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EXHIBIT C TO PARTICIPATION AGREEMENT
FORM OF TRUST AGREEMENT
dated as of May 28, 1999
between
STRATOSPHERE GAMING CORP.,
as Grantor,
and
FIRST SECURITY TRUST COMPANY OF NEVADA,
as Trustee
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TRUST AGREEMENT
TRUST AGREEMENT
THIS TRUST AGREEMENT (as amended and supplemented from time to time, this
"Trust Agreement") dated as of May 28, 1999, is entered into by and between
FIRST SECURITY TRUST COMPANY OF NEVADA, a Nevada trust company (in its
individual capacity, "Trust Company"; the Trust Company, not in its individual
capacity but solely as trustee, and any institution that shall act as a
successor trustee in accordance with the terms of Section 3.10, the "Trustee");
and Stratosphere Gaming Corp., as grantor ("Grantor"). For purposes hereof,
capitalized terms used in this Trust Agreement without specific definition
herein shall have the meanings assigned thereto in Appendix-1 to the
Participation Agreement, dated as of May 28, 1999, among the Trustee; the
Lenders identified therein; Grantor; Stratosphere Corporation, as Guarantor; and
Xxxxxx Financial Leasing, Inc., as Agent.
ARTICLE I
THE TRUST ESTATE
SECTION 1.1. Appointment, Authorization and Direction to Trustee. Grantor
hereby requests that Trust Company act as Trustee of the trust created hereunder
(the "Trust") and Trust Company hereby accepts its appointment as trustee of the
Trust, effective as of the date hereof. Lenders and Grantor authorize and direct
Trustee, subject to confirmation by Lenders of the satisfaction or waiver of all
appropriate conditions set forth in the Participation Agreement, to enter into,
execute and deliver:
(A) ON THE CLOSING DATE AND FROM TIME TO TIME THEREAFTER (INCLUDING ON THE
ADVANCE DATE), THE OPERATIVE DOCUMENTS TO WHICH THE TRUST OR TRUSTEE IS TO
BECOME A PARTY ON EACH SUCH DATE;
(B) FROM TIME TO TIME, THE NOTES IN THE MANNER AND SUBJECT TO THE TERMS AND
CONDITIONS PROVIDED IN THE PARTICIPATION AGREEMENT AND THE LOAN AGREEMENT; AND
(C) ALL OTHER DOCUMENTS, AND TO DO ALL SUCH THINGS AND TAKE ALL SUCH ACTIONS, AS
MAY BE NECESSARY OR CONVENIENT TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY
THE OPERATIVE DOCUMENTS AND TO PERFORM THE TERMS AND CONDITIONS OF THIS TRUST
AGREEMENT, ALL AS CONTEMPLATED HEREIN OR IN THE OPERATIVE DOCUMENTS.
SECTION 1.2. Declaration and Purpose.
(A) TRUSTEE HEREBY DECLARES, UNDERTAKES AND AGREES THAT IT WILL AND DOES
RECEIVE, TAKE AND HOLD ALL ESTATE, RIGHT, TITLE AND INTEREST OF TRUSTEE IN AND
TO THE TRUST ESTATE IN TRUST FOR THE USE AND BENEFIT OF GRANTOR.
(B) THE PURPOSE OF THE TRUST IS TO ACQUIRE AND HOLD TITLE TO THE EQUIPMENT AND
THE REMAINDER OF THE TRUST ESTATE AS COLLATERAL SECURITY FOR THE OBLIGATIONS OF
TRUSTEE UNDER THE LOAN AGREEMENT, TO DISCHARGE SUCH OBLIGATIONS IN ACCORDANCE
WITH THE PROVISIONS OF THE LOAN AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS AND
TO ENGAGE IN ACTIVITIES ANCILLARY AND INCIDENTAL THERETO AS SET FORTH IN THE
OPERATIVE DOCUMENTS AND AS PERMITTED BY APPLICABLE LAW. EXCEPT IN CONNECTION
WITH THE FOREGOING, TRUSTEE IN ITS CAPACITY AS TRUSTEE
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SHALL NOT (I) ENGAGE IN ANY BUSINESS OR ACTIVITY, (II) HAVE ANY PROPERTY, RIGHTS
OR INTEREST, WHETHER REAL OR PERSONAL, TANGIBLE OR INTANGIBLE, (III) INCUR ANY
LEGAL LIABILITY OR OBLIGATION, WHETHER FIXED OR CONTINGENT, MATURED OR
UNMATURED, OTHER THAN IN THE NORMAL COURSE OF THE ADMINISTRATION OF THE TRUST OR
(IV) SUBJECT ANY OF THE TRUST ESTATE TO ANY MORTGAGE, LIEN, SECURITY INTEREST OR
OTHER CLAIM OR ENCUMBRANCE, OTHER THAN IN FAVOR OF AGENT AND LENDERS PURSUANT TO
THE PROVISIONS OF THE OPERATIVE DOCUMENTS. THE TRUST IS NOT A BUSINESS TRUST.
THE SOLE PURPOSE OF THE TRUST IS TO ACQUIRE AND HOLD TITLE TO THE EQUIPMENT AND
TO COLLECT AND CONSERVE THE VALUE THEREOF AND OF THE TRUST ESTATE, SUBJECT TO
THE RIGHTS OF AGENT AND GRANTOR, FOR THE BENEFIT OF LENDERS. TRUSTEE MAY NOT
TRANSACT BUSINESS OF ANY KIND WITH RESPECT TO THE TRUST ESTATE NOR SHALL THIS
TRUST AGREEMENT BE DEEMED TO BE, OR CREATE OR EVIDENCE THE EXISTENCE OF A
CORPORATION DEFACTO OR DE JURE, OR A MASSACHUSETTS TRUST, OR ANY OTHER TYPE OF
BUSINESS TRUST, ASSOCIATION OR JOINT VENTURE BETWEEN TRUSTEE, AGENT AND LENDERS.
ARTICLE II
COLLECTIONS AND DISTRIBUTIONS
SECTION 2.1. Collections and Remittances by Trustee. Trustee agrees that,
subject to the provisions of this Trust Agreement, it will, during the term of
this Trust, administer the Trust Estate and, at the direction of Grantor, or if
the Loan Agreement has not been fully discharged Agent (the appropriate Person
permitted to give instructions being hereafter called the "Instructing Party")
may take steps to collect all sums payable to Trustee by Grantor or any other
Person under the Lease and the other Operative Documents. Trustee agrees to
distribute all proceeds received from the Trust Estate in accordance with the
Loan Agreement and Sections 2.2 and 2.3. Trustee shall make such distribution
promptly upon receipt of such proceeds (if such proceeds are available for
distribution) by Trustee, it being understood and agreed that Trustee shall not
be obligated to make such distribution until the funds for such distribution
have been received by Trustee in cash or its equivalent reasonably acceptable to
Trustee. All distributions to a Lender shall be made by Trustee to the order of
such Lender in the manner and at its address referred to in Section 9.3 of the
Participation Agreement.
SECTION 2.2. Distribution of Payments.
(A) PAYMENTS TO TRUSTEE FOR THE BENEFIT OF LENDERS AND AGENT. UNTIL THE LOAN
AGREEMENT SHALL HAVE BEEN FULLY DISCHARGED PURSUANT TO ITS TERMS, SUBJECT TO
APPLICABLE LAW, ALL RENT, INSURANCE PROCEEDS AND REQUISITION OR OTHER PAYMENTS
OF ANY KIND INCLUDED IN THE TRUST ESTATE (OTHER THAN EXCLUDED AMOUNTS) PAYABLE
TO AND RECEIVED BY TRUSTEE SHALL BE HELD BY TRUSTEE FOR THE BENEFIT OF LENDERS
AND AGENT FOR DISTRIBUTION IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE III OF
THE LOAN AGREEMENT; PROVIDED, HOWEVER, THAT ANY PAYMENTS RECEIVED BY TRUSTEE
FROM GRANTOR WITH RESPECT TO TRUSTEE'S FEES AND DISBURSEMENTS, OR PURSUANT TO
SECTION 5.1, SHALL BE RETAINED BY TRUSTEE AND APPLIED TOWARD THE PURPOSE FOR
WHICH SUCH PAYMENTS WERE MADE.
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(B) EXCLUDED AMOUNTS. ANY EXCLUDED AMOUNTS RECEIVED BY TRUSTEE AT ANY TIME SHALL
BE PROMPTLY PAID BY TRUSTEE TO THE PERSON TO WHOM SUCH EXCLUDED AMOUNTS ARE
PAYABLE UNDER THE PROVISIONS OF THE PARTICIPATION AGREEMENT OR ANY OTHER
OPERATIVE DOCUMENT.
SECTION 2.3. Effect of Sales by Trustee. Any sale of all or any part of the
Trust Estate by Trustee permitted hereunder shall bind Lenders and shall be
effective for the benefit of the purchasers thereof and their respective
successors and assigns to divest and transfer all right, title and interest
vested in Trustee or Lenders hereunder in the property so sold, and no purchaser
shall be required to inquire as to compliance by Trustee with any of the terms
hereof or to see to the application of any consideration paid for such property.
ARTICLE III
CERTAIN PROVISIONS RESPECTING TRUSTEE
SECTION 3.1. Acceptance of Trusts and Duties. Trust Company accepts the
trusts hereby created and agrees to perform the same as herein expressed and
agrees to receive and disburse all moneys constituting part of the Trust Estate
in accordance with the terms hereof.
SECTION 3.2. Limitation of Power. Trustee shall have no power, right, duty
or authority to manage, control, possess, use, sell, lease, dispose of or
otherwise deal with the Equipment or any other property at any time constituting
a part of the Trust Estate, or otherwise to take or refrain from taking any
action under or in connection with the Operative Documents, except (a) to
execute and deliver the Operative Documents to which Trustee is to be a party,
(b) to exercise and carry out or cause to be exercised and carried out the
rights, duties and obligations of Trustee hereunder, (c) to exercise and carry
out or cause to be exercised and carried out the rights, duties and obligations
of Trustee under the Operative Documents, (d) to receive, collect and distribute
and deal with the sums due under the Lease and with the Equipment and the
proceeds thereof as provided in the Lease, the Loan Agreement and in this Trust
Agreement, and (e) as expressly provided in written instructions from the
Instructing Party given pursuant to Section 3.3 or 3.4. Other than as expressly
provided in this Trust Agreement, Trustee shall not have the authority to make
management decisions relating to the Trust Estate and may take only ministerial
actions without consent of Agent. For purposes of this Trust Agreement neither
Grantor nor, if applicable, the Parent, shall have the right to direct Trustee
to exercise and carry out or cause to be exercised and carried out the rights,
duties and obligations of Trustee hereunder and under the Operative Documents
until the Loan Agreement and Notes have been paid and discharged in full.
SECTION 3.3. Notice of Event of Default. If a Responsible Officer of
Trustee has actual knowledge of a Lease Event of Default or Loan Event of
Default, Trustee shall give prompt written notice of such event to Lenders,
Grantor and Agent in the manner specified in Section 5.2. Subject to Section
3.4, Trustee shall take such action with respect to any such event as shall be
specified in written instructions from the Instructing Party. For all purposes
of this Trust Agreement and the Lease, in the absence of such actual knowledge,
Trustee shall not be deemed to have knowledge of a Lease Event of Default or a
Loan Event of Default unless any of its Responsible Officers is notified in
writing by a Lender or Agent. Trustee shall have no obligation and shall not
take any action in the event it receives no direction from the applicable
Instructing Party.
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SECTION 3.4. Action Upon Instructions. Subject to Sections 3.5, 3.6 and 5.1
and the Loan Agreement, upon the written instructions at any time and from time
to time of the Instructing Party, Trustee shall take such of the following
actions as may be specified in such instructions:
(A) GIVE SUCH NOTICE OR DIRECTION OR EXERCISE SUCH RIGHT OR POWER UNDER THE
LEASE OR ANY OTHER OPERATIVE DOCUMENT AS SHALL BE SPECIFIED IN SUCH
INSTRUCTIONS;
(B) APPROVE AS SATISFACTORY TO IT ALL MATTERS REQUIRED BY THE TERMS OF ANY
OPERATIVE DOCUMENT TO BE SATISFACTORY TO TRUSTEE;
(C) UPON EXPIRATION OF THE LEASE TERM AND DISCHARGE IN FULL OF THE LOAN
AGREEMENT AND THE NOTES PURSUANT TO ITS TERMS, CONVEY ALL OF TRUSTEE'S RIGHT,
TITLE AND INTEREST IN AND TO THE TRUST ESTATE (INCLUDING THE EQUIPMENT) TO
GRANTOR; AND
(D) ANY OTHER ACTION AS SPECIFIED BY THE INSTRUCTING PARTY.
SECTION 3.5. Certain Duties and Responsibilities of Trustee.
(A) EXCEPT DURING THE CONTINUANCE OF A LEASE EVENT OF DEFAULT OR A LOAN EVENT OF
DEFAULT:
(I) TRUSTEE UNDERTAKES TO PERFORM SUCH DUTIES AND ONLY SUCH
DUTIES AS ARE SPECIFICALLY SET FORTH HEREIN AND IN THE OTHER OPERATIVE
DOCUMENTS, AND NO IMPLIED COVENANTS OR OBLIGATIONS SHALL BE READ INTO
THIS TRUST AGREEMENT AGAINST TRUSTEE, AND TRUSTEE AGREES THAT IT SHALL
NOT, NOR SHALL IT HAVE A DUTY TO, MANAGE, CONTROL, USE, SELL, MAINTAIN,
INSURE, REGISTER, LEASE, OPERATE, MODIFY, DISPOSE OF OR OTHERWISE DEAL
WITH THE EQUIPMENT OR ANY OTHER PART OF THE TRUST ESTATE IN ANY MANNER
WHATSOEVER, EXCEPT AS REQUIRED BY THE OPERATIVE DOCUMENTS AND AS
OTHERWISE PROVIDED HEREIN; AND
(II) IN THE ABSENCE OF BAD FAITH OR GROSS NEGLIGENCE ON ITS
PART, TRUSTEE MAY CONCLUSIVELY RELY, AS TO THE TRUTH OF THE STATEMENTS
AND THE CORRECTNESS OF THE OPINIONS EXPRESSED THEREIN, UPON
CERTIFICATES OR OPINIONS FURNISHED TO TRUSTEE AND CONFORMING TO THE
REQUIREMENTS OF THIS TRUST AGREEMENT.
(B) NO PROVISION OF THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, INCLUDING,
WITHOUT LIMITATION, ARTICLES VII AND VIII OF THE PARTICIPATION AGREEMENT, SHALL
BE CONSTRUED TO RELIEVE TRUST COMPANY IN ITS INDIVIDUAL CAPACITY OR TRUSTEE OF
LIABILITY FOR ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR ITS NEGLIGENCE IN
THE HANDLING OF FUNDS, IT BEING UNDERSTOOD THAT, WITHOUT LIMITING THE FOREGOING:
(I) TRUSTEE SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT MADE
IN GOOD FAITH BY AN RESPONSIBLE OFFICER OF TRUSTEE, UNLESS IT SHALL BE
PROVED THAT TRUSTEE WAS GROSSLY NEGLIGENT;
(II) TRUSTEE SHALL NOT BE LIABLE WITH RESPECT TO ANY ACTION
TAKEN OR OMITTED TO BE TAKEN BY IT IN GOOD FAITH IN ACCORDANCE WITH THE
DIRECTION OF THE INSTRUCTING
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PARTY PURSUANT TO THE EXPRESS PROVISIONS HEREOF; IT BEING UNDERSTOOD
THAT TRUSTEE SHALL BE LIABLE IF IT TAKES ANY ACTION PURSUANT TO
INSTRUCTIONS FROM GRANTOR PRIOR TO RECEIVING NOTICE FROM AGENT THAT THE
LOAN AGREEMENT HAS BEEN DISCHARGED IN FULL PURSUANT TO ITS TERMS;
(III) NO PROVISION HEREOF SHALL REQUIRE TRUST COMPANY IN ITS
INDIVIDUAL CAPACITY TO EXPEND OR RISK ITS OWN FUNDS IN THE PERFORMANCE
OF ANY OF ITS DUTIES HEREUNDER OR UNDER ANY OF THE OTHER OPERATIVE
DOCUMENTS, OR IN THE EXERCISE OF ANY OF ITS RIGHTS OR POWERS; AND
(IV) TRUST COMPANY SHALL BE LIABLE FOR (A) ANY TAXES ON, WITH
RESPECT TO OR MEASURED BY ANY AMOUNTS PAID TO IT AS COMPENSATION FOR
SERVICES AS TRUSTEE HEREUNDER OR OTHERWISE UNDER THE OPERATIVE
DOCUMENTS, (B) ACTS OR OMISSIONS NOT RELATED TO THE TRANSACTIONS
CONTEMPLATED BY THE OPERATIVE DOCUMENTS, (C) THE INACCURACY OF
REPRESENTATIONS AND WARRANTIES MADE BY TRUST COMPANY IN ITS INDIVIDUAL
CAPACITY IN THE PARTICIPATION AGREEMENT OR ANY CERTIFICATE OR DOCUMENT
DELIVERED PURSUANT THERETO, AND (D) ITS NEGLIGENCE IN THE HANDLING OF
FUNDS.
(C) TRUSTEE SHALL NOT BE REQUIRED TO TAKE ANY ACTION HEREUNDER OR UNDER THE
OTHER OPERATIVE DOCUMENTS, NOR SHALL ANY OTHER PROVISION OF THIS TRUST AGREEMENT
OR ANY OTHER OPERATIVE DOCUMENT BE DEEMED TO IMPOSE A DUTY ON TRUSTEE TO TAKE
ANY ACTION, IF TRUSTEE DETERMINES, OR IS ADVISED BY COUNSEL, THAT SUCH ACTION IS
LIKELY TO RESULT IN PERSONAL LIABILITY OR IS CONTRARY TO APPLICABLE LAW OR THE
OPERATIVE DOCUMENTS.
(D) WHETHER OR NOT THEREIN EXPRESSLY SO PROVIDED, EVERY PROVISION OF THIS TRUST
AGREEMENT RELATING TO THE CONDUCT OR AFFECTING THE LIABILITY OF OR AFFORDING
PROTECTION TO TRUSTEE SHALL BE SUBJECT TO THE PROVISIONS OF THIS SECTION 3.5.
SECTION 3.6. Certain Rights of Trustee. Except as otherwise provided in
Section 3.5:
(A) TRUSTEE MAY RELY AND SHALL BE PROTECTED IN ACTING OR REFRAINING FROM ACTING
UPON ANY SIGNATURE, RESOLUTION, CERTIFICATE, STATEMENT, INSTRUMENT, OPINION,
REPORT, NOTICE, REQUEST, DIRECTION, CONSENT, ORDER OR OTHER PAPER OR DOCUMENT
REASONABLY BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN SIGNED OR PRESENTED BY
THE PROPER PARTY OR PARTIES;
(B) ANY REQUEST, DIRECTION OR AUTHORIZATION BY ANY PARTY HERETO OR TO ANY OTHER
OPERATIVE DOCUMENT SHALL BE SUFFICIENTLY EVIDENCED BY A REQUEST, DIRECTION OR
AUTHORIZATION IN WRITING, DELIVERED TO TRUSTEE AND SIGNED IN THE NAME OF SUCH
PARTY BY THE PRESIDENT, ANY VICE PRESIDENT, THE TREASURER OR THE SECRETARY OF
SUCH PARTY, AS THE CASE MAY BE, AND ANY RESOLUTION OF THE BOARD OF DIRECTORS OR
COMMITTEE THEREOF OF SUCH PARTY SHALL BE SUFFICIENTLY EVIDENCED BY A COPY OF
SUCH RESOLUTION CERTIFIED BY THE SECRETARY OR AN ASSISTANT SECRETARY OF SUCH
PARTY, AS THE CASE MAY BE, TO HAVE BEEN DULY ADOPTED AND TO BE IN FULL FORCE AND
EFFECT ON THE DATE OF SUCH CERTIFICATION, AND DELIVERED TO TRUSTEE;
(C) WHENEVER IN THE ADMINISTRATION OF THIS TRUST AGREEMENT TRUSTEE DEEMS IT
DESIRABLE THAT A MATTER BE PROVED OR ESTABLISHED BEFORE TAKING, SUFFERING OR
OMITTING ANY ACTION HEREUNDER, TRUSTEE MAY IN GOOD FAITH RELY UPON A CERTIFICATE
IN WRITING, DELIVERED TO
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TRUSTEE AND SIGNED BY THE PRESIDENT, ANY VICE PRESIDENT, ANY ASSISTANT VICE
PRESIDENT, THE TREASURER, ANY ASSISTANT TREASURER, THE SECRETARY OR ANY
ASSISTANT SECRETARY OF A LENDER;
(D) TRUSTEE MAY EXERCISE ITS POWERS AND PERFORM ITS DUTIES BY OR THROUGH SUCH
ATTORNEYS, AGENTS AND SERVANTS AS IT MAY APPOINT, AND IT SHALL NOT BE LIABLE FOR
THE CONDUCT OR MISCONDUCT OF SUCH ATTORNEYS, AGENTS AND SERVANTS, PROVIDED, THAT
TRUSTEE SHALL USE DUE CARE IN THE APPOINTMENT OF SUCH ATTORNEYS, AGENTS AND
SERVANTS; AND IT SHALL BE ENTITLED TO THE ADVICE OF COUNSEL AND SHALL BE
PROTECTED BY THE ADVICE OF SUCH COUNSEL IN ANYTHING DONE OR OMITTED TO BE DONE
IN ACCORDANCE WITH SUCH ADVICE IF SUCH ADVICE PERTAINS TO SUCH MATTERS AS
TRUSTEE MAY REASONABLY PRESUME TO BE WITHIN THE SCOPE OF SUCH COUNSEL'S AREA OF
EXPERTISE;
(E) TRUSTEE SHALL NOT BE UNDER ANY OBLIGATION TO EXERCISE ANY OF THE RIGHTS OR
POWERS VESTED IN IT BY THIS TRUST AGREEMENT AT THE REQUEST OR DIRECTION OF THE
INSTRUCTING PARTY, UNLESS THE INSTRUCTING PARTY OFFERS TO TRUSTEE REASONABLE
SECURITY OR INDEMNITY AGAINST THE COSTS, EXPENSES (INCLUDING REASONABLE FEES AND
EXPENSES OF ITS LEGAL COUNSEL) AND LIABILITIES WHICH MAY BE INCURRED BY IT IN
COMPLIANCE WITH SUCH REQUEST OR DIRECTION;
(F) PROVIDED NO RESPONSIBLE OFFICER HAS ACTUAL KNOWLEDGE OF THE INACCURACY
THEREOF, TRUSTEE SHALL NOT BE BOUND TO MAKE ANY INVESTIGATION INTO THE FACTS OR
MATTERS STATED IN ANY RESOLUTION, CERTIFICATE, STATEMENT, INSTRUMENT, OPINION,
REPORT, NOTICE, REQUEST, DIRECTION, CONSENT OR OTHER PAPER OR DOCUMENT, BUT
TRUSTEE, IN ITS DISCRETION, MAY MAKE SUCH FURTHER INQUIRY OR INVESTIGATION INTO
SUCH FACTS OR MATTERS AS IT MAY SEE FIT, AND, IF TRUSTEE DETERMINES TO MAKE SUCH
FURTHER INQUIRY OR INVESTIGATION, IT SHALL BE ENTITLED TO EXAMINE THE BOOKS AND
RECORDS OF GRANTOR RELATED TO THE EQUIPMENT TO REASONABLY DETERMINE WHETHER
GRANTOR IS IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE LEASE AND TO
EXAMINE THE EQUIPMENT, BY AGENT OR ATTORNEY, ALL UPON THE TERN AND CONDITIONS
CONTAINED IN THE LEASE; AND
(G) WITHOUT LIMITING THE GENERALITY OF SECTION 3.5, TRUSTEE SHALL NOT HAVE ANY
DUTY (I) TO SEE TO ANY RECORDING OR FILING OF THE OPERATIVE DOCUMENTS OR ANY
UNIFORM COMMERCIAL CODE FINANCING STATEMENTS OR TO SEE TO THE MAINTENANCE OF ANY
SUCH RECORDING OR FILING, (II) TO SEE TO ANY INSURANCE ON THE EQUIPMENT OR TO
EFFECT OR MAINTAIN ANY SUCH INSURANCE, WHETHER OR NOT GRANTOR IS IN DEFAULT WITH
RESPECT THERETO, OTHER THAN TO FORWARD PROMPTLY TO LENDERS COPIES OF ALL
CERTIFICATES, REPORTS AND OTHER WRITTEN INFORMATION IT RECEIVES FROM GRANTOR
PURSUANT TO THE LEASE (UNLESS LENDERS ARE TO RECEIVE SUCH CERTIFICATES, REPORTS
AND OTHER WRITTEN INFORMATION DIRECTLY FROM GRANTOR), (III) TO SEE TO THE
PAYMENT OR DISCHARGE OF ANY TAX, ASSESSMENT OR OTHER GOVERNMENT CHARGE OR ANY
LIEN OWING WITH RESPECT TO, ASSESSED OR LEVIED AGAINST ANY PART OF THE TRUST
ESTATE, OTHER THAN LESSOR LIENS ATTRIBUTABLE TO IT, (IV) TO CONFIRM OR VERIFY
ANY FINANCIAL STATEMENTS OF GRANTOR OR ANY OTHER PERSON, OR (V) TO INSPECT THE
EQUIPMENT AT ANY TIME OR ASCERTAIN OR INQUIRE AS TO THE PERFORMANCE OR
OBSERVANCE OF ANY OF GRANTOR'S OR ANY OTHER PERSON'S (OTHER THAN ITS OR TRUST
COMPANY'S) COVENANTS UNDER THE OPERATIVE DOCUMENTS WITH RESPECT TO THE
EQUIPMENT.
SECTION 3.7. NO REPRESENTATIONS OR WARRANTIES AS TO THE
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EQUIPMENT OR DOCUMENTS. TRUST COMPANY IS NOT A BUILDER, DEVELOPER OR
MANUFACTURER OF THE EQUIPMENT OR A DEALER IN OR VENDOR OF SIMILAR EQUIPMENT AND
HAS NOT INSPECTED THE EQUIPMENT BEFORE DELIVERY TO AND ACCEPTANCE BY GRANTOR.
TRUST COMPANY HAS NOT MADE NOR DOES IT MAKE (A) ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO ANY ENVIRONMENTAL MATTER OR CONDITION, VALUE, DESIGN,
OPERATION, CONDITION, QUALITY, DURABILITY, SUITABILITY, MERCHANTABILITY OR
FITNESS FOR USE OR FITNESS FOR A PARTICULAR PURPOSE, ABSENCE OF LATENT OR OTHER
DEFECTS WHETHER OR NOT DISCOVERABLE, ABSENCE OF ANY INFRINGEMENT OF ANY PATENT,
TRADEMARK OR COPYRIGHT, OR ANY OTHER WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE EQUIPMENT, OR AS TO TITLE THERETO, OR (B) ANY REPRESENTATION
OR WARRANTY AS TO THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THE OPERATIVE
DOCUMENTS (OTHER THAN AS TO THIS TRUST AGREEMENT AGAINST TRUST COMPANY), OR AS
TO THE CORRECTNESS OF ANY STATEMENT CONTAINED IN ANY THEREOF, EXCEPT AS SET
FORTH IN SECTION 4.3 OF THE PARTICIPATION AGREEMENT.
SECTION 3.8. Status of Moneys Received. All moneys received by Trustee or
Trust Company under or pursuant to this Trust Agreement or any other Operative
Document (other than Excluded Amounts to be paid to Trust Company) shall
constitute trust funds for the purpose for which they were paid or are held, but
need not be segregated in any manner from any other moneys and may be deposited
by Trustee under such conditions as may be prescribed or permitted by Applicable
Law for trust funds, or, at the direction of Agent may be invested in Cash
Equivalents.
SECTION 3.9. Permitted Activities. Trustee or any corporation in or with
which Trustee may be interested or affiliated or any officer or director of any
such corporation may have commercial relations and otherwise deal with Grantor
or any other Person or with any other corporation having relations with Grantor
to the full extent permitted by Applicable Law.
SECTION 3.10. Resignation or Removal of Trustee. Trust Company or any
successor thereto as Trustee may resign as Trustee at any time without cause by
giving at least 60 days' prior written notice to each Lender, Agent and Grantor,
and Agent may at any time remove Trustee without cause by an instrument in
writing delivered to Trustee, Agent and Grantor, such resignation or removal to
be effective on the later of the date specified in such notice or written
instrument or the date on which a successor trustee is appointed hereunder. With
the written consent of Agent and, so long as a Lease Event of Default shall not
have occurred and be continuing, Grantor, Agent may, at any time upon 30 days'
prior written notice to Agent and Grantor by an instrument in writing, appoint a
successor trustee; provided, however, that any successor trustee shall be a
national banking association authorized to do business in Nevada, a banking
corporation formed or regulated under the laws of Nevada or a wholly owned
subsidiary of such a banking association or corporation that is formed or
regulated under the laws of Nevada that has a combined capital and surplus of at
least $100,000,000, and provided, further, that the Nevada Gaming Commission
shall not have determined that such successor trustee is unsuitable. If Agent do
not appoint a successor trustee within 30 days after the giving of notice of
such resignation or removal, Agent or Trustee may apply to any court of
competent jurisdiction to appoint a successor trustee to act until a successor
or successors is appointed by Agent as above
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provided. Any successor trustee so appointed by such court shall immediately and
without further act be superseded by a successor trustee appointed by Agent
within one year from the date of the appointment by such court.
SECTION 3.11. Estate and Rights of Successor Trustee. Any successor
Trustee, whether appointed by Agent or a court, shall execute and deliver to the
predecessor Trustee an instrument accepting such appointment, and thereupon each
successor Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trusts of the predecessor
Trustee in the trusts hereunder with like effect as if originally named Trustee
herein, but nevertheless upon the written request of such successor Trustee,
such predecessor Trustee shall execute and deliver an instrument transferring to
such successor Trustee, upon the trusts herein expressed, all the estates,
properties, rights, powers and trusts of such predecessor Trustee, and such
predecessor Trustee shall duly assign, transfer, deliver and pay over to such
successor Trustee any property or moneys then held by such predecessor Trustee
upon the trusts herein expressed.
SECTION 3.12. Merger or Consolidation of Trustee. Any corporation into
which Trust Company serving as Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which Trust Company serving as Trustee is a party, or any corporation to which
substantially all of the business of Trustee may be transferred, shall be a
successor trustee under this Trust Agreement without further act.
SECTION 3.13. Co-Trustees. At any time, for the purpose of meeting any
legal requirements of any jurisdiction in which any part of the Trust Estate may
at the time be located, the Instructing Party and Trustee jointly shall have the
power, and shall execute and deliver all instruments, to appoint one or more
Persons approved by Agent and Trustee, to act as co-trustee, or co-trustees,
jointly with Trustee, or separate trustee or separate trustees, of all or any
part of the Trust Estate, and to vest in such Person or Persons, in such
capacity, such title to the Trust Estate or any part thereof, and such rights,
powers, duties, trusts or obligations as Agent and Trustee may consider
necessary or desirable. If the Instructing Party has not joined in such
appointment within 15 days after the receipt by it of a request to do so,
Trustee alone shall have power to make such appointment. The Trustee shall not
be liable for any act or omission of any co-trustee or separate trustee
appointed under this Section 3.13.
SECTION 3.14. Books and Records. Trustee shall be responsible for keeping
the customary books and records relating to the receipt and disbursement of all
moneys actually received and disbursed by it.
ARTICLE IV
TERMINATION OF AND AMENDMENTS TO TRUST
SECTION 4.1. Termination. The Trust created and provided for hereby
shall cease and be terminated in any one of the following events, whichever
shall first occur:
(A) IF AGENT SHALL BY NOTICE IN WRITING TO TRUSTEE, LENDERS AND GRANTOR REVOKE
AND TERMINATE THE TRUST ON AND AS OF A DATE STATED IN SUCH NOTICE, WHICH DATE
SHALL NOT BE LESS THAN TEN NOR MORE THAN THIRTY DAYS FROM THE DATE OF MAILING
SUCH NOTICE, THEN ON THE DATE SPECIFIED IN SUCH NOTICE THE TRUST CREATED AND
PROVIDED FOR HEREBY SHALL CEASE AND TERMINATE, PROVIDED, HOWEVER, THAT THIS
TRUST SHALL NOT BE SUBJECT TO REVOCATION OR TERMINATION BY LENDERS PRIOR TO THE
PAYMENT IN FULL AND DISCHARGE OF THE LOANS AND ALL
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OTHER INDEBTEDNESS SECURED BY THE OPERATIVE DOCUMENTS AND THE TERMINATION OF THE
OPERATIVE DOCUMENTS AND THE RELEASE OF THE LIENS GRANTED THEREBY; OR
(B) THE SALE OR OTHER FINAL DISPOSITION BY TRUSTEE OF ALL PROPERTY CONSTITUTING
THE TRUST ESTATE AND THE FINAL DISPOSITION BY TRUSTEE OF ALL MONEYS OR OTHER
PROPERTY OR PROCEEDS CONSTITUTING PART OF THE TRUST ESTATE IN ACCORDANCE WITH
THE TEXT HEREOF AND SUBJECT TO ALL APPLICABLE LAW; PROVIDED, HOWEVER, THAT THE
TRUST ESTATE SHALL NOT BE SUBJECT TO SALE OR OTHER FINAL DISPOSITION BY TRUSTEE
PRIOR TO THE PAYMENT IN FULL AND DISCHARGE OF THE LOANS AND ALL OTHER
INDEBTEDNESS SECURED BY THE OPERATIVE DOCUMENTS AND THE RELEASE OF THE OPERATIVE
DOCUMENTS AND THE LIENS GRANTED THEREBY AND THE PAYMENT IN FULL OF THE
COMMITMENT AMOUNTS; OR
(C) 110 YEARS AFTER THE DATE HEREOF.
SECTION 4.2. Distribution of Trust Estate Upon Termination. Upon any
termination of this Trust pursuant to Section 4.1, Trustee shall convey the
Trust Estate to such purchaser or purchasers thereof or other Persons entitled
thereto and for such amount and on such terms as are specified in written
instructions from Agent delivered to Trustee before the date of termination;
provided that (a) if at the time of any termination the Lease remains in force
and effect, then the Trust Estate shall be conveyed as a unit subject to the
Lease and not in parcels, and (b) if such written instructions are not delivered
to Trustee on or before the date of termination, Trustee shall transfer title to
the Trust Estate to Lenders. Upon making such transfer or sale Trustee shall be
entitled to immediate receipt of any sums due and owing to Trustee, including,
without limitation, any expenses (including reasonable attorneys' fees and
expenses) incurred pursuant hereto or as compensation for services rendered
hereunder and not theretofore paid and Trustee shall be discharged and free of
any further liability hereunder subject to Section 3.5(c).
SECTION 4.3. Amendments. Subject to Section 5.8 hereof and Section 9.5
of the Participation Agreement, at any time and from time to time, upon the
written request of the Instructing Party, (i) Trustee shall execute a supplement
hereto for the purpose of adding provisions to, or changing or eliminating
provisions of, this Trust Agreement as specified in such request, and (ii)
Trustee shall enter into or consent to such written amendment of or supplement
to the other Operative Documents as Grantor or Agent, as the case may be, may
agree to and as may be specified in such request, or execute and deliver such
written waiver or modification of the terms of the Operative Documents as may be
specified in such request; provided, however, if in the reasonable opinion of
Trustee, any document required to be executed by it pursuant to this Section 4.3
adversely affects any right or duty of, or immunity or indemnity in favor of,
Trustee under this Trust Agreement or the other Operative Documents, Trustee may
in its reasonable discretion decline to execute such document.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Compensation and Indemnification. Trustee shall receive
reasonable compensation for its services hereunder from Grantor and shall be
reimbursed by Grantor for Trustee's reasonable fees and expenses (including the
reasonable disbursements and fees of
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counsel). If a Lease Event of Default or a Loan Event of Default shall have
occurred and be continuing and Trustee is required pursuant to this Trust
Agreement to take any action in connection therewith, it shall be reimbursed by
Grantor for any expenses it may incur in relation to taking any such action.
Grantor shall reimburse and indemnify and save Trustee harmless from and against
any and all losses, damages, liabilities, claims, actions, suits, obligations,
penalties, demands, disbursements and expenses, including taxes, counsel fees,
and including tort claims for which Trustee is strictly liable, which may be
asserted against or incurred by reason of Trust Company being Trustee or acting
as Trustee hereunder or under the other Operative Documents or the performance
or enforcement of any of the terms hereof, or arising out of or relating to this
Trust Agreement or the other Operative Documents or the Equipment, the Trust
Estate or the Rent and other sums payable therefor, or the building,
manufacture, purchase, installation, acceptance, rejection, ownership, delivery,
lease, possession, use, operation, condition, sale, return or other disposition
of the Equipment or in any way relating to or arising out of the Trust Estate or
the action or the inaction of Trustee hereunder or by reason of any occurrence
while so acting. In no event shall Grantor be so obligated in respect of any
such losses, damages, liabilities, claims, actions, suits, obligations,
penalties, demands, disbursements and expenses, including taxes and counsel fees
pursuant to this Section 5.1, arising from or as a result of (a) the willful
misconduct or gross negligence of Trust Company or the negligence of Trust
Company in handling of funds, (b) any taxes on, with respect to or measured by
any amounts paid to Trust Company as compensation for services as Trustee
hereunder or otherwise under the Operative Documents, or (c) the inaccuracy of
representations and warranties made by Trust Company in its individual capacity
in the Participation Agreement or in any certificate or documents delivered
pursuant thereto. The provisions of this Section 5.1 (other than the
requirements for compensation of Trustee after its resignation, which shall
terminate upon the resignation or removal of Trustee) shall continue in force
and effect notwithstanding the termination of this Trust, the resignation or
removal of Trustee or the obligation of any other party to any other Operative
Document to make any payment to Trustee which Grantor is required to make
pursuant to this Section 5.1.
SECTION 5.2. Notices. All notices and communications provided for herein
shall be in writing and shall be deemed to have been given in accordance with
Section 9.3 of the Participation Agreement. Trustee shall deliver to each Lender
promptly after receipt copies of all notices, certificates and reports delivered
to it pursuant to any Operative Document.
SECTION 5.3. GOVERNING LAW. THIS TRUST IS BEING CREATED IN THE STATE OF
NEVADA AND THE VALIDITY, CONSTRUCTION AND ALL RIGHTS UNDER THIS TRUST SHALL BE
GOVERNED BY THE LAWS OF THAT STATE, EXCLUDING ALL CHOICE OF LAWS AND CONFLICT OF
LAWS RULES OF SUCH STATE. IF ANY PROVISION OF THIS TRUST SHALL BE INVALID OR
UNENFORCEABLE, THE REMAINING PROVISIONS HEREOF SHALL CONTINUE TO BE FULLY
EFFECTIVE, PROVIDED THAT SUCH REMAINING PROVISIONS DO NOT INCREASE THE
OBLIGATIONS OR LIABILITIES OF TRUSTEE.
SECTION 5.4. Tax Reports: Information Reporting: Withholding Taxes. If any
tax report or tax return is required to be made by Trustee with respect to the
Trust Estate and Grantor is not required to prepare and file the same pursuant
to the Leases, each Lender will prepare such tax report or return in respect of
its interest in the Trust and deliver a copy thereof to Trustee. Trustee agrees
to promptly forward to each Lender any communications with respect to taxes
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pertaining to the Trust Estate received by Trustee from tax authorities or from
Grantor.
SECTION 5.5. Headings. The headings of the various Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 5.6. Successors and Assigns. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the parties hereto
and their respective successors and assigns. Grantor may not assign, transfer or
otherwise dispose of its interest in the Trust, except as expressly contemplated
in the Operative Documents.
SECTION 5.7. Severability. Any provision of this Trust Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition on unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.
SECTION 5.8. Only Written Waivers. No term or provision of this Trust
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party or other person against whom
enforcement of the change, waiver, discharge or termination is sought; and any
waiver of the terms hereof shall be effective only in the specific instance and
for the specific purpose given.
SECTION 5.9. Counterparts. This instrument may be simultaneously executed
in any number of counterpart, each of which when so executed shall be deemed to
be an original, and such counterparts together shall constitute and be one and
the same instrument.
SECTION 5.10. Rights in Trust Agreement. Except as expressly provided to
the contrary in the Operative Documents, nothing in this Trust Agreement,
whether express or implied, shall be construed to give any Person other than
Trustee and each Lender and their respective successors and assigns, any legal
or equitable right, remedy or claim under or in respect of this Trust Agreement.
SECTION 5.11. Payment of Trustee Fees, Costs and Expenses. Grantor shall
pay to Trustee for its services hereunder such fees and expenses as heretofore
have been agreed upon by Trustee and Grantor and shall also pay to Trustee such
fees and expenses as may be reasonably incurred by Trustee as a result of taking
any direction of the Instructing Party. Trustee agrees that it shall have no
right against Lenders or Agent for any fee as compensation for its services
hereunder, except as hereafter expressly agreed upon by Lenders, Agent and
Trustee.
SECTION 5.12. Identification of Trust. The name of the trust created hereby
is the STRATOSPHERE 1999-1 TRUST.
(Signature page follows]
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IN WITNESS WHEREOF, Trust Company and Grantor have caused this Trust
Agreement to be duly executed all as of the day and year first above written.
FIRST SECURITY TRUST COMPANY OF NEVADA, as
Trust Company and as Trustee
By:
-------------------------------
Name:
Title:
STRATOSPHERE GAMING CORP., as Grantor
By:
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President-Administration/
Chief Financial Officer
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