans in accordance with the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual terms and conditions
herein contained, the parties hereto agree as follows:
PART I
DEFINITIONS
Subpart 1.1. Certain Definitions. Unless otherwise defined in Appendix
I to the Original Participation Agreement, capitalized terms used in this
Agreement without definition shall have the following meanings:
"Agreement" is defined in the preamble to this Agreement.
"Deposited Amount" is defined in the fifth recital to this
Agreement.
"Effective Date" means the first date on which all of the conditions
precedent set forth in Subpart 5.1 of this Agreement shall be satisfied or
waived by all of the Lenders, but in no event shall such date be later than
October 31, 1996.
"Existing Events of Default" is defined in the sixth recital of this
Agreement.
"Existing Term Loans" is defined in the first recital to this
Agreement.
"Funding Request" means the certificate delivered by Lessee to the
Agent on September 25, 1996 under Section 2.14 of the Original Participation
Agreement.
"Insolvency Event" means the occurrence of any condition, event or
happening described in Section 10.1(f) or (g) of the Lease (other than any event
arising from the Parent's admission in writing of its inability to make the
payment due November 15, 1996 under the Indenture).
"Original Participation Agreement" is defined in the first recital of
this Agreement.
"Standstill Period" means the period commencing on the Effective Date
of this Agreement and ending on the earliest of (x) January 30, 1997, (y) the
occurrence of an Insolvency Event and (z) the occurrence or continuation of an
Event of Default (other than Existing Events of Defaults).
PART II
AMENDMENT TO ORIGINAL PARTICIPATION AGREEMENT
Effective on (and subject to the occurrence of) the Effective Date, the
Original Participation Agreement is hereby amended in accordance with this Part
II.
Subpart 2.1. Amendment to Article II. Article II of the Original
Participation Agreement is amended as set forth in this Subpart 2.1.
(a) Section 2.12 of the Original Participation Agreement is
hereby amended to read in its entirety as follows:
"Section 2.12. Amortization Schedule. Schedule III attached to
the Standstill and Amendment Agreement, dated October 30, 1996 among the parties
to the Participation Agreement (the "Standstill Agreement") sets forth the
mandatory principal amortization schedule for the Loans (the "Amortization
Schedule"). Trustee, as agent of the Agent under Section 7.1 of the Loan
Agreement, shall distribute all mandatory principal amortization payments in
accordance with Section 3.2 of the Loan Agreement."
PART III
AMENDMENTS TO THE LOAN AGREEMENT
Effective on (and subject to the occurrence of) the Effective Date, the
Loan Agreement is hereby amended in accordance with this Part III.
Subpart 3.1. Article II of the Loan Agreement is amended as set forth
in this Subpart 3.1.
(a) A new Section 2.4(e) is hereby added to the Loan Agreement
to read in its entirety as follows:
"(e) Notwithstanding Section 2.4(c), upon the Effective Date,
Borrower shall withdraw the Deposited Amount from the Account and apply such
proceeds in partial prepayment of the Loans in accordance with Section 3.2.
Borrower acknowledges receipt of proper instructions to make the withdrawal and
distributions required by this Section 2.4(e)."
Subpart 3.2. Article III of the Loan Agreement is amended as set forth
in this Subpart 3.2.
(a) Section 3.2(a), second, of the Loan Agreement shall be
amended by inserting the following phrase after "second" as follows:
"in the case of a mandatory prepayment required by Section
2.4(b)," and inserting "and" at the end of such sentence.
(b) A new Section 3.2(a), third, is hereby added in
its entirety to read as follows:
"third, in the case of a mandatory prepayment required by
Section 2.4(e), the Deposited Amount shall be distributed and paid to the
Lenders pro rata, without priority of one Lender over the other, in proportion
that the unpaid principal amount of the Notes held by each Lender bears to the
aggregate unpaid principal amount of the Notes."
(c) A new Section 3.2(c) is hereby added to the Loan Agreement
to read in its entirety as follows:
"(c) Each mandatory prepayment distributed pursuant to Section
2.4(c) or Section 2.4(e) shall be applied by each holder of the Notes to the
remaining scheduled mandatory amortization payments listed in Schedule III to
the Standstill Agreement (or as revised pursuant to this Section 3.2(c)) in the
proportion that each scheduled mandatory prepayment bears to the aggregate
outstanding amortization payments so listed."
PART IV
WITHDRAWALS, CONSENTS AND WAIVERS
The following actions and consents shall be effective on (and subject
to the occurrence of) the Effective Date.
Subpart 4.1. Withdrawal. Lessee hereby withdraws its Funding Request
and hereby agrees that the Trustee may withdraw the Deposited Amount from the
Account for distribution to the Lenders in accordance with Section 3.2 (a) of
the Loan Agreement.
Subpart 4.2. Waiver. Each Lender hereby waives any Additional Costs
that may be owed by the Trustee as a result of the prepayment pursuant to
Sections 2.4(e) and 3.2(a) of the Loan Agreement.
Subpart 4.3. Standstill. Each Lender, the Agent, the Co- Agents and the
Trustee during the Standstill Period shall not exercise or instruct, authorize
or allow any other Person to exercise, any right, remedy, power or privilege
under the Lease, the Loan Agreement or any other Operative Document as a result
of Existing Events of Default; provided, however, that such agreement shall not
constitute or operate as a waiver thereof by any Lender, the Agent, the
Co-Agents or the Trustee; nor shall the failure of any Lender, the Agent, the
Co-Agents or the Trustee to exercise any right, remedy, power or privilege
during the Standstill Period preclude any right, remedy, power or privilege upon
the termination for any reason of the Standstill Period.
PART V
CONDITIONS TO THE EFFECTIVENESS OF PARTS II, III AND IV
Subpart 5.1. Effective Date. Subparts II, III, and IV shall be and
become effective upon the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Subpart 5.1.
Subpart 5.1.1. Execution of Counterparts. Agent shall have received
counterparts of this Agreement duly executed by the Trustee, Agent, Lenders, the
Co-Agents, the Lead Manager, and the Trustee (or evidence thereof satisfactory
to the Agent).
Subpart 5.1.2. Resolutions, Incumbency, etc.. Agent shall have received
a certificate, dated the date hereof, of the Secretary or Assistant Secretary of
each of the Lessee and Guarantor, respectively, as to
(i) resolutions of the Board of Directors of such
Person then in full force and effect authorizing the execution, delivery and
performance of this Agreement,
(ii) the incumbency and signatures of those officers
of such Person authorized to act with respect to this Agreement, and
(iii) the Articles or Certificate of Incorporation of
such Person as in effect on the date hereof, certified by the Secretary of State
or similarly applicable Governmental Authority) of its state of incorporation as
of a recent date and the by-laws of such Person as in effect on the date hereof,
upon which certificates each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of the Lessee or the Guarantor,
as the case may be, cancelling or amending such prior certificate, and
Subpart 5.1.3. Fees and Expenses. All reasonable fees and expenses of
Xxxxx, Xxxxx & Xxxxx in connection with the execution and delivery of this
Agreement shall have been paid in full.
Subpart 5.1.4. Opinions of Counsel. Agent shall have received an
opinion, dated as of the date hereof and addressed to the Agent, the Lenders and
the Trustee, from Xxxxxx & Silver, counsel to the Lessee and Guarantor, in form
and substance acceptable to the Agent.
Subpart 5.1.5. Accuracy of Representations of Warranties. On the
Effective Date, Agent shall have received (with copies for the Trustee and each
Lender) certificates of the Secretary or Assistant Secretary of Guarantor and
Lessee stating that all of the representations and warranties of the Lessee and
Guarantor contained in the Participation Agreement (other than the
representations contained in Section 4.1(d)(ii), (f), (u) (as to Existing Events
of Default only), (v) and (aa), as to which no representation or warranty shall
be made) shall be true and correct on and as of the Effective Date in all
material respects as though made on and as of that date.
Subpart 5.1.6. No Payment Defaults. There shall exist no event
described in Section 10.1(a) of the Lease (without taking in to account any
grace period thereunder).
Subpart 5.1.7. Instructions to Trustee. Each Lender shall have signed
the Letter of Instructions to the Trustee attached hereto as Exhibit A.
Subpart 5.2. Limitation. Except as expressly provided hereby, all other
representations, warranties, terms, covenants and conditions of the Loan
Agreement, the Original Participation Agreement and any other Operative Document
shall remain unamended and unwaived, and shall continue to be, and shall remain
in full force and effect in accordance with their respective terms. The
amendments, modifications and consents set forth herein shall be limited
precisely as provided for herein and shall not be deemed to be a waiver of,
amendment of, consent to or modification of any other term or provision of the
Loan Agreement, the Original Participation Agreement or any term or provision of
any other Operative Document, or of any transaction or further or future action
on the part of the Trustee, Lessee or any other Person which would require the
consent of the Agent or any of the Lenders under the Loan Agreement or any other
Operative Document.
PART VI
MISCELLANEOUS
Subpart 6.1. Cross-References. References in this Amendment to any Part
or Subpart are, unless otherwise specified, to such Part or Subpart of this
Agreement.
Subpart 6.2. Agreement is an Operative Document. This Agreement is an
Operative Document executed in accordance with the Participation Agreement and
Trust Agreement.
Subpart 6.3. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Subpart 6.4. Counterparts, etc.. This Agreement may be executed by the
parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
Subpart 6.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
Subpart 6.6. Guarantor Affirmation and Consent. By its signature below,
Guarantor under the Guaranty hereby acknowledges and consents to this Agreement
and the amendments to the Loan Agreement and the Original Participation
Agreement as amended hereby, and the terms and provisions hereof and
acknowledges that this Agreement, among other things, results in a prepayment
through the application of Collateral of the outstanding Existing Term Loans to
the Lenders in an aggregate principal amount equal to the Deposited Amount.
Guarantor hereby reaffirms as of the Effective Date its covenants and agreements
contained in the Guaranty, including as such covenants and agreements may be
modified by this Agreement, and further confirms that as of the Effective Date
(both before and after giving effect to the effectiveness to this Agreement),
the Guaranty is and shall continue to be in full force and effect and is hereby
ratified and confirmed in all respects except that upon the effectiveness of
this Agreement, all references in the Guaranty to the "Operative Documents",
"Participation Agreement", the "Loan Agreement", "thereunder", "thereof", or
words of like import shall mean the Loan Agreement or the Original Participation
Agreement, as the case may be, as in effect and amended by this Agreement.
Subpart 6.7. Lender Confirmation. Execution and delivery to the Agent
by a Lender of a counterpart to this Agreement shall be deemed confirmation by
such Lender that (i) all conditions precedent in Subpart 5.1 have been fulfilled
to the satisfaction of such Lender and (ii) the decision of such Lender to
execute and deliver to the Agent an executed counterpart to this Agreement was
made by such Lender independently and without reliance on the Agent or any other
Lender as to the satisfaction of any condition precedent set for in Subpart 5.1.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
STRATOSPHERE GAMING CORP.,
as Lessee
By:/s/
Name: Xxxxxx X. Xxxxxxx
Title: Vice President-Administration/
Chief Financial Officer
STRATOSPHERE CORPORATION,
as Guarantor
By:/s/
Name: Xxxxxx X. Xxxxxxx
Title: Vice President-Administration/
Chief Financial Officer
FIRST SECURITY TRUST
COMPANY OF NEVADA, not in
its individual capacity
except as expressly stated
herein, but solely as
Lessor and Trustee
By:/s/
Name: Xxxxx X. Xxxx
Title: Vice President
BA LEASING & CAPITAL CORPORATION, as
Agent and Lender
By:/s/
Name: Xxxx Xxxxxxx
Title: Vice President
BA LEASING & CAPITAL CORPORATION, as
Agent and Lender
By:/s/
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
BANK OF SCOTLAND, as Co-Agent and as
Lender
By:/s/
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION
(successor by merger to FIRST INTERSTATE
BANK OF NEVADA), as Co-Agent and as
Lender
By:/s/
Name: Xxxxxxx X. Xxxxxx
Title: Vice President/Principal
SOCIETE GENERALE, as Co-Agent and as
Lender
By:/s/
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
CREDIT LYONNAIS, LOS ANGELES BRANCH, as
Lead Manager and as Lender
By:/s/
Name: Xxxx Xxxxxxx
Title: First Vice President
THE CIT GROUP/EQUIPMENT FINANCING, INC.,
as Lender
By:/s/
Name: Xxxxxx X. Addata
Title: E.X.P.
UNITED STATES NATIONAL BANK OF OREGON,
as Lender
By:/s/
Name: Xxxx Xxxxxxxx
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF BOSTON, as
Lender
By:/s/
Name: Xxxxxxxx X. Xxxxxx
Title: Director
IMPERIAL BANK, as Lender
By:/s/
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
TRUSTMARK NATIONAL BANK, as Lender
By:/s/
Name: Xxxx X. Xxx, Xx.
Title: Vice President
FIRST SECURITY BANK, N.A., as Lender
By:/s/
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exhibit A to the Agreement
Authorization Letter
October 31, 1996
First Security Trust Company of Nevada, as Trustee
c/o First Society Bank
000 Xxx Xxxxx Xxxxxxxxx, Xxxxx
Xxx Xxxxx, X.X. 00000
Attention: Corporate Trust Department
Re: Stratosphere Gaming Corp./Capital Lease
Pursuant to Article 7 of the Loan Agreement, dated as of April 29,
1996, among First Security Trust Company of Nevada, as Borrower (in its trust
capacity), BA Leasing & Capital Corporation, as Agent, Bank of Scotland, Xxxxx
Fargo Bank National Association (successor by merger to First Interstate Bank of
Nevada), and Societe Generale, as Co-Agents, Credit Lyonnais, Los Angeles Branch
as Lead Manager and the persons named therein on Schedule I thereto as Lenders
(the "Loan Agreement"), the Lenders each do hereby instruct the Agent (i) to
direct the Trustee in its trust capacity, to sign the Agreement to which a
specimen of this letter is attached and (ii) to direct the Trustee to withdraw
the Deposited Amount from the Account and apply the proceeds in accordance with
Section 3.2(a) of the Loan Agreement.
Pursuant to Section 4.3 of the Trust Agreement, Agent hereby instructs
the Trustee to sign the Agreement to which a specimen of this letter is attached
and further instructs the Trustee to withdraw the Deposited Amount from the
Account and to apply such funds in accordance with Section 3.2 of the Loan
Agreement.
The parties hereto agree that all actions taken by the Agent or the
Trustee in connection with this authorization is covered by the indemnification
provisions set forth in Section 7.7 of the Loan Agreement and Section 5.1 of the
Trust Agreement, respectively.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Loan Agreement.
This authorization and direction letter may be executed by the parties
hereto in separate counterparts, each of which shall be an original and all of
which when taken together shall constitute one and the same instrument.
[Remainder of page intentionally left blank]
BA LEASING & CAPITAL CORPORATION,
as Agent
By:
Name:
Title:
BA LEASING & CAPITAL CORPORATION,
as Lender
By:
Name:
Title:
BANK OF SCOTLAND, as Co-Agent and
as Lender
By:
Name:
Title:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION (successor by merger to
FIRST INTERSTATE BANK OF NEVADA),
as Co-Agent and as Lender
By:
Name:
Title:
SOCIETE GENERALE, as Co-Agent and
as Lender
By:
Name:
Title:
CREDIT LYONNAIS, LOS ANGELES
BRANCH, as Lead Manager and as
Lender
By:
Name:
Title:
THE CIT GROUP/EQUIPMENT FINANCING,
INC.,
as Lender
By:
Name:
Title:
UNITED STATES NATIONAL BANK OF
OREGON,
as Lender
By:
Name:
Title:
BANK OF BOSTON, as Lender
By:
Name:
Title:
IMPERIAL BANK, as Lender
By:
Name:
Title:
TRUSTMARK NATIONAL BANK, as Lender
By:
Name:
Title:
FIRST SECURITY BANK OF UTAH, N.A.,
as Lender
By:
Name:
Title:
SCHEDULE II
BA LEASING & CAPITAL CORPORATION
BANK OF SCOTLAND
XXXXX FARGO BANK, NATIONAL ASSOCIATION (successor by merger to
FIRST INTERSTATE BANK OF NEVADA)
SOCIETE GENERALE
CREDIT LYONNAIS, LOS ANGELES BRANCH
THE CIT GROUP/EQUIPMENT FINANCING, INC.
UNITED STATES NATIONAL BANK OF OREGON
THE FIRST NATIONAL BANK OF BOSTON
IMPERIAL BANK
TRUSTMARK NATIONAL BANK
FIRST SECURITY BANK, N.A.
