Exhibit 10.20.1
MODIFICATION AGREEMENT
          THIS MODIFICATION AGREEMENT, dated as of July 31, 2007 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between COLUMN FINANCIAL, INC., having an address at 11 Madison
Avenue, New York, New York 10010 (“Lender”), CSE CASABLANCA HOLDINGS II LLC
having its principal place of business at 4445 Willard Avenue, 12th Floor, Chevy
Chase, MD 20815 (“Borrower”).
RECITALS
     A. Lender made a certain mezzanine loan (the “Loan”) to Borrower in the
original principal amount of $36,140,981.00 subject to and in accordance with
the terms of that certain Mezzanine Loan Agreement dated as of July 31, 2007
(the “Existing Loan Agreement”).
     B. The Loan is evidenced by that certain Promissory Note dated as of
July 31, 2007 in the principal amount of $36,140,981.00 (the “Note”), and is
secured by, among other things, that certain Pledge and Security Agreement
(Mezzanine Loan) dated as of July 31, 2007 executed by Borrower in favor of
Lender (the “Pledge”).
     C. Lender and Borrower desire to modify the Existing Loan Agreement subject
to and in accordance with the terms and provisions of this Agreement.
AGREEMENT
     1. Definitions. All capitalized terms used but not defined in this
Agreement shall have the meanings given to them in the Existing Loan Agreement.
     2. Modifications to Existing Loan Agreement.
          (a) Article I of the Existing Loan Agreement is hereby amended as
follows:
          (i) The definition of “Bankruptcy Action” is modified by deleting the
word “Collateral” in clause (d) and inserting in its place the word “Property”.
          (ii) The last sentence within the definition of “Indebtedness” is
modified by deleting the word “Borrower” and inserting in its place the word
“Owner”.
          (iii) The definition of “Liabilities” is hereby deleted in its
entirety.
          (iv) The definition of “Lien” is modified by inserting the word
“Owner,” immediately prior to the word “Borrower”.
          (v) The definition of “Liquidation Event” is modified by adding to the
beginning of clause (i) “any Casualty, or”.

 

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          (vi) The definition of “Net Liquidation Proceeds after Debt Service”
is modified by (1) inserting the words “or Borrower” after the word “Owner”, in
the first instance where the word “Owner” is used therein, and (2) by inserting
the words “or Senior Lender’s” after the word “Lender’s” in clause (i) thereof.
          (vii) The definition of “Permitted Encumbrances” is modified by
inserting the word “Senior,” within clause (d) immediately prior to the words
“Loan Documents”.
          (viii) The definition of “Principal” is hereby deleted in its entirety
and replaced with the following: “shall mean (i) with respect to Borrower, the
Special Purpose Entity which is the managing member of Borrower, and (ii) with
respect to Owner, the Special Purpose Entity which is the (a) the managing
member of Owner in the event that such Owner is a limited liability company, or
(b) general partner of Owner in the event such Owner is a limited partnership.”
          (ix) The definition of “Special Purpose Entity” is modified as
follows:
          (A) By inserting the phrase “since the date of its formation, and”
immediately following the phrase “which at all times”;
          (B) By deleting the word “Properties” in clause (c) and inserting in
its place the word “Collateral”; and
          (C) By deleting the phrase “or in name franchised or licensed to it by
an entity other than an Affiliate of Borrower” in clause (p).
          (x) The following new definition is hereby added to Article I of the
Existing Loan Agreement:
Term: shall mean the entire term of this Agreement, including any applicable
extension periods, which shall expire upon repayment in full of the Debt and
full performance of each and every obligation to be performed by Borrower
pursuant to the Loan Documents.
          (b) All references in the Existing Loan Agreement to the “Interest
Rate Cap Agreement” shall have the meaning ascribed to the term in the
Collateral Assignment of Interest Rate Cap Agreement (Mezzanine Loan) dated as
of July 31, 2007 by CSE Mortgage LLC (“CSE Mortgage”) in favor of Lender.
          (c) The following sentence is hereby added to Section 1.2 of the
Existing Loan Agreement before the fourth sentence: “The words “Borrower shall
cause Owner to” or “Borrower shall cause Owner not to” or “Borrower shall not
permit Owner to” (or words of

 

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similar meaning), as used herein, shall mean Borrower shall cause or permit
Owner, or shall cause or permit the Principal of Owner to cause or permit Owner,
to act or not to so act, as applicable.”
          (d) Section 2.1.4 of the Existing Loan Agreement is hereby modified by
inserting at the end thereof the phrase “for the purposes permitted under the
Senior Loan Documents”.
          (e) Section 2.2.7(a) of the Existing Loan Agreement is hereby modified
by deleting the word “Lockbox” in clause (iii) thereof and inserting in its
place the words “Cash Management”.
          (f) Section 2.4.2(a) is hereby amended by inserting the words “due to
a Casualty or Condemnation” at the end thereof.
          (g) Section 2.5.2 of the Existing Loan Agreement is hereby modified by
deleting the word “Mortgage” and inserting in its place the word “Pledge”.
          (h) Section 2.6.1(c) of the Existing Loan Agreement is hereby amended
by deleting the words “Senior Cash Management Account” and inserting in its
place the words “Senior Lockbox Account”.
          (i) Section 2.8(l) is hereby amended by inserting the words “(as
defined in the Senior Loan Agreement”) after the words “Special Purpose Entity”.
          (j) All references in section 2.8(s) of the Existing Loan Agreement to
the term “Substituted Collateral” are deleted and replaced with the term
“Substitute Collateral”.
          (k) Section 4.1.30(a) of the Existing Loan Agreement is hereby amended
by deleting the word “is” in clause (i) and inserting in its place the words
“and Owner are”.
          (l) Section 5.1.11(c) of the Existing Loan Agreement is hereby amended
by deleting the words “and the Rollover Reserve Fund” in clause (ii).
          (m) All references in the Existing Loan Agreement to the term
“Alteration” are deleted and replaced with the term “alteration”.
          (n) Section 5.1.12 of the Existing Loan Agreement is hereby deleted in
its entirety and replaced with the following:
“Business and Operations. Borrower will, and will cause Owner to, continue to
engage in the businesses presently conducted by it as and to the extent the same
are necessary, for the ownership, maintenance, management, and operation of the
Collateral and the Property. Borrower will, and will cause Owner to, qualify to
do business and will remain in good standing under the laws of each jurisdiction
as and to the extent

 

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the same are required for the ownership, maintenance, management, and operation
of the Collateral and the Property.”
          (o) Section 5.1.17 of the Existing Loan Agreement is hereby amended by
adding the following at the end thereof:
“Borrower shall in a timely manner cause Owner to observe, perform and fulfill
each and every covenant, term and provision of each Senior Loan Document
executed and delivered by, or applicable to, Owner, and shall not permit Owner
to enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Senior Loan Document executed and
delivered by, or applicable to, Owner without the prior consent of Lender.”
          (p) Section 5.1.23(a)(v) of the Existing Loan Agreement is hereby
amended by deleting the phrase “To the extent Borrower has such right under the
applicable Operating Lease” in the third (3rd) sentence and inserting in its
place the phrase “To the extent Owner has such right under the applicable
Operating Lease”.
          (q) Section 5.1.23(k) of the Existing Loan Agreement is hereby amended
by deleting the phrase “or impose remedies upon Borrower” and inserting in its
place the phrase “or impose remedies upon Owner”.
          (r) Section 7.1 of the Existing Loan Agreement is hereby amended by
(1) inserting the phrase “and the Senior Loan Documents” at the end of the first
parenthetical, and (2) deleting the words “Cash Management Agreement” and
inserting in its place the words “Cash Management Account”.
          (s) Section 8.1(a)(iv) of the Existing Loan Agreement is hereby
amended by deleting the words “Article 6 of the Mortgage” and inserting in its
place the words “the Pledge”.
          (t) The second to last paragraph of Section 9.4 is hereby modified as
follows:
          (A) By deleting the phrase “the additional covenant to comply with any
assumption in the Insolvency Opinion in any Additional Insolvency Opinion” in
clause (ii) thereof and inserting in its place the phrase “any additional
covenant set forth in the Insolvency Opinion and in any Additional Insolvency
Opinion which is not otherwise set forth herein”.
          (B) By inserting the phrase “or Owner” after the phrase “if Borrower”,
and by inserting the phrase “or the Collateral” after the phrase “Individual
Properties” in the first instance the phrase “Individual Properties” is used,
and by

 

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inserting the word “to” after the phrase “part of the Collateral”, in each
instance in clause (iii) thereof.
          (u) Section 10.3(A) of the Existing Loan Agreement is hereby amended
by deleting the following:
“EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND
ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS
ARISING HEREUNDER OR THEREUNDER”.
          (v) All references in the Existing Loan Agreement to the term “Pledged
Company Interests” are deleted and replaced with the term “Pledged Collateral”.
          (w) All references in the Existing Loan Agreement to the Loan
Agreement shall mean the Existing Loan Agreement, as modified by this Agreement.
     3. Representations and Warranties. Without limiting in any way any
representation or warranty in any Loan Document, Borrower represents and
warrants to Lender as follows:
          (a) The execution and delivery by Borrower of this Agreement and
Borrower’s performance of its obligations hereunder provided for in this
Agreement (i) have been duly authorized by all requisite action on the part of
Borrower, (ii) will not violate any provision of any applicable legal
requirements, any order, writ, decree, injunction or demand of any court or
other governmental authority, any organizational document of Borrower or any
indenture or agreement or other instrument to which Borrower is a party or by
which the Borrower is bound, (iii) will not be in conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under, or result in the creation or imposition of any lien of any nature
whatsoever upon any of the property or assets of the Borrower pursuant to, any
indenture or agreement or instrument and (iv) have been duly executed and
delivered by Borrower. Except for those obtained or filed on or prior to the
date hereof, the

 

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Borrower is not required to obtain any consent, approval or authorization from,
or to file any declaration or statement with, any governmental authority or
other agency in connection with or as a condition to the execution, delivery or
performance of this Agreement. This Agreement has been duly authorized, executed
and delivered by Borrower.
          (b) This Agreement is a legal, valid and binding obligation of
Borrower, enforceable against the Borrower in accordance with its terms, subject
to bankruptcy, insolvency and other limitations on creditors’ rights generally
and to equitable principles.
          (c) There are no existing claims or causes of action by Borrower
against Lender relating to or arising out of the Loan, and the Loan Documents
and there are no offsets or defenses by Borrower to the payment of any amounts
required to be paid by Borrower under the Loan Documents, or otherwise to the
enforcement by Lender of the Loan Documents.
          (d) Borrower agrees that in the event Borrower elects to extend the
Loan beyond April 9, 2009 in accordance with the Loan Documents, (i) Borrower
shall deliver to Lender an Interest Rate Cap Agreement and an assignment of such
Interest Rate Cap Agreement for the benefit of Lender for such extended term,
each in the form executed by CSE Mortgage LLC in connection with the initial
closing of the Loan, and (ii) Lender shall not be required to accept an Interest
Rate Cap Agreement or any assignment to Lender thereof from any entity or Person
other than Borrower.
     4. Miscellaneous.
          (a) All references in the Loan Documents to the “Loan Agreement” shall
hereafter mean the Existing Loan Agreement, as modified by this Agreement, and
as it may be amended, modified, restated, consolidated or supplemented from time
to time after the date hereof.
          (b) This Agreement constitutes the entire agreement among the parties
concerning its subject matter. This Agreement shall inure to the benefit of and
be binding upon the parties and their respective heirs, successors and assigns.
This Agreement may be executed in two or more counterparts and by facsimile each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
          (c) Borrower and Lender confirm and ratify the terms and provisions of
the Loan Documents, as modified hereby, and agree that the Loan Documents, as so
modified, remain in full force and effect as of the date hereof, and nothing
herein contained shall be construed to impair the security or affect the first
priority of the lien of the Pledge, nor impair any rights or powers which Lender
or its successors may have for nonperformance of any term of any of the Loan
Documents. Borrower and Lender further reaffirm and ratify their respective
obligations to be bound by and perform all of the terms of the Loan Documents.
          (d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without giving effect to New York’s
principles of conflict of law).

 

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(Signatures on following page)

 

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.

            BORROWER:

CSE CASABLANCA HOLDINGS II LLC,
a Delaware limited liability company
      By:   /S/ JAMES J. PIECZYNSKI         Name:   James J. Pieczynski       
Title:   President        LENDER:

COLUMN FINANCIAL, INC.
      By:   /S/ REESE MASON         Name:   Reese Mason        Title:   Vice
President     

{Signatures continue on the next page}

 

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CSE Mortgage LLC hereby joins in this Agreement for the purposes of
acknowledging the terms hereof and agreeing to abide by the terms hereof to the
extent applicable.
CSE MORTGAGE LLC, a Delaware limited
liability company

         
By:
  /S/ JAMES J. PIECZYNSKI
 
  Name: James J. Pieczynski
 
  Title: Co-President

[End of Signatures]