SUBLEASE AGREEMENT
dated as of September 25, 1996
between
STATION CASINOS, INC.,
as Sublessor
and
SUNSET STATION, INC.,
as Sublessee.
COUNTERPART NO. __ OF __ SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO
THE EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM
COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH
THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; SUBLESSEE LIABILITY . . . . . . . . . . . . . 1
ARTICLE II SUBLEASE OF EQUIPMENT; SUBLEASE TERM . . . . . . . . . . . 1
2.1 Acceptance and Sublease of Equipment . . . . . . . . . . . . . . 1
2.2 Acceptance Procedure . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Sublease Term. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III RENT; QUIET ENJOYMENT; NET SUBLEASE . . . . . . . . . . . . 2
3.1 Periodic Sublease Rent . . . . . . . . . . . . . . . . . . . . . 2
3.2 Supplemental Sublease Rent . . . . . . . . . . . . . . . . . . . 2
3.3 Place and Manner of Payment. . . . . . . . . . . . . . . . . . . 2
3.4 Late Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.5 Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . 2
3.6 Net Sublease; No Setoff, Etc . . . . . . . . . . . . . . . . . . 3
3.7 No Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV POSSESSION . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1 Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE V SUBLEASE TERMINATION . . . . . . . . . . . . . . . . . . . 5
5.1 Sublessee's Options Upon Termination . . . . . . . . . . . . . . 5
5.2 Election of Options. . . . . . . . . . . . . . . . . . . . . . . 5
5.3 Option Procedures. . . . . . . . . . . . . . . . . . . . . . . . 5
5.4 Early Termination. . . . . . . . . . . . . . . . . . . . . . . . 5
5.5 Return of Equipment. . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE VI DISCLAIMER AND ASSIGNMENT OF WARRANTIES . . . . . . . . . . 6
6.1 Disclaimer of Warranties . . . . . . . . . . . . . . . . . . . . 6
6.2 Assignment of Warranties . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VII MAINTENANCE AND REPAIR; ALTERATIONS AND ADDITIONS . . . . . 7
7.1 Maintenance and Repair; Compliance With Law. . . . . . . . . . . 7
7.2 Alterations. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.3 Removal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.4 Maintenance and Repair Reports . . . . . . . . . . . . . . . . . 9
ARTICLE VIII USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.1 Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IX CASUALTY; REPLACEMENT; INSURANCE . . . . . . . . . . . . . 10
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9.1 Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.2 Required Coverages . . . . . . . . . . . . . . . . . . . . . . . 11
9.3 Delivery of Insurance Certificates . . . . . . . . . . . . . . . 12
ARTICLE X EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 12
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . 12
10.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.3 Right to Perform Obligations. . . . . . . . . . . . . . . . . . 15
10.4 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . 15
10.5 Remedies Cumulative; No Waiver; Consents. . . . . . . . . . . . 16
ARTICLE XI SUBLESSOR'S RIGHT TO CURE . . . . . . . . . . . . . . . . . 16
11.1 Sublessor's Right to Cure Sublessee's Defaults. . . . . . . . . 16
ARTICLE XII WARRANT OF TITLE . . . . . . . . . . . . . . . . . . . . . 17
12.1 Warrant of Title. . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XIII ASSIGNMENTS . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XIV TRUE LEASE - SECURITY INTEREST . . . . . . . . . . . . . . 18
ARTICLE XV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 18
15.1 Cumulative Remedies; No Waiver. . . . . . . . . . . . . . . . . 18
15.2 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . 18
15.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
15.4 No Third Parties Benefited. . . . . . . . . . . . . . . . . . . 19
15.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 19
15.6 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.8 Severability of Provisions. . . . . . . . . . . . . . . . . . . 20
15.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 21
15.10 Subordination to Lease . . . . . . . . . . . . . . . . . . . . 21
15.11 Waiver of Right to Trial by Jury . . . . . . . . . . . . . . . 21
15.12 Purported Oral Amendments. . . . . . . . . . . . . . . . . . . 21
15.13 General Indemnification. . . . . . . . . . . . . . . . . . . . 22
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SUBLEASE
This SUBLEASE (as amended, supplemented, or otherwise modified
from time to time, this "SUBLEASE"), dated as of September 25, 1996, is between
STATION CASINOS, INC., a Nevada corporation, as Sublessor ("SUBLESSOR") and
SUNSET STATION, INC., a Nevada corporation, as Sublessee ("SUBLESSEE").
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; SUBLESSEE 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 the date hereof (the
"PARTICIPATION AGREEMENT"), among First Security Trust Company of Nevada, as
trustee ("LESSOR"), Sublessor and the Holders identified therein. All
obligations imposed on the "SUBLESSEE" in this Sublease shall be the full
recourse liability of Sublessee.
ARTICLE II
SUBLEASE OF EQUIPMENT; SUBLEASE TERM
SECTION 2.1 ACCEPTANCE AND SUBLEASE OF EQUIPMENT. With respect
to each Advance under Section 2.4.2 of the Participation Agreement, on the
Advance Date for that Advance Sublessor shall lease to Sublessee hereunder, and
Sublessee shall lease from Sublessor hereunder, the Equipment accepted on that
Advance Date by Sublessor under a Certificate of Acceptance pursuant to the
Participation Agreement for the Sublease Term. With respect to each Advance
made under Section 2.4.3 of the Participation Agreement, on the date the
Equipment to which that Advance is related is acquired Sublessor shall lease to
Sublessee hereunder, and Sublessee shall lease from Sublessor hereunder, the
Equipment accepted on the date such Equipment is acquired under a Certificate of
Acceptance pursuant to the Participation Agreement for the Sublease Term.
SECTION 2.2 ACCEPTANCE PROCEDURE. Sublessee's acceptance of the
items of Equipment to be accepted on any Advance Date shall be evidenced by a
Certificate of Acceptance, in each case executed by Sublessee and delivered to
Sublessor.
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SECTION 2.3 SUBLEASE TERM. The term of this Sublease (the
"SUBLEASE TERM") shall consist of the Interim Sublease Period and the Base
Sublease Period, subject to Article V.
ARTICLE III
RENT; QUIET ENJOYMENT; NET SUBLEASE
SECTION 3.1 PERIODIC SUBLEASE RENT. During the Sublease Term,
Sublessee shall pay to Sublessor Periodic Sublease Rent on each Payment Date in
the amount determined in accordance with the definition of "PERIODIC SUBLEASE
RENT."
SECTION 3.2 SUPPLEMENTAL SUBLEASE RENT. During the Sublease
Term, Sublessee shall pay to Sublessor, or to whomever shall be entitled to
payment thereof as expressly provided herein or in any other Operative Document
(and Sublessor hereby directs Sublessee, on behalf of Sublessor, so to pay any
such other Person) any and all Supplemental Sublease Rent promptly as the same
shall become due and payable, and, in the event of any failure on the part of
Sublessee to pay any Supplemental Sublease Rent, Sublessor 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 Sublease Rent.
SECTION 3.3 PLACE AND MANNER OF PAYMENT. Sublease Rent and all
other sums due to Sublessor shall be paid in accordance with Section 2.7 of the
Participation Agreement; PROVIDED, however, that so long as the Sublease remains
in effect all such payments shall be made directly to Lessor for the account of
Sublessor (and Sublessor hereby specifically and irrevocably instructs Sublessee
to make such payments directly to Lessor so long as the Lease remains in
effect).
SECTION 3.4 LATE PAYMENT. If any Periodic Sublease Rent shall
not be paid when due, Sublessee shall pay to Sublessor, or if any Supplemental
Sublease Rent payable to or on behalf or for the account of Sublessor, Holder or
any other Indemnitee is not paid when due, Sublessee shall pay to whomever shall
be entitled thereto, in each case as Supplemental Sublease Rent, interest at the
Default 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 and subordinate in any
event to the rights of the Lessor under the Lease, so long as no Sublease Event
of Default exists Sublessee shall, peaceably and quietly have, hold and enjoy
the Equipment for the Sublease Term, free of any claim or other action by
Sublessor or anyone claiming by, through or under Sublessor (other than its
successors and assigns) with respect to any matters arising from and after the
Closing Date. Such right of quiet enjoyment is independent of, and shall not
affect Sublessor's rights otherwise to initiate legal action to enforce
Sublessor's rights and Sublessee's obligations under this Sublease.
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SECTION 3.6 NET SUBLEASE; NO SETOFF, ETC. THIS SUBLEASE SHALL
CONSTITUTE A NET LEASE AND, NOTWITHSTANDING ANY OTHER PROVISION OF THIS
SUBLEASE, IT IS INTENDED THAT PERIODIC SUBLEASE RENT AND SUPPLEMENTAL SUBLEASE
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 SUBLESSEE'S OBLIGATION TO PAY ALL SUCH AMOUNTS, THROUGHOUT THE
SUBLEASE TERM IS ABSOLUTE AND UNCONDITIONAL. The obligations and liabilities of
Sublessee hereunder shall in no way be released, discharged or otherwise
affected for any reason, including, without limitation, to the maximum extent
permitted by Law: (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 Requirements of 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, including
eviction; (c) any prohibition, restriction, prevention or curtailment of or
interference with any use of any item of Equipment by any Person, including
eviction; (d) the attachment of any Lien of any third party to any item of
Equipment; (e) any change, waiver, extension, indulgence or other action or
omission or breach in respect of any obligation or liability of or by Sublessor
or Lessor; (f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceedings relating to
Sublessee, Sublessor, Lessor or any other Person, or any action taken with
respect to this Sublease by any trustee or receiver of Sublessor, Lessor or any
other Person, or by any court, in any such proceeding; (g) any claim that
Sublessee has or might have against any Person, including, without limitation,
Sublessor or Lessor; (h) any failure on the part of Sublessor to perform or
comply with any of the terms of this Sublease, any other Operative Document or
of any other agreement whether or not related to the transactions contemplated
by the Operative Documents; (i) any invalidity or unenforceability or
disaffirmance against or by Sublessee of this Sublease or any provision hereof
or any of the other Operative Documents or any provision of any thereof; (j) the
impossibility of performance by Sublessee, Sublessor or both; (k) any action by
any court, administrative agency or other Governmental Agency; or (l) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether
or not Sublessee shall have notice or knowledge of any of the foregoing. Except
as specifically set forth in ARTICLES V or IX of this Sublease, this Sublease
shall be noncancellable by Sublessee for any reason whatsoever, and Sublessee,
to the extent permitted by Laws, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Sublease, or to any
diminution, abatement or reduction of Rent payable by Sublessee hereunder. If
for any reason whatsoever this Sublease shall be terminated in whole or in part
by operation of law or otherwise, except as expressly provided in ARTICLES V or
IX of this Sublease, Sublessee shall, unless prohibited by Laws, nonetheless pay
to Sublessor (or, in the case of Supplemental Sublease Rent, to whom ever shall
be entitled thereto) an amount equal to each Sublease Rent payment at the time
and in the manner that such payment would have become due and payable under the
terms of this Sublease if it had not been terminated in whole or in part, and in
such case, so long as such payments are made and no Sublease Event of Default
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shall have occurred and be continuing, Sublessor will deem this Sublease to
have remained in effect. Each payment of Sublease Rent made by Sublessee
hereunder shall be final and, absent manifest error in the determination of
the amount thereof, Sublessee shall not seek or have any right to recover all
or any part of such payment from Sublessor or any party to any agreements
related thereto for any reason whatsoever. Sublessee assumes the sole
responsibility for the condition, use, operation, maintenance and management
of the Equipment, and Sublessor shall have no responsibility in respect
thereof and shall have no liability for damage to the property of Sublessee
or any subtenant of Sublessee on any account or for any reason whatsoever
other than by reason of Sublessor'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 Sublessee's right or ability to bring and pursue any action for monetary
damages against Sublessor or any other Person for any breach or alleged breach
of its obligations hereunder.
ARTICLE IV
POSSESSION
SECTION 4.1 POSSESSION. SUBLESSEE SHALL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF SUBLESSOR, 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 (OTHER THAN AS PERMITTED
BY ARTICLE XIII OR IN CONNECTION WITH REPAIR AND MAINTENANCE OF THE EQUIPMENT)
BY SUBLESSEE SHALL BE NULL AND VOID.
ARTICLE V
SUBLEASE TERMINATION
SECTION 5.1 SUBLESSEE'S OPTIONS UPON TERMINATION. Not later
than (i) 360 days prior to the last day of the Sublease Term or
(ii) notwithstanding any election made under clause (i), 20 days prior to the
last day of the Sublease Term if a Lease Event of Default then exists, Sublessee
shall, by delivery of written notice to the Sublessor and Lessor, exercise one
of the following options:
(a) to purchase for cash for the Purchase Option Exercise
Amount all, but not less than all, of the Equipment subject to this
Sublease on the last day of the Sublease Term (the "PURCHASE OPTION");
or
(b) to return the Equipment to Sublessor.
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SECTION 5.2 ELECTION OF OPTIONS. Sublessee's election of the
Purchase Option will be irrevocable at the time made, but if Sublessee fails to
make a timely election, Sublessee will be deemed to have irrevocably elected the
Purchase Option.
SECTION 5.3 OPTION PROCEDURES. If Sublessee elects the Purchase
Option, Sublessor shall execute and deliver to Sublessee such documents as may
be reasonably required to release the Equipment from the terms and scope of this
Sublease and to transfer the right, title and interest of Sublessor in the
Equipment to Sublessee without representations or warranties except that the
Equipment is free and clear of the Lease, in such form as may be reasonably
requested by Sublessee all at Sublessee's sole cost and expense.
SECTION 5.4 EARLY TERMINATION. Sublessee may, on any Scheduled
Payment Date, at its option, upon at least thirty (30) days' advance written
notice to Sublessor, effect a purchase of all, but not less than all, of the
Equipment subject to this Sublease for an exercise price equal to the greater of
(A) the sum of (i) all accrued unpaid Periodic Rent payable on or prior to such
Scheduled Payment Date, (ii) the Sublease Balance, (iii) for any purchase made
pursuant to this SECTION 5.4 on or before the Permitted Refi Date, an amount
equal to one percent (1%) of the Sublease Balance to be repaid in connection
with such purchase pursuant to clause (ii) above, (iv) all other fees and
expenses and other amounts then due and payable by Sublessee to Sublessor
pursuant to this Sublease and the other Operative Documents to which Sublessee
is a party and (v) such additional amount (if any) as may be required to permit
Sublessor to exercise its early termination option under Section 5.4 of the
Lease or (B) the fair market value of the Equipment. On the date of the full
payment of such exercise price to Sublessor by Sublessee (and Sublessor hereby
directs Sublessee, and Sublessee agrees, to pay the amounts payable in
connection with a purchase of the Equipment pursuant to this Section 5.4
directly to Lessor) in accordance with the provisions of the preceding
sentence:(a) the obligations of Sublessee to pay Sublease Rent hereunder shall
cease, (b) the term of this Sublease shall end and this Sublease shall
terminate, and (c) Sublessor shall execute and deliver and shall cause Lessor,
by exercising Sublessor's rights under Section 5.4 of the Lease, to execute and
deliver to Sublessee such documents as may be reasonably required to release the
Equipment from the terms and scope of this Sublease and to transfer the right,
title and interest of Sublessor in the Equipment to Sublessee without
representations or warranties except that the Equipment is free and clear of the
Lease, in such form as may be reasonably requested by Sublessee all at
Sublessee's sole cost and expense.
SECTION 5.5 RETURN OF EQUIPMENT. Unless the Equipment is
purchased by Sublessee pursuant to Sections 5.1(a) or 5.4, at the expiration of
the Sublease Term, Sublessee shall forthwith deliver exclusive possession of the
Equipment to Sublessor, at a location designated by Sublessor, together with a
copy of an inventory list of the Equipment then subject to this Sublease, all
then current plans, specifications and operating, maintenance and repair manuals
relating to the Equipment that have been received or prepared by Sublessee,
appro-
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priately protected and in the condition required by ARTICLE VII (and in any
event in condition to be placed in immediate service). If Sublessor shall
rightfully demand possession of the Equipment pursuant to this Sublease or
otherwise, Sublessee, at its expense, shall forthwith deliver possession of
such Equipment to Sublessor by delivering the Equipment, appropriately
protected and in the condition required by ARTICLE VII, to Sublessor at such
place or places as may be specified by Sublessor.
ARTICLE VI
DISCLAIMER AND ASSIGNMENT OF WARRANTIES
SECTION 6.1 DISCLAIMER OF WARRANTIES. THE EQUIPMENT IS
SUBLEASED BY SUBLESSEE "AS IS" IN ITS PRESENT OR THEN CONDITION, AS THE CASE MAY
BE. SUBLESSEE ACKNOWLEDGES AND AGREES THAT (a) THE EQUIPMENT IS OF A SIZE,
DESIGN, CAPACITY AND MANUFACTURE SELECTED BY SUBLESSEE, (b) SUBLESSEE IS
SATISFIED THAT THE SAME IS SUITABLE FOR ITS PURPOSES, (c) NEITHER SUBLESSOR NOR
LESSOR IS A MANUFACTURER THEREOF OR A DEALER IN PROPERTY OF SUCH KIND, (d)
NEITHER SUBLESSOR NOR LESSOR SHALL BE LIABLE FOR ANY LATENT, HIDDEN OR PATENT
DEFECT IN ANY EQUIPMENT, OR THE FAILURE OF ANY EQUIPMENT TO COMPLY WITH
REQUIREMENTS OF LAW AND (e) NEITHER SUBLESSOR NOR LESSOR HAS MADE, OR DOES OR
WILL MAKE, (i) ANY REPRESENTATION OR WARRANTY OR COVENANT, WITH RESPECT TO THE
TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONDITION, QUALITY,
DESCRIPTION, DURABILITY OR SUITABILITY OF ANY ITEM OF EQUIPMENT IN ANY RESPECT
OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES OF SUBLESSEE OR SUBLESSEE OR
(ii) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY SUCH ITEM OF EQUIPMENT, IT BEING AGREED THAT ALL RISKS, AS
BETWEEN SUBLESSOR AND LESSOR, ON THE ONE HAND, AND SUBLESSEE, ON THE OTHER HAND,
SHALL BE BORNE BY SUBLESSEE EXCEPT THAT ON THE DATE OF ITS DELIVERY TO
SUBLESSEE, EACH ITEM OF EQUIPMENT SHALL BE FREE AND CLEAR OF ANY SUBLESSORS'
LIEN ATTRIBUTABLE TO SUBLESSOR OR LESSOR.
SECTION 6.2 ASSIGNMENT OF WARRANTIES. Sublessor assigns to
Sublessee, for the benefit of the Sublessee, 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 Sublease Event of Default exists; and PROVIDED,
FURTHER, that any action taken by Sublessee by reason thereof shall be at the
expense of Sublessee and shall be consistent with Sublessee's obligations
pursuant to this Sublease.
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ARTICLE VII
MAINTENANCE AND REPAIR;
ALTERATIONS AND ADDITIONS
SECTION 7.1 MAINTENANCE AND REPAIR; COMPLIANCE WITH LAW.
(a) Sublessee, 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 set forth in the manufacturer's manuals
pertaining to the Equipment (and in any event to at least as
high a standard of maintenance and repair as Sublessee observes
with respect to similar equipment owned or leased by it) 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 Requirements of Law and the standards
imposed by insurance policies required to be maintained
hereunder with respect to the Equipment.
(b) In addition, subject to Article IX, Sublessee
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 by clause (a) above.
(c) Leased items of Equipment that have replaced
other items of Equipment pursuant to this SECTION 7.1 shall
become the property of Sublessor, and title thereto shall
automatically vest in Sublessor upon such permitted substitution
or replacement. Title to the replaced item of Equipment shall
automatically vest in Sublessee (subject to the rights of any
casualty insurance insurer) and such item of Equipment shall no
longer be subject to any right or interest of Lessor or
Sublessor.
(d) Notwithstanding any other provision in this
Sublease, Sublessee may remove any item of Equipment from
service for the purpose of maintenance, repair, service,
overhaul or testing of such item of Equipment.
SECTION 7.2 ALTERATIONS.
(a) If any item of Equipment or individual
component thereof is required to be altered, added to, replaced,
improved or modified in order to comply with Requirements of Law
(a "REQUIRED ALTERATION"), Sublessee shall notify Sublessor and
Sublessor shall notify the Lessor, and Sublessee shall
diligently proceed to make such Required Alteration at its own
expense; and
(b) Sublessee at its own expense, may make any
alteration, addition, replacement, improvement or modification
to any item of Equipment (a "PERMITTED ALTERATION"), or remove
any part that becomes worn out, broken or obsolete, if Sublessee
continues to be in compliance
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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
Sublessee; and
(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; and
(d) Sublessor need not inquire into or confirm that
Alterations were made in conformity with these requirements.
SECTION 7.3 REMOVAL. No component used in a Required
Alteration may be removed or severed from the item of Equipment to which it
is attached. A component used in a Permitted Alteration may be removed by
Sublessee 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 Requirements of Law and (iii) no Sublease Default or
Sublease Event of Default is continuing.
SECTION 7.4 MAINTENANCE AND REPAIR REPORTS. Sublessee shall
keep maintenance and repair reports in sufficient detail, and as customary
for owners or operators of hotels or casinos, to indicate the nature and date
of major work done. Such reports shall be kept on file by Sublessee at its
offices during the Sublease Term, and shall be made available to Sublessor
upon reasonable request. Sublessee shall give notice to Sublessor of any
Condemnation or Casualty the cost to repair which is reasonably expected by
Sublessee to exceed $250,000, promptly after Sublessee has knowledge thereof.
ARTICLE VIII
USE
SECTION 8.1 USE. Sublessee shall use and operate the
Equipment in compliance with any and all Requirements of Law. Sublessee
shall procure and maintain in effect all licenses, registrations,
certificates, permits, approvals and consents required by applicable
Requirements of Law or any Governmental Agency 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
Sublessee pursuant to the Sublease, subject, however, to ARTICLE IX and shall
in no event be located outside of the Project except to the extent necessary
to effect maintenance, repair or servicing thereof.
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ARTICLE IX
CASUALTY; REPLACEMENT; INSURANCE
SECTION 9.1 CASUALTY.
(a) If a Casualty occurs with respect to an item of
Equipment, Sublessee shall (i) give prompt written notice of such
occurrence and the date thereof to Sublessor and (ii) replace such
item of Equipment with respect to which the Casualty has occurred
pursuant to the following provisions of SECTION 9.1(b). If a Casualty
occurs with respect to all or substantially all of the Equipment,
Sublessee shall purchase the Equipment from Sublessor, no later than
the next Payment Date occurring after such Casualty (but in no event
later than the Sublease Termination Date), at a purchase price equal
to the Sublease Balance, together with all other amounts payable under
this Sublease.
(b) If any item of Equipment is to be replaced, within
ninety (90) days thereafter Sublessee 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 it must be of the same general type, year of manufacture
(or a later year of manufacture), function, utility, economic life,
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 Encumbrances and in
any event sufficient to permit Sublessor to comply with the Lease.
Sublessee shall cause a ▇▇▇▇ of Sale and a Certificate of Acceptance
to be executed and delivered to Sublessor in order to subject such
replacement equipment to this Sublease. Sublessee shall also provide
Sublessor with a certificate of insurance in accordance with
SECTION 9.3 evidencing Sublessee's compliance with the insurance
provisions of SECTION 9.2 with respect to such replacement Equipment.
(c) If no Sublease Event of Default exists and Sublessee
elects to replace any item of Equipment suffering a Casualty,
Sublessee shall be entitled to receive from Sublessor the Casualty
Recoveries with respect thereto, to be used to reimburse Sublessee for
the cost of replacement of such item of Equipment after Sublessee
fully applies the Casualty Recoveries properly received by it in
replacement of such item of Equipment. Sublessor, subject to the
rights of any insurer insuring such item of Equipment as provided
herein, shall execute and deliver to Sublessee, or to its assignee or
nominee, a quitclaim ▇▇▇▇ of sale (without representations or
warranties except that such item of Equipment is free and clear of
Sublessor 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 Sublease, in such form as may reasonably be requested by
Sublessee. All fees, costs and expenses
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relating to a substitution as described herein shall be borne by
Sublessee.
(d) All Casualty Recoveries in excess of $500,000 in
respect of a Casualty to any item of Equipment shall be paid directly
to Sublessor, or if paid to Sublessee, such excess funds shall be
immediately paid by Sublessee to Sublessor. If a Sublease Event of
Default exists, Sublessor may retain all Casualty Recoveries as cash
collateral or, if no Sublease Event of Default exists, Sublessee shall
be entitled to apply all Casualty Recoveries in accordance with
SECTION 9.1(b), and any balance remaining after compliance with
SECTION 9.1(b), as the case may be, shall be retained by or returned
to Sublessee. Sublessee shall not be entitled to any Casualty
Recoveries in excess of $500,000 until it applies all amounts
received of less than or equal to such amount in repair or
replacement of the affected item of Equipment.
SECTION 9.2 REQUIRED COVERAGES. Sublessee 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 Sublessee
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, on a
replacement cost basis, be less than one hundred and ten percent of
the then outstanding Sublease 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 $100,000,000 per occurrence with such
deductibles as are carried by similarly situated companies involved in
operating similar facilities and equipment.
(c) OTHER INSURANCE. Such other insurance including
workmen's compensation and business interruption insurance, in each
case as generally carried by owners of similar facilities and
equipment in the State of Nevada, in such amounts and against such
risks as are then customary for equipment and property similar in use.
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 Sublessee, it
shall name Sublessor and Lessor as additional insureds and, in the case of
casualty insurance, it shall name Sublessor and Lessor as loss payees. Each
policy referred to in this SECTION 9.2 shall provide that: (i) it will not
be cancelled or its limits reduced, or allowed to lapse without
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renewal, except after not less than 30 days' prior written notice to
Sublessor; (ii) the interests of Sublessor and Lessor shall not be
invalidated by any act or negligence of Sublessor or Sublessee or any person
having an interest in any item of Equipment (other than the failure to pay
premiums or other amounts payable to the insurer after giving effect to the
required notice period referred to in clause (i) above); (iii) such insurance
is primary with respect to any other insurance carried by or available to
Sublessor and Lessor; (iv) the insurer shall waive any right of subrogation,
setoff, counterclaim, or other deduction, whether by attachment or otherwise,
against the Sublessor and Lessor; and (v) such policy shall contain a
cross-liability clause providing for coverage of Sublessor and Lessor as if
separate policies had been issued to each of them. Sublessee will notify
Sublessor promptly of any policy cancellation, reduction in policy limits,
modification or amendment.
SECTION 9.3 DELIVERY OF INSURANCE CERTIFICATES. On or before
the Closing Date, upon renewal of any policy and upon written request of
Sublessor after a Sublease Event of Default, Sublessee shall deliver to
Sublessor certificates of insurance satisfactory to Sublessor 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
EVENTS OF DEFAULT
SECTION 10.1 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
"SUBLEASE EVENT OF DEFAULT":
(a) any payment of Periodic Sublease Rent, the Purchase
Option Sublease Exercise Amount or payment in respect of a Casualty
shall not be paid within two (2) Business Days after the date when
due;
(b) any payment of Supplemental Sublease Rent or any other
payment payable by Sublessee hereunder or under any other Operative
Document shall not be paid within ten (10) Business Days after the
date when due;
(c) any representation or warranty on the part of Sublessee
contained in any Operative Document to which it is a party or in any
certificate or other writing furnished or delivered to Sublessor or
Lessor shall at any time prove to have been incorrect in any material
respect when made, deemed made or reaffirmed, as the case may be;
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(d) Sublessee 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 ARTICLE IX;
(e) Sublessee shall default in any material respect in the
performance or observance of any other term, covenant, condition or
agreement on its part to be performed or observed hereunder or under
any other Operative Document to which it is a party (and not
constituting a Sublease Event of Default under any other clause of
this SECTION 10.1), and such Default shall continue unremedied for a
period of ten (10) Business Days after written notice thereof by
Sublessor or Lessor to Sublessee;
(f) (i) Sublessee or any Material Subsidiary 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, custodian or liquidator for
itself or a substantial portion of its property, assets or business;
(g) involuntary proceedings or an involuntary petition
shall be commenced or filed against Sublessee or any Material
Subsidiary, under any bankruptcy, insolvency or similar law or seeking
the dissolution, liquidation or reorganization of Sublessee or any
Material Subsidiary or the appointment of a receiver, trustee,
custodian or liquidator for Sublessee or any Material Subsidiary or of
a substantial part of the property, assets or business of Sublessee or
any Material Subsidiary, 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 Sublessee or
any Material Subsidiary or 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) any Plan maintained by Sublessee is determined to have
a material "accumulated funding deficiency" as that term is defined in
Section 302 of ERISA in excess of an amount equal to 5% of the
consolidated total assets of Sublessee as of the most-recently ended
fiscal quarter; or
(i) the occurrence of a Lease Event of Default;
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(j) (i) Sublessee or any Material Subsidiary fails to pay
the principal, or any principal installment, of any present or future
Indebtedness of $10,000,000 or more, or any guaranty of present or
future Indebtedness of $10,000,000 or more, on its part to be paid,
when due (or within any stated grace period), whether at the stated
maturity, upon acceleration, by reason of required prepayment or
otherwise or (ii) fails to perform or observe any other term, covenant
or agreement on its part to be performed or observed, or suffers any
event of default to occur, in connection with any present or future
Indebtedness of $10,000,000 or more, or of any guaranty of present or
future Indebtedness of $10,000,000 or more, if as a result of such
failure or sufferance any holder or holders thereof (or an agent or
trustee on its or their behalf) has the right to declare such
Indebtedness due before the date on which it otherwise would become
due or the right to require Sublessee or any Material Subsidiary to
redeem or purchase, or offer to redeem or purchase, all or any portion
of such Indebtedness (PROVIDED, that for the purpose of this
clause (j), the principal amount of Indebtedness consisting of a Swap
Agreement shall be the amount which is then payable by the
counterparty to close out the Swap Agreement); or
(k) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Sublessee or any Material Subsidiary and such judgment or
judgments 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 $10,000,000; or
(l) there has occurred any License Revocation which
continues for more than three (3) consecutive days; or
(m) any Event of Default under and as defined in the
Secured Credit Agreement (or under any documentation evidencing a
refinancing or replacement of the Indebtedness created thereunder) has
occurred and is continuing.
SECTION 10.2 REMEDIES. If any Sublease Event of Default exists,
Sublessor may terminate this Sublease and take possession of the Equipment, and
shall have the other rights, options and remedies of a lessor under applicable
Laws (including the Nevada Uniform Commercial Code) or, if this Sublease is
determined not to be a true operating lease, the rights, options and remedies of
a secured party under the Nevada Uniform Commercial Code.
SECTION 10.3 RIGHT TO PERFORM OBLIGATIONS. If Sublessee fails
to perform any of its agreements contained herein, whether or not a Sublease
Event of Default exists, Sublessor may perform such agreement, and the
reasonable fees and expenses incurred by Sublessor in connection with such
performance together with interest thereon shall be payable by Sublessee upon
demand.
SECTION 10.4 POWER OF ATTORNEY. Sublessee unconditionally and
irrevocably appoints Sublessor as its true and lawful attorney-in-fact,
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with full power of substitution, to the extent permitted by Requirements of
Law, in its name and stead and on its behalf, for the purpose of executing
and delivering all such deeds, bills of sale, assignments, releases
(including releases of this Sublease on the records of any Governmental
Agency) and other proper instruments as Sublessor may reasonably consider
necessary or appropriate in connection with any sale, assignment, transfer or
disposition pursuant to Section 10.3, if a Sublease Event of Default exists,
whether pursuant to foreclosure or power of sale or otherwise. Sublessee
hereby ratifies and confirms all that such attorney or any substitute shall
lawfully do by virtue hereof. If requested by Sublessor or any purchaser,
Sublessee shall specifically ratify and confirm any such lawful sale,
assignment, transfer or disposition by executing and delivering to Sublessor
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, Requirements
of Law, each and every right, power and remedy herein specifically given to
Sublessor or otherwise in this Sublease 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 Sublessor, 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 Sublessor 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 Sublessee or be an acquiescence therein.
Sublessor's consent to any request made by Sublessee shall not be deemed to
constitute or preclude the necessity for obtaining Sublessor's consent, in the
future, to all similar requests. No express or implied waiver by Sublessor of
any Sublease Event of Default shall in any way be, or be construed to be, a
waiver of any future or subsequent Sublease Event of Default. To the extent
permitted by Requirements of Law, Sublessee hereby waives any rights now or
hereafter conferred by statute or otherwise that may require Sublessor to sell,
lease or otherwise use the Equipment in mitigation of Sublessor's damages upon
the occurrence of an Event of Default or that may otherwise limit or modify any
of Sublessor's rights or remedies under this ARTICLE X.
ARTICLE XI
SUBLESSOR'S RIGHT TO CURE
SECTION 11.1 SUBLESSOR'S RIGHT TO CURE SUBLESSEE'S DEFAULTS.
Sublessor, upon two (2) Business Days prior notice (except that in any
circumstance in which there is a risk of imminent harm to any Person or property
or any possibility of criminal liability to Sublessor or Lessor,
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no notice shall be required), without waiving or releasing any obligation or
Sublease Event of Default, may (but shall be under no obligation to) remedy
any Sublease Default or Sublease Event of Default for the account and at the
sole cost and expense of Sublessee, including the failure by Sublessee to
maintain the insurance required by ARTICLE IX, and may, to the fullest extent
permitted by Law, and notwithstanding any right of quiet enjoyment in favor
of Sublessee, enter upon the real property where the Equipment is located for
such purpose and take all such action thereon as may be necessary or
appropriate therefor. No such entry shall be deemed an eviction of
Sublessee. All reasonable out-of-pocket costs and expenses so incurred
(including fees and expenses of counsel and allocated time charges of
internal counsel), together with interest thereon at the Default Rate from
the date on which such sums or expenses are paid by Sublessor, shall be paid
by Sublessee to Sublessor on demand. All rights of Sublessor in this Article
11.1 are subject to Section 15.10.
ARTICLE XII
WARRANT OF TITLE
SECTION 12.1 WARRANT OF TITLE. Nothing contained in this
Sublease shall be construed as constituting the consent or request of Sublessor,
expressed or implied, to or for the performance by any contractor, mechanic,
laborer, materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition, repair
or demolition of or to the Project or any part thereof. NOTICE IS HEREBY GIVEN
THAT NEITHER SUBLESSOR NOR LESSOR IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES
OR MATERIALS FURNISHED OR TO BE FURNISHED TO SUBLESSEE, OR TO ANYONE HOLDING THE
EQUIPMENT OR ANY PART THEREOF THROUGH OR UNDER SUBLESSEE, AND THAT NO MECHANIC'S
OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR
AFFECT THE INTEREST OF SUBLESSOR OR LESSOR IN AND TO THE EQUIPMENT.
ARTICLE XIII
ASSIGNMENTS
All or any of the right, title or interest and obligations of
Sublessor in and to this Sublease and the rights, benefits, advantages and
obligations of Sublessor hereunder, including the rights to receive payment of
rental or any other payment hereunder, and the rights, titles and interests in
and to the Equipment, may be assigned or transferred by Sublessor only in
accordance with the provisions set forth in the Trust Agreement. All rights of
Sublessee (including under ARTICLE V) under this Sublease shall be assignable
without the consent of Lessor or Sublessor; PROVIDED that (a) Sublessee or any
such assignee shall notify Sublessor of such assignment in writing promptly
thereafter and (b) such assignee shall concurrently execute and deliver to
Lessor a Consent to Sublease Assignment. Sublessor agrees that it will
recognize any such assignee as the successor to Sublessee with respect to this
Sublease. Any assignment
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by Sublessee shall not relieve Sublessee of its obligations hereunder and
shall in any event be subject to Section 15.10.
ARTICLE XIV
TRUE LEASE - SECURITY INTEREST
It is the intent of the parties that this Sublease be a true
operating lease of the Equipment by Sublessor to Sublessee, including for all
purposes of the Nevada Uniform Commercial Code. In the event that the Sublease
is determined not to be a true operating lease, then as a precaution Sublessee
hereby grants to Sublessor a security interest in all of Sublessee's right,
title and interest in the Equipment to secure the obligations of Sublessee
hereunder.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 CUMULATIVE REMEDIES; NO WAIVER. The rights, powers,
privileges and remedies of the Sublessor provided herein or in any other
Operative Document are cumulative and not exclusive of any right, power,
privilege or remedy provided by Law or equity. No failure or delay on the part
of the Sublessor in exercising any right, power, privilege or remedy may be, or
may be deemed to be, a waiver thereof; nor may any single or partial exercise of
any right, power, privilege or remedy preclude any other or further exercise of
the same or any other right, power, privilege or remedy.
SECTION 15.2 COSTS, EXPENSES AND TAXES. Sublessee shall pay on
demand, accompanied by an invoice therefor, the reasonable costs and expenses of
Sublessor and Lessor in connection with the refinancing, restructuring,
reorganization (INCLUDING a bankruptcy reorganization) and enforcement or
attempted enforcement of the Operative Documents, and any matter related
thereto. The foregoing costs and expenses shall include filing fees, recording
fees, title insurance fees, appraisal fees, search fees, and other out-of-pocket
expenses and the reasonable fees and out-of-pocket expenses of any legal counsel
(INCLUDING reasonably allocated costs of legal counsel employed by Sublessor or
Lessor), independent public accountants and other outside experts retained by
the Sublessor or any Holder, whether or not such costs and expenses are
incurred or suffered by Sublessor or Lessor in connection with or during the
course of any bankruptcy or insolvency proceedings of Sublessee or any
Subsidiary thereof. Such costs and expenses shall also include, in the case of
any amendment or waiver of any Operative Document requested by Sublessee, the
administrative costs of Sublessor reasonably attributable thereto. Sublessee
shall pay any and all documentary and other taxes arising out of this Sublease
and shall reimburse Sublessor for all such taxes which Sublessor pays to Lessor
pursuant to ARTICLE 8 of the Participation Agreement. Any amount payable
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to the Sublessee under this Section shall bear interest from the second
Business Day following the date of demand for payment at the Default Rate.
SECTION 15.3 NOTICES. EXCEPT as otherwise expressly provided in the
Operative Documents, all notices, requests, demands, directions and other
communications provided for hereunder or under any other Operative Document must
be in writing and must be mailed, telegraphed, telecopied, dispatched by
commercial courier or delivered to the appropriate party at the address set
forth on the signature pages of this Sublease or other applicable Operative
Document or, as to any party to any Operative Document, at any other address as
may be designated by it in a written notice sent to all other parties to such
Operative Document in accordance with this Section. EXCEPT as otherwise
expressly provided in any Operative Document, if any notice, request, demand,
direction or other communication required or permitted by any Operative Document
is given by mail it will be effective on the earlier of receipt or the fourth
Business Day after deposit in the United States mail with first class or airmail
postage prepaid; if given by telegraph or cable, when delivered to the telegraph
company with charges prepaid; if given by telecopier, when sent; if dispatched
by commercial courier, on the scheduled delivery date; or if given by personal
delivery, when delivered.
SECTION 15.4 NO THIRD PARTIES BENEFITED. This Sublease is made for
the purpose of defining and setting forth certain obligations, rights and duties
of Sublessee and the Sublessor in connection with the leasing the Equipment, and
is made for the sole benefit of Sublessee and the Sublessor, and the Sublessee's
and Sublessor's successors and assigns. This Section 15.4 is subject to Section
15.10.
SECTION 15.5 CONFIDENTIALITY. The Sublessor agrees to hold any
confidential information that it may receive from Sublessee pursuant to this
Sublease or other Operative Documents in confidence, EXCEPT for disclosure:
(a) to Lessor; (b) to legal counsel and accountants for Sublessor or Lessor;
(c) to other professional advisors to Sublessor or Lessor, provided that the
recipient has accepted such information subject to a confidentiality agreement
substantially similar to this Section; (d) to regulatory officials having
jurisdiction over Lessor; (e) to any Gaming Board having regulatory jurisdiction
over Sublessee or its Subsidiaries, provided that Sublessor agrees to notify
Sublessee of any such disclosure unless prohibited by applicable Laws; and
(f) as required by Law or legal process, provided that Sublessor agrees to
notify Sublessee of any such disclosures unless prohibited by applicable Laws or
in connection with any legal proceeding to which Sublessor and Sublessee are
adverse parties. For purposes of the foregoing, "confidential information"
shall mean any information respecting Sublessee or its Subsidiaries reasonably
considered by Sublessee to be confidential, OTHER THAN (i) information
previously filed with any Governmental Agency and available to the public,
(ii) information previously published in any public medium from a source other
than, directly or indirectly, Sublessor, and (iii) information previously
disclosed by Sublessee to any Person not associated with Sublessee without a
confidentiality agreement or obligation substantially similar to this Section.
Nothing in this Section shall be construed to
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create or give rise to any fiduciary duty on the part of Sublessor to
Sublessee.
SECTION 15.6 INTEGRATION. This Sublease, together with the other
Operative Documents to which Sublessee is a party, comprises the complete and
integrated agreement of the parties on the subject matter hereof and supersedes
all prior agreements, written or oral, on the subject matter hereof. In the
event of any conflict between the provisions of this Sublease and those of any
other Operative Document to which Sublessee is a party, the provisions of this
Sublease shall control and govern; PROVIDED that the inclusion of supplemental
rights or remedies in favor of Sublessor in any other Operative Document shall
not be deemed a conflict with this Sublease. Each Operative Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
SECTION 15.7 GOVERNING LAW. This Sublease shall be governed by, and
construed and enforced in accordance with, the local Laws of Nevada applicable
to contracts made and performed in Nevada.
SECTION 15.8 SEVERABILITY OF PROVISIONS. Any provision in any
Operative Document that is held to be inoperative, unenforceable or invalid as
to any party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all
Operative Documents are declared to be severable.
SECTION 15.9 COUNTERPARTS. This Sublease has been executed in
several counterparts. One counterpart has been prominently marked "Sublessor's
Copy" and the other counterparts have been prominently marked "Sublessee's Copy"
or "Copy." Only the counterpart marked "Sublessor's Copy" shall evidence a
monetary obligation of Sublessee or 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 (so
long as the Lease remains in effect) or Sublessor.
SECTION 15.10 SUBORDINATION TO LEASE. It is expressly understood and
agreed by the parties hereto that this Sublease is expressly subject and
subordinate to all of the terms of the Lease and to all rights of Lessor
thereunder. Sublessee expressly acknowledges and confirms that Lessor may
exercise all remedies available to it with respect to the Equipment during the
existence of a Lease Event of Default, whether or not there then exists a
Sublease Event of Default.
SECTION 15.11 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
SUBLEASE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY OPERATIVE DOCUMENT OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO
OR ANY OF THEM WITH RESPECT TO ANY OPERATIVE DOCUMENT, OR THE
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TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY
TO THIS SUBLEASE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 15.12 PURPORTED ORAL AMENDMENTS. SUBLESSEE EXPRESSLY
ACKNOWLEDGES THAT THIS SUBLEASE AND THE OTHER OPERATIVE DOCUMENTS MAY ONLY BE
AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED,
BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 9.15 OF THE PARTICIPATION
AGREEMENT. SUBLESSEE AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING,
COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF
THE SUBLESSOR THAT DOES NOT COMPLY WITH SECTION 9.15 OF THE PARTICIPATION
AGREEMENT TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS
SUBLEASE OR THE OTHER OPERATIVE DOCUMENTS.
SECTION 15.13 GENERAL INDEMNIFICATION. Sublessee hereby agrees that
it will indemnify Sublessor and its assigns (each of whom shall be a third party
beneficiary of this covenant) against the matters covered by Article 7 of the
Participation Areement (the terms of which are incorporated herein by this
reference) on each of the same terms and conditions set forth in such Article 7.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have executed this
Sublease as of the day and year first above written.
STATION CASINOS, INC.,
a Nevada corporation
as Sublessor
By: /s/ ▇▇▇▇▇ C, ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Executive Vice President,
Chief Financial Officer
and Treasurer
SUNSET STATION, INC.,
a Nevada corporation
as Sublessee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President, Chief
Financial Officer and
Treasurer
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