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LEASE AGREEMENT
EXHIBIT A TO PARTICIPATION AGREEMENT
FORM OF LEASE AGREEMENT
dated as of May 28, 1999
between
FIRST SECURITY TRUST COMPANY OF NEVADA,
not in its individual capacity,
except as expressly stated herein,
but solely as Trustee, as Lessor,
and
STRATOSPHERE GAMING CORP.,
as Lessee.
ALL RIGHT, TITLE AND INTEREST OF LESSOR UNDER THIS LEASE AGREEMENT AND THE
PROPERTY RIGHTS SUBJECT HERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A LIEN
AND SECURITY INTEREST IN FAVOR OF, XXXXXX FINANCIAL LEASING, INC. AS AGENT
("AGENT"), UNDER THE SECURITY AGREEMENT AND ASSIGNMENT OF LEASE, DATED AS OF MAY
7, 1999, FOR THE BENEFIT OF AGENT AND THE LENDERS REFERRED TO IN SUCH SECURITY
AGREEMENT AND ASSIGNMENT OF LEASE. THIS LEASE AGREEMENT HAS BEEN EXECUTED IN
SEVERAL COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS LEASE AGREEMENT
CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL
CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS
LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY
COUNTERPART HEREOF OTHER THAN THE ORIGINAL EXECUTED "LESSOR'S COPY," WHICH SHALL
BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY
AGENT ON OR FOLLOWING THE SIGNATURE PAGE(S) THEREOF.
[LESSOR'S COPY] [LESSEE'S COPY] [COPY]
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS; LESSEE LIABILITY......................................1
ARTICLE II LEASE OF EQUIPMENT; LEASE TERM.....................................1
SECTION 2.1. Acceptance and Lease of Equipment..................................1
SECTION 2.2. Acceptance Procedure...............................................1
SECTION 2.3. Lease Term.........................................................1
ARTICLE III RENT; QUIET ENJOYMENT; NET LEASE; SUBLEASING.................................1
SECTION 3.1. Periodic Rent......................................................1
SECTION 3.2. Supplemental Rent..................................................1
SECTION 3.3. Place and Manner of Payment........................................2
SECTION 3.4. Late Payment.......................................................2
SECTION 3.5. Quiet Enjoyment....................................................2
SECTION 3.6. Net Lease; No Setoff, etc..........................................2
SECTION 3.7. No Bar 3
SECTION 3.8. Intent of the Parties..............................................3
ARTICLE IV POSSESSION AND SUBLEASING.....................................................4
ARTICLE V LEASE TERMINATION..............................................................4
SECTION 5.1. Early Termination..................................................4
SECTION 5.2. Termination and Transfer...........................................5
ARTICLE VI DISCLAIMER AND ASSIGNMENT OF WARRANTIES.......................................5
SECTION 6.1. Disclaimer of Warranties...........................................5
SECTION 6.2. Assignment of Warranties...........................................6
ARTICLE VII MAINTENANCE AND REPAIR; ALTERATIONS AND ADDITIONS............................6
SECTION 7.1. Maintenance and Repair; Compliance with Law........................6
SECTION 7.2. Alterations........................................................6
SECTION 7.3. Replacement and Substitution.......................................7
SECTION 7.4. Removal 7
SECTION 7.5. Maintenance and Repair Reports.....................................7
ARTICLE VIII USE.........................................................................7
SECTION 8.1. Use................................................................7
ARTICLE IX CASUALTY; REPLACEMENT; INSURANCE..............................................8
SECTION 9.1. Casualty...........................................................8
SECTION 9.2. Non-Casualty Losses................................................9
SECTION 9.3. Required Coverage..................................................9
SECTION 9.4. Delivery of Insurance Certificates................................10
ARTICLE X LEASE EVENTS OF DEFAULT.......................................................11
SECTION 10.1. Lease Events of Default..........................................11
SECTION 10.2. Remedies.........................................................12
SECTION 10.3. Waiver of Certain Rights.........................................13
SECTION 10.4. Power of Attorney................................................13
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TABLE OF CONTENTS
PAGE
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SECTION 10.5. Remedies Cumulative: No Waiver; Consents.........................13
ARTICLE XI [not used]..................................................................14
ARTICLE XII ASSIGNMENTS.................................................................14
ARTICLE XIII GRANT OF SECURITY INTEREST.................................................14
SECTION 13.1. Grant of Security Interest.......................................14
SECTION 13.2. Retention of Title or Proceeds in the Case of Default............14
ARTICLE XIV MISCELLANEOUS...............................................................15
SECTION 14.1. Governing Law....................................................15
SECTION 14.2. Notices..........................................................15
SECTION 14.3. Counterpart......................................................15
SECTION 14.4. Severability.....................................................15
SECTION 14.5. Successors and Assigns...........................................15
SECTION 14.6. Parties in Interest..............................................15
SECTION 14.7. Limitation of Liability..........................................15
SECTION 14.8. Captions; Table of Contents......................................16
SECTION 14.9. Schedules and Exhibits...........................................16
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LEASE
This LEASE AGREEMENT (as amended, supplemented, or otherwise modified
from time to time, this "Lease"), dated as of May 28, 1999, is between FIRST
SECURITY TRUST COMPANY OF NEVADA, not in its individual capacity, except as
expressly stated herein, but solely as Trustee under the Trust Agreement, as
Lessor ("Lessor"), and STRATOSPHERE GAMING CORP., a Nevada corporation, as
Lessee ("Lessee").
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, hereby
agree as follows.
ARTICLE I
DEFINITIONS; LESSEE LIABILITY
For all purposes hereof, the capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in Appendix 1 to that
certain Participation Agreement, dated as of May 28, 1999 (as amended,
supplemented, or otherwise modified from time to time, the "Participation
Agreement"), among Stratosphere Corporation, a Delaware corporation; Lessee;
Lessor; Lenders; and Agent. All obligations imposed on Lessee in this Lease
shall be the full recourse liabilities of Lessee.
ARTICLE II
LEASE OF EQUIPMENT; LEASE TERM
SECTION 2.1. Acceptance and Lease of Equipment. On the Advance Date,
Lessor, subject to the satisfaction or waiver of the applicable conditions set
forth in Article III of the Participation Agreement, shall lease to Lessee
hereunder, and Lessee shall lease from Lessor hereunder, the Equipment for the
Lease Term.
SECTION 2.2. Acceptance Procedure. Lessee and Lessor each hereby agrees
that the execution and delivery by Lessee on the Advance Date of a Certificate
of Acceptance pursuant to Section 3.1(1) of the Participation Agreement
(appropriately completed) shall, without further act, irrevocably constitute
acceptance by Lessee on behalf of itself and Lessor of the Equipment which is
the subject thereof for all purposes of this Lease and the other Operative
Documents.
SECTION 2.3. Lease Term. The term of this Lease (the "Lease Term")
shall commence on the Lease Commencement Date and shall expire on the third
anniversary thereof.
ARTICLE III
RENT; QUIET ENJOYMENT; NET LEASE; SUBLEASING
SECTION 3.1. Periodic Rent. During the Lease Term, Lessee shall pay to
Lessor Periodic Rent on each Payment Date in the amount determined in accordance
with the definition of "Periodic Rent".
SECTION 3.2. Supplemental Rent. During the Lease Term, Lessee shall pay
to Lessor, or to whomever shall be entitled to payment thereof as expressly
provided herein or in any other Operative Document (and Lessor hereby directs
Lessee, on behalf of Lessor, so to pay any such other Person) any and all
Supplemental Rent promptly as the same shall become due and
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payable, and, in the event of any failure on the part of Lessee to pay any
Supplemental Rent, Lessor shall have all rights, powers and remedies provided
for herein or by law or in equity or otherwise in the case of nonpayment of
Periodic Rent. Lessee hereby reaffirms its obligation to pay as Supplemental
Rent (i) an amount equal to Additional Costs as the same become due and payable,
(ii) all amounts determined to be due and payable pursuant to Section 5.1 of the
Trust Agreement in accordance with its terms and (iii) any Premium that becomes
due and payable pursuant to Section 2.4(d) of the Loan Agreement.
SECTION 3.3. Place and Manner of Payment. Rent and all other sums due
to Lessor, Agent or any Lender hereunder shall be paid in accordance with
Section 2.7 of the Participation Agreement.
SECTION 3.4. Late Payment. If any Periodic Rent shall not be paid when
due, Lessee shall pay to Lessor, or if any Supplemental Rent payable to or on
behalf or for the account of Lessor, any Lender, Agent or any other Indemnitee
is not paid when due, Lessee shall pay to whomever shall be entitled thereto, in
each case as Supplemental Rent, interest at the Overdue Rate on such overdue
amount from and including the due date (not taking into account any grace
period) thereof to but excluding the Business Day of payment thereof.
SECTION 3.5. Quiet Enjoyment. Subject to the rights of Lessor contained
in Article X and the other terms of the Operative Documents to which Lessee is a
party, Lessee shall peaceably and quietly have, hold and enjoy the Equipment for
the Lease Term, free of any claim or other action by Lessor or anyone claiming
by, through or under Lessor (other than Lessee) with respect to any matters
arising from and after the Advance Date. Such right of quiet enjoyment is
independent of, and shall not affect Lessor's rights otherwise to initiate legal
action to enforce the obligations of Lessee under this Lease.
SECTION 3.6. Net Lease; No Setoff, etc. THIS LEASE SHALL CONSTITUTE A
NET LEASE AND, NOTWITHSTANDING ANY OTHER PROVISION OF THIS LEASE, IT IS INTENDED
THAT PERIODIC RENT AND SUPPLEMENTAL RENT SHALL BE PAID WITHOUT COUNTERCLAIM,
SETOFF, DEDUCTION OR DEFENSE OF ANY KIND AND WITHOUT ABATEMENT, SUSPENSION,
DEFERMENT, DIMINUTION OR REDUCTION OF ANY KIND, AND LESSEE'S OBLIGATION TO PAY
ALL SUCH AMOUNTS, THROUGHOUT THE LEASE TERM IS ABSOLUTE AND UNCONDITIONAL. The
obligations and liabilities of Lessee hereunder shall in no way be released,
discharged or otherwise affected for any reason, including, without limitation,
to the maximum extent permitted by law, by: (a) any defect in the condition,
merchantability, design, construction, quality or fitness for use of any item of
Equipment, or any failure of any item of Equipment to comply with all Applicable
Law, including any inability to use any item of Equipment by reason of such
non-compliance; (b) any damage to, abandonment, loss, destruction, requisition,
taking or contamination of or Release from any item of Equipment; (c) any
restriction, prevention or curtailment of or interference with any use of any
item of Equipment; (d) the attachment of any Lien of any third party to any item
of Equipment; (e) any prohibition or restriction of or interference with
Lessee's use of any or all of the Equipment by any Person; (f) any change,
waiver, extension, indulgence or other action or omission or breach in respect
of any obligation or liability of or by Lessor, Agent or any Lender; (g) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to Lessee, Lessor, Agent, any
Lender
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or any other Person, or any action taken with respect to this Lease by any
trustee or receiver of Lessee, Lessor, Agent, any Lender or any other Person, or
by any court, in any such proceeding; (h) any claim that Lessee has or might
have against any Person, including, without limitation, Lessor, Agent or any
Lender; (i) any failure on the part of Lessor to perform or comply with any of
the terms of this Lease, any other Operative Document or of any other agreement
whether or not related to the transactions contemplated by the Operative
Documents; (j) any invalidity or unenforceability or disaffirmance against or by
Lessee of this Lease or any provision hereof or any of the other Operative
Documents or any provision of any thereof; (k) the impossibility of performance
by Lessee, Lessor or both; (l) any action by any court, administrative agency or
other Governmental Authority; (m) any restriction, prevention or curtailment of
or any interference with the construction or any use of any item of Equipment;
or (n) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether or not Lessee shall have notice or knowledge of any of the
foregoing. Except as specifically set forth in Articles IV or X of this Lease,
this Lease shall be noncancellable by Lessee for any reason whatsoever, and
Lessee, to the extent permitted by Applicable Law, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Lease, or to any diminution, abatement or reduction of Rent payable by Lessee
hereunder. If for any reason whatsoever this Lease shall be terminated in whole
or in part by operation of law or otherwise, except as expressly provided in
Articles IV or X of this Lease, Lessee shall, unless prohibited by Applicable
Law, nonetheless pay to Lessor (or, in the case of Supplemental Rent, to
whomever shall be entitled thereto) an amount equal to each Rent payment at the
time and in the manner that such payment would have become due and payable under
the terms of this Lease if it had not been terminated in whole or in part, and
in such case, so long as such payments are made and no Lease Event of Default
shall have occurred and be continuing, Lessor will deem this Lease to have
remained in effect. Each payment of Rent made by Lessee hereunder shall be final
and, absent manifest error in the determination of the amount thereof, Lessee
shall not seek or have any right to recover all or any part of such payment from
Lessor, Agent or any party to any agreements related thereto for any reason
whatsoever. Lessee assumes the sole responsibility for the condition, use,
operation, maintenance and management of the Equipment, and Lessor shall have no
responsibility in respect thereof and shall have no liability for damage to the
property of Lessee or any subtenant of Lessee on any account or for any reason
whatsoever other than by reason of Lessor's willful misconduct or gross
negligence or breach of any of its obligations under any Operative Document.
SECTION 3.7. No Bar. Notwithstanding the foregoing, nothing set forth
herein shall bar, limit, preclude, prevent, stay or otherwise adversely affect
Lessee's right or ability to bring and pursue any action for monetary damages
against Lessor or any other Person for any breach or alleged breach of its
obligations hereunder or under any other Operative Document.
SECTION 3.8. Intent of the Parties. Lessor and Lessee further intend
and agree that this Lease is also a conditional sales agreement and that, for
the purpose of securing Lessee's obligations for the repayment of the Loans from
Lessor and Lenders to Lessee, (i) the Lease shall also be deemed to be a
security agreement and financing statement within the meaning of Article 9 of
the UCC; (ii) the conveyance provided for hereby shall be deemed to be a grant
by Lessee to Lessor, for the benefit of Lenders, of a security interest in all
of Lessee's present and future right, title and interest in the Equipment,
including but not limited to Lessee's leasehold estate therein and all proceeds
of the conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or
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other property to secure such loans, effective on the date hereof, to have and
to hold such interests in the Equipment unto Lessor, for the benefit of Lenders
and their respective successors and assigns, forever, provided always that these
presents are upon the express condition that, if all amounts due under the Lease
and the other Operative Documents shall have been paid and satisfied in full,
then this instrument and the estate hereby granted shall cease and become void;
(iii) the possession by Lessor or Lenders of notes and such other items of
property as constitute instruments, money, negotiable documents or chattel paper
shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the UCC; and (iv)
notifications to Persons holding such property, and acknowledgments, receipts or
confirmations from financial intermediaries, bankers or agents (as applicable)
of Lessee shall be deemed to have been given for the purpose of perfecting such
security interest under Applicable Law. Lessor and Lessee shall, to the extent
consistent with the Lease, take such actions and execute, deliver, file and
record such other documents and financing statements as may be necessary to
ensure that the security interest in the Equipment created in accordance with
this Lease will be deemed to be a perfected security interest with priority over
all Liens, other than Permitted Liens, under Applicable Law and will be
maintained as such throughout the Lease Term.
ARTICLE IV
POSSESSION AND SUBLEASING
LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, SUBLEASE
ANY OR ALL OF THE EQUIPMENT OR ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS,
INTERESTS OR OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED SUBLEASE, ASSIGNMENT,
TRANSFER OR ENCUMBERING BY LESSEE SHALL BE NULL AND VOID, except as provided
hereafter in this Article IV or pursuant to a transaction permitted under
Section 5.2 of the Participation Agreement. Lessee may, with Lessor's and
Lenders' prior written consent, which shall not be unreasonably withheld or
delayed, sublease or assign the Equipment as an integrated whole, if such
sublease or assignment permitted by this Article IV (a "Sublease") (a) is
expressly subject and subordinate to all of the provisions of this Lease and the
rights and interests of Lessor and Lenders hereunder in respect of the Equipment
covered by such Sublease upon the occurrence of an Event of Default thereunder
or hereunder, (b) expressly requires the Equipment subject thereto to be
returned as directed by Lessor or the Required Lenders upon notice to such
assignee or sublessee that an Event of Default exists and (c) expressly
prohibits any further sublease or assignment of the Equipment subject thereto.
Lessee shall remain primarily liable for its obligations under this Lease
notwithstanding the existence of any such Sublease. All of Lessee's right, title
and interest in, to and under such Sublease shall be pledged by Lessee to
Lessor, as collateral for Lessee's obligations under this Lease, and Lessee
shall, at its expense, do any further act and execute, acknowledge, deliver,
file, register and record any further documents which Lessor or any Lender may
reasonably request in order to create, perfect, preserve and protect Lessor's
security interest in such Sublease. If so requested by Lessor or any Lender,
Lessee shall, within 15 days after the execution of any such Sublease, deliver a
conformed copy thereof to Lessor or such Lender.
ARTICLE V
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LEASE TERMINATION
SECTION 5.1. Early Termination. On any date after the first anniversary
of the Lease Commencement Date, Lessee may, at its option, upon at least 30
days' advance written notice to Lessor, purchase all (but not less than all) of
the Equipment for an amount equal to the sum of (i) accrued and unpaid Rent
payable on or before such date, (ii) the Lease Balance (after giving effect to
any payments pursuant to clause (i)), (iii) any Premium payable in respect of
the Notes, and (iv) all other fees and expenses and other amounts then due and
payable pursuant to this Lease and the other Operative Documents. On any date
after and during the continuance of a Lease Event of Default due to one or more
of the following only: (i) Lessee or Guarantor fails to have unrestricted Gaming
Permits, (ii) Lessee is in default (subject to any applicable grace period)
under any other indebtedness to any Person individually or in the aggregate
equal to or greater than $1,000,000, or (iii) Xxxx Xxxxx shall cease to own,
directly or indirectly, at least 51% of the voting stock of Parent on a fully
diluted basis, Lessee may, at its option, upon at least three Business Days'
advance written notice to Lessor, purchase all (but not less than all) of the
Equipment for an amount equal to the sum of (i) accrued and unpaid Rent payable
on or before such date, (ii) the Lease Balance (after giving effect to any
payments pursuant to clause (i)), and (iii) all other fees and expenses and
other amounts then due and payable pursuant to this Lease and the other
Operative Documents.
SECTION 5.2. Termination and Transfer. Upon payment in full in cash of
all amounts then due and owing hereunder on the Lease Termination Date, Lessor
shall release the Equipment then subject to the Lease on the Lease Termination
Date from the Lien created by this Lease and transfer all of Lessor's right,
title and interest thereto to Lessee ("AS IS-WHERE IS" and without any
representations or warranties and with the disclaimers set forth in Section 6.1,
except that such Equipment is free and clear of Lessor Liens), all at Lessee's
sole cost and expense.
ARTICLE VI
DISCLAIMER AND ASSIGNMENT OF WARRANTIES
SECTION 6.1. Disclaimer of Warranties. The Equipment is let by Lessor
"AS IS-WHERE IS" in its present or then condition, as the case may be, subject
to (a) any rights of any parties in possession thereof, (b) the state of the
title thereto existing at the time Lessor acquired its interest in the
Equipment, (c) any state of facts which a physical inspection might show, (d)
all Applicable Law, and (e) any violations of Applicable Law which may exist at
the commencement of the Lease Term or thereafter. Lessee has examined the
Equipment (insofar as Lessor is concerned) and has found the same to be
satisfactory. NEITHER LESSOR, AGENT NOR ANY LENDER HAS MADE OR SHALL BE DEEMED
TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE
DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE TO THE EQUIPMENT OR TO
THE VALUE, MERCHANTABILITY, HABITABILITY, CONDITION, OR FITNESS FOR USE OR
PARTICULAR PURPOSE OF THE SAME, OR ANY PART THEREOF, OR THE LACK OF INFRINGEMENT
OF THE RIGHTS OF ANY PERSON, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT OR ANY PART THEREOF, AND
NEITHER LESSOR,
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AGENT NOR ANY LENDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT
THEREIN OR THE FAILURE OF THE EQUIPMENT, OR ANY PART THEREOF, TO COMPLY WITH ANY
APPLICABLE LAWS, except that Lessor hereby represents and warrants that the
Equipment is and shall be free of Lessor Liens (such Lessor representation and
warranty being made by (x) Trust Company with respect to any Lessor Liens
attributable to Trust Company, and (y) Trustee with respect to any Lessor Liens
attributable to Trustee). Lessee has been afforded full opportunity to inspect
the Equipment, is satisfied with the results of its inspections and is entering
into this Lease solely on the basis of the results of its own inspections, and
all risks incident to the matters discussed in the preceding sentence, as
between Lessor, Agent and Lenders, on the one hand, and Lessee, on the other,
are to be borne by Lessee. The provisions of this Article VI have been
negotiated, and, except to the extent otherwise expressly stated, the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties by any of Lessor, Agent or Lenders, express or
implied, with respect to the Equipment (or any interest therein), that may arise
pursuant to any law now or hereafter in effect, or otherwise.
SECTION 6.2. Assignment of Warranties. Lessor assigns to Lessee, to the
extent assignable, all of its interest, if any, in any warranties, covenants and
representations of any manufacturer or vendor of any item of Equipment; provided
that such assignment shall be effective only when no Event of Default exists;
and provided, further, that any action taken by Lessee by reason thereof shall
be at the expense of Lessee and shall be consistent with Lessee's obligations
pursuant to this Lease.
ARTICLE VII
MAINTENANCE AND REPAIR; ALTERATIONS AND ADDITIONS
SECTION 7.1. Maintenance and Repair; Compliance with Law. Without
limiting Lessee's obligations under Section 5.11 of the Participation Agreement,
Lessee, at its own expense, shall at all times maintain the Equipment in good
and safe order, operating condition and repair (ordinary wear and tear
excepted), substantially in conformance with the maintenance and repair
standards and procedures as are set forth in the manufacturers' manuals
pertaining to the Equipment and as otherwise required to enforce claims against
each vendor or manufacturer of each item of Equipment and in compliance in all
material respects with Applicable Law and the standards imposed by insurance
policies required to be maintained hereunder with respect to the Equipment, but
in any event such Equipment shall be maintained at a standard that is no less
than the standard used by Lessee for similar equipment it owns or leases.
In addition, Lessee shall make all necessary or appropriate repairs,
replacements, substitutions and modifications in respect of the Equipment (or
any component thereof) which may be required to keep the Equipment in the
condition required above.
SECTION 7.2. Alterations.
(a) If the Equipment, any item of Equipment or individual
component thereof is required to be altered, added to, replaced, improved or
modified in order to comply with Applicable Law (a "Required Alteration"),
Lessee shall notify Lessor and diligently proceed to make such Required
Alteration at its own expense.
(b) Lessee, at its own expense, may make any alteration,
addition, replacement, improvement or modification to the Equipment or any item
of Equipment (a
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"Permitted Alteration"), or remove any part that becomes worn out, broken or
obsolete, if Lessee continues to be in compliance with Section 7.1 and such
action, when completed, will be of such character as not to materially adversely
affect (i) the current fair market value of the item of Equipment, (ii) the
originally anticipated use or function thereof, as applicable, and (iii) the
originally anticipated residual value of the item of Equipment. In addition, the
Permitted Alteration shall not cause the item of Equipment to become suitable
for use only by Lessee.
(c) All Alterations shall be completed in a commercially
reasonable manner and shall not, when completed, violate the terms of any
restriction, easement, condition, covenant or other matter affecting the
Equipment.
(d) Neither Lessor nor Agent need inquire into or confirm that
Alterations were made in conformity with these requirements.
SECTION 7.3. Replacement and Substitution. Lessee may replace an item
of Equipment subject to this Lease with a replacement item of equipment that
meets the suitability standards set forth in Section 9.1(b). Lessee may request
the replacement of an item of Equipment by delivery of a replacement notice to
Lessor at least 20 days prior to the date of the proposed substitution. Upon a
permitted substitution of equipment pursuant to this Section 7.3, Lessor shall
execute and deliver to Lessee a xxxx of sale (without representations or
warranties, except that the substituted item is free and clear of all Lessor
Liens) and such other documents as may be required to release the substituted
item from the terms of this Lease, all at Lessee's expense. Leased items of
Equipment that have been substituted or replaced pursuant to this Section 7.3
shall become the property of Lessee, and title thereto shall automatically vest
in Lessee upon such permitted substitution or replacement.
SECTION 7.4. Removal. No Required Alteration may be removed or severed
from the item of Equipment to which it is attached (unless no longer required by
Applicable Law so long as clauses (i) and (iii) below are satisfied). A
Permitted Alteration (or component thereof) may be removed by Lessee at its
expense if (i) it is readily removable without causing material damage to the
item of Equipment to which it is attached, (ii) the removal does not violate
Applicable Law and (iii) no Default or Event of Default is continuing.
SECTION 7.5. Maintenance and Repair Reports. Lessee shall keep
maintenance and repair reports in sufficient detail, and as customary for owners
or operators of casinos, to indicate the nature and date of major work done.
Such reports shall be kept on file by Lessee at its offices during the Lease
Term, and shall be made available to Lessor upon reasonable request. Lessee
shall give notice to Lessor and Agent of any Condemnation or Casualty the cost
to repair which is reasonably expected by Lessee to exceed $250,000, promptly
after Lessee has knowledge thereof.
ARTICLE VIII
USE
SECTION 8.1. Use. Without limiting Lessee's obligations under Section
5.17 of the Participation Agreement, Lessee shall use and operate the Equipment
in compliance with any and all Applicable Law. Lessee shall procure and maintain
in effect all licenses, registrations, certificates, permits, approvals and
consents required by Applicable Law or any Governmental Authority in connection
with the ownership, delivery, installation, use and operation of the Equipment.
The Equipment will at all times be and remain in the possession and control of
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Lessee, subject, however, to Articles IV and X. The Equipment shall in no event
be located outside of (i) the Resort without prior written notice to Lessor (and
in no event shall any Equipment be located on any space leased from
Strato-Retail LLC pursuant to the Strato-Retail Lease), (ii) the State of Nevada
without prior written notice to Lessor and the taking (before such relocation)
of all actions necessary to maintain the perfection of the security interest of
Lessor and Agent therein, and (iii) the continental United States.
ARTICLE IX
CASUALTY; REPLACEMENT; INSURANCE
SECTION 9.1. Casualty.
(a) If a Casualty occurs with respect to an item or items of
Equipment, Lessee shall (i) give prompt written notice of such occurrence and
the date thereof to Lessor and (ii) if such Casualty causes damage in an
aggregate amount in excess of $250,000, either (A) replace such item or items of
Equipment with respect to which the Casualty has occurred pursuant to the
following provisions of Section 9.1(b) or (B) purchase such item or items of
Equipment from Lessor, no later than the next Payment Date occurring at least 60
days after such Casualty (but in no event later than the Lease Termination
Date), at a purchase price equal to the Casualty Item Amount.
(b) If any item of Equipment is to be replaced, no later than
the earlier of (i) 60 days after the occurrence of a Casualty or (ii) the Lease
Termination Date, Lessee will substitute equipment meeting the suitability
standards set forth in this Section 9.1(b) for the item of Equipment suffering
the Casualty. To be suitable as a replacement, such replacement item of
equipment must be of the same general type, year of construction (or a later
year of construction), function, utility, state of repair and operating
condition as the item of Equipment suffering the Casualty, must have a fair
market value of not less than the fair market value (immediately preceding the
Casualty assuming that such item of Equipment had been maintained in accordance
with Article VII of the item of Equipment suffering the Casualty, and be free
and clear of any Liens other than Permitted Liens. Lessee shall cause a Xxxx of
Sale and a Certificate of Acceptance to be executed and delivered to Lessor in
order to subject such replacement item of Equipment to this Lease, and upon such
execution and delivery and the receipt by Lessor, Agent and Lenders of (i) a
certificate of insurance in accordance with Section 9.4 evidencing Lessee's
compliance with the insurance provisions of Section 9.3 with respect to such
replacement item of Equipment, and (ii) an opinion of counsel to Lessor in form
and substance reasonably satisfactory to the Agent and Lenders to the effect
that properly prepared financing statements have been filed and recorded in all
public offices where necessary to perfect the security interest of Lessor in the
replacement item of equipment, that the description of the replacement item of
equipment is adequate and that no other filing or recording or giving of notice
with or to any other Governmental Authority is necessary to perfect Lessor's
security interest in such replacement item of equipment. Such replacement item
of equipment shall be deemed an item of Equipment for all purposes hereof.
(c) If no Event of Default exists and Lessee elects to replace
any item of Equipment suffering a Casualty, Lessee shall be entitled to receive
from Lessor the Casualty Recoveries with respect thereto, to be used to
reimburse Lessee for the cost of replacement of such item of Equipment after
Lessee fully applies the Casualty Recoveries properly received by
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it in replacement of such item of Equipment pursuant to Section 9.1(d). Lessor,
subject to the rights of any insurer insuring such item of Equipment as provided
herein, shall execute and deliver to Lessee, or to its assignee or nominee, a
quitclaim xxxx of sale (without representations or warranties except that such
item of Equipment is free and clear of Lessor Liens) for such item of Equipment,
and such other documents as may be required to release such item of Equipment
from the terms of this Lease, in such form as may reasonably be requested by
Lessee. All fees, costs and expenses relating to a substitution as described
herein shall be borne by Lessee.
(d) All Casualty Recoveries in excess of $250,000 in respect of a
Casualty to any item of Equipment shall be paid directly to Lessor for deposit
into an account in the name of Lessor (the "Account"), or if paid to Lessee,
such excess funds shall be immediately paid by Lessee to Lessor. If an Event of
Default exists, Lessor may retain all Casualty Recoveries as cash collateral or,
if no Event of Default exists, Lessee shall be entitled to apply all Casualty
Recoveries in accordance with Section 9.1(c), as applicable, and any balance
remaining after compliance with Section 9.1(c), as the case may be, shall be
retained by or returned to Lessee. Lessee shall not be entitled to any Casualty
Recoveries in excess of $250,000 until it applies all amounts received in
relation to such Casualty Recovery of less than or equal to such amount in
repair or replacement of the affected item of Equipment. If Lessor receives
Casualty Recoveries in an amount that is less than $250,000, so long as no Event
of Default exists, Lessor shall promptly remit such funds to Lessee.
SECTION 9.2. Non-Casualty Losses.
(a) If any item of Equipment suffers any condemnation, loss,
physical harm or damage not constituting a Casualty (a "Non-Casualty Loss"),
Lessee shall repair such item of Equipment.
(b) All Non-Casualty Recoveries in excess of $250,000 in
respect of any Non-Casualty Loss to an item of Equipment (including any
component thereof) shall be paid directly to Lessor for deposit into the
Account. Non-Casualty Recoveries held by Lessor shall be disbursed by Lessor
from the Account to Lessee from time to time (but no more frequently than twice
per calendar month) to pay Lessee for the costs of repairing and rebuilding the
affected portions of the Equipment as required under Section 9.2(a), subject to
such reasonable disbursement conditions as Lessor may impose, including
presentation of invoices and other supporting documentation reflecting such
costs and delivery of Lien waivers; provided, however, Lessor shall have no
obligation to disburse any Non-Casualty Recoveries out of the Account at any
time that Lessor shall reasonably determine (i) that such Non-Casualty
Recoveries are not sufficient to repair and rebuild the affected portions of the
Equipment as required by Section 9.2(a) (unless additional funds which are, in
the sole discretion of Lessor, sufficient to so repair and rebuild the affected
portions of the Equipment have been deposited in the Account) or (ii) that
Lessee is not diligently performing its obligations under Section 9.2(a).
Notwithstanding the foregoing provisions of this Section 9.2(b), and provided no
Event of Default exists, if the aggregate amount of Non-Casualty Recoveries
attributable to any Non-Casualty Loss is $250,000 or less, Lessee may receive
such Non-Casualty Recoveries directly, without delivery to Lessor, provided such
Non-Casualty Recoveries are applied in accordance with the requirements of
Section 9.2(a). If Lessor receives Non-Casualty Recoveries in an amount that is
less than $250,000, so long as no Event of Default exists, Lessor shall promptly
remit such funds to Lessee. Notwithstanding any Non-Casualty Loss, all of
Lessee's obligations under this Lease (including its obligation to make all
payments of Rent as they become due) shall continue
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unabated and in full force and effect as provided in this Lease.
SECTION 9.3. Required Coverage. Lessee will keep the Equipment insured
by financially sound and reputable insurers against loss or damage of the kinds
and in the amounts customarily insured against by similar corporations engaged
in similar operations and carry such other insurance as is usually carried by
such corporations, provided that in any event Lessee will maintain:
(a) Casualty Insurance. Insurance against all risks of loss or
damage with respect to the Equipment with deductibles and in such minimum
amounts as are consistent with industry standards; provided, however, that at no
time shall the amount of coverage be less than the greater of the full
replacement value of the Equipment or 110% of the then outstanding Lease
Balance.
(b) Comprehensive General Liability Insurance. Combined single
limit insurance against claims for bodily injury, death or third party property
damage occurring on, in or about the Equipment in an amount at least equal to
$25,000,000 per occurrence with such deductibles as are carried by similarly
situated companies involved in operating similar equipment.
(c) Property Insurance. Insurance against loss or damage
covering the Equipment or any portion thereof by reason of any peril in an
amount and with such deductibles as are carried by companies similar to Lessee
owning or leasing equipment similar to the Equipment; provided, however, that at
no time shall the amount of such coverage be less than the greater of the full
replacement value of the Equipment or 110% of the then outstanding Lease
Balance.
(d) Other Insurance. Such other insurance including workmen's
compensation and business interruption insurance, in each case as generally
carried by owners of similar equipment in the State of Nevada, in such amounts
and against such risks as are then customary for equipment similar in use.
Lessee may elect to self-insure for workmen's compensation coverage provided
such insurance is obtained and maintained in accordance with all Applicable Law
of the State of Nevada.
Such insurance shall be written by reputable insurance companies that are
financially sound and Solvent and otherwise reasonably appropriate considering
the amount and type of insurance being provided by such companies. In the case
of liability insurance maintained by Lessee, each policy shall name Trust
Company, Agent, Lessor and Lenders as additional insureds. In the case of
casualty and property insurance maintained by Lessee, each policy shall name
Agent as sole loss payee. Each policy referred to in this Section 9.3 shall
provide that: (i) it will not be cancelled or its limits reduced or otherwise
modified, or allowed to lapse without renewal, except after not less than 30
days' prior written notice to each additional insured; (ii) the interests of
Trust Company, Agent, Lessor and Lenders shall not be invalidated by any act or
negligence of Lessee or any person having an interest in the Resort, or any item
of Equipment; (iii) such insurance is primary with respect to any other
insurance carried by or available to Trust Company, Agent, Lessor and Lenders;
(iv) the insurer shall waive any right of subrogation, setoff, counterclaim, or
other deduction, whether by attachment or otherwise, against Trust Company,
Agent, Lessor or Lenders; and (v) such policy shall contain a cross-liability
clause providing for coverage of Trust Company, Agent, Lessor and each Lender as
if separate policies had been issued to each of them. Lessee will notify Trustee
and Agent promptly of any policy cancellation, reduction in policy limits,
modification or amendment.
SECTION 9.4. Delivery of Insurance Certificates. On or before the
Closing Date and
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thereafter not less than 30 days prior to the expiration date of the expiring
policies which are required to be maintained pursuant to Section 9.3 and upon
written request of Lessor or Agent after a Lease Event of Default, Lessee shall
deliver to Trustee and Agent certificates of insurance satisfactory to Trustee
and Agent evidencing the existence of all insurance required to be maintained
hereunder and setting forth the respective coverages, limits of
liability, carrier, policy number and period of coverage.
ARTICLE X
LEASE EVENTS OF DEFAULT
SECTION 10.1. Lease Events of Default. The occurrence of any one or
more of the following events, whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body, shall constitute a
"Lease Event of Default":
(a) any payment of Rent or any other payment payable by Lessee
hereunder or under any other Operative Document shall not be paid when due and
such failure shall continue unremedied for a period of 3 Business Days;
(b) any representation or warranty on the part of Lessee or
Guarantor contained in any Operative Document or in any certificate, letter or
other writing or instrument furnished or delivered to Lessor, Agent or any
Lender or pursuant thereto, shall at any time prove to have been incorrect in
any material respect when made, deemed made or reaffirmed, as the case may be;
(c) Parent shall default in the performance or observance of
any term, covenant, condition or agreement on its part to be performed or
observed under Section 5.2 of the Participation Agreement, or the Guaranty;
(d) Lessee shall default in any material respect in the
performance or observance of any term, covenant, condition or agreement on its
part to be performed or observed under Section 9.3;
(e) Lessee or Parent shall default in any material respect in
the performance or observance of any other term, covenant, condition or
agreement on their part to be performed or observed hereunder or under any
Operative Document (and not constituting a Lease Event of Default under any
other clause of this Section 10.1), and such default shall continue unremedied
for a period of 30 days after: (i) written notice thereof by Lessor, Agent or
any Lender to Lessee or Guarantor; or (ii) Lessee or Parent has knowledge
thereof;
(f) (i) Lessee, Guarantor or any Subsidiary that is a
sublessee, assignee or transferee of any Equipment shall generally fail to pay,
or admit in writing its inability to pay, its debts as they become due, or shall
voluntarily commence any case or proceeding or file any petition under any
bankruptcy, insolvency or similar law or seeking dissolution, liquidation or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for itself or a substantial portion of its property, assets or
business or to effect a plan or other arrangement with its creditors, or shall
file any answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition filed against it in any bankruptcy,
insolvency or similar case or proceeding, or shall be adjudicated bankrupt, or
shall make a general assignment for the benefit of creditors, or shall consent
to, or acquiesce in the appointment of, a receiver, trustee,
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custodian or liquidator for itself or a substantial portion of its property,
assets or business; or (ii) corporate action shall be taken by Lessee, Guarantor
or any Subsidiary that is a sublessee, assignee or transferee of any Equipment
for the purpose of effectuating any of the foregoing;
(g) involuntary proceedings or an involuntary petition shall
be commenced or filed against Lessee, Guarantor or any Subsidiary that is a
sublessee, assignee or transferee of any Equipment under any bankruptcy,
insolvency or similar law or seeking the dissolution, liquidation or
reorganization of Lessee, Guarantor or any Subsidiary that is a sublessee,
assignee or transferee of any Equipment or the appointment of a receiver,
trustee, custodian or liquidator for Lessee, Guarantor or any Subsidiary that is
a sublease, assignee or transferee of any Equipment or of a substantial part of
the property, assets or business of Lessee, or any writ, judgment, warrant of
attachment, execution or similar process shall be issued or levied against a
substantial part of the property, assets or business of Lessee, Guarantor or any
Subsidiary that is a sublease, assignee or transferee of any Equipment, and such
proceedings or petition shall not be dismissed or stayed, or such writ,
judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded, within 60 days after commencement, filing or
levy, as the case may be;
(h) a Plan shall fail to maintain the minimum funding standard
required by Section 412(d) of the Code for any plan year or a waiver of such
standard is sought or granted under Section 412(d), or a Plan is or shall have
been terminated or the subject of termination proceedings under ERISA, or the
Lessee or an ERISA Affiliate has incurred a liability to or on account of a Plan
under Section 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall result
from any such event or events a Material Adverse Effect;
(i) any Operative Document or any Lien granted under any
Operative Document shall (except in accordance with its terms), in whole or in
part, terminate, cease to be effective or cease to be the legally valid, binding
and enforceable obligation of Lessee, or Guarantor, as the case may be; or
Lessee, any Guarantor, or any Affiliate of any of them shall, directly or
indirectly, contest in any manner the effectiveness, validity, binding nature or
enforceability thereof; or the Liens securing Lessee's or Trustee's obligations
under the Operative Documents shall, in whole or in part, cease to be a
perfected first priority Lien, subject only to Permitted Liens;
(j) (A) any default (subject to any applicable grace period)
occurs as to any other indebtedness to Agent or any Lender or (B) any default
(subject to any applicable grace period) occurs as to any other indebtedness to
any Person individually or in the aggregate equal to or greater than $1,000,000,
in either case under which Parent or Lessee may be obligated as borrower or
guarantor;
(k) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction against the
Parent or Lessee and such judgment or judgments (to the extent not covered by
insurance provided by a recognized insurance carrier) remain undischarged for a
period (during which execution shall not be effectively stayed) of 30 days,
provided that the aggregate of all such judgments exceeds $5,000,000;
(l) there has occurred any revocation, suspension or loss of
any Gaming Permit of Lessee or Parent (after the same shall have been obtained)
which results in the cessation of gaming business at the Casino or any other
gaming location of Lessee for a period of more than five consecutive days;
(m) [not used]
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(n) there shall have occurred a Change of Control.
SECTION 10.2. Remedies. If any Lease Event of Default exists and is
continuing, Lessor shall have the rights, options and remedies of a secured
party at law and in equity and, without limiting the foregoing, subject to
Applicable Law, Lessor may, so long as such Lease Event of Default is
continuing, do one or more of the following as Lessor in its sole discretion
shall determine, without limiting any other right or remedy Lessor may have on
account of such Lease Event of Default:
(a) Lessor may proceed by appropriate court action or actions,
either at law or in equity, to enforce performance by Lessee of the applicable
covenants of this Lease or to recover damages for the breach thereof; or
(b) Lessor may by notice in writing to Lessee terminate this
Lease, but Lessee shall remain liable as hereinafter provided; and Lessor may,
at its option, do any one or more of the following: (i) declare the Lease
Balance, all accrued but unpaid Rent (to the extent of the accrued unpaid
interest on the Notes), all other amounts then payable by Lessee under this
Lease and the other Operative Documents to be immediately due and payable, and
recover any other damages and expenses (including the costs and expenses
described in Sections 7.1 and 9.8 of the Participation Agreement) in addition
thereto which Lessor shall have sustained by reason of such Lease Event of
Default; (ii) enforce the Lien given hereunder pursuant to the UCC or any other
law; and (iii) enter upon the premises where any item of Equipment may be and
either remove such Equipment (or any portion thereof), with any damage to the
improvements upon which the Equipment may be attached to be borne by Lessee, or
take possession of the Equipment; or
(c) Lessor may require Lessee immediately to purchase the
Equipment (or the remaining portion thereof) in accordance with the provisions
of Section 5.1. Amounts received by Lessor from the Account will be applied
against Lessee's liabilities hereunder. If, pursuant to the exercise by Lessor
of its remedies pursuant to this Section 10.2, the Lease Balance and all other
amounts due and owing from Lessee under this Lease and the other Operative
Documents have been paid in full, then Lessor shall remit to Lessee any excess
amounts received by Lessor.
SECTION 10.3. Waiver of Certain Rights. If this Lease shall be
terminated pursuant to Section 10.2, Lessee waives, to the fullest extent
permitted by law, (a) any notice of the institution of legal proceedings to
obtain possession; (b) any right of redemption or repossession; (c) the benefit
of any laws now or hereafter in force exempting property from liability for rent
or for debt or limiting Lessor with respect to the election of remedies; and (d)
any other rights which might otherwise limit or modify any of Lessor's rights or
remedies under this Article X.
SECTION 10.4. Power of Attorney. Lessee unconditionally and irrevocably
appoints Lessor as its true and lawful attorney-in-fact, with full power of
substitution, to the extent permitted by Applicable Law, in its name and stead
and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery hereunder, if a Lease Event of Default occurs, whether
pursuant to foreclosure or power of sale or otherwise, and in connection
therewith to execute and deliver all such deeds, bills of sale, assignments,
releases (including releases of this Lease on the records of any Governmental
Authority) and other proper instruments as Lessor may reasonably consider
necessary or appropriate. Lessee ratifies and confirms all that such attorney or
any substitute shall lawfully do by virtue hereof. If requested by Lessor or any
purchaser, Lessee shall ratify and confirm any such lawful sale, assignment,
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transfer or delivery by executing and delivering to Lessor or such purchaser,
all deeds, bills of sale, assignments, releases and other proper instruments to
effect such ratification and confirmation as may be designated in any such
request.
SECTION 10.5. Remedies Cumulative: No Waiver; Consents. To the extent
permitted by, and subject to the mandatory requirements of, Applicable Law, each
and every right, power and remedy herein specifically given to Lessor or
otherwise in this Lease shall be cumulative and shall be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
Lessor, and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any right, power or remedy. No delay or omission by Lessor in the
exercise of any right, power or remedy or in the pursuit of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of Lessee or be an acquiescence therein. Lessor's consent to
any request made by Lessee shall not be deemed to constitute or preclude the
necessity for obtaining Lessor's consent, in the future, to all similar
requests. No express or implied waiver by Lessor of any Lease Event of Default
shall in any way be, or be construed to be, a waiver of any future or subsequent
Lease Event of Default. To the extent permitted by Applicable Law, Lessee hereby
waives any rights now or hereafter conferred by statute otherwise that may
require Lessor to sell, lease or otherwise use the Equipment in mitigation of
Lessor's damages upon the occurrence of a Lease Event of Default or that may
otherwise limit or modify any of Lessor's rights or remedies under this Article
X.
ARTICLE XI
[NOT USED]
ARTICLE XII
ASSIGNMENTS
All or any of the right, title or interest and obligations of Lessor in
and to this Lease and the rights, benefits, advantages and obligations of Lessor
hereunder, including the right to receive payment of rental or any other payment
hereunder, and the right, title and interest in and to the Equipment, may be
assigned or transferred by Lessor only in accordance with the provisions set
forth in the Trust Agreement.
ARTICLE XIII
GRANT OF SECURITY INTEREST
SECTION 13.1. Grant of Security Interest. Title to the Equipment is
held by Lessor as collateral security for the obligations of Lessee hereunder
and under the Operative Documents to which it is a party until such time as
Lessee has fulfilled all of its obligations hereunder and under such Operative
Documents. Lessee hereby assigns, grants and pledges to Lessor and Lenders a
security interest and Lien in (a) the Equipment, (b) all of Lessee's right,
title and
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interest, whether now or hereafter existing or acquired, in, to and under each
of the items, accounts, agreements listed in Section 2.1 of the Security
Agreement, and (c) the proceeds thereof (collectively, the "Lessee Collateral"),
to secure the payment of all sums due hereunder and under the Operative
Documents to which it is a party and the performance of all obligations
hereunder and the other Operative Documents to which it is a party.
SECTION 13.2. Retention of Title or Proceeds in the Case of Default. If
Lessee would be entitled to any amount (including any Casualty Recoveries [or
Non-Casualty Recoveries]) or title to any item of Equipment hereunder but for
the existence of any Event of Default or event which with the giving of notice
and/or passage of time could become an Event of Default, Lessor shall hold such
amount or portion of the item of Equipment as part of the Lessee Collateral and
shall be entitled to apply such amounts against any amounts due hereunder;
provided that Lessor shall distribute such amount or transfer the Equipment in
accordance with the other terms of this Lease if and when no Event of Default or
event which with the giving of notice and/or passage of time could become an
Event of Default exists.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Governing Law. THIS LEASE HAS BEEN DELIVERED IN THE STATE
OF NEVADA AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS LEASE SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEVADA, BUT WITHOUT REGARD TO THE CONFLICT OF LAWS RULES OF SUCH
STATE.
SECTION 14.2. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be in writing and shall be delivered and shall be deemed to have
been given in accordance with Section 9.3 of the Participation Agreement.
SECTION 14.3. Counterpart. This Lease has been executed in several
counterparts. One counterpart has been prominently marked "Lessor's Copy" and
the other counterparts have been prominently marked "Lessee's Copy" or "Copy."
Only the counterpart marked "Lessor's Copy" shall be deemed to be an original or
to be chattel paper for purposes of the UCC, and such copy shall be held by
Lessor or Agent.
SECTION 14.4. Severability. Whenever possible, each provision of this
Lease shall be interpreted in such manner as to be effective and valid under
Applicable Law; but if any provision of this Lease shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease.
SECTION 14.5. Successors and Assigns. This Lease shall be binding upon
the parties hereto and their respective successors and assigns and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
SECTION 14.6. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Lease is intended for the benefit of any Person
except the parties hereto, their successors and permitted assigns; provided that
each of Lessor and Lessee agrees that the Lenders shall benefit from all of the
provisions of this Lease applicable to them.
SECTION 14.7. Limitation of Liability. It is expressly understood and
agreed by the
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parties hereto that (a) this Lease is executed and delivered by Trust Company,
not individually or personally but solely as Trustee of the Trust, as Lessor, in
the exercise of the power and authority conferred and vested in it under the
Trust Agreement; (b) each of the representations, undertakings and agreements
herein made on the part of Lessor is made and intended not as personal
representations, undertakings and agreements by but is made and intended for the
purpose for binding only Lessor; (c) nothing herein contained shall be construed
as creating any liability on Trust Company, individually or personally to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any other
Person claiming by, through or under this Lease; and (d) under no circumstances
shall Trust Company be personally liable for the payment of any indebtedness or
expenses of Lessor or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by Lessor under this
Lease or any of the other Operative Documents; provided that Trust Company shall
be liable in its individual capacity for its own willful misconduct or gross
negligence (or negligence in the handling of funds) or for any Taxes based in or
measured by any fees, commission or compensation received by it for acting as
Trustee.
SECTION 14.8. Captions; Table of Contents. Section captions and the
table of contents used in this Lease (including the Schedules, Exhibits and
Annexes hereto) are for convenience of reference only and shall not affect the
construction of this Lease.
SECTION 14.9. Schedules and Exhibits. The Schedules and Exhibits
hereto, along with all attachments referenced in any of such items, are
incorporated herein by reference and made a part hereof.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
FIRST SECURITY TRUST COMPANY OF NEVADA, not in its
individual capacity, except as expressly stated
herein, but solely as Trustee and as Lessor
By: ______________________________________
Name Printed:
Title:
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STRATOSPHERE GAMING CORP.,
as Lessee
By: ______________________________________
Name Printed: Xxxxxx X. Xxxxxxx
Title: Vice President - Administration
Chief Financial Officer
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