Exhibit 10.6

 

 

AMENDED AND RESTATED LOAN AGREEMENT

Dated as of March 2, 2012

by and among

CLP NORTHSTAR, LLC; CLP NORTHSTAR TRS CORP.;

CLP SIERRA, LLC; CLP SIERRA TRS CORP.;

CLP BRIGHTON, LLC; CLP BRIGHTON TRS CORP.;

CLP SNOQUALMIE, LLC; CLP SNOQUALMIE TRS CORP.;

CLP LOON MOUNTAIN, LLC; CLP LOON MOUNTAIN TRS CORP.;

CLP STEVENS PASS, LLC; and CLP STEVENS PASS TRS CORP.

(individually and collectively as the context may require, as “Borrower”)

and

CLP SKI II, LLC; CLP SKI III, LLC; CLP SKI IV, LLC;

CLP SKI HOLDING, LLC; and

CLP NORTHSTAR TRS PARENT, INC.

(individually and collectively as the context may require, as “Pledgor”)

and

CNL LIFESTYLE PROPERTIES, INC.

(as “Guarantor”)

and

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

(as “Lender”)

 

 

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TABLE OF CONTENTS

 

              Page  

ARTICLE 1

  DEFINITIONS; PRINCIPLES OF CONSTRUCTION      4   

Section 1.1

     Definitions      4   

Section 1.2

     Location of Additional Defined Terms      23   

Section 1.3

     Principles of Construction      27   

ARTICLE 2

  THE LOAN      27   

Section 2.1

     The Original Loan; the New Loan      27   

Section 2.2

     Interest Rate      27   

Section 2.3

     Payments      27   

ARTICLE 3

  DEPOSITS      28   

Section 3.1

     Tax and Insurance Deposits      28   

Section 3.2

     Deposits Generally      29   

ARTICLE 4

  REPRESENTATIONS AND WARRANTIES      29   

Section 4.1

     Organization      29   

Section 4.2

     Authorization      30   

Section 4.3

     Enforceability      30   

Section 4.4

     Litigation      30   

Section 4.5

     Full and Accurate Disclosure      30   

Section 4.6

     Compliance      31   

Section 4.7

     ERISA      31   

Section 4.8

     Not Foreign Person      31   

Section 4.9

     Investment Company Act; Public Utility Holding Company Act      32   

Section 4.10

     Title to the Property, Equity Collateral; Liens      32   

Section 4.11

     Condemnation      32   

Section 4.12

     Utilities, Water Rights and Public Access      32   

Section 4.13

     Separate Lots      32   

Section 4.14

     Assessments      32   

Section 4.15

     Post Closing Obligations      33   

Section 4.16

     Physical Condition      33   

Section 4.17

     Title Insurance; UCC Insurance      33   

Section 4.18

     Leases and Rents      33   

Section 4.19

     Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws      34   

Section 4.20

     Organizational Chart      34   

Section 4.21

     Single-Purpose Entity      35   

Section 4.22

     Property Management      35   

Section 4.23

     Solvency; Fraudulent Conveyance      35   

Section 4.24

     Margin Regulations      35   

 

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TABLE OF CONTENTS

(continued)

 

              Page  

Section 4.25

     Material Agreements      36   

Section 4.26

     Original Loan Application      36   

Section 4.27

     Acquisition Documentation      36   

Section 4.28

     Title Certificate      36   

Section 4.29

     Ownership and Operation      36   

Section 4.30

     Booth Creek Asset Purchase Agreement      39   

Section 4.31

     Brighton Asset Purchase Agreement      39   

Section 4.32

     Stevens Pass Asset Purchase Agreement      40   

Section 4.33

     Third Party Consents      40   

Section 4.34

     Property-Specific      41   

ARTICLE 5

  COVENANTS      41   

Section 5.1

     Compliance with Legal Requirements; Impositions and Other Claims; Contests
     41   

Section 5.2

     Maintenance; Waste; Alterations      42   

Section 5.3

     Access to Property and Records      43   

Section 5.4

     Management of Property      43   

Section 5.5

     Financial and Other Reporting      43   

Section 5.6

     Northstar/Martis Camp Provisions      44   

Section 5.7

     Leases      46   

Section 5.8

     Place of Business; State of Organization      48   

Section 5.9

     Zoning; Joint Assessment      48   

Section 5.10

     Material Agreements      48   

Section 5.11

     ERISA      49   

Section 5.12

     Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws      49   

Section 5.13

     Individual Property Environmental Indemnities      50   

Section 5.14

     Vehicles      50   

Section 5.15

     Property-Specific Covenants      51   

Section 5.16

     Debt Service Reserve      51   

Section 5.17

     Pledged Letter of Credit; Pledge of Additional Cash Collateral      52   

Section 5.18

     Stevens Pass Security Deposit; Other Matters      53   

ARTICLE 6

  TRANSFERS AND CHANGE OF BUSINESS      54   

Section 6.1

     Transfer      54   

Section 6.2

     Other Indebtedness      56   

Section 6.3

     Chance In Business      56   

ARTICLE 7

  INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION      56   

Section 7.1

     Property and Time Element Insurance      56   

Section 7.2

     Liability and Other Insurance      57   

Section 7.3

     Form of Policy      57   

Section 7.4

     Original Policies      58   

 

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TABLE OF CONTENTS

(continued)

 

              Page  

Section 7.5

    

General Provisions

     58   

Section 7.6

    

Waiver of Subrogation

     58   

Section 7.7

    

Restoration Proceeds

     58   

Section 7.8

    

Restoration

     59   

Section 7.9

    

Disbursement

     61   

ARTICLE 8

  DEFAULTS      61   

Section 8.1

    

Event of Default

     61   

Section 8.2

    

Remedies

     64   

Section 8.3

    

Remedies Cumulative

     64   

Section 8.4

    

Lender Appointed Attorney-In-Fact

     65   

Section 8.5

    

Lender’s Right to Perform

     65   

ARTICLE 9

  ENVIRONMENTAL PROVISIONS      65   

Section 9.1

    

Environmental Representations and Warranties

     65   

Section 9.2

    

Environmental Covenants

     66   

Section 9.3

    

Environmental Cooperation and Access

     67   

Section 9.4

    

Environmental Indemnity

     67   

Section 9.5

    

Duty to Defend

     68   

ARTICLE 10

  SECONDARY MARKET TRANSACTIONS      68   

Section 10.1

    

General

     68   

Section 10.2

    

Borrower and Pledgor Cooperation

     69   

Section 10.3

    

Dissemination of Information

     69   

Section 10.4

    

Change of Payment Date

     69   

Section 10.5

    

Register

     69   

Section 10.6

    

Borrower and Pledgor Indemnification

     70   

Section 10.7

    

Additional Financial Information

     70   

ARTICLE 11

  EXCULPATION      71   

ARTICLE 12

  MISCELLANEOUS      71   

Section 12.1

    

Survival

     71   

Section 12.2

    

Lender’s Discretion

     72   

Section 12.3

    

Governing Law; Venue

     72   

Section 12.4

    

Modification, Waiver in Writing

     72   

Section 12.5

    

Delay Not a Waiver

     72   

Section 12.6

    

Notices

     73   

Section 12.7

    

Trial By Jury

     74   

Section 12.8

    

Headings

     74   

Section 12.9

    

Severability

     74   

Section 12.10

    

Preferences

     74   

Section 12.11

    

Waiver of Notice

     75   

Section 12.12

    

Intentionally Omitted

     75   

 

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TABLE OF CONTENTS

(continued)

 

              Page  

Section 12.13

     Exhibits Incorporated      75   

Section 12.14

     Offsets, Counterclaims and Defenses      75   

Section 12.15

     No Joint Venture or Partnership      75   

Section 12.16

     Waiver of Marshalling of Assets Defense      75   

Section 12.17

     Waiver of Counterclaim      76   

Section 12.18

     Construction of Documents      76   

Section 12.19

     Brokers and Financial Advisors      76   

Section 12.20

     Counterparts      76   

Section 12.21

     Certificates      76   

Section 12.22

     Reserved      77   

Section 12.23

     Bankruptcy Waiver      77   

Section 12.24

     Entire Agreement      77   

Section 12.25

     Liability and Indemnification      77   

Section 12.26

     Publicity      78   

Section 12.27

     Time of the Essence      79   

Section 12.28

     Taxes      79   

Section 12.29

     Further Assurances      79   

Section 12.30

     Certain Additional Rights of Lender (VCOC)      79   

Section 12.31

     Co-Lenders      80   

ARTICLE 13

  SPECIAL PROVISIONS      81   

Section 13.1

     Use of Terms      81   

Section 13.2

     Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets   
  81   

Section 13.3

     Joint and Several Liability      82   

Section 13.4

     Borrower Contribution      83   

Section 13.5

     Pledgor Contribution      85   

Section 13.6

     Partial Release.      88   

Section 13.7

     Substitution of Collateral      90   

Section 13.8

     Ground Leases.      94   

Section 13.9

     Forest Service Permits      99   

ARTICLE 14

  DUE ON SALE AND APPLICATION OF PROCEEDS      103   

Section 14.1

     Parent Debt Documents      103   

SCHEDULES AND EXHIBITS

  

SCHEDULE A - Description of the Mortgages

   SA-1

SCHEDULE 1A - Original Loan Documents

   S1A-1

SCHEDULE 1B - Certain New Loan Documents

   S1B-1

SCHEDULE 2 - Individual Properties

   S2-1

 

iv

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TABLE OF CONTENTS

(continued)

 

     Page

SCHEDULE 3 - Individual Borrower Equity Collateral

   S3-1

SCHEDULE 4 - Individual Pledgor Equity Collateral

   S4-1

SCHEDULE 4.4 - Litigation

   S4.4-1

SCHEDULE 4.6 - Compliance

   S4.6-1

SCHEDULE 4.13 - Separate Tax Lot

   S4.13-1

SCHEDULE 4.18 - Interests that are not Subordinate to the Loan Documents

   S4.18-1

SCHEDULE 4.18(d) - Possessory Interest(s) in Property

   S4.18(d)-1

SCHEDULE 4.22 - Property Management

   S4.22-1

SCHEDULE 4.28A - Bills of Sale – Original Borrower

   S4.28A-1

SCHEDULE 4.28B - Bills of Sale – Stevens Pass

   S4.28B-1

SCHEDULE 4.30(h) - Booth Creek APA Purchase Options

   S4.30(h)-1

SCHEDULE 4.31(e) - Brighton APA Purchase Options

   S4.31(e)-1

SCHEDULE 5 - Forest Service Permits

   S5-1

SCHEDULE 5.2 - Third Party Operator Work

   S5.2-1

SCHEDULE 5.16 - Debt Service Deposit

   S5.16-1

SCHEDULE 6 - Material Agreements

   S6-1

SCHEDULE 6.1 - Permitted Transfers

   S6.1-1

SCHEDULE 7 - Acquisition Documentation

   S7-1

EXHIBIT A - Organizational Chart of Borrower

   A-1

EXHIBIT B - Intentionally omitted

   B-1

EXHIBIT C - Definition of Single-Purpose Entity

   C-1

EXHIBIT D - Additional Representations, Covenants, Negative Covenants and Events
of Default Relating to each Individual Property

   D-1

EXHIBIT E - Rent Roll

   E-1

 

v

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AMENDED AND RESTATED LOAN AGREEMENT

THIS AMENDED AND RESTATED LOAN AGREEMENT (as the same may from time to time
hereafter be modified, supplemented or amended, this “Agreement”), dated as of
March 2, 2012 (the “Closing Date”), is made by and among THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation (together with its
successors and assigns, “Lender”), CLP NORTHSTAR, LLC, a Delaware limited
liability company, formerly known as CNL Income Northstar, LLC (“CLP
Northstar”), CLP NORTHSTAR TRS CORP., a Delaware corporation, formerly known as
CNL Income Northstar TRS Corp. (“Northstar TRS”, and together with CLP
Northstar, “Northstar”), CLP SIERRA, LLC, a Delaware limited liability company,
formerly known as CNL Income Sierra, LLC (“CLP Sierra”), CLP SIERRA TRS CORP., a
Delaware corporation, formerly known as CNL Income Sierra TRS Corp. (“Sierra
TRS”, and together with CLP Sierra, “Sierra”), CLP BRIGHTON, LLC, a Delaware
limited liability company. formerly known as CNL Income Brighton, LLC (“CLP
Brighton”), CLP BRIGHTON TRS CORP., a Delaware corporation (“Brighton TRS”, and
together with CLP Brighton, “Brighton”), CLP SNOQUALMIE, LLC, a Delaware limited
liability company, formerly known as CNL Income Snoqualmie, LLC (“CLP
Snoqualmie”), CLP SNOQUALMIE TRS CORP., a Delaware corporation, formerly known
as CNL Income Snoqualmie TRS Corp. (“Snoqualmie TRS”, and together with CLP
Snoqualmie, “Snoqualmie”), CLP LOON MOUNTAIN, LLC, a Delaware limited liability
company, formerly known as CNL Loon Mountain, LLC (“CLP Loon Mountain”), CLP
LOON MOUNTAIN TRS CORP., a Delaware corporation, formerly known as CNL Income
Loon Mountain TRS Corp. (“Loon Mountain TRS”, and together with CLP Loon
Mountain, “Loon Mountain”), CLP STEVENS PASS, LLC, a Delaware limited liability
company (“CLP Stevens Pass”), CLP STEVENS PASS TRS CORP., a Delaware corporation
(“Stevens Pass TRS,” and, together with CLP Stevens Pass, collectively “Stevens
Pass”) (Northstar, Sierra, Brighton, Snoqualmie and Loon Mountain are
collectively referred to herein as “Original Borrower”; each of Northstar,
Sierra, Brighton, Snoqualmie, Loon Mountain and Stevens Pass referred to herein
as an “Individual Borrower” and collectively as “Borrower”), CLP SKI II, LLC, a
Delaware limited liability company, formerly known as CNL Income Ski II, LLC
(“Ski II Pledgor”), CLP SKI III, LLC, a Delaware limited liability company,
formerly known as CNL Income Ski III, LLC (“Ski III Pledgor”), CLP SKI IV, LLC,
a Delaware limited liability company, (“Ski IV Pledgor”), CLP SKI HOLDING, LLC,
Delaware limited liability company, formerly known as CNL Income Ski Holding,
LLC (“Ski Holding Pledgor”), CLP NORTHSTAR TRS PARENT, INC., a Delaware
corporation, formerly known as CNL Income Northstar TRS Parent, Inc. (“Northstar
Pledgor”) (Ski II Pledgor, Ski III Pledgor, Ski Holding Pledgor and Northstar
Pledgor are collectively referred to herein as “Original Pledgor”; each of Ski
II Pledgor, Ski III Pledgor, Ski IV Pledgor, Ski Holding Pledgor and Northstar
Pledgor referred to herein as an “Individual Pledgor” and collectively as
“Pledgor”), and CNL LIFESTYLE PROPERTIES, INC., a Maryland corporation, formerly
known as CNL Income Properties, Inc. (“Guarantor”).

RECITALS

A. On March 23, 2007 (the “Original Closing Date”), Original Borrower obtained a
loan (the “Original Loan”) from Lender in the aggregate principal amount of
$111,500,000.00 (the “Original Loan Amount”). Lender, Original Borrower and
Original Pledgor are the current parties to that certain Loan Agreement dated as
of March 23, 2007 (the “Ski Loan Agreement”),

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as the same has been amended pursuant to that certain First Amendment to Loan
Agreement dated as of December 1, 2009 by and among Original Borrower, Original
Pledgor, Guarantor and Lender (the “First Amendment”), that certain Second
Amendment to Loan Agreement dated as of October 25, 2010 by and among Original
Borrower, Original Pledgor, Guarantor, and Lender (the “Second Amendment”), that
certain Third Amendment to Loan Agreement dated as of April 5, 2011 by and among
Original Borrower, Original Pledgor, Guarantor, and Lender (the “Third
Amendment”), and that certain Fourth Amendment to Loan Agreement dated as of
June 3, 2011 by and among Original Borrower, Original Pledgor, Guarantor and
Lender (the “Fourth Amendment” and, together with the Ski Loan Agreement, the
First Amendment, the Second Amendment and the Third Amendment, collectively the
“Original Loan Agreement”), which Original Loan Agreement governs certain of the
terms and conditions of the Original Loan.

B. The Original Loan is also evidenced by that certain Promissory Note A-1 dated
as of March 23, 2007, in the principal amount of Seventy-Eight Million and
00/100 Dollars ($78,000,000.00), made by Original Borrower and payable to the
order of Lender, and that certain Promissory Note A-2 dated as of March 23,
2007, in the original principal amount of Thirty-Three Million Five Hundred
Thousand and 00/100 Dollars ($33,500,000.00), made by Original Borrower and
payable to the order of Lender (collectively, the “Original Note”, and the
Original Note, together with all other documents, instruments and agreements now
or hereafter evidencing or securing the repayment of, or otherwise pertaining to
the Original Loan, being herein referred to collectively as the “Original Loan
Documents”).

C. The Original Note is secured by, inter alia, those certain security
instruments encumbering certain property described therein as set forth on
Schedule A attached hereto and made a part hereof. The Northstar Mortgage, the
Sierra Mortgage, the Brighton Mortgage, the Snoqualmie – King Mortgage, the
Snoqualmie – Kittitas Mortgage, and the Loon Mountain Mortgage, as defined on
Schedule A are hereinafter referred to individually and collectively as the
“Original Mortgage”. The Sierra Pledge, the Brighton Pledge, the Snoqualmie
Pledge, and the Loon Mountain Pledge, as defined on Schedule A are hereinafter
referred to individually and collectively as the “Original Borrower Pledge
Agreement”. The Ski II Pledge, the Ski III Pledge, the Ski Holding Pledge, and
the Northstar Pledge, as defined on Schedule A are hereinafter referred to
individually and collectively as the “Original Pledgor Pledge Agreement”.

D. As a material inducement to Lender in making the Loan to Original Borrower,
Guarantor did execute and deliver to Lender (i) that certain Guaranty of
Recourse Obligations dated as of March 23, 2007 (as amended and reaffirmed from
time to time, the “Original Guaranty”), (ii) that certain ERISA Indemnity
Agreement dated as of March 23, 2007 (as amended and reaffirmed from time to
time, the “Original ERISA Indemnity”), and (iii) that certain Environmental
Indemnity Agreement dated as of March 23, 2007 (as amended and reaffirmed from
time to time, the “Original Environmental Indemnity”).

E. Pursuant to the Original Guaranty, the Original ERISA Indemnity, and the
Original Environmental Indemnity, Guarantor made representations, warranties and
covenants to Lender with respect to the performance of Guarantor, Original
Borrower and Original Pledgor under the Original Guaranty, the Original ERISA
Indemnity, the Original Environmental Indemnity, the Original Mortgage, the
Original Borrower Pledge Agreement, the Original Pledgor Pledge Agreement, and
the other Original Loan Documents.

 

2

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F. Borrower has requested that Lender make a loan to Borrower (the “New Loan”)
in the aggregate original principal sum of Thirteen Million Three Hundred
Thousand and 00/100 Dollars ($13,300,000.00) (the “New Loan Amount”).

G. The New Loan would be evidenced by that certain Promissory Note A-3 dated as
of the date hereof, in the principal amount of Thirteen Million Three Hundred
Thousand and 00/100 Dollars ($13,300,000.00), made by Borrower and payable to
the order of Lender (the “New Note”, together with all other documents,
instruments and agreements now or hereafter evidencing or securing the repayment
of, or otherwise pertaining to the New Loan, being herein referred to
collectively as the “New Loan Documents”).

H. The New Note would be secured by, among other things, that certain Deed of
Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
(Stevens Pass) dated as of the date hereof by Stevens Pass in favor of Lender
encumbering the fee simple interest and leasehold estate in a 2,484 acre ski
resort commonly known as Steven’s Pass and described more particularly therein
(the “New Mortgage”), that certain Pledge and Security Agreement dated as of the
date hereof by CLP Stevens Pass in favor of Lender (the “Stevens Pass Pledge”),
that certain Pledge and Security Agreement dated as of the date hereof by Ski IV
Pledgor in favor of Lender (the “Ski IV Pledge”) and that certain Pledge and
Security Agreement dated as of the date hereof by Ski Holding Pledgor in favor
of Lender (the “New Ski Holding Pledge” and, together with the Stevens Pass
Pledge and the Ski IV Pledge, collectively, the “New Pledge Agreements”; CLP
Stevens Pass, SKI IV Pledgor and SKI Holding Pledgor, as pledgors under the New
Pledge Agreements, collectively, the “New Pledgor”).

I. In addition, Original Borrower, Original Pledgor and Guarantor have requested
that Lender modify the terms of the Original Loan in certain respects,
including, but not limited to, extending the maturity date of the Original Loan
such that it is coterminous with the maturity date of the New Loan.

J. As a material inducement to Lender making the New Loan to Borrower and
modifying the terms of the Original Loan as requested, Guarantor has agreed to
execute and deliver to Lender (i) that certain Amended and Restated Guaranty of
Recourse Obligations dated as of the date hereof (as amended and reaffirmed from
time to time, the “Guaranty”), (ii) that certain Amended and Restated ERISA
Indemnity Agreement dated as of the date hereof (as amended and reaffirmed from
time to time, the “ERISA Indemnity”), and (iii) that certain Amended and
Restated Environmental Indemnity Agreement dated as of the date hereof (as
amended and reaffirmed from time to time, the “Environmental Indemnity”).

K. Lender is willing to make the New Loan to Borrower and to amend the Original
Loan as requested by Original Borrower, Original Pledgor and Guarantor, provided
that, among other things (i) Borrower shall act as co-maker of the New Note and
Borrower, Pledgor, and Guarantor agree that the Original Loan and the New Loan
shall be cross-defaulted and cross-collateralized with each other, (ii) each
Original Mortgage shall be modified to provide that the such Original Mortgage
shall secure both the Original Loan and the New Loan and all obligations of
Borrower pursuant to the New Loan Documents, (iii) the New Loan Documents shall
provide that the New Loan Documents will secure both the New Loan and the
Original Loan and all obligations of Original Borrower pursuant to the Original
Loan Documents and (iv)

 

3

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all applicable parties shall execute such guaranties, contribution agreements,
amendments and other instruments as Lender shall deem necessary to evidence the
foregoing, in each case in accordance with the terms of this Agreement and all
other documents, instruments and agreements required by Lender to be executed or
delivered in connection with this Agreement and the New Loan.

L. Lender, Borrower, Pledgor, and Guarantor wish to enter into this Agreement in
order to document the amendment and restatement in its entirety of the Original
Loan Agreement in connection with the consummation of the New Loan and the
cross-default and cross-collateralization described above, incorporate certain
modifications to the Original Loan Agreement agreed to by the parties in prior
amendments and new modifications to the Original Loan Agreement, the addition of
Stevens Pass as a co-maker of the Original Note and the making of the New Loan
and other matters as set forth herein, and Lender is willing to make the New
Loan on the terms and conditions set forth in this Agreement and the other Loan
Documents.

NOW, THEREFORE, in consideration of the foregoing, the parties hereby agree to
amend and restate the Original Loan Agreement in its entirety as follows:

ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1 Definitions.

For all purposes of this Agreement and the other Loan Documents, the following
terms shall have the following respective meanings. The location of additional
defined terms is set forth in Section 1.2 below and in the Introductory
Paragraph hereof and the Recitals:

“Acquisition Documentation” means, collectively, the Original Acquisition
Documentation and the New Acquisition Documentation.

“Agreement Regarding Exercise of Rights” shall mean that certain Agreement
Regarding Exercise of Rights, dated January 19, 2007, by and among CLP
Northstar, Trimont Land Holdings, TPO Northstar and Northstar TRS.

“Affiliate” of any specified Person means any other Person Controlling,
Controlled by or under common Control with such specified Person.

“Allocated Loan Amount” means, with respect to each Individual Property, the
Allocated Loan Amount for such Individual Property set forth on Schedule 2
attached hereto, as such amounts shall be adjusted from time to time as
hereinafter set forth (including Section 13.6(a)(v)). Upon each adjustment in
the amount of the Principal Indebtedness due to the making of a prepayment of
the Loan in accordance with the terms of the Loan Documents (other than pursuant
to Section 13.6, which Section sets forth specifically how adjustments are made
with respect to Property Releases) (including any amortization payment), each
Allocated Loan Amount shall be decreased by an amount equal to the product of
(i) the amount of such payment and (ii) a fraction, the numerator of which is
the applicable Allocated Loan Amount (prior to the adjustment in question) and
the denominator of which is the total of all Allocated Loan Amounts

 

4

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(prior to the adjustment in question). Notwithstanding the foregoing sentence to
the contrary, when the Indebtedness is reduced as the result of Lender’s receipt
of proceeds with respect to a condemnation or Casualty affecting one hundred
percent (100%) of any Individual Property, the Allocated Loan Amount for such
Individual Property with respect to which the Insurance Proceeds or Condemnation
Proceeds were received shall, at Lender’s discretion, be reduced to zero (such
Allocated Loan Amount prior to reduction being referred to as the “Withdrawn
Allocated Amount”), and each other Allocated Loan Amount shall, if the Withdrawn
Allocated Amount exceeds such proceeds (such excess being referred to as the
“Proceeds Deficiency”), be increased by an amount equal to the product of
(1) the Proceeds Deficiency and (2) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question) and the
denominator of which is the aggregate of all of the Allocated Loan Amounts
(prior to the adjustment in question) other than the Withdrawn Allocated Amount.
The “Allocated Loan Amount” for any Substitute Property, following the
occurrence of a Substitution, shall be the Allocated Loan Amount, as of the date
of such Substitution, for the Individual Property replaced by such Substitute
Property.

“BCRP” means BCRP Inc., a Delaware corporation, together with its permitted
successors and assigns.

“Booth Creek APA” means that certain Asset Purchase Agreement, dated as of
December 1, 2006, by and among TPO Northstar, TPO Snoqualmie, DRE, L.L.C., a
Delaware limited liability company, TPO Loon Mountain, Loon Realty Corp, TPO
Sierra, Booth Creek Resort Properties, and CLP Partners.

“Booth Creek Ski Group” means Booth Creek Ski Group, Inc, a Delaware
corporation, together with its permitted successors and assigns.

“Booth Creek Ski Holdings” means Booth Creek Ski Holdings, Inc, a Delaware
corporation, together with its permitted successors and assigns.

“Booth Creek Resort Properties” means Booth Creek Resort Properties, LLC a
Delaware limited liability company, together with its permitted successors and
assigns.

“Boyne” means Boyne USA, Inc., a Michigan corporation, together with its
permitted successors and assigns.

“Brighton APA” that certain Asset Purchase Agreement dated as of January 9, 2007
by and among TPO Brighton and CLP Partners.

“Brighton Ground Lease” means that certain Lease dated July 23, 1992 between
Royal and Boyne, as amended by that certain Addendum to Lease dated July 23,
1992, between Royal and Boyne, as assigned by Boyne to Brighton Resort, pursuant
to that certain Assignment and Assumption of Lease between Boyne and Brighton
dated as of December 28, 2000, as further assigned pursuant to that certain
General Conveyance and Assignment of Agreements, Leases, Licenses, Permits,
Plans, Contracts and Warranties between Brighton and CLP Brighton, dated as of
January 9, 2007, which lease is evidenced by that certain Memorandum of Lease
dated January 8, 2007, by and between Royal and CLP Brighton and recorded
January 9, 2007, as Entry No. 9966748 in Book 9406, at Page 4350 of the Official
Records of Salt Lake County, Utah.

 

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“Brighton Personal Property Lease” means that certain Personal Property Lease
Agreement by and between Brighton TRS and TPO Brighton, dated as of January 9,
2007, as amended and restated in its entirety by that certain Amended and
Restated Personal Property Lease Agreement dated as of August 10, 2009.

“Brighton Real Property Lease” means that certain Lease Agreement by and between
CLP Brighton and TPO Brighton, dated as of January 9, 2007, as amended and
restated in its entirety by that certain Amended and Restated Lease Agreement
dated as of August 10, 2009.

“Brighton Resort” means Brighton Resort, LLC, a Michigan limited liability
company, together with its permitted successors and assigns.

“Business Day” means any day other than a Saturday, a Sunday or a legal holiday
on which national banks are not open for general business.

“Cash Management Agreement” means, collectively, the Existing Cash Management
Agreements and the New Cash Management Agreement.

“Centex” means Centex Homes, d/b/a Centex Destination Properties, a Nevada
general partnership, together with its permitted successors and assigns.

“Centex Operating Agreement” means that certain Operating Agreement among
Centex, TPO Loon Mountain, and Loon Realty Corp. dated August 25, 2006 as
assigned to CLP Loon Mountain pursuant to that certain Assignment and Assumption
Agreement, dated January 19, 2007, by and among TPO Loon Mountain, Loon Realty
Corp. and CLP Loon Mountain.

“Centex Mortgage” means that certain Mortgage Deed from Centex to Booth Creek
Ski Group, dated September 14, 2006 and recorded in the Grafton County Registry
of Deeds, Book 3326, Page 0078 and assigned by Booth Creek Ski Group, to TPO
Loon Mountain by that certain Assignment of Mortgage dated November 22, 2006 and
recorded in said Registry of Deeds, Book 3352, Page 0676, and further assigned
by TPO Loon Mountain to CLP Loon Mountain, by that certain Assignment of
Mortgage dated January 19, 2007 and recorded in said Registry of Deeds, Book
3371, Page 0556.

“CLP Affiliate” means, those entities which directly, or indirectly through
various subsidiaries, are wholly owned by the Guarantor.

“CLP Partners” means CLP Partners, LP, a Delaware limited partnership, formerly
known as CNL Income Partners, LP.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statutes thereto.

 

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“Co-Lender” means the holder of any Note at any time, together with its
successors and assigns.

“Control” (and terms correlative thereto) when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or otherwise.

“Crossing Agreement” means that certain Crossing Agreement by and between the
New Hampshire Department of Transportation, TPO Loon Mountain, and Loon Realty
Corp., dated August 17, 2006.

“Debt Service Coverage Ratio” shall mean the ratio, as reasonably determined by
Lender, calculated by dividing (i) NOI by (ii) TADS.

“Dubois Settlement Agreement” means that certain Settlement Agreement, dated
February 22, 2001, by and among Roland Dubois, an individual, TPO Loon Mountain,
and Loon Realty Corp., as assigned to CLP Loon Mountain pursuant to that certain
Assignment and Assumption Agreement by and among TPO Loon Mountain, Loon Realty
Corp., and CLP Loon Mountain, dated January 19, 2007.

“Employee Housing Agreement” shall mean that certain Employee Housing Agreement
dated September 22, 2000, between TPO Northstar and Northstar Mountain
Properties, as assigned to CLP Northstar pursuant to that certain Assignment and
Assumption of Assumed Contracts [Northstar Ski Resort] dated January 19, 2007,
by TPO Northstar and CLP Northstar.

“Environmental Law” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
relating to protection of human health or the environment, relating to Hazardous
Substances, relating to liability for or costs of other actual or threatened
danger to human health or the environment, including the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and the
like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including Subtitle I relating to underground
storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air
Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the
Occupational Safety and Health Act; the Federal Water Pollution Control Act; the
Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act;
the National Environmental Policy Act; and the River and Harbors Appropriation
Act.

“Environmental Reports” means, collectively, the Original Environmental Reports
and the Stevens Pass Environmental Reports.

 

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“Equity Interests” means (a) partnership interests (general or limited) in a
partnership; (b) membership interests in a limited liability company; (c) shares
or stock interests in a corporation, and (d) the beneficial ownership interests
in a trust.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended or
re-codified from time to time, and the regulations promulgated thereunder.

“Essential Ski Property Deed of Trust” shall mean that certain Essential Ski
Property Deed of Trust, Security Agreement and Fixture Filing dated
September 22, 2000, by Trimont Land Holdings to TPO Northstar, as amended by
that certain Collateral Assignment of Deed of Trust dated September 22, 2000,
between TPO Northstar and Fleet National Bank, as amended by that certain
Assumption Agreement dated September 22, 2000, between Trimont Land Holdings and
Northstar Mountain Properties, as amended by that certain Deed of Partial
Reconveyance dated February 4, 2002, by Placer Title Company, as trustee, as
amended by that certain Deed of Partial Reconveyance dated August 7, 2003, by
Placer Title Company, as trustee, as amended by that certain Modification of
Deed of Trust dated November 13, 2002, among Northstar Mountain Properties, TPO
Northstar and Fleet National Bank, as amended by that certain Modification and
Spreader of Deed of Trust dated December 24, 2003, among Northstar Mountain
Properties, TPO Northstar and Fleet National Bank, as amended by that certain
Third Modification and Spreader of Deed of Trust dated May 30, 2003, among
Northstar Mountain Properties, TPO Northstar and Fleet National Bank, as amended
by that certain Fourth Modification and Spreader of Deed of Trust dated
December 24, 2003, among Northstar Mountain Properties, TPO Northstar and Fleet
National Bank, as amended by that certain Fifth Modification and Spreader of
Deed of Trust dated December 24, 2003, among Northstar Mountain Properties, TPO
Northstar and Fleet National Bank, as amended by that certain Sixth Modification
and Spreader of Deed of Trust dated December 24, 2003, among Northstar Mountain
Properties, TPO Northstar and Fleet National Bank, as amended by that certain
Substitution of Trustee and Deed of Partial Reconveyance dated January 12, 2004,
between U.S. Bank National Association and TPO Northstar, as amended by that
certain First Priority Collateral Assignment of Deed of Trust dated May 31,
2005, between TPO Northstar and General Electric Capital Corporation, as amended
by that certain Second Priority Collateral Assignment of Deed of Trust dated
May 31, 2005, between TPO Northstar and The Bank of New York, as amended by that
certain Assignment of Collateral Assignment of Deed of Trust dated July 7, 2005,
by Bank of America, N.A., as successor-in-interest to Fleet National Bank, in
favor of TPO Northstar, as amended by that certain Deed of Partial Reconveyance
dated September 5, 2005, among TPO Northstar, General Electric Capital
Corporation and The Bank of New York, as amended by that certain Deed of Partial
Reconveyance dated December 19, 2005, among TPO Northstar, General Electric
Capital Corporation and The Bank of New York, as amended by that certain Deed of
Partial Reconveyance dated February 28, 2006, among TPO Northstar, General
Electric Capital Corporation and The Bank of New York, as amended by that
certain Seventh Modification and Spreader of Deed of Trust dated May 11, 2006,
between Northstar Mountain Properties and TPO Northstar, as amended by that
certain Eight Modification and Spreader of Deed of Trust dated August 28, 2006,
between Northstar Mountain Properties and TPO Northstar, as amended by that
certain Assignment of Deed of Trust dated January 19, 2007, by TPO Northstar in
favor of CLP Northstar.

 

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“Existing Cash Management Agreements” means collectively, each of the following
Cash Management Agreements dated as of April 5, 2011 (i) Cash Management
Agreement (CLP Northstar), by and between CLP Northstar, as borrower, and
Lender, as lender; (ii) Cash Management Agreement (Northstar TRS), by and
between Northstar TRS, as borrower, and Lender, as lender; (iii) Cash Management
Agreement (CLP Sierra), by and between CLP Sierra, as borrower, and Lender, as
lender; (iv) Cash Management Agreement (Sierra TRS), by and between Sierra TRS,
as borrower, and Lender, as lender; (v) Cash Management Agreement (CLP
Brighton), by and between CLP Brighton, as borrower, and Lender, as lender;
(vi) Cash Management Agreement (Brighton TRS), by and between Brighton TRS, as
borrower, and Lender, as lender; (vii) Cash Management Agreement (CLP
Snoqualmie), by and between CLP Snoqualmie, as borrower, and Lender, as lender;
(viii) Cash Management Agreement (Snoqualmie TRS), by and between Snoqualmie
TRS, as borrower, and Lender, as lender; (ix) Cash Management Agreement (CLP
Loon Mountain), by and between CLP Loon Mountain, as borrower, and Lender, as
lender; and (x) Cash Management Agreement (Loon Mountain TRS), by and between
Loon Mountain TRS, as borrower, and Lender, as lender.

“Existing Environmental Indemnity Agreements” means the following agreements:
(a) Environmental Indemnity Agreement dated January 19, 2007 by Booth Creek Ski
Holdings, Booth Creek Resort Properties, TPO Snoqualmie, and CLP Snoqualmie,
LLC; (b) Environmental Indemnity Agreement dated January 19, 2007 by Booth Creek
Ski Holdings, Booth Creek Resort Properties, TPO Sierra, and CLP Sierra, as
amended by that certain Release and Amendment of Environmental Indemnity
Agreement dated as of October 25, 2010 by Booth Creek Ski Holdings, Booth Creek
Resort Properties, TPO Sierra and CLP Sierra; (c) Environmental Indemnity
Agreement dated January 19, 2007 by Booth Creek Ski Holdings, Booth Creek Resort
Properties, TPO Loon Mountain, and CLP Loon Mountain; and (d) Environmental
Indemnity Agreement dated January 19, 2007 by Booth Creek Ski Holdings, Booth
Creek Resort Properties, TPO Northstar, and CLP Northstar, as amended by that
certain Assignment, Assumption, Amendment and Release of Environmental Indemnity
Agreement dated as of October 25, 2010 by Booth Creek Resort Properties, Booth
Creek Ski Holdings, TPO Northstar, CLP Northstar and VR Acquisition, Inc.

“Fiscal Year” means the 12-month period ending on December 31 of each year or
such other fiscal year of Borrower or Pledgor as Borrower or Pledgor may select
from time to time with the prior written consent of Lender. Borrower and Pledgor
shall have the same fiscal year.

“Forest Service Permits” means those permits issued by the USFS to the
applicable Real Property Owner set forth on Schedule 5.

“Forest Service Land” means the real property described in the Forest Service
Permits.

“Governmental Authority” means any national, federal, state, regional or local
government, or any other political subdivision of any of the foregoing, in each
case with jurisdiction over Borrower, Pledgor, the Equity Collateral, the
Property (including the Forest Service Land), or any Person with jurisdiction
over Borrower, Pledgor, the Equity Collateral, or the Property (including the
Forest Service Land) exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including, but not
limited to, the USFS.

 

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“Ground Lease” means individually and collectivity, as the context may require,
each of (i) the Northstar Net Lease Agreement, (ii) the Brighton Ground Lease
and (iii) the Loon Mountain Ground Lease.

“Guarantor” means CNL Lifestyle Properties, Inc., a Maryland corporation,
formerly known as CNL Income Properties, Inc.

“Guaranty of Lease Agreement” means, collectively, (i) that certain Amended and
Restated Guaranty of Lease Agreement and Release dated as of October 25, 2010,
by Booth Creek Resort Properties, Booth Creek Ski Holdings and BCRP and accepted
by Sierra and Northstar, and (ii) that certain Guaranty of Lease Agreement,
dated as of October 25, 2010 by Booth Creek Ski Holdings, BCRP and VR
Acquisition, Inc. in favor of Northstar.

“Hallisey Option Agreement” means that certain Hallisey Option Agreement, dated
October 3, 2005, by and among Booth Creek Ski Group, TPO Loon Mountain, and Loon
Realty Corp., as assigned to CLP Loon Mountain pursuant to that certain
Assignment and Assumption Agreement, dated January 19, 2007, by and among TPO
Loon Mountain, Loon Realty Corp. and CLP Loon Mountain/

“Hazardous Substance” means, without limitation, any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified as pollutants,
toxic or hazardous wastes, toxic or hazardous substances, toxic or hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including petroleum and
petroleum products, mold or fungus, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives.

“Impositions”, means all ground rents and all taxes (including, without
limitation, all real estate, ad valorem or value added, sales (including those
imposed on lease rentals), use, single business, gross receipts, intangible
transaction privilege, privilege, license or similar taxes), assessments
(including, without limitation, to the extent not discharged prior to the
Closing Date, all assessments for public improvements or benefits, whether or
not commenced or completed within the term of the Loan), water, sewer or other
rents and charges, excises, levies, fees (including, without limitation,
license, permit, inspection, authorization and similar fees), and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character in respect of the
Property (including all interest and penalties thereon) and the Forest Service
Land (including all interest and penalties thereon), which at any time prior to,
during or in respect of the term hereof may be assessed or imposed on or in
respect of or be a Lien upon (i) Borrower, Pledgor (including, without
limitation, all income, franchise, single business or other taxes imposed on
Borrower or Pledgor for the privilege of doing business in the jurisdiction in
which the Property (including the Forest Service Land) is located, or Lender
(including taxes resulting from future changes in law which impose upon Lender
or any trustee an obligation to pay any property taxes or other taxes or

 

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which otherwise adversely affect Lender’s interests), (ii) the Property
(including the Forest Service Land) or any part thereof, the Equity Collateral,
or any part thereof, or (iii) any occupancy, operation, use or possession of, or
sales from, or activity conducted on, or in connection with the Property
(including the Forest Service Land) or the leasing or use of the Property
(including the Forest Service Land) or any part thereof, or the acquisition or
financing of the acquisition of the Property (including the Forest Service Land)
by Borrower or Pledgor. Without limitation of the foregoing, any such rents,
taxes, assessments, fees or charges assessed, levied or imposed against the
Borrower or the portion of the Property demised under the Brighton Ground Lease
that arise out of or relate to the fact that such Property is not a separate tax
lot, shall be deemed to be “Impositions” under the Loan Documents.

“Indebtedness,” unless otherwise specified, means collectively, at any given
time, the Principal Indebtedness of the Original Loan and the New Loan, together
with all accrued and unpaid interest thereon and all other obligations and
liabilities due or to become due to Lender pursuant hereto or any of the other
Loan Documents.

“Indemnified Party” means each of Lender, each of its Affiliates and their
respective successors and assigns, any Person who is or will have been involved
with the servicing of the Loan, Persons who may hold or acquire or will have
held a full or partial interest in the Loan (including Investors, as well as
custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in the Loan for the benefit of third parties) (including any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan or the collateral therefor), and the
respective officers, directors, and employees, agents, Affiliates, successors
and assigns of any and all of the foregoing.

“Indenture” means that certain Indenture, dated as of April 5, 2011, executed in
connection with the Parent Debt and Related Guarantees, as the same may be
amended and/or supplemented from time to time in accordance with the terms
thereof.

“Leases” means all leases and other agreements or arrangements affecting the use
or occupancy of all or any portion of the Property (including the Forest Service
Land) now in effect or hereafter entered into (including all lettings,
subleases, licenses, concessions, tenancies and other occupancy agreements
covering or encumbering all or any portion of the Property or the Forest Service
Land), together with any guarantees, supplements, amendments, modifications,
extensions and renewals of the same.

“Legal Requirements” means (a) all statutes, laws, rules, orders, regulations,
ordinances, judgments, orders, decrees and injunctions of Governmental
Authorities affecting Borrower, Pledgor, the Loan Documents, the Property
(including the Forest Service Land) or any part thereof, Equity Collateral or
any part thereof, and all Permits, Forest Service Permits, and regulations
relating thereto (including, without limitation, all Environmental Laws, the
Fair Housing Act of 1988, as amended, and the Americans with Disabilities Act,
and anything relating to zoning, land use, and building codes), (b) all
covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower or Pledgor, at any time in
force affecting the Property (including the Forest Service Land) or any part
thereof, (c) terms of any insurance policy maintained by or on behalf of
Borrower, and (d) the organizational documents of Borrower or Pledgor.

 

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“Lien” means any mortgage, deed of trust, deed to secure debt, lien pledge,
easement, restrictive covenant, hypothecation, assignment, security interest,
conditional sale or other title retention agreement, financing lease having
substantially the same economic effect as any of the foregoing, or financing
statement or similar instrument.

“Loan” means individually and collectively, as the context may require, the
Original Loan and the New Loan.

“Loan Documents” means, collectively, this Agreement and all other documents,
agreements, instruments and certificates now or hereafter evidencing, securing
or delivered to Lender in connection with the Original Loan or the New Loan,
including without limitation the documents listed on Schedules 1A and 1B
attached hereto, as each may be (and each of the defined terms shall refer to
such documents as they may be) amended, restated, or otherwise modified from
time to time.

“Loan to Value Ratio” means the ratio, as reasonably determined by Lender, of
(i) the sum of the Indebtedness plus the amount of all other Liens on the
Property and Equity Collateral to (ii) the fair market value of the Property.

“Loon Mountain Conceptual Approval Agreement” means that certain Conceptual
Approval Agreement, dated August 25, 2006, by and among Loon Realty Corp., TPO
Loon Mountain and Centex, as assigned to CLP Loon Mountain pursuant to that
certain Assignment and Assumption Agreement, dated January 19, 2007, by and
among Loon Realty Corp., TPO Loon Mountain and CLP Loon Mountain.

“Loon Mountain Easement Agreement” means that certain Amended and Restated
Easement Agreement, dated August 25, 2006, by and among Centex, TPO Loon
Mountain and Loon Realty Corp., as assigned to CLP Loon Mountain pursuant to
that certain Assignment and Assumption Agreement, dated January 19, 2007, by and
among Loon Realty Corp., TPO Loon Mountain and CLP Loon Mountain.

“Loon Mountain Ground Lease” means that certain Ground Lease with Lessee to
Construct Improvements dated March 20, 2000, by and between Peter F. Govoni and
Carol C. Govoni, as lessors and TPO Loon Mountain, as lessee, as evidenced by
that certain Notice of Lease recorded with the Grafton County, New Hampshire
Registry of Deeds at Book 2461, Page 540, as by assigned by TPO Loon Mountain to
CLP Loon Mountain, pursuant to that certain Assignment and Assumption of Leases
recorded March 7, 2007, in Book 3383, Page 857.

“Loon Mountain Personal Property Lease” means that certain Personal Property
Lease Agreement by and between Loon Mountain TRS and TPO Loon Mountain, dated as
of January 19, 2007, as amended by that certain First Amendment to Personal
Property Lease Agreement dated as of October 5, 2007, as amended and restated in
its entirety by that certain Amended and Restated Personal Property Lease
Agreement dated as of August 10, 2009.

“Loon Mountain Pipeline Construction and Maintenance Agreement” means that
certain Permitting and Pipeline Construction and Maintenance Agreement, dated
June 29, 2006, by and among, TPO Loon Mountain and Town of Lincoln, New
Hampshire, as assigned by TPO

 

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Loon Mountain to CLP Loon Mountain pursuant to that certain Assignment and
Assumption of Assumed Contracts dated January 19, 2007, by and among Loon
Mountain Recreation Corporation, Loon Realty Corp. and CLP Loon Mountain.

“Loon Mountain Real Property Lease” means that certain Lease Agreement by and
between CLP Loon Mountain and TPO Loon Mountain, dated as of January 19, 2007,
as amended by that certain First Amendment to Lease Agreement dated as of
October 5, 2007, as amended and restated in its entirety by that certain Amended
and Restated Lease Agreement dated as of August 10, 2009.

“Loon Realty Corp” means Loon Realty Corp., a New Hampshire corporation,
together with its permitted successors or assigns.

“Losses” means any losses (including, without limitation, unrealized loss of
value of the Property or the Equity Collateral), actual damages, reasonable
costs, fees, expenses, claims, suits, actions, proceedings, judgments, awards,
liabilities (including strict liabilities), obligations, debts, diminutions in
value, fines, penalties, charges, costs of Remediation (whether or not performed
voluntarily), amounts paid in settlement, foreseeable and unforeseeable
consequential damages, litigation costs, attorneys’ fees, engineers’ fees,
environmental consultants’ fees, and investigation costs (including costs for
sampling, testing and analysis of soil, water, air, building materials, and
other materials and substances whether solid, liquid or gas), of whatever kind
or nature, and whether or not incurred in connection with any judicial or
administrative proceedings, actions, claims, suits, judgments or awards.

“Material Adverse Effect” means a material adverse effect upon (a) the business
or financial position or results of operation of any Individual Borrower or any
Individual Pledgor, (b) the ability of any Individual Borrower or any Individual
Pledgor to perform, or of Lender to enforce, any of the Loan Documents, (c) the
value, use or marketability of any Individual Property (including the Forest
Service Land), or (d) the value, use or marketability of any Equity Collateral
pledged by any Individual Pledgor.

“Material Agreement” means (i) those agreements set forth on Schedule 6 and
Schedule 7 attached hereto and (ii) each contract and agreement relating to the
ownership, management, development, use, operation, leasing, maintenance, repair
or improvement of the Property (including the Forest Service Land), other than
the Leases, under which there is an obligation of Borrower or Pledgor which
exceeds a value of more than $100,000 per annum.

“Mountaineers License” means that certain 2006-2007 Agreement, dated
November 27, 2006, by and between The Mountaineers and Booth Creek Ski Holdings,
as assigned by Booth Creek Ski Holdings to TPO Snoqualmie, as further assigned
by TPO Snoqualmie to CLP Snoqualmie pursuant to that certain Assignment and
Assumption dated as of January 19, 2007, between TPO Snoqualmie and CLP
Snoqualmie.

“New Acquisition Documentation” means collectively the documents listed on
Schedule 7 attached hereto under the heading “Stevens Pass Resort.”

 

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“New Cash Management Agreement” means collectively (i) that certain Cash
Management Agreement dated as of the date hereof by and between CLP Stevens
Pass, as borrower, and Lender, as lender and (ii) that certain Cash Management
Agreement dated as of the date hereof by and between Stevens Pass TRS, as
borrower, and Lender, as lender.

“New Stevens LLC” means New Stevens LLC, a Washington limited liability company.

“NOI” means the gross annual income realized from operations of the Property
(including the Forest Service Land) for the applicable twelve (12) month period
after subtracting all necessary and ordinary operating expenses (both fixed and
variable) for that twelve (12) month period ((assuming for expense purposes only
that the Property (including the Forest Service Land) is ninety-five percent
(95%) leased and occupied if actual leasing is less than ninety-five percent
(95%)), including, without limitation, utilities, administrative expenses,
cleaning, landscaping, security, repairs, and maintenance, ground rent payments,
management fees, reserves for replacements, real estate and other taxes,
assessments and insurance, but excluding deduction for federal, state and other
income taxes, debt service expense, depreciation or amortization of capital
expenditures, and other similar non-cash items. Gross annual income shall be
based on the cash actually received for the preceding twelve (12) months and
projected income based on the leases in place for the next succeeding twelve
(12) months, and ordinary operating expenses shall not be prepaid. Documentation
of NOI and expenses shall be certified by an officer of Borrower with detail
satisfactory to Lender and shall be subject to the approval of Lender.

“Northstar Agreement” means that certain Agreement dated March 2, 2005, among
Sierra Watch, Mountain Area Preservation Foundation, Northstar Mountain
Properties, Trimont Land Holdings, and TPO Northstar, as assigned to CLP
Northstar pursuant to that certain Assignment and Assumption of Assumed
Contracts [Northstar Ski Resort] dated January 19, 2007, by TPO Northstar and
CLP Northstar.

“Northstar Assumption Agreement” means that certain Assumption Agreement dated
September 22, 2000, between Trimont Land Holdings and Northstar Mountain
Properties.

“Northstar Closing Letter” dated January 19, 2007, among TPO Northstar, TPO
Snoqualmie, DRE L.L.C., TPO Loon Mountain, Loon Realty Corp., TPO Sierra., Booth
Creek Resort Properties, CLP Partners, The Talon Group and BCRP.

“Northstar Easement” means that certain Easement Agreement dated September 22,
2000, between Trimont Land Holdings, as grantor and TPO Northstar, as grantee,
as amended by that certain Assumption Agreement dated September 22, 2000,
between Trimont Land Holdings and Northstar Mountain Properties, as amended by
that certain Partial Release of Easement Agreement recorded December 18, 2001,
between Northstar Mountain Properties and TPO Northstar, as amended by that
certain First Amendment to Easement Agreement dated May 30, 2003, between
Northstar Mountain Properties and TPO Northstar, as amended by that certain
Partial Release of Easement Agreement dated July 9, 2003, between Northstar
Mountain Properties and TPO Northstar, as amended by that certain Second
Amendment to Easement Agreement dated December 24, 2003, between Northstar
Mountain Properties and TPO

 

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Northstar, as amended by that certain Third Amendment to Easement Agreement
dated December 24, 2003, between Northstar Mountain Properties and TPO
Northstar, as amended by that certain Fourth Amendment to Easement Agreement
dated December 24, 2003, between Northstar Mountain Properties and TPO
Northstar, as amended by that certain Fifth Amendment to Easement Agreement
dated December 24, 2003, between Northstar Mountain Properties and TPO
Northstar, as amended by that certain Partial Assignment and Assumption of
Agreements relating to the Village-at-Northstar (Stage 1 of Phase I) dated
October 26, 2004, between Northstar Mountain Properties and Northstar Iron
Horse, LLC, as amended by that certain Sixth Amendment to Easement Agreement
dated January 12, 2005, among Northstar Mountain Properties, Northstar Iron
Horse, LLC and TPO Northstar, as amended by that certain Partial Assignment and
Assumption of Agreements relating to the Village-at-Northstar (Stage 2 of Phase
I) dated October 26, 2005, between Northstar Mountain Properties and Northstar
Big Horn, LLC, as amended by that certain Seventh Amendment to Easement
Agreement dated October 26, 2005, among Northstar Mountain Properties, Northstar
Big Horn, LLC and TPO Northstar, as amended by that certain Partial Release of
Easement Agreement (Releasing the Day Lodge Parcel) dated March 2, 2006, between
Northstar Mountain Properties and TPO Northstar, as amended by that certain
Eighth Amendment to Easement Agreement recorded July 14, 2006, between Northstar
Mountain Properties and TPO Northstar.

“Northstar Letter Agreement” means that certain Letter Agreement Re: Future
Capital Improvements dated January 19, 2007, among CLP Northstar, TPO Northstar
and Booth Creek Ski Group, Inc.

“Northstar/Martis Camp Ski Improvement Agreement” means that certain Ski
Improvement Agreement, dated as of June 10, 2007, by and among DMB/Highlands
Group, LLC, an Arizona limited liability company, TPO Northstar and CLP
Northstar, as the same may be hereafter amended or modified.

“Northstar/Martis Camp Ski Improvement Easement Agreement” means that certain
Easement Agreement (Ski Improvements), by and among DMB/Highlands Group, LLC, an
Arizona limited liability company, and CLP Northstar, as the same may be
hereafter amended or modified.

“Northstar/Martis Camp Ski Services Agreement” means that certain Ski Services
Agreement, dated as of June 10, 2007, by and among DMB/Highlands Group, LLC, an
Arizona limited liability company, TPO Northstar and CLP Northstar, as the same
may be hereafter amended or modified.

“Northstar/Martis Camp Settlement Agreement” means that certain Settlement and
Development Agreement, dated as of January 30, 2008, by and among CLP Northstar,
TPO Northstar, Northstar Mountain Properties, Porcupine Hill Estates, LLC, NMP
Holdings, LLC, and East West Resort Development V, L.P., L.L.L.P., as the same
may be hereafter amended or modified.

“Northstar Mountain Properties” means Northstar Mountain Properties, LLC, a
Delaware limited liability company, together with its successors and assigns.

 

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“Northstar Net Lease Agreement” means that certain Net Lease Agreement dated
September 22, 2000, between TPO Northstar, as tenant, and Trimont Land Holdings,
as landlord, as amended by that certain Assumption Agreement dated September 22,
2000, between Trimont Land Holdings and Northstar Mountain Properties, as
amended by that certain First Amendment to Net Lease Agreement dated
December 30, 2003, between TPO Northstar and Northstar Mountain Properties, as
amended by that certain Second Amendment to Net Lease Agreement dated
December 30, 2003, between TPO Northstar and Northstar Mountain Properties, as
amended by that certain Partial Assignment and Assumption of Agreements relating
to the Village-at-Northstar (Stage 1 of Phase I) dated October 26, 2004, between
Northstar Mountain Properties and Northstar Iron Horse, LLC, as amended by that
certain Partial Termination, Assignment and Assumption of Net Lease dated
January 12, 2005, among Northstar Mountain Properties, Northstar Iron Horse,
LLC, Trimont Land Holdings and TPO Northstar, as amended by that certain Partial
Termination of Net Lease dated September [    ], 2005, between Northstar
Mountain Properties and TPO Northstar, as amended by that certain Partial
Assignment and Assumption of Agreements relating to the Village-at-Northstar
(Stage 2 of Phase I) dated October 26, 2005, between Northstar Mountain
Properties and Northstar Big Horn, LLC, as amended by that certain Partial
Termination of Net Lease dated October 26, 2005, between Northstar Big Horn, LLC
and TPO Northstar, as amended by that certain Subordination, Non-Disturbance and
Attornment Agreement dated October 26, 2005, between TPO Northstar and JPMorgan
Chase Bank, N.A., as amended by that certain Partial Termination of Net Lease
dated March 2, 2006, between Northstar Mountain Properties and TPO Northstar, as
assigned by TPO Northstar to CLP Northstar, pursuant to the Assignment and
Assumption of Net Lease Agreement dated January 19, 2007, between TPO Northstar
and CLP Northstar.

“Northstar Personal Property Lease” means that certain Personal Property Lease
Agreement by and between Northstar TRS and TPO Northstar, dated as of
January 19, 2007, as amended by that certain First Amendment to Personal
Property Lease Agreement effective as of November 1, 2008, as further amended by
that certain Second Amendment to Personal Property Lease Agreement dated as of
August 1, 2009, and as amended and restated in its entirety by that certain
Amended and Restated Personal Property Lease Agreement dated as of October 25,
2010.

“Northstar Real Property Lease” means that certain Lease Agreement by and
between CLP Northstar and TPO Northstar, dated as of January 19, 2007, as
amended by that certain First Amendment to Lease Agreement dated as of June 10,
2007, as further amended by that certain Second Amendment to Lease Agreement
dated as of November 15, 2007, as further amended by that certain Third
Amendment to Lease Agreement, dated as of November 15, 2007, as further amended
by that certain Fourth Amendment to Lease Agreement effective as of November 1,
2008, as further amended by that certain Fifth Amendment to Lease Agreement
dated as of August 1, 2009, and as amended and restated in its entirety by that
certain Amended and Restated Personal Property Lease Agreement dated as of
October 25, 2010, as amended by that certain First Amendment to Amended and
Restated Lease Agreement dated as of August 17, 2011.

“Northstar Settlement Agreement” dated January 16, 2007, between TPO Northstar
and Ski Trails Condominium Owners’ Association, as assigned to CLP Northstar
pursuant to that certain Assignment and Assumption of Assumed Contracts
[Northstar Ski Resort] dated January 19, 2007, by TPO Northstar and CLP
Northstar.

 

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“Original Acquisition Documentation” means collectively the documents listed on
Schedule 7 attached hereto under the headings “Common Documents: Northstar at
Tahoe, Sierra at Tahoe, Summit at Snoqualmie and Loon Mountain Resort,” “Sierra
at Tahoe,” “Summit at Snoqualmie,” “Loon Mountain,” and “Brighton Ski Resort.”

“Original Closing Date” means March 23, 2007.

“Original Environmental Reports” means the following reports: (a) Phase I
Environmental Site Assessment (12/18/06) by ECS-Florida, LLC, prepared for CNL
Income Corp.; (b) Final Environmental Impact Statement, Volume 1 (10/99), for
the Brighton Ski Resort Master Development Plan Update, prepared by U.S.
Department of Agriculture, Forest Service and Bear West Consulting Team;
(c) Environmental Review of Booth Creek Ski Holdings, Inc., Northstar-at-Tahoe
(12/06; revised 3/07) by Environ International Corp. for CNL Income Corp.;
(d) Environmental Review of Six Ski Resort Areas Owned by Booth Creek Ski
Holdings, Inc. (5/04) by Environ International Corp. for Booth Creek Ski
Holdings, Inc.; (e) Draft Environmental Review Update of Six Ski Resort Areas
Owned by Booth Creek Ski Holdings, Inc. (5/05) by Environ International Corp,
for General Electric Commercial & Industrial Finance; (f) Environmental Review
of Booth Creek Ski Holdings, Inc., Loon Mountain (12/06) by Environ
International Corporation for CNL Income Corp.; (g) Phase I Environmental Site
Assessment, 43.83 Acre Property, Cox Farm Access Road, Grafton County, New
Hampshire (2/28/07) by ECS-Florida, LLC; (h) Environmental Review of Booth Creek
Ski Holdings, Inc., Sierra-at-Tahoe (12/06) by Environ International Corporation
for CNL Income Corp.; (i) Environmental Review of Booth Creek Ski Holdings,
Inc., The Summit at Snoqualmie (12/06) by Environ International Corporation for
CNL Income Corp; and (j) 43.85 Acre Cox Farm Access Road Property Limited
Regulatory Compliance Review dated March 1, 2007 prepared by ECS Florida LLC.

“Original Loan Application” means that certain First Mortgage Loan Application
by and among Lender and the Original Real Property Owners, dated as of
February 22, 2007.

“Original Real Property Owner” means individually and collectively, as the
context may require, each of (a) CLP Northstar, (b) CLP Sierra, (c) CLP
Brighton, (d) CLP Snoqualmie and (e) CLP Loon Mountain.

“Parent” means Guarantor.

“Parent Debt and Related Guarantees” means up to an aggregate amount of Four
Hundred Million and 00/100 Dollars ($400,000,000.00) of senior notes issued by
Parent in a private offering through Jefferies & Company, Inc., Merrill Lynch,
Pierce Fenner & Smith Incorporated, Fifth Third Securities, Inc., BB&T Capital
Markets and Morgan Keegan & Company, Inc., as initial purchasers, which notes
are fully and unconditionally guaranteed by Original Borrower together with
certain Affiliates of Original Borrower.

“Parent Debt Documents” means the Indenture and other documents evidencing the
Parent Debt and Related Guarantees.

 

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“Permitted Encumbrances” means, (a) with respect to the Property, collectively,
(i) the Lien created by the Loan Documents, (ii) all Liens and other matters
disclosed in the title insurance policy insuring the Mortgage, or any part
thereof which have been approved by Lender, (iii) Liens, if any, for Impositions
imposed by any Governmental Authority not yet due or delinquent, and (iv) such
governmental, public utility and private restrictions, covenants, reservations,
easements, licenses or other agreements of an immaterial nature which may be
granted by Borrower after the Closing Date, (v) Leases approved by Lender in
accordance with the Loan Documents, (vi) any Permitted Transfers or easements
required under the TPO Lease or described on Schedule 6.1, and (vii) subdivision
plats as may be required under and subject to any TPO Lease or Acquisition
Documentation, (b) with respect to the Equity Collateral, collectively the Liens
created by the Loan Documents.

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association, or any
other entity, any Governmental Authority, and any fiduciary acting in such
capacity on behalf of any of the foregoing.

“Personal Property Owner” means individually and collectively, as the context
may require, each of (a) Northstar TRS, (b) Sierra TRS, (c) Brighton TRS,
(d) Snoqualmie TRS, (e) Loon Mountain TRS and (f) Stevens Pass TRS.

“Plum Creek” means Plum Creek Timberlands, L.P., a Delaware limited partnership,
together with its permitted successors or assigns.

“Plum Creek License” means that certain Permit No. 890-5.06-2007 dated
December 18, 2006 by Plum Creek in favor of TPO Snoqualmie, as assigned by TPO
Snoqualmie to CLP Snoqualmie pursuant to that certain Assignment and Assumption
of Permit No. 890-5.06-2007 dated March 6, 2007, between TPO Snoqualmie and CLP
Snoqualmie.

“Plum Creek Option Agreement” means that certain Option and Purchase and Sale
Agreement No. 560-5.06-0160 dated as of May 11, 2006 by and among Plum Creek
Timberlands, L.P., a Delaware limited partnership, successor by merger to Plum
Creek Timber Company, L.P. (“Plum Creek Optionor”), and Ski Lifts, Inc. (“Ski
Lifts”), a Washington corporation (the “Plum Creek Option”), which Plum Creek
Option was assigned by Ski Lifts to Snoqualmie pursuant to that certain
Assignment and Assumption of Option and Purchase and Sale Agreement
No. 560-5.06-0160 dated as of December 19, 2006 between Ski Lifts and CLP
Snoqualmie, as amended by that certain Amendment No. 1 dated April 24, 2008.

“Pooling Agreement” means that certain Pooling Agreement dated January 19, 2007,
by and among CLP Northstar, CLP Sierra, CLP Snoqualmie, CLP Loon Mountain, TPO
Northstar, TPO Sierra, TPO Snoqualmie, TPO Loon Mountain, BCRP, Booth Creek
Resort Properties and Book Creek Ski Holdings, as amended by that certain First
Amendment to Pooling Agreement dated as of August 1, 2009, by and among CLP
Northstar, CLP Sierra, TPO Northstar, TPO Sierra, BCRP, Booth Creek Resort
Properties and Booth Creek Ski Holdings.

 

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“Principal Indebtedness” means, as applicable with respect to the Original Loan
and the New Loan, the principal amount of such Loan outstanding as the same may
be increased or decreased, as a result of prepayment or otherwise, from time to
time.

“Prior Taxes” shall have the meaning set forth in that certain Real Estate Tax
Indemnification Agreement, by and among CLP Partners, CLP Brighton and Brighton
Resort, dated as of January 9, 2007.

“Proceeds Deficiency” has the meaning set forth in the definition of “Allocated
Loan Amount”.

“Property Option Agreement” shall mean that certain Non-Residential Property
Option Agreement dated September 22, 2000, between Northstar Mountain Properties
and Trimont Land Holdings, as amended by that certain Partial Release of
Memorandum of Agreement for Purchase and Sale of Real Property recorded
December 18, 2001, between Northstar Mountain Properties and Trimont Land
Holdings, as amended by that certain Amendment of Non-Residential Property
Option Agreement dated May 30, 2003, between Northstar Mountain Properties and
Trimont Land Holdings, as amended by that certain Second Amendment to
Non-Residential Property Option Agreement dated December 24, 2003, between
Northstar Mountain Properties and Trimont Land Holdings, as amended by that
certain Third Amendment to Non-Residential Property Option Agreement dated
December 24, 2003, between Northstar Mountain Properties and Trimont Land
Holdings, as amended by that certain Fourth Amendment to Non-Residential
Property Option Agreement dated December 24, 2003, between Northstar Mountain
Properties and Trimont Land Holdings, as amended by that certain Fifth Amendment
to Non-Residential Property Option Agreement dated December 24, 2003, between
Northstar Mountain Properties and Trimont Land Holdings, as amended by that
certain Partial Assignment and Assumption of Agreements relating to the
Village-at-Northstar (Stage I of Phase I) dated October 26, 2004, between
Northstar Mountain Properties and Northstar Iron Horse, LLC, as amended by that
certain Release dated January 12, 2005, by Trimont Land Holdings and Northstar
Iron Horse, LLC, as amended by that certain Partial Release of Non-Residential
Property Option Agreement (Releasing the Day Lodge Parcel) dated March 2, 2006,
between Northstar Mountain Properties and Trimont Land Holdings, as amended by
that certain Partial Release of Non-Residential Property Option Agreement dated
November 20, 2006, between Northstar Mountain Properties and Trimont Land
Holdings, as amended by that certain Partial Assignment and Assumption of
Agreements Relating to Trailside Townhomes dated August 29, 2006, between
Northstar Mountain Properties and Northstar Trailside Townhomes, LLC, as amended
by that certain Partial Release of Non-Residential Property Option Agreement
dated October 25, 2006, between Northstar Mountain Properties and Trimont Land
Holdings, as assigned by that certain Assignment and Assumption of
non-Residential Property Option Agreement dated January 19, 2007, among Trimont
Land Holdings, TPO Northstar and CLP Northstar.

“Rating Agencies” means Fitch, Inc., Moody’s Investors Service, Inc., S&P, and
Dominion Bond Rating Service Limited or any successor thereto, and any other
nationally recognized statistical rating organization to the extent that any of
the foregoing have been or will be engaged by Lender or its designees in
connection with or in anticipation of a Secondary Market Transaction (each,
individually, a “Rating Agency”).

 

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“Real Property Owner” means individually and collectively, as the context may
require, each of (a) CLP Northstar, (b) CLP Sierra, (c) CLP Brighton, (d) CLP
Snoqualmie, (e) CLP Loon Mountain and (f) CLP Stevens Pass.

“Resolution Agreement” means that certain Lease and Loan Default Resolution and
Forbearance Agreement dated as of August 1, 2009, by and among Northstar,
Sierra, CNL Income Northstar Commercial, LLC, CLP Partners, TPO Northstar, TPO
Sierra, Northstar Group Commercial Properties, LLC, Booth Creek Ski Holdings,
Inc., BCRP, Inc., Booth Creek Resort Properties, LLC, Mount Cranmore Ski Resort,
Inc., Porcupine Hill Estates, LLC, Gillett Resorts, LLC and CB Management Co.
LLC, as the same may be amended from time to time.

“Release” with respect to any Hazardous Substance includes but is not limited to
any presence, release, deposit, discharge, emission, leaking, leaching,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Substances.

“Remediation” includes but is not limited to any activity to (a) clean up,
detoxify, decontaminate, disinfect, contain, treat, remove, respond to, correct,
dispose of, transport, or otherwise remediate, prevent, cure or mitigate any
Release of any Hazardous Substance; any action to comply with any Environmental
Laws or with any permits issued pursuant thereto; or (b) inspect, investigate,
study, monitor, assess, audit, sample, test, or evaluate any actual, potential
or threatened Release of Hazardous Substances.

“Royal” means Royal Street Land Company, a Utah corporation, together with its
permitted successors or assigns.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

“Sierra Personal Property Lease” means that certain Personal Property Lease
Agreement by and between Sierra TRS and TPO Sierra, dated as of January 19,
2007, as amended by that certain First Amendment to Personal Property Lease
Agreement effective as of November 1, 2008, as further amended by that certain
Second Amendment to Personal Property Lease Agreement dated as of August 1,
2009, and as amended and restated in its entirety by that certain Amended and
Restated Personal Property Lease Agreement dated as of October 25, 2010.

“Sierra Real Property Lease” means that certain Lease Agreement by and between
CLP Sierra and TPO Sierra, dated as of January 19, 2007, as amended by that
certain First Amendment to Lease Agreement effective as of November 1, 2008, as
further amended by that certain Second Amendment to Lease Agreement dated as of
August 1, 2009, and as amended and restated in its entirety by that certain
Amended and Restated Lease Agreement dated as of October 25, 2010.

“Snoqualmie Licenses” means individually and collectively, as the context may
require, each of (i) the Plum Creek License and (ii) the Mountaineers License.

“Snoqualmie Personal Property Lease” means that certain Personal Property Lease
Agreement by and between Snoqualmie TRS and TPO Snoqualmie, dated as of January
20,

 

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2007, as amended by that certain First Amendment to Personal Property Lease
Agreement dated as of October 5, 2007, as amended and restated in its entirety
by that certain Amended and Restated Personal Property Lease Agreement dated as
of August 10, 2009.

“Snoqualmie Real Property Lease” means that certain Lease Agreement by and
between CLP Snoqualmie and TPO Snoqualmie, dated as of January 20, 2007, as
amended by that certain First Amendment to Lease Agreement dated as of
October 5, 2007, as further amended by that certain Second Amendment to Lease
Agreement dated as of May 9, 2008, as amended and restated in its entirety by
that certain Amended and Restated Lease Agreement dated as of August 10, 2009.

“Stevens Pass APA” means that certain Asset Purchase Agreement, dated as of
October 12, 2011, by and among New Stevens LLC, as seller, and CLP Partners, as
purchaser.

“Stevens Pass Environmental Issues” means those issues associated with the
ongoing remediation activities related to the underlying petroleum hydrocarbon
contamination previously identified at the Stevens Pass Vehicle Maintenance and
Former Mini Mart location, described more particularly in the Stevens Pass
Environmental Reports.

“Stevens Pass Environmental Reports” means collectively the following reports:
the Draft Phase I Environmental Site Assessment, prepared by ECS Florida, LLC,
dated, April 2010, the Draft Phase II Environmental Site Investigation Report,
prepared by Sound Environmental Strategies dated May, 2010, Remedial
Investigation Report prepared by SLR International Corp., dated, August, 2010,
the Draft Remedial Action Work Plan, prepared by SLR International Corp., dated,
February, 2011 and the Proposed Revisions to Draft Remedial Action Work Plan
prepared by SLR International Corp., dated, August, 2011; the Opinion Pursuant
to WAC 173-340-515(5) on Draft Remedial Action Work Plan, issued by the State of
Washington Department of Ecology and dated August 18, 2011.

“Stevens Pass Personal Property Lease” means that certain Personal Property
Lease Agreement by and between Stevens Pass TRS, as Landlord, and TPO Stevens
Pass, as Tenant, dated as of November 17, 2011.

“Stevens Pass Real Property Lease” means that certain Real Property Lease
Agreement by and between CLP Stevens Pass, as Landlord, and TPO Stevens Pass, as
Tenant, dated as of November 17, 2011.

“TADS” shall mean the aggregate debt service payments for any given calendar
year on the Loan and on all other indebtedness secured, or to be secured, by any
part of the Property.

“Third Party Operators” means individually and collectively, as the context may
require, each of (a) TPO Northstar, (b) TPO Sierra, (c) TPO Brighton, (d) TPO
Snoqualmie, (e) TPO Loon Mountain and (f) TPO Stevens Pass.

“TPO Brighton” means Brighton Resort, LLC, a Michigan limited liability company,
together with its permitted successors or assigns.

 

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“TPO Leases” means individually and collectively, as the context may require,
each of (a) TPO Personal Property Leases, (b) the TPO Real Property Leases,
(c) any other Lease entered into by Borrower with any Third Party Operator and
(d) any Lease entered into by Borrower with any Person demising a material
portion of any Individual Property.

“TPO Loon Mountain” means Loon Mountain Recreation Corporation, a New Hampshire
corporation, together with its permitted successors or assigns.

“TPO Northstar” means Trimont Land Company, a California corporation, together
with its permitted successors or assigns.

“TPO Personal Property Leases” means individually and collectively, as the
context may require, each of (a) Northstar Personal Property Lease, (b) Sierra
Personal Property Lease, (c) Brighton Personal Property Lease, (d) Snoqualmie
Personal Property Lease, (e) Loon Mountain Personal Property Lease, and
(f) Stevens Pass Personal Property Lease.

“TPO Real Property Leases” means individually and collectively, as the context
may require, each of (a) Northstar Real Property Lease, (b) Sierra Real Property
Lease, (c) Brighton Real Property Lease, (d) Snoqualmie Real Property Lease,
(e) Loon Mountain Real Property Lease and (f) Stevens Pass Real Property Lease.

“TPO Snoqualmie” means Ski Lifts, Inc., a Washington corporation, together with
its permitted successors or assigns.

“TPO Sierra” means Sierra-at-Tahoe, Inc., a Delaware corporation, together with
its permitted successors or assigns.

“TPO Stevens Pass” means Stevens Pass Mountain Resort, LLC, a Delaware limited
liability company, together with its permitted successors or assigns.

“Trademark License Agreement” means that certain Trademark License Agreement by
and between TPO Loon Mountain and Centex dated October 3, 2005 and assigned by
that certain Assignment and Assumption of Assumed Contracts by and between TPO
Loon Mountain, Loon Realty Corp., and CLP Loon Mountain, dated as of January 19,
2007.

“Transfer” means (a) any conveyance, transfer, sale, Lease entered into by
Borrower, assignment, disposition, divestiture of title to, conveyance of
security title to, or Lien, whether by operation of law or otherwise (and in any
manner or way, whether voluntary or involuntary or otherwise), of, on or
affecting (i) all or any portion of the Property or the Equity Collateral, or
(ii) any direct or indirect interest (whether legal, beneficial or otherwise) in
Borrower or Pledgor or any Person that has the right to participate in the
control of the management or operations of Borrower or Pledgor (including any
profit interest or the issuance of any new direct or indirect interest, whether
legal, beneficial or otherwise, in Borrower or Pledgor) or all or any portion of
the Property (except for Third Party Operator and any sublessee, concessionaire,
or other Person with whom Third Party Operator has entered into a contract,
agreement or Lease), and (b) any direct or indirect change in Control of
Borrower or Pledgor or any Person that has the right to participate in the
control of the management or operations of Borrower or Pledgor, and “Transfers”
shall include, without limitation, (A) any merger,

 

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consolidation, sale, transfer, assignment or dissolution involving all or
substantially all of the assets of Borrower or Pledgor or any general partner or
managing member of Borrower or Pledgor; (B) any Lien to secure financing,
indebtedness or otherwise; (C) if Borrower or Pledgor is a partnership, in the
event of the conversion of any general partnership interest in Borrower or
Pledgor to a limited partnership interest; (D) if Borrower or Pledgor is a
partnership, in the event of any change, removal, or resignation of any general
partner of Borrower or Pledgor; (E) if Borrower or Pledgor is a limited
liability company, in the event of any change, removal, addition, or resignation
of a managing member (or if no managing member, any member) of Borrower or
Pledgor or (F) any unsecured debt in contravention of this Agreement.

“Trimont Land Holdings” means Trimont Land Holdings, Inc., a Delaware
corporation, together with its permitted successors or assigns.

“TRS Brighton Note” means that certain Revolving Promissory Note, in the
original principal amount of $5,000,000, dated January 9, 2007, by TRS Brighton
in favor of CLP Partners.

“TRS Loon Mountain Note” means that certain Revolving Promissory Note, in the
original principal amount of $5,000,000, dated January 19, 2007, by TRS Loon
Mountain in favor of CLP Partners.

“TRS Northstar Note” means that certain Revolving Promissory Note, in the
original principal amount of $5,000,000, dated January 19, 2007, by TRS
Northstar in favor of CLP Partners.

“TRS Notes” means individually and collectively, as the context may require,
each of (i) the TRS Brighton Note, (ii) the TRS Loon Mountain Note, (iii) the
TRS Northstar Note, (iv) the TRS Sierra Note, and (v) the TRS Snoqualmie Note.

“TRS Sierra Note” means that certain Revolving Promissory Note, in the original
principal amount of $5,000,000, dated January 19, 2007, by TRS Sierra in favor
of CLP Partners.

“TRS Snoqualmie Note” means that certain Revolving Promissory Note, in the
original principal amount of $5,000,000, dated January 19, 2007, by TRS Loon
Mountain in favor of CLP Partners.

“USFS” means the United States Department of Agriculture, Forest Service.

“Withdrawn Allocated Amount” has the meaning set forth in the definition of
“Allocated Loan Amount”.

Section 1.2 Location of Additional Defined Terms.

 

Defined Term

  

Location

“Additional Cash Collateral

   Section 5.17

“Agreement”

   First Paragraph

“Allocated Monthly Payment Amount”

   Schedule 2

 

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“Anti-Terrorism Regulations”

   Section 5.12(b)

“Applicable Borrower Contribution”

   Section 13.4(e)

“Applicable Pledgor Contribution”

   Section 13.5(e)

“Assignment of Leases”

   Schedule 1

“Borrower”

   First Paragraph

“Borrower Benefited Amount”

   Section 13.4(d)

“Borrower Equity Collateral”

   Section 13.1

“Borrower Contribution”

   Section 13.4(a)

“Borrower Pledge Agreement”

   Schedule 1

“Borrower Reimbursement Contribution”

   Section 13.4(c)

“Casualty”

   Section 7.7(a)

“Casualty Retainage”

   Section 7.9(b)

“Centex Mortgage Assignment”

   Schedule 1

“Closing Date”

   First Paragraph

“Condemnation Proceeds”

   Section 7.7(a)

“Contracts”

   The Mortgage

“Debt Service Deposit”

   Section 5.16

“Debt Service Reserve Account”

   Section 5.16

“Default Rate”

   The Note

“Deposits”

   Section 3.1

“Disclosure Document”

   Section 10.7

“Duplicate Certificates”

   Section 5.14(c)

“Earnings Threshold”

   Section 5.17

“EBITDA”

   Section 5.17

“Environmental Claims”

   Section 9.4

“Environmental Lien”

   Section 9.2

“Equipment”

   The Mortgage

“Equity Collateral”

   The Pledge Agreement

“Essential Ski Property Deed of Trust Assignment”

   Schedule 1

“Event of Default”

   Section 8.1

“Exiting Property”

   Section 13.7

“First Amendment”

   Recitals

“First Notice”

   Section 8.1(n)

“Fourth Amendment”

   Recitals

“Funding Borrower”

   Section 13.4(c)

“Funding Pledgor”

   Section 13.5(c)

“Improvements”

   The Mortgage

“Individual Borrower”

   First Paragraph

“Individual Borrower Equity Collateral”

   Section 13.1

“Individual Equity Collateral”

   Section 13.1

“Individual Pledgor”

   First Paragraph

“Individual Pledgor Equity Collateral”

   Section 13.1

“Individual Property”

   Section 13.1

“Insolvency Action”

   Section 8.1(f)

“Insurance Premiums”

   Section 3.1

“Insurance Proceeds”

   Section 7.7(a)

 

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“Interest Rate”    Section 2.2 “Inventory”    The Mortgage “Investors”   
Section 10.3 “Lender”    First Paragraph “Loan Amount”    Recitals “Loan
Paydown”    Section 14.1 “Loon Mountain Leases”    Section 5.7(e) “Loon Mountain
Capex Funding Obligation”    Exhibit D “Material Alterations”    Section 5.2
“Maturity Date”    Section 2.3(d) “Mortgage”    Schedule 1 “Net Restoration
Proceeds”    Section 7.7(a) “New Loan”    Recitals “New Loan Amount”    Recitals
“New Loan Documents”    Recitals “New Loan Interest Rate”    Section 2.2 “New
Mortgage”    Recitals “New Note”    Schedule 1B “New Payment Date”    Section
10.4 “New Pledge Agreements”    Recitals “New Pledgor”    Recitals “Note”   
Schedule 1B “Noteholder”    Section 12.30 “Northstar Capex Funding Obligation”
   Exhibit D “Northstar and Loon Mountain Capex Funding Obligation”    Exhibit D
“Northstar/Sierra Property”    Section 5.17 “OFAC List”    Section 4.19 “OFAC
Violation”    Section 5.12(c) “Original Borrower”    First Paragraph “Original
Closing Date”    Recitals “Original Environmental Indemnity”    Recitals
“Original ERISA Indemnity”    Recitals “Original Guaranty”    Recitals “Original
Loan”    Recitals “Original Loan Agreement”    Recitals “Original Loan Amount”
   Recitals “Original Loan Documents”    Recitals “Original Loan Interest Rate”
   Section 2.2 “Original Mortgage”    Recitals “Original Note”    Schedule 1A
“Original Pledgor”    First Paragraph “Original Pledgor Pledge Agreements”   
Recitals “Payment Date”    Section 2.3(a) “Permits”    The Mortgage “Permitted
Trade Payables”    Exhibit C, clause (xx)

 

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“Permitted Transfer”    Section 6.1 “Plan Asset Regulation”    Section 12.30
“Pledge Agreement”    Schedule 1 “Pledgor Benefited Amount”    Section 13.5(d)
“Pledgor Equity Collateral”    Section 13.1 “Pledgor Contribution”    Section
13.5(a) “Pledgor Reimbursement Contribution”    Section 13.5(c) “Post Closing
Letter”.    Schedule 1 “Prepayment Premium”    The Note “Principal Payment
Amount”    Section 13.6 “Property”    The Mortgage “Property Release”    Section
13.6 “PTE”    Section 4.7 “Recourse Guaranty”    Schedule 1 “Register”   
Section 10.5 “Registrar”    Section 10.5 “Registration Statement”    Section
10.6 “Release Price”    Section 13.6 “Released Property”    Section 13.6 “Rents”
   The Mortgage “Rent Roll”    Section 4.18 “Replacement Equipment Lease”   
Section 5.2 “Restoration”    Section 7.8 “Restoration Proceeds”    Section
7.7(a) “Restoration Proceeds Threshold”    Section 7.7(a) “Sale Proceeds”   
Section 14.1 “Second Amendment”    Recitals “Second Notice”    Section 8.1(n)
“Secondary Market Transaction”    Section 10.1 “Securities Filing”    Section
10.7 “Single Member LLC”    Exhibit C “Single-Purpose Entity”    Exhibit C
“Snoqualmie Leases”    Section 5.7(f) “Special Member”   
Exhibit C, clause (xxxiii) “Substitute Property”    Section 13.7 “Substitution”
   Section 13.7 “Substitution Administrative Fee”    Section 13.7 “Taking”   
Section 7.7(a) “Tax and Insurance Deposits”    Section 3.1 “Third Amendment”   
Recitals “Titling Documentation”    Section 5.14(b) “Transaction Taxes”   
Section 12.28 “UCC”    The Mortgage “USFS Agreement”    Schedule 1 “Underwriter
Group”    Section 10.6 “VCOC”    Section 12.30

 

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“Vehicles”    The Mortgage “Vehicles Notice Date”    Section 5.14(c) “Violation”
   Section 5.11

Section 1.3 Principles of Construction. All references to sections and schedules
are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. Unless otherwise
specified, the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.

ARTICLE 2

THE LOAN

Section 2.1 The Original Loan; the New Loan. Original Borrower received only one
borrowing in the amount of the Original Loan Amount and any amount borrowed and
repaid with respect to the Original Loan may not be reborrowed. Borrower shall
receive only one borrowing hereunder in the amount of the New Loan Amount and
any amount borrowed and repaid hereunder may not be reborrowed. Borrower’s
obligation to pay the Indebtedness is evidenced by this Agreement and by the
Note and secured by the Mortgage, the Borrower Pledge Agreement, the Pledgor
Pledge Agreement, and the other Loan Documents to the extent provided therein.

Section 2.2 Interest Rate.

(a) Interest shall accrue on the Principal Indebtedness of the Original Loan at
six and eleven hundredths percent (6.11%) per annum (the “Original Loan Interest
Rate”) commencing on the Original Closing Date.

(b) Interest shall accrue on the Principal Indebtedness of the New Loan at six
percent (6.00%) per annum (the “New Loan Interest Rate” and, together with the
Original Loan Interest Rate, collectively or individually, as the context may
require, the “Interest Rate”) commencing on the Closing Date.

(c) Interest on Principal Indebtedness for any full month shall be calculated on
the basis of a three hundred sixty (360) day year consisting of twelve
(12) thirty (30) day months. For any partial month, interest shall be due in an
amount equal to (i) the applicable Interest Rate divided by 360 multiplied by
(ii) the number of days in such month any such Principal Indebtedness is
outstanding through and including the day of payment.

Section 2.3 Payments. Borrower shall make the following payments to Lender:

(a) On March 5, 2012 and on the same calendar day of each calendar month during
the term of the Original Loan (including the Maturity Date) (each, a “Payment
Date”), Borrower shall pay to Lender a monthly payment in the amount of
$805,912.50, which amount is based on the Original Loan Amount, the Original
Loan Interest Rate and a 240-month

 

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amortization schedule as of the Original Closing Date. Prior to an Event of
Default, such payment shall be allocated by Lender towards the payment of the
principal and interest due on the Original Loan, as set forth on Schedule 2
attached hereto.

(b) On the date hereof (unless the date hereof is the same calendar day as a
Payment Date), Borrower shall pay to Lender a payment of interest only on the
New Loan Amount for the period from the Closing Date to and including March 4,
2012 in the amount of $6,650.01.

(c) On April 5, 2012 and on each Payment Date thereafter, Borrower shall pay to
Lender a monthly payment in the amount of $95,285.33, which amount is based on
the New Loan Amount, New Loan Interest Rate and a 240-month amortization
schedule as of the Closing Date. Prior to an Event of Default, such payment
shall be allocated by Lender towards the payment of the principal and interest
due on the New Loan.

(d) All proceeds of payment and payments with respect to any Loan, including any
payment or recovery on any Property or any Equity Collateral, shall be applied
to the aggregate Indebtedness and Notes in such order and in such manner and
priority as Lender shall elect in Lender’s discretion.

(e) Upon Borrower’s payment of any Release Price pursuant to Section 13.6 of
this Agreement, the next monthly payment coming due, and each monthly payment
thereafter, shall be reduced to an amount which will result in the full
amortization of the remaining Principal Indebtedness of the applicable Loan
based on the applicable Interest Rate and an amortization over a term equal to
240 months less the number monthly payments made by the Borrower prior to the
date of the payment of such Release Payment.

(f) The entire outstanding Indebtedness of the Original Loan and the New Loan
shall be due and payable on the Payment Date occurring in April 5, 2017 (the
“Maturity Date”), or such earlier date resulting from acceleration of any of the
Indebtedness by Lender.

(g) For purposes of making payments hereunder, if the Payment Date of a given
month shall not be a Business Day, then the Payment Date for such month shall be
the preceding Business Day.

ARTICLE 3

DEPOSITS

Section 3.1 Tax and Insurance Deposits. At Lender’s option (1) following an
Event of Default or (ii) in the event that Borrower and Pledgor fail to timely
deliver to Lender evidence of payment of Impositions or insurance premiums as
required by Section 5.1(b), Borrower shall make monthly deposits (the “Tax and
Insurance Deposits” or “Deposits”) with Lender equal to one-twelfth (1/12th) of
the annual Impositions (except for income taxes, franchise taxes, ground rents,
maintenance charges and utility charges) and insurance premiums for all
insurance required under the Loan Documents (“Insurance Premiums”) together with
amounts sufficient to pay these items thirty (30) days before they are due.
Lender shall estimate the amount of the Deposits until ascertainable. At that
time, Borrower shall promptly deposit any deficiency.

 

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Borrower and Pledgor shall promptly notify Lender of any changes to the amounts,
schedules and instructions for payment of the Impositions and Insurance
Premiums. Borrower and Pledgor authorize Lender or its agent to obtain the bills
for Impositions directly from the appropriate Governmental Authority. If
(i) there is no Event of Default at the time of payment, (ii) Borrower and
Pledgor have delivered bills or invoices to Lender for the Impositions and
Insurance Premiums in sufficient time to pay them when due, and (iii) the
Deposits are sufficient to pay the Impositions and Insurance Premiums, as
applicable, or Borrower has deposited the necessary additional amount, then
Lender shall pay the Impositions prior to their due date. Any Deposits remaining
after payment of the Impositions and insurance premiums shall, at Lender’s
option, be credited against the Deposits required for the following year or paid
to Borrower.

Section 3.2 Deposits Generally. All Deposits are pledged to Lender and shall
constitute additional security for the Indebtedness. The Deposits shall be held
by Lender without interest (except to the extent required under Laws) and may be
commingled with other funds. If an Event of Default occurs, the Deposits may, at
Lender’s option, be applied to the Indebtedness in any order of priority. Any
application to principal shall be deemed a voluntary prepayment subject to the
Prepayment Premium. Borrower and Pledgor shall not claim any credit against the
Indebtedness for the Deposits. Upon an assignment or other transfer of the Loan,
Lender may pay over the Deposits in its possession to the assignee or transferee
and then it shall be completely released from all liability with respect to the
Deposits. Borrower and Pledgor shall look solely to the assignee or transferee
with respect thereto. This provision shall apply to every transfer of the
Deposits to a new assignee or transferee. Subject to Article 6, a Transfer of
the Property shall automatically transfer to the new owner the beneficial
interest in the Deposits. Upon full payment and satisfaction of the Loan or, at
Lender’s option, at any prior time, the balance of the Deposits in Lender’s
possession shall be paid over to the record owner of the Property and no other
party shall have any right or claim to the Deposits. Lender may transfer all its
duties under this Section to such servicer or financial institution as Lender
may periodically designate and Borrower agrees to make the Deposits to such
servicer or institution.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

Each of Borrower and Pledgor represents and warrants to Lender as of the Closing
Date as follows:

Section 4.1 Organization. Borrower (a) is duly organized and validly existing in
good standing under the laws of the State of its formation, (b) is duly
qualified to do business in each jurisdiction in which the nature of its
business, any of the Property (including the Forest Service Land) or any of the
Borrower Equity Collateral makes such qualification necessary, (c) has the
requisite power and authority to carry on its business as now being conducted,
and (d) has the requisite power to execute and deliver, and perform its
obligations under, the Loan Documents. Borrower is a “registered organization”
within the meaning of the Uniform Commercial Code in effect in the State where
Borrower is organized, and Borrower’s organizational identification number
issued by such State is set forth under its signature hereto. Pledgor (i) is
duly organized and validly existing in good standing under the laws of the State
of its formation, (ii) is duly qualified to do business in each jurisdiction in
which the nature of its business, any of the Property (including the Forest
Service Land) or any of the Pledgor Equity Collateral makes such

 

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qualification necessary, (iii) has the requisite power and authority to carry on
its business as now being conducted, and (iv) has the requisite power to execute
and deliver, and perform its obligations under, the Loan Documents.

Section 4.2 Authorization. The execution and delivery by each of Borrower and
Pledgor of the Loan Documents, each of Borrower’s and Pledgor’s performance of
its obligations thereunder and the creation of the Liens provided for in the
Loan Documents (a) have been duly authorized by all requisite action on the part
of each of Borrower and Pledgor, (b) will not violate any provision of any
applicable Legal Requirements, and (c) 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 Borrower or Pledgor pursuant
to, any indenture or agreement or instrument. Except for those obtained or filed
on or prior to the Closing Date, Borrower and Pledgor are not required to obtain
any consent, approval or authorization from, or to file any declaration or
statement with, any Governmental Authority in connection with or as a condition
to the execution, delivery or performance of the Loan Documents. The Loan
Documents to which Borrower or Pledgor is a party have been duly executed and
delivered by such parties.

Section 4.3 Enforceability. The Loan Documents executed by each of Borrower and
Pledgor in connection with the Loan are the legal, valid and binding obligations
of Borrower and Pledgor, enforceable against Borrower and Pledgor in accordance
with their terms, subject only to bankruptcy, insolvency and other limitations
on creditors’ rights generally and to equitable principles. Such Loan Documents
are, as of the Closing Date, not subject to any right of rescission, set-off,
counterclaim or defense by Borrower or Pledgor, including the defense of usury.

Section 4.4 Litigation. There are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority or other agency now pending and
served or, to Borrower’s and Pledgor’s knowledge, threatened, involving or
concerning Borrower, Pledgor, Guarantor, the Property (including the Forest
Service Land), the Equity Collateral, or (to Borrower’s knowledge) Third Party
Operator, other than as set forth on Schedule 4.4 attached hereto, provided,
nothing contained on Schedule 4.4 could reasonably be expected to result in a
Material Adverse Effect.

Section 4.5 Full and Accurate Disclosure. No statement of fact made by or on
behalf of Borrower or Pledgor in the Loan Documents or in any other document or
certificate delivered to Lender by Borrower or Pledgor contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There is no fact
which has not been disclosed to Lender by Borrower which materially adversely
affects, nor as far as Borrower and Pledgor can foresee, might materially
adversely affect the business, operations or condition (financial or otherwise)
of Borrower or Pledgor. Since the delivery of such data, except as otherwise
disclosed in writing to Lender, there has been no material adverse change in the
financial position of Borrower, Pledgor, the Property (including the Forest
Service Land), the Equity Collateral or in the results of operations of Borrower
and Pledgor. Borrower and Pledgor have not incurred any obligation or liability,
contingent or otherwise, not reflected in such financial data which might
materially adversely affect its business operations or the Property (including
the Forest Service Land).

 

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Section 4.6 Compliance. Borrower, Pledgor, the Equity Collateral, and to
Borrower’s knowledge, the Property (including the Forest Service Land) and all
uses thereof and operations thereat comply with all applicable Legal
Requirements, except as set forth on Schedule 4.6 attached hereto, provided,
nothing contained on Schedule 4.6 could reasonably be expected to result in a
Material Adverse Effect. Borrower has obtained (in its own name) or, to
Borrower’s knowledge, Third Party Operator has obtained (in its own name), all
Permits necessary to use and operate the Property (including the Forest Service
Land) as the Property is currently used and operated, and all such Permits are
in full force and effect.

Section 4.7 ERISA.

(a) Borrower and Pledgor understand and acknowledge that, as of the date hereof,
the source of funds from which Lender is extending the Loan will include one or
more of the following accounts: (i) an “insurance company general account,” as
that term is defined in Prohibited Transaction Class Exemption (“PTE”) 95-60 (60
Fed. Reg. 35925 (Jul. 12, 1995)), as to which Lender meets the conditions for
relief in Sections I and IV of PTE 95-60; (ii) pooled and single client
insurance company separate accounts, which are subject to the provisions of
ERISA; and (iii) one or more insurance company separate accounts maintained
solely in connection with fixed contractual obligations of the insurance
company, under which the amounts payable or credited to the plan are not
affected in any manner by the investment performance of the separate account.

(b) Borrower and Pledgor represent and warrant to Lender that (i) Borrower,
Pledgor and Guarantor are not an “employee benefit plan” as defined in
Section 3(3) of ERISA, or a “governmental plan” within the meaning of
Section 3(32) of ERISA; (ii) Borrower, Pledgor and Guarantor are not a “party in
interest”, as defined in Section 3(14) of ERISA, other than as a service
provider or an Affiliate of a service provider, to any employee benefit plan
that has invested in a separate account described in Section 4.7(a)(ii), from
which funds have been derived to make the Loan, or if so, the execution of the
Loan Documents and making of the Loan thereunder do not constitute nonexempt
prohibited transactions under ERISA; (iii) Borrower, Pledgor and Guarantor are
not subject to state statutes regulating investments and fiduciary obligations
with respect to governmental plans, or if subject to such statutes, is not in
violation thereof in the execution of the Loan Documents and the making of the
Loan thereunder; (iv) the assets of Borrower, Pledgor and Guarantor do not
constitute “plan assets” of one or more plans within the meaning of 29 C.F.R.
Section 2510.3-101; and (v) one or more of the following circumstances is true
for each of Borrower, Pledgor and Guarantor: (1) such entity’s Equity Interests
are publicly offered securities, within the meaning of 29 C.F.R.
Section 2510.3-101(b)(2); (2) less than twenty-five percent (25%) of all Equity
Interests in such entity are held by “benefit plan investors” within the meaning
of 29 C.F.R. Section 2510.3-101(f)(2); or (3) such entity qualifies as an
“operating company,” a “venture capital operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. Section 2510.3-101(c), (d) or
(e), respectively.

Section 4.8 Not Foreign Person. Neither Borrower nor Pledgor is a “foreign
person” within the meaning of § 1445(f)(3) of the Code.

 

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Section 4.9 Investment Company Act; Public Utility Holding Company Act. Neither
Borrower nor Pledgor is (i) an “investment company” or a company “controlled” by
an “investment company,” within the meaning of the Investment Company Act of
1940, as amended, (ii) a “holding company” or a “subsidiary company” of a
“holding company” or an “affiliate” of either a “holding company” or a
“subsidiary company” within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (iii) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.

Section 4.10 Title to the Property, Equity Collateral; Liens. Borrower owns
good, indefeasible, marketable and insurable title to the Property and the
Borrower Equity Collateral, free and clear of all Liens, other than the
Permitted Encumbrances. Pledgor owns good, indefeasible, marketable and
insurable title to the Pledgor Equity Collateral, free and clear of all Liens,
other than the Permitted Encumbrances. The Permitted Encumbrances do not and
will not materially and adversely affect (i) the ability of Borrower and Pledgor
to pay in full all sums due under the Note or any of its other obligations under
the Loan Documents in a timely manner or (ii) the use of the Property (including
the Forest Service Land) for the use currently being made thereof, the operation
of the Property (including the Forest Service Land) as currently being operated
or the value of the Property. The Mortgage creates a valid and enforceable first
Lien on the Property and a valid and enforceable first priority security
interest in the personal property constituting part of the Property, subject to
no Liens other than the Permitted Encumbrances. The Assignment of Leases creates
a valid and enforceable first Lien on and a valid and enforceable first priority
security interest in all of Borrower’s interest in all Leases, subject to no
Liens other than the Permitted Encumbrances. The Pledge Agreement creates a
valid and perfected first lien on and security interest in the Equity
Collateral, subject to no Liens other than the Permitted Encumbrances.

Section 4.11 Condemnation. No Taking has been commenced or, to Borrower’s and
Pledgor’s knowledge, is contemplated with respect to all or any portion of the
Property (including the Forest Service Land) or for the relocation of roadways
providing access to the Property.

Section 4.12 Utilities, Water Rights and Public Access. The Property (including
the Forest Service Land) has adequate rights of access to public ways, and to
Borrower’s knowledge, has all water rights necessary to use and operate the
Property as the Property is currently used and operated and is served by all
utilities required for the current use thereof.

Section 4.13 Separate Lots. Except as set forth on Schedule 4.13 attached
hereto, the Property is comprised of one or more parcels, each of which
constitutes a separate tax lot and none of which constitutes a portion of any
other tax lot.

Section 4.14 Assessments. Except as disclosed in the Lender’s title insurance
policy, there are no pending or proposed special or other assessments for public
improvements or otherwise affecting the Property, nor, to the knowledge of
Borrower and Pledgor are there any contemplated improvements to the Property
(including the Forest Service Land) that may result in such special or other
assessments.

 

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Section 4.15 Post Closing Obligations. To Borrower’s knowledge, Original
Borrower has performed all of the obligations that it undertook to perform
pursuant to the terms of that certain “post closing obligations agreement” dated
March 23, 2007 executed by Original Borrower, Original Pledgor and Lender in all
material respects.

Section 4.16 Physical Condition. Except as disclosed in the engineering
report(s) delivered to Lender in connection with the Loan, to Borrower’s
knowledge, the Property (including the Forest Service Land) is free of material
structural defects and all building systems contained therein are in good
working order in all material respects subject to ordinary wear and tear.

Section 4.17 Title Insurance; UCC Insurance.

(a) The Property is covered by an First American Title Insurance Company
mortgagee’s title insurance commitment, and pursuant to the commitment the
Property will be covered by a title insurance policy insuring a valid first lien
on the Property, which (a) is in full force and effect, (b) is freely assignable
to and will inure to the benefit of Lender and any successor or assignee of
Lender, including the trustee in any Secondary Market Transaction, (c) has been
paid in full, (d) is issued by a title company licensed in the State where the
Property is located, (e) has had no claims made against it, (f) contains no
exclusions for (i) access or (ii) survey (except as set forth in the title
insurance policy), and (g) lists only the Permitted Encumbrances as exceptions.

(b) The Equity Collateral is covered by a UCC title insurance commitment, and
pursuant to the commitment the Equity Collateral will be covered by a UCC title
insurance policy in the amount of the Loan Amount, insuring that the Pledge
Agreement creates a valid and perfected first lien on and security interest in
the Equity Collateral, that the Real Property Owner is the sole owner of the
Borrower Equity Collateral and that the Pledgor is the sole owner of the Pledgor
Equity Collateral, with such endorsements and affirmative coverages as Lender
shall have reasonably requested, which (a) is in full force and effect, (b) is
freely assignable to and will inure to the benefit of Lender and any successor
or assignee of Lender, including the trustee in any Secondary Market
Transaction, (c) has been paid in full, (d) is issued by a title company
acceptable to Lender, (e) has had no claims made against it, and (f) lists only
the Permitted Encumbrances as exceptions.

Section 4.18 Leases and Rents. (a) There are no Leases (excluding those that
Borrower is not a party to and that Borrower has no knowledge of) now in effect
except for the Ground Leases and those set forth on the rent roll hereby
certified to Lender and attached hereto as Exhibit E (the “Rent Roll”) in
connection with the Loan, and Borrower and Pledgor have delivered to Lender
true, correct and complete copies of all Leases to which Borrower is a party
(together with all modifications thereto) demising any portion of the Property;
(b) Borrower is the sole owner of the entire lessor’s interest in the Leases
(excluding any Leases to which Borrower is not a party), and no Leases or Rents
have been Transferred by Borrower except to Lender pursuant to the Loan
Documents; (c) except as disclosed to Lender in any tenant estoppel certificates
delivered to Lender in connection with the Loan, (i) none of the Rents have been
collected by Borrower for more than one (1) month in advance; (ii) the premises
demised under the Leases have been completed (except for certain future capital
improvements as contemplated

 

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by the TPO Leases, the Centex Operating Agreement, and as set forth on Schedule
5.2 attached hereto) and Third Party Operator has accepted and taken possession
of the same on a rent-paying basis; (iii) there exists no offset or defense to
the payment of any portion of the Rents to Borrower; (iv) no Lease contains an
option to purchase, right of first refusal to purchase, expansion right, or any
other similar provision except as set forth on Schedules 4.30(h) and 4.31(e);
(v) there are no defaults or events of default (and to Borrower’s and Pledgor’s
knowledge, no events or circumstances exist which with or without the giving of
notice, the passage of time or both may constitute a default or event of
default) under any of the TPO Leases; and (vi) no residential Lease is for a
term of less than six (6) months or more than twelve (12) months; (d) Borrower
has granted no Person any possessory interest in, or right to occupy, the
Property except under and pursuant to a Lease and as set forth in Schedule
4.18(d) and Exhibit E; (e) each Lease is subordinate to the Loan Documents,
either pursuant to its terms or a recorded subordination agreement except as set
forth on Schedule 4.18, and none of the Leases contain any purchase option,
right of first refusal, or right of first offer with respect to all or any
portion of the Property that is senior to the Lien of the Loan Documents;
(f) Borrower is holding all security deposits and reserves collected under
Leases in a segregated account, and Borrower has delivered all non-cash security
deposits to Lender; (g) each TPO Lease encumbers one-hundred percent (100%) of
the applicable Individual Property; and (h) no Lease is to a dry cleaner that
uses dry cleaning solvents on the Property.

Section 4.19 Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws. Borrower, Pledgor, Guarantor, and to the best of Borrower’s and
Pledgor’s knowledge, after having made reasonable inquiry (a) each Person owning
a direct or indirect interest in Borrower, Pledgor or Guarantor, and (b) each
Third Party Operator: (i) is not currently identified on the list of specially
designated nationals and blocked persons subject to financial sanctions that is
maintained by the U.S. Treasury Department, Office of Foreign Assets Control
(currently is accessible through the internet website at
www.treas.gov/ofac/t11sdn.pdf.) or any other similar list maintained by the U.S.
Treasury Department, Office of Foreign Assets Control pursuant to any Legal
Requirements (or if such list does not exist, the similar list then being
maintained by the United States), including trade embargo, economic sanctions,
or other prohibitions imposed by Executive Order of the President of the United
States (an “OFAC List”); (ii) is not a Person subject to any trade restriction,
trade embargo, economic sanction, or other prohibition under federal law,
including the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et
seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
executive orders or regulations promulgated thereunder; and (iii) is not in
violation of Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
and the Uniting and Strengthening America by Providing Appropriate Tools
Required in Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56),
with the result that (A) the investment in Borrower, Pledgor or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law, or (B) the
Loan is in violation of law.

Section 4.20 Organizational Chart. The organizational chart attached hereto as
Exhibit A is true, complete and correct on and as of the date hereof. No Person
other than those Persons shown on Exhibit A and the holders of securities in
Guarantor has any ownership interest in, or (except for officers and managers of
such entity in their capacity as officers and managers) right of control,
directly or indirectly, in Borrower or Pledgor. Borrower and Pledgor

 

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further represent and warrant that: (a) Northstar Pledgor is the owner of 100%
of the direct legal and beneficial ownership interest in Northstar TRS, (b) Ski
Holding Pledgor is the owner of 100% of the direct legal and beneficial
ownership interest in Ski IV Pledgor, Ski III Pledgor and Ski II Pledgor,
(c) Ski IV Pledgor is the owner of 100% of the direct legal and beneficial
ownership interest in CLP Stevens Pass, (d) Ski III Pledgor is the owner of 100%
of the direct legal and beneficial ownership interest in CLP Brighton, (e) CLP
Brighton is the owner of 100% of the direct legal and beneficial ownership
interest in Brighton TRS, (f) Ski II Pledgor is the owner of 100% of the direct
legal and beneficial ownership interest in CLP Northstar, CLP Sierra, CLP
Snoqualmie and CLP Loon Mountain, (f) CLP Sierra is the owner of 100% of the
direct legal and beneficial ownership interest in Sierra TRS, (h) CLP Snoqualmie
is the owner of 100% of the direct legal and beneficial ownership interest in
Snoqualmie TRS, (i) CLP Loon Mountain is the owner of 100% of the direct legal
and beneficial ownership interest in Loon Mountain TRS and (j) CLP Stevens Pass
is the owner of 100% of the direct legal and beneficial ownership interest in
Stevens Pass TRS.

Section 4.21 Single-Purpose Entity. Each of Borrower and Pledgor have been since
their formation, and will continue to be, Single-Purpose Entities. All of the
assumptions made in the substantive non-consolidation opinion delivered to
Lender by Borrower’s and Pledgor’s counsel in connection with the closing of the
Loan are true and correct in all respects.

Section 4.22 Property Management. The TPO Leases are in full force and effect,
and together, with the Material Agreements, constitute the entire agreement with
respect to the management and operation of the Property (including the Forest
Service Land) between each Third Party Operator and Borrower, and have not been
assigned or encumbered (other than pursuant to the Loan Documents), or modified,
amended, or supplemented. Borrower, and to Borrower’s and Pledgor’s knowledge,
Third Party Operator, is not in default in the performance of the terms and
provisions of the TPO Leases. Except as set forth on Schedule 4.22 attached
hereto, there exists no other agreement with respect to the management and
operation of the Property (including the Forest Service Land).

Section 4.23 Solvency; Fraudulent Conveyance. Each of Borrower and Pledgor
(i) have not entered into this Agreement or any Loan Document with the actual
intent to hinder, delay, or defraud any creditor, and (ii) has received
reasonably equivalent value in exchange for its obligations under the Loan
Documents. The fair saleable value of each of Borrower’s and Pledgor’s assets is
and will, immediately following the execution and delivery of the Loan
Documents, be greater than each of Borrower’s and Pledgor total liabilities
(including the maximum amounts of its subordinated, unliquidated, disputed, or
contingent liabilities or its debts as such debts become absolute and matured).
Each of Borrower’s and Pledgor’s assets do not and will not, immediately
following the execution and delivery of the Loan Documents, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Each of Borrower and Pledgor does not intend to, and does not
believe that it will, incur debts and liabilities (including, without
limitation, contingent liabilities and other commitments) beyond its ability to
pay such debts as they mature (taking into account the timing and amount to be
payable on or in respect of obligations of the Borrower and the Pledgor).

Section 4.24 Margin Regulations. No part of the proceeds of the Loan will be
used for the purpose of purchasing or acquiring any “margin stock” within the
meaning of Regulation U

 

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of the Board of Governors of the Federal Reserve System or for any other purpose
which would be inconsistent with such Regulation U or any other Regulations of
such Board of Governors, or for any purposes prohibited by applicable Legal
Requirements.

Section 4.25 Material Agreements. Each of the Material Agreements (other than
the Original Acquisition Documents) is in full force and effect. Each of the
Original Acquisition Documents was in full force and effect on the Original
Closing Date. Borrower and/or Pledgor have provided Lender with true, accurate
and complete copies of all of the Material Agreements (other than the Original
Acquisition Documents). Borrower and/or Pledgor provided Lender with true,
accurate and complete copies of all of the Original Acquisition Documents) on
the Original Closing Date. As of the Closing Date, none of the Material
Agreements relating to the Property known as “Stevens Pass” have been modified
other than as set forth in Schedules 6 and 7 and none of the other Material
Agreements have been modified in any manner or respect that could reasonably be
expected to have a Material Adverse Effect. There are no defaults or events of
default (and to Borrower’s and Pledgor’s knowledge, no events or circumstances
exist which with or without the giving of notice, the passage of time or both
may constitute a default or event of default) under any of the Material
Agreements.

Section 4.26 Original Loan Application. Each of the representations, warranties
and certifications made by Original Borrower, Original Pledgor and Guarantor
contained in the Original Loan Application were true, accurate and complete as
of the Original Closing Date and there has been no change thereto that could
reasonably be expected to result in a Material Adverse Effect.

Section 4.27 Acquisition Documentation. Borrower and/or Pledgor have provided
Lender with true, accurate and complete copies of the New Acquisition
Documentation. Borrower and/or Pledgor provided Lender with true, accurate and
complete copies of the Original Acquisition Documentation on the Original
Closing Date. The New Acquisition Documentation identifies all of the material
property owned by Stevens Pass on the Closing Date. The Original Acquisition
Documentation identified all of the material property owned by Northstar,
Sierra, Brighton, Snoqualmie and Loon Mountain on the Original Closing Date. No
portion of the Property consists of copyrights.

Section 4.28 Title Certificate. Borrower and or Pledgor own no assets that are
evidenced by (or required under applicable Legal Requirements to be evidenced
by) a certificate of title or similar registration establishing title, except
for the Vehicles. All Vehicles owned by Original Borrower as of the Original
Closing Date are identified in the bills of sale that are described on Schedule
4.28A. All Vehicles owned by Stevens Pass as of the Closing Date are identified
in the bills of sale that are described on Schedule 4.28B.

Section 4.29 Ownership and Operation.

(a) Without limitation of any other representation or warranty set forth in the
Loan Documents, Northstar (i) owns all of the land, leasehold interests and
equipment and (ii) has obtained all necessary access, water and other rights and
permits (except for such equipment, rights and permits as Third Party Operator
may possess and, to Borrower’s knowledge, does possess), necessary to operate
the ski facility at the “Northstar at Tahoe Resort” with an address

 

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of 100 Northstar Drive, Truckee, CA 96161 as currently operated. Pursuant to the
Loan Documents, Northstar has provided Lender with liens and security
instruments, such that if Lender were to foreclose upon such liens and security
instruments effective as of the Closing Date, provided Lender succeeded to
Borrower’s rights in respect of the TPO Leases, Lender would hold title to all
of the (x) land, leasehold interests and equipment and (y) all necessary access,
water and other rights and permits (except for (i) such equipment, rights and
permits as Third Party Operator may possess, (ii) the Forest Service Permits,
Lender’s rights under which are as provided in the applicable USFS Agreement,
and (iii) matters set forth in the Post Closing Letter with respect to Vehicles
and estoppels and lease/license amendments) necessary to operate the ski
facility at the “Northstar at Tahoe Resort” with an address of 100 Northstar
Drive, Truckee, CA 96161 as currently operated.

(b) Without limitation of any other representation or warranty set forth in the
Loan Documents, Sierra (i) owns, subject to the applicable Forest Service
Permit, all of the land, leasehold interests and equipment and (ii) has obtained
all necessary access, water and other rights and permits (except for such
equipment, rights and permits as Third Party Operator may possess and, to
Borrower’s knowledge, does possess), necessary to operate the ski facility at
the “Sierra-at-Tahoe Resort” with an address of 1111 Sierra-at-Tahoe Road, Twin
Bridges, CA 95735 as currently operated. Pursuant to the Loan Documents, Sierra
has provided Lender with liens and security instruments, such that if Lender
were to foreclose upon such liens and security instruments effective as of the
Closing Date, provided Lender succeeded to Borrower’s rights in respect of the
TPO Leases, Lender would hold title to all of the (x) land, leasehold interests
and equipment and (y) all necessary access, water and other rights and permits
(except for (i) such equipment, rights and permits as Third Party Operator may
possess, (ii) the Forest Service Permits, Lender’s rights under which are as
provided in the applicable USFS Agreement, and (iii) matters set forth in the
Post Closing Letter with respect to Vehicles and estoppels and lease/license
amendments) necessary operate the ski facility at the “Sierra-at-Tahoe Resort”
with an address of 1111 Sierra-at-Tahoe Road, Twin Bridges, CA 95735 as
currently operated.

(c) Without limitation of any other representation or warranty set forth in the
Loan Documents, Brighton (i) owns, subject to the applicable Forest Service
Permit, all of the land, leasehold interests and equipment and (ii) has obtained
all necessary access, water and other rights and permits (except for such
equipment, rights and permits as Third Party Operator may possess and, to
Borrower’s knowledge, does possess), necessary to operate the ski facility at
the “Brighton Resort” with an address of 12601 E. Big Cottonwood Cyn, Brighton,
Utah 84121 as currently operated. Pursuant to the Loan Documents, Brighton has
provided Lender with liens and security instruments, such that if Lender were to
foreclose upon such liens and security instruments effective as of the Closing
Date, provided Lender succeeded to Borrower’s rights in respect of the TPO
Leases, Lender would hold title to all of the (x) land, leasehold interests and
equipment and (y) all necessary access, water and other rights and permits
(except for (i) such equipment, rights and permits as Third Party Operator may
possess, (ii) the Forest Service Permits, Lender’s rights under which are as
provided in the applicable USFS Agreement, and (iii) matters set forth in the
Post Closing Letter with respect to Vehicles and estoppels and lease/license
amendments) necessary operate the ski facility at the “Brighton Resort” with an
address of 12601 E. Big Cottonwood Cyn, Brighton, Utah 84121 as currently
operated.

 

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(d) Without limitation of any other representation or warranty set forth in the
Loan Documents, Snoqualmie (i) owns, subject to the applicable Forest Service
Permit, all of the land, leasehold interests and equipment and (ii) has obtained
all necessary access, water and other rights and permits (except for such
equipment, rights and permits as Third Party Operator may possess and, to
Borrower’s knowledge, does possess), necessary to operate the ski facility at
the “The Summit at Snoqualmie” with an address of PO Box 1068 Snoqualmie Pass,
WA 98068 as currently operated. Pursuant to the Loan Documents, Snoqualmie has
provided Lender with liens and security instruments, such that if Lender were to
foreclose upon such liens and security instruments effective as of the Closing
Date, provided Lender succeeded to Borrower’s rights in respect of the TPO
Leases, Lender would hold title to all of the (x) land, leasehold interests and
equipment and (y) all necessary access, water and other rights and permits
(except for (i) such equipment, rights and permits as Third Party Operator may
possess, (ii) the Forest Service Permits, Lender’s rights under which are as
provided in the applicable USFS Agreement, and (iii) matters set forth in the
Post Closing Letter with respect to Vehicles and estoppels and lease/license
amendments) necessary operate the ski facility at the “The Summit at Snoqualmie”
with an address of PO Box 1068 Snoqualmie Pass, WA 98068 as currently operated.

(e) Without limitation of any other representation or warranty set forth in the
Loan Documents, Loon Mountain (i) owns, subject to the applicable Forest Service
Permit, all of the land, leasehold interests and equipment and (ii) has obtained
all necessary access, water and other rights and permits (except for such
equipment, rights and permits as Third Party Operator may possess and, to
Borrower’s knowledge, does possess), necessary to operate the ski facility at
“Loon Mountain” with an address of 60 Loon Mountain Rd, Lincoln, NH 03251 as
currently operated. Pursuant to the Loan Documents, Loon Mountain has provided
Lender with liens and security instruments, such that if Lender were to
foreclose upon such liens and security instruments effective as of the Closing
Date, provided Lender succeeded to Borrower’s rights in respect of the TPO
Leases, Lender would hold title to all of the (x) land, leasehold interests and
equipment and (y) all necessary access, water and other rights and permits
(except for (i) such equipment, rights and permits as Third Party Operator may
possess, (ii) the Forest Service Permits, Lender’s rights under which are as
provided in the applicable USFS Agreement, and (iii) matters set forth in the
Post Closing Letter with respect to Vehicles and estoppels and lease/license
amendments) necessary operate the ski facility at “Loon Mountain” with an
address of 60 Loon Mountain Rd, Lincoln, NH 03251 as currently operated

(f) Without limitation of any other representation or warranty set forth in the
Loan Documents, Stevens Pass (i) owns, subject to the applicable Forest Service
Permit, all of the land, leasehold interests and equipment and (ii) has obtained
all necessary access, water and other rights and permits (except for such
equipment, rights and permits as Third Party Operator may possess and, to
Borrower’s knowledge, does possess), necessary to operate the ski facility
commonly known as “Stevens Pass ski area” with an address of Stevens Road,
Stevens Pass, WA 98826, as currently operated. Pursuant to the Loan Documents,
Stevens Pass has provided Lender with liens and security instruments, such that
if Lender were to foreclose upon such liens and security instruments effective
as of the Closing Date, provided Lender succeeded to Steven Pass’s rights in
respect of the TPO Leases, Lender would hold title to all of the (x) land,
leasehold interests and equipment and (y) all necessary access, water and other
rights and permits (except for (i) such equipment, rights and permits as Third
Party Operator may possess, and (ii) the Forest Service Permits, Lender’s rights
under which are as provided in the applicable USFS Agreement) necessary to
operate the ski facility commonly known as “Stevens Pass ski area” with an
address of Stevens Road, Stevens Pass, WA 98826, as currently operated.

 

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Section 4.30 Booth Creek Asset Purchase Agreement.

(a) Borrower and Pledgor have delivered to Lender all material Assumed
Contracts, as such term is defined in the Booth Creek APA.

(b) The Seller Expansion CapEx Projects and the Seller Maintenance CapEx
Projects, each term as defined in the Booth Creek APA, have been completed.

(c) None of Borrower, Pledgor, CLP Partners, or any of their Affiliates have
sent or received any notice claiming or asserting a right to indemnification
under the Booth Creek APA.

(d) As of the Original Closing Date, CLP Partners (or its Affiliates) was the
holder of three notes made pursuant to the terms of the Booth Creek APA by
(i) Porcupine Hill Estates LLC (in the principal amount of $2,900,000.00),
(ii) Waterville Valley Ski Resort, Inc. (in the principal amount of
$2,900,000.00), and (iii) Mount Cranmore Ski Resort, Inc. (in the principal
amount of $6,200,000.00).

(e) As of the Closing Date, all of the transactions contemplated by the Booth
Creek APA have been completed (except for (i) those specified in the Closing
Letter identified as item (n) of the Acquisition Documents and (ii) those
matters that have been waived by Borrower, Pledgor, CLP Partners, or any of
their Affiliates, as Purchaser under the Booth Creek APA the waiver of which
cannot be reasonably expected to result in a Material Adverse Effect) and all
transfer taxes relating to such transactions have been paid in full.

(f) All third party consents and approvals described on Schedules 7.3(a) and
7.3(b) of the Booth Creek APA have been obtained.

(g) None of the Permitted Liens or Permitted Exceptions (each term as defined in
the Booth Creek APA) and none of the matters set forth on Schedules 2.3 and
7.7(a) of the Booth Creek APA could reasonably be expected (if performed in
accordance with their terms) to result in a Material Adverse Effect.

(h) None of the Purchased Assets, as such term is defined in the Booth Creek
APA, are subject to any purchase options, rights of first refusal or rights of
first offer except as disclosed on Schedule 4.30(h) attached hereto.

Section 4.31 Brighton Asset Purchase Agreement.

(a) None of Borrower, Pledgor, CLP Partners, or any of their Affiliates have
sent or received any notice claiming or asserting a right to indemnification
under the Brighton APA.

(b) As of the Closing Date, all of the transactions contemplated by the Brighton
APA have been completed (except for those matters that have been waived by

 

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Borrower, Pledgor, CLP Partners, or any of their Affiliates, as Purchaser under
the Brighton APA the waiver of which cannot be reasonably expected to result in
a Material Adverse Effect) and all transfer taxes relating to such transactions
have been paid in full. Lender acknowledges that (i) ownership of certain
“Consumables and Inventory” as defined in the Brighton APA was retained by Third
Party Operator, as Seller under the Brighton APA, (ii) Borrower is taking all
necessary steps to complete federal registration requirements pertaining to the
transfer of certain trademarks, but that such registration has not been
completed as of the Closing Date, and (iii) neither of the circumstances
described in the preceding clauses (i) and (ii) could reasonably be expected to
result in a Material Adverse Effect.

(c) All third party consents and approvals required to effectuate the
transactions described in the Brighton APA have been obtained.

(d) None of the Permitted Encumbrances (as such term is defined in the Brighton
APA) could reasonably be expected (if performed in accordance with their terms)
to result in a Material Adverse Effect.

(e) None of the Assets, as such term is defined in the Brighton APA, are subject
to any purchase options, rights of first refusal or rights of first offer except
as disclosed on Schedule 4.31(e).

Section 4.32 Stevens Pass Asset Purchase Agreement.

(a) Borrower and New Pledgor have delivered to Lender all Tenant Leases,
Contracts, Licenses and Permits (each, as defined in the Stevens Pass APA) as
provided to Borrower pursuant to the Stevens Pass APA constituting Assumed
Liabilities (as defined in the Stevens Pass APA), except the vehicle licenses
listed on Schedule 2.2.8 to the Stevens Pass APA.

(b) None of Borrower, New Pledgor, CLP Partners, or any of their Affiliates have
sent or received any notice claiming or asserting a right to indemnification
under the Stevens Pass APA.

(c) As of the Closing Date, all of the transactions contemplated by the Stevens
Pass APA have been completed and all transfer taxes relating to such
transactions have been paid in full.

(d) All third party consents and approvals required to effectuate the
transactions described in the Stevens Pass APA have been obtained.

(e) None of the Permitted Exceptions (as defined in the Stevens Pass APA) could
reasonably be expected to result in a Material Adverse Effect.

(f) None of the Assets, as such term is defined in the Stevens Pass APA, are
subject to any purchase options, rights of first refusal or rights of first
offer.

Section 4.33 Third Party Consents. Borrower and Pledgor have obtained all third
party consents necessary to grant to Lender (and enable Lender to exercise all
of its remedies

 

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with respect to) a first priority lien on and security interest in all material
portions of the Property other than the Forest Service Land and except for those
consents that Lender has agreed may be delivered by Borrower following the
Closing Date (including, without limitation, all Property necessary or desirable
for the current ownership, use and operation of those portions of the resorts
owned, leased or licensed by Borrower and commonly known as the (a) “Northstar
at Tahoe Resort” with an address of 100 Northstar Drive, Truckee, CA 96161,
(b) “Sierra-at-Tahoe Resort” with an address of 1111 Sierra-at-Tahoe Road, Twin
Bridges, CA 95735, (c) “Brighton Resort” with an address of 12601 E. Big
Cottonwood Cyn, Brighton, Utah 84121, (d) “The Summit at Snoqualmie” with an
address of PO Box 1068 Snoqualmie Pass, WA 98068, (e) “Loon Mountain” with an
address of 60 Loon Mountain Rd, Lincoln, NH 03251 and (f) “Stevens Pass ski
area” with an address of Stevens Road, Stevens Pass, WA 98826.

Section 4.34 Property-Specific. The representations and warranties for each
Individual Property owned by an Original Borrower set forth in Exhibit D were
true, accurate and complete as of the Original Closing Date and there has been
no change thereto that could reasonably be expected to result in a Material
Adverse Effect.

ARTICLE 5

COVENANTS

Each of Borrower and Pledgor covenant and agree that, from the Closing Date and
until payment in full of the Indebtedness:

Section 5.1 Compliance with Legal Requirements; Impositions and Other Claims;
Contests.

(a) Borrower and Pledgor shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, Permits and franchises necessary for the conduct of its business and
comply in all material respects with all applicable Legal Requirements,
Contracts, Permits, and private covenants, conditions and restrictions that at
any time apply to Borrower, Pledgor, the Equity Collateral, or the Property
(including the Forest Service Land). Borrower and Pledgor shall notify Lender
promptly of any written notice or order that Borrower or Pledgor receives from
any Governmental Authority relating to any of Borrower’s or Pledgor’s failure to
comply with such applicable Legal Requirements.

(b) Unless Borrower is making Deposits pursuant to the terms of Section 3.1,
Borrower and/or Pledgor shall pay or cause to be paid by the Third Party
Operator all Impositions and Insurance Premiums with respect to Borrower,
Pledgor, the Equity Collateral and the Property (including the Forest Service
Land) in accordance with the terms hereof and Borrower and/or Pledgor shall
provide Lender with receipts evidencing such payments (except for income taxes,
franchise taxes, ground rents, maintenance charges, and utility charges) within
forty-five (45) days after their due date. Any Borrower or Pledgor, at its
expense, after prior notice to Lender, may seek to enforce the obligations of
the Third Party Operator with respect to such payments, and may contest by
appropriate proceedings conducted in good faith and with due diligence, the
validity or application of any Legal Requirements, Imposition, or any claims of
mechanics, materialmen, suppliers or vendors, and may withhold payment of the
same

 

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pending such proceedings if permitted by law, as long as (1) in the case of any
Impositions, judgment liens or claims of mechanics, materialmen, suppliers or
vendors, such proceedings shall suspend the collection thereof from the Property
(including the Forest Service Land) or the Equity Collateral, (ii) none of the
Property (including the Forest Service Land), the Equity Collateral, or any part
thereof or interest therein will be sold, forfeited or lost if Borrower or
Pledgor pays the amount or satisfies the condition being contested, and Borrower
would have the opportunity to do so, in the event of Borrower’s or Pledgor’s
failure to prevail in such contest, (iii) Lender would not, by virtue of such
permitted contest, be exposed to any risk of civil or criminal liability, and
neither the Property (including the Forest Service Land) nor any part thereof or
any interest therein would be subject to the imposition of any Lien for which
Borrower or Pledgor has not furnished additional security as provided in clause
(iv) below, as a result of the failure to comply with any Legal Requirement of
such proceeding which would not be released if Borrower or Pledgor pays the
amount or satisfies the condition being contested, and Borrower or Pledgor would
have the opportunity to do so, in the event of Borrower’s or Pledgor’s failure
to prevail in the contest, and (iv) Borrower or Pledgor shall have furnished to
Lender additional security in respect of the claim or lien being contested or
the loss or damage that may result from Borrower’s or Pledgor’s failure to
prevail in such contest in such amount as may be requested by Lender, but in no
event less than one hundred twenty-five percent (125%) of the amount of such
claim.

Section 5.2 Maintenance; Waste; Alterations. Borrower and Pledgor shall at all
times keep or cause the Third Party Operator to keep the Property (including the
Forest Service Land) in good repair, working order and condition, except for
reasonable wear and use. Borrower and Pledgor shall not permit the Improvements,
Equipment or Inventory to be removed or demolished or otherwise altered
(provided, however, that Borrower may remove, demolish or alter worn out or
obsolete Improvements, Equipment and Inventory that are promptly replaced with
Improvements, Equipment or Inventory, as applicable, of equivalent value and
functionality, unless Borrower reasonably determines that such replacement is
not necessary for the operation of the Property (including the Forest Service
Land) and would not have a Material Adverse Effect). Borrower and Pledgor may
not, without Lender’s approval, perform alterations to the Improvements and
Equipment which (a) exceed $1,000,000 (not including (i) tenant improvements and
other capital improvements and alterations work, as set forth on Schedule 5.2
attached hereto, performed by a Third Party Operator as a matter of right
pursuant to the terms of any Lease executed on or prior to the date hereof,
(ii) alterations performed in connection with a Restoration, and (iii) work
performed pursuant to Section 5.6), or (b) are not in the ordinary course of
Borrower’s business (such alterations, “Material Alterations”). Borrower and
Pledgor shall not perform any Material Alteration unless approved in writing by
Lender in Lender’s discretion. Borrower or Pledgor shall reimburse Lender for
all actual costs and expenses incurred by Lender, including the fees charged by
any professional engaged by Lender in connection with any such Material
Alteration. With respect to any Material Alteration, as a condition to Lender’s
approval, Lender may, at its option, require Borrower or Pledgor to deliver to
Lender security for payment of the cost of such Material Alteration in an amount
equal to one hundred twenty-five percent (125%) of the cost of such Material
Alteration, as estimated by Lender. Borrower and Lender acknowledge that
Borrower shall not be required to obtain Lender’s consent to any Equipment lease
where the Equipment to be leased is intended to serve as a replacement for
Equipment which is owned by the Borrower as of the date hereof (each such lease,
a “Replacement Equipment Lease”) provided that such Replacement Equipment Lease
is

 

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otherwise entered into by Borrower in accordance with the provisions of this
Agreement and so long as the value of all Equipment leased under all Replacement
Equipment Leases entered into throughout the term of the Loan (including the
value of the Equipment to be leased pursuant to the Replacement Equipment Lease
in question) does not exceed $5,000,000 in the aggregate. Borrower shall execute
and deliver a collateral assignment of any such Equipment lease to Lender within
thirty (30) days of Borrower entering into the same.

Section 5.3 Access to Property and Records. Each of Borrower and Pledgor shall
permit agents, representatives and employees of Lender (at Lender’s cost and
expense if no Event of Default has occurred), to inspect (a) the Property
(including the Forest Service Land) or any part thereof, and (b) such books,
records and accounts of Borrower and Pledgor and to make such copies or extracts
thereof as Lender shall desire, in each case at such reasonable times as may be
requested by Lender upon reasonable advance notice, subject to the rights of
tenants under Leases.

Section 5.4 Management of Property. The Property (including the Forest Service
Land) will be managed and operated at all times by the Third Party Operator
pursuant to the TPO Leases unless terminated as provided in the Loan Documents.
Borrower shall diligently perform all terms and covenants required of Borrower
under the TPO Leases. Borrower and Pledgor shall not enter into any other
agreement relating to the management or operation of the Property (including the
Forest Service Land) with any Third Party Operator or any other Person without
Lender’s consent, which shall not be unreasonably withheld. If at any time
Lender consents to the appointment of a new manager and operator, such new
manager or operator and Borrower shall, as a condition to Lender’s consent,
which shall not be unreasonably withheld, execute a subordination agreement in
form and substance satisfactory to Lender.

Section 5.5 Financial and Other Reporting.

(a) Records and Reports. Borrower shall maintain complete and accurate books and
records with respect to all operations of, or transactions involving, the
Property (including the Forest Service Land) and the Borrower Equity Collateral.
Pledgor shall maintain complete and accurate books and records with respect to
all operations of, or transactions involving, the Pledgor Equity Collateral.
Annually, Borrower and Pledgor shall furnish Lender financial statements for the
most current fiscal year (including a schedule of all related Indebtedness and
contingent liabilities) for (i) Borrower, (ii) Pledgor, (iii) Guarantor, and
(iv) to the extent available through commercially reasonable efforts by Borrower
and Pledgor, any tenants under the TPO Leases; provided however, the financial
statements described in the preceding clauses (i) and (ii) may be on a
consolidated basis. As and when provided to Borrower, Borrower shall provide to
Lender (a) any other statements, reports or certificates delivered to Borrower
by the Third Party Operator (including without limitation, monthly operating
statements indicating the payment amounts due to the USFS pursuant to the USFS
Permits) and (b) any appraisals of the Property (including the Forest Service
Land) performed during the term of the Loan. Notwithstanding anything set forth
herein to the contrary, Borrower shall use commercially reasonable efforts to
deliver to Lender the operating statements described above, reflecting activity
through March 30, 2012, on or before April 15, 2012. Upon Lender’s request
following an Event of Default, Borrower shall provide to Lender (A) a schedule
showing Borrower’s and Pledgor’s tax basis in the Property and the Equity
Collateral, (B) the distribution

 

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of economic interests in the Property (including the Forest Service Land) and
the Equity Collateral, and (C) copies of any other loan documents affecting the
Property (including the Forest Service Land) and the Equity Collateral.

(b) Delivery of Reports. All of the reports, statements, and items required
under this Section shall be (i) certified as being true, correct, and accurate
by an authorized person, partner, or officer of the delivering party or, at the
deliverer’s option, audited by a certified public accountant; (ii) satisfactory
to Lender in form and substance; and (iii) delivered within (A) ninety (90) days
after the end of Borrower’s and Pledgor’s fiscal year for annual reports and
(B) forty-five (45) days after the end of each calendar quarter for quarterly
reports. If any one report, statement, or item is not received by Lender on the
date due, and thereafter, if such report, statement or item has not been
delivered within fifteen (15) days of Lender’s written request for the same, a
late fee of Five Hundred and No/100 Dollars ($500.00) per month shall be due and
payable by Borrower. Borrower and Pledgor shall (i) provide Lender with such
additional financial, management, or other information regarding Borrower,
Pledgor, Guarantor, the Equity Collateral or the Property (including the Forest
Service Land), as Lender may reasonably request and (ii) upon Lender’s request,
deliver all items required by this Section in an electronic format (i.e. on
computer disks) or by electronic transmission acceptable to Lender.

(c) Borrower and Pledgor shall give prompt written notice to Lender of any
litigation or governmental proceedings pending or threatened involving Borrower
or Pledgor which is reasonably likely to have a Material Adverse Effect.

All financial statements and other documents to be delivered pursuant to this
Agreement shall (A) be in form and substance acceptable to Lender in Lender’s
discretion, (B) be prepared in accordance with sound accounting principles
consistently applied, and (C) be certified by Borrower and Pledgor as being
true, correct, complete and accurate in all material respects and fairly
reflecting the results of operations and financial condition of Borrower and
Pledgor for the relevant period, as applicable.

Section 5.6 Northstar/Martis Camp Provisions.

(a) Material Agreements; Ski Improvements. For the avoidance of doubt, the
Northstar/Martis Camp Ski Services Agreement, the Northstar/Martis Camp Ski
Improvement Agreement and the Northstar/Martis Camp Settlement Agreement listed
on Schedule 6 attached hereto, as well as any Connection Agreement (as such term
is defined in Section 4(f) of the Northstar/Martis Camp Settlement Agreement)
shall also be deemed “Contracts” as that term is defined in the Northstar
Mortgage; provided, however, that the parties hereto acknowledge that with
respect to the foregoing agreements, no consents to assignment to Lender have
been obtained. The parties hereto acknowledge that the Ski Improvements (as that
term is defined in the Northstar/Martis Camp Ski Improvement Agreement), have
been substantially completed. The Final Budget for the Ski Improvements (as such
terms are defined in the Northstar/Martis Camp Ski Improvement Agreement) was
delivered to Lender in connection with the execution and delivery of, and
attached to, the First Amendment. Borrower shall deliver to Lender a copy of any
notices received by Borrower indicating any material deviations from the Final
Budget promptly upon Borrower’s receipt of the same.

 

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(b) Amendment to Northstar Mortgage for Development Land. Upon the reconveyance
to CLP Northstar of any portion of the Development Land (as such term is defined
in Section 4(b) of the Northstar/Martis Camp Settlement Agreement), as
contemplated under Sections 4(l) and (m) of the Northstar/Martis Camp Settlement
Agreement, Northstar shall execute and deliver to Lender an Amendment to the
Northstar Mortgage substantially in the form of the Amendment to Northstar
Mortgage that was executed and delivered in connection with the First Amendment.
Borrower shall pay all costs incurred by Lender in connection with the
preparation and recordation of the Amendment to Northstar Mortgage and obtain
and pay the cost of any endorsement to Lender’s title policy for Northstar
reasonably requested by Lender.

(c) Exercise of Approval by CLP Northstar Under Northstar/Martis Camp Settlement
Agreement. Prior to the exercise of any approval right of CLP Northstar under
the Northstar/Martis Camp Settlement Agreement relating to the location, design
or construction of units and ski improvements on the Development Land (as
defined in the Northstar/Martis Camp Settlement Agreement) which is reasonably
likely to result in a Material Adverse Effect if such approval is granted,
Borrower shall obtain Lender’s approval (which shall not be unreasonably
withheld, conditioned or delayed) and shall provide Lender with reasonably
sufficient information to allow Lender to make such determination. Borrower
shall also deliver to Lender a copy of the final budget for the Ski Improvements
referenced in Section 4 of the Northstar/Martis Camp Settlement Agreement
promptly upon completion of same and a copy of any notices received by Borrower
indicating any material deviations from this budget.

(d) Deposit of Funds to Reserve. CLP Northstar shall cause (i) all Property
Payments (as such term is defined in Section 4(d) of the Northstar/Martis Camp
Settlement Agreement) and (b) any Ski Improvement Fees paid pursuant to
Section 6 of the Northstar/Martis Camp Ski Improvement Agreement to be deposited
in the Martis Camp Reserve (as such term is defined in Section 5.1.6 of the
Northstar Real Property Lease), to the extent that such funds are released from
the Northstar Escrow or the Improvement Escrow (as such terms are defined in the
Northstar/Martis Camp Ski Improvement Agreement).

(e) Survey of Ski Improvements Easement Area. The parties hereto acknowledge
that delivery of the boundary survey of the Easement Area referenced in
Section 2(e) of the Northstar/Martis Camp Ski Improvement Agreement was waived
by CLP Northstar. The map of the Easement Area was attached to the First
Amendment and is on file with Lender.

(f) Martis Camp Reserve. The Martis Camp Reserve (as such term is defined in
Section 5.1.6 of the Northstar Real Property Lease) shall be established at a
bank reasonably approved by Lender and shall be subject to a Blocked Account
Control Agreement in the form previously approved by Lender. Prior to the
occurrence of an Event of Default, CLP Northstar and TPO Northstar may make
disbursements from the Martis Camp Reserve without notice to or approval of
Lender. During the continuance of an Event of Default, withdrawals from the
Martis Camp Reserve shall not be permitted without Lender’s approval; provided,
however, that Lender shall not unreasonably withhold its approval if a
withdrawal is for any of the purposes set forth in the second sentence of
Section 5.1.6 of the Northstar Real Property Lease.

 

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Section 5.7 Leases.

(a) Borrower and Pledgor shall (i) observe and perform all obligations imposed
upon the lessor under any Lease to which Borrower and/or Pledgor is a party;
(ii) promptly send copies to Lender of all notices of default that Borrower or
Pledgor shall send or receive under any Lease; (iii) promptly notify Lender of
any tenant under a TPO Lease at the Property which has vacated, or has given
Borrower or Pledgor written notice of its intention to vacate, the premises (or
any portion thereof) leased to such tenant pursuant to the applicable TPO Lease;
(iv) enforce the terms, covenants and conditions in the Leases to which Borrower
and/or Pledgor are party to be observed by tenants in accordance with
commercially reasonable practices for properties similar to the Property; and
(v) obtain the prior written consent of Lender, which consent may be withheld in
Lender’s sole and absolute discretion, except as otherwise expressly set forth
herein, for any TPO Lease, amendment or modification of any Lease to which
Borrower and/or Pledgor are party, assignment of any Lease to which Borrower
and/or Pledgor are party, subletting of any Lease to which Borrower and/or
Pledgor are party (except in accordance with mandatory actions by lessor under
the existing Lease provisions, if any), or termination or acceptance of
surrender of any Lease to which Borrower and/or Pledgor are party. Borrower and
Pledgor shall obtain the prior written consent of Lender, which shall not be
unreasonably withheld for any extension or renewal of any Lease to which
Borrower and/or Pledgor are party; provided however, the exercise by Third Party
Operator of any unilateral renewal or extension option set forth in, and subject
to the conditions of, the TPO Lease shall not require Lender’s consent.

(b) Reserved.

(c) Without Lender’s prior written consent, which may be withheld in Lender’s
sole and absolute discretion, except as otherwise expressly set forth herein,
Borrower shall not (i) make any assignment or pledge of any Lease or Rents to
anyone other than Lender until the Indebtedness is paid in full, (ii) collect
any Rents under the Leases more than one (1) month in advance (except that
Borrower may collect in advance such security deposits as are permitted pursuant
to applicable Legal Requirements and are commercially reasonable in the
prevailing market); (iii) declare a default under Section 12.1(j) of any of the
TPO Leases relating to the Stevens Pass Ski Resort or Section 12.1(i) of any of
the TPO Leases relating to the Loon Mountain Resort, the Summit at Snoqualmie or
the Brighton Ski Resort; (iv) execute or grant any modification of any TPO
Lease; (v) consent to the assignment or encumbrance by any Third Party Operator
of its interest under the TPO Leases; (vi) waive or release any of its rights
and remedies under the TPO Leases; or (vii) lease any portion of the Property to
a dry cleaner that uses dry cleaning solvents on the Property. Without Lender’s
prior written consent, which shall not be unreasonably withheld, Borrower shall
not enter into, amend, renew, extend, accept the surrender of, or terminate any
TPO Lease.

(d) Any letter of credit or other instrument that Borrower receives in lieu of a
cash security deposit under any Lease (other than the Northstar Real Property
Lease, the Northstar Personal Property Lease, the Sierra Real Property Lease and
the Sierra Personal Property Lease) shall, if permitted pursuant to applicable
Legal Requirements, name Lender and Borrower as co-payees or mortgagee
thereunder (and, at Lender’s option, be fully assigned to and held by Lender).
Any original letters of credit delivered to a landlord pursuant to the TPO

 

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Leases (other than the Northstar Real Property Lease, the Northstar Personal
Property Lease, the Sierra Real Property Lease and the Sierra Personal Property
Lease) in respect of security deposit obligations shall be delivered to Lender
on the Closing Date and Lender shall hold such letters of credit for so long as
any portion of the Loan remains outstanding. Upon Lender’s reasonable
determination that Borrower is entitled to draw against such letters of credit
pursuant to the terms of the applicable TPO Leases, Borrower shall be entitled
to draw against such letters of credit (except that during the continuation of
an Event of Default, only Lender shall be entitled to draw against such letters
of credit), subject to the provisions of the TPO Leases; provided however, that
the amount of any such draws shall be deposited into an account controlled by
Lender and distributed or applied upon the request of Borrower against debt
service coming due or against operating expenses reasonably approved by Lender;
provided further, that during the continuation of an Event of Default, Lender
may apply such amounts in Lender’s sole discretion, subject only to the
provisions of the TPO Leases. Borrower shall use commercially reasonable efforts
to cause any such letters of credit to be re-issued naming Lender as an
additional beneficiary thereof within sixty (60) days of the Closing Date.

(e) Lender previously consented to (i) the Transfer of TPO Loon Mountain’s
interest in the (x) Loon Mountain Real Property Lease and (y) Loon Mountain
Personal Property Lease (collectively the “Loon Mountain Leases”) to Boyne or an
Affiliate of Boyne, (ii) the release of TPO Loon Mountain and its Affiliates
from any ongoing liability under the Loon Mountain Leases in connection with the
Transfer and (iii) the modification of the Loon Mountain Leases in connection
with the Transfer. Lender’s consent to the foregoing matters was subject to:
(A) Lender’s review and approval of the final Transfer documentation and
documents related thereto (such documentation shall be delivered to Lender in a
reasonable amount of time prior to such Transfer), and Lender’s review shall be
completed in a timely manner, (B) Lender’s determination that the modification
of the provisions of the Loon Mountain Real Leases relating to rent, lease term
and any other material provision would not adversely effect the Borrower,
Pledgor or Lender and (C) the delivery by Boyne or an Affiliate of Boyne of any
subordination agreement, estoppel certificate and other documentation as may be
requested by Lender. To Borrower’s knowledge, the foregoing requirements have
been satisfied.

(f) Lender previously consented to (i) the Transfer of TPO Snoqualmie interest
in the (x) Snoqualmie Real Property Lease and (y) Snoqualmie Personal Property
Lease (collectively the “Snoqualmie Leases”) to Boyne or an Affiliate of Boyne,
(ii) the release of TPO Snoqualmie and its Affiliates from any ongoing liability
under the Snoqualmie Leases in connection with the Transfer and (iii) the
modification of the Snoqualmie Leases in connection with the Transfer. Lender’s
consent to the foregoing matters was subject to: (A) Lender’s review and
approval of the final Transfer documentation and documents related thereto (such
documentation shall be delivered to Lender in a reasonable amount of time prior
to such Transfer), and Lender’s review shall be completed in a timely manner,
(B) Lender’s determination that the modification of the provisions of the
Snoqualmie Real Leases relating to rent, lease term and any other material
provision would not adversely effect the Borrower, Pledgor or Lender, and
(C) the delivery by Boyne or an Affiliate of Boyne of any subordination
agreement, estoppel certificate and other documentation as may be requested by
Lender. To Borrower’s knowledge, the foregoing requirements have been satisfied.

 

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Section 5.8 Place of Business; State of Organization. Each of Borrower and
Pledgor shall not change its (a) chief executive office or its principal place
of business or place where its books and records are kept, or (b) the
jurisdiction in which it is organized.

Section 5.9 Zoning; Joint Assessment. Without the prior written consent of
Lender, which may be withheld in Lender’s sole and absolute discretion, Borrower
and Pledgor shall not change the Property’s (including the Forest Service Land)
use or initiate, join in or consent to any (a) change in any private restrictive
covenant, zoning ordinance or other public or private restrictions limiting or
defining the Property’s (including the Forest Service Land) uses or any part
thereof (including filing a declaration of condominium, map or any other
document having the effect of subjecting the Property (including the Forest
Service Land) to the condominium or cooperative form of ownership), except those
necessary in connection with the uses permitted pursuant to this Agreement, or
(b) joint assessment of the Property (including the Forest Service Land) with
any other real or personal property.

Section 5.10 Material Agreements.

(a) Borrower and Pledgor shall not, without Lender’s prior written consent enter
into, materially modify, surrender, terminate, renew, extend, amend in any
material fashion or waive any provision of any Material Agreement to which it is
a party; provided however, Lender’s consent shall not be unreasonably withheld
for such renewals or extensions.

(b) Each of Borrower and Pledgor and its Affiliates shall, at its sole cost and
expense, promptly and timely perform and observe all the terms, covenants and
conditions required to be performed and observed by Borrower or Pledgor under
the Material Agreements.

(c) If Borrower or Pledgor shall violate any of the covenants specified in
(b) above, Borrower and Pledgor grants to Lender the right (but not the
obligation), without notice to Borrower or Pledgor, to take any action as may be
necessary to prevent or cure any default of Borrower or Pledgor under any
Material Agreement, if necessary to protect Lender’s interest hereunder, and
Lender shall have the right to enter all or any portion of the Property at such
times and in such manner as Lender deems necessary, in order to prevent or to
cure any such default.

(d) The curing by Lender of any default by Borrower or Pledgor under any
Material Agreement shall not remove or waive, as between Borrower or Pledgor and
Lender, the default that occurred hereunder by virtue of the default by Borrower
under any Material Agreement. All sums expended by Lender in order to cure any
such default shall be paid by Borrower to Lender, upon demand, with interest
thereon at the Default Rate unless prohibited by applicable law. All such
amounts shall be added to the Indebtedness. No action or payment taken or made
by Lender to prevent or cure a default by Borrower or Pledgor under any Material
Agreement shall waive or cure the corresponding default by Borrower or Pledgor
under the Loan Documents.

(e) Borrower or Pledgor shall notify Lender promptly in writing of (a) the
occurrence of any default by any party under any Material Agreement or the
occurrence of any event which, with the passage of time or service of notice, or
both, would constitute a default by

 

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any party under any Material Agreement, and/or (b) of the receipt by Borrower or
Pledgor of any notice (written or otherwise) under any Material Agreement noting
or claiming the occurrence of any default by Borrower or Pledgor under such
Material Agreement or the occurrence of any event which, with the passage of
time or service of notice, or both, would constitute a default by Borrower or
Pledgor under such Material Agreement.

(f) Borrower and Pledgor shall promptly execute, acknowledge and deliver to
Lender such instruments as may be reasonably required to permit Lender to cure
any default under any Material Agreement or permit Lender to take such other
action as may be necessary to cure or remedy the matter in default and preserve
the security interest of Lender under the Loan Documents. Borrower and Pledgor
hereby irrevocably appoints Lender as its true and lawful attorney-in-fact to
do, in its name or otherwise, any and all acts and to execute any and all
documents which are necessary to preserve any rights of Borrower or Pledgor
under or with respect to any Material Agreement (and the above powers granted to
Lender are coupled with an interest and shall be irrevocable).

(g) Each of Lender’s rights contained in this Section 5.10 shall be without
limitation of any other rights granted to Lender pursuant to the provisions of
the Loan Documents.

Section 5.11 ERISA. Borrower and Pledgor shall (and cause Guarantor to) deliver
to Lender such certifications and/or other evidence periodically requested by
Lender, in its discretion, to verify the representations and warranties in
Section 4.7. Notwithstanding anything in the Loan Documents to the contrary, no
sale, assignment, or transfer of any direct or indirect right, title, or
interest in Borrower, Pledgor, Guarantor, the Equity Collateral or the Property
(including creation of a junior lien, encumbrance or leasehold interest) shall
be permitted which would, in Lender’s reasonable opinion, negate Borrower’s or
Pledgor’s representations in Section 4.7 or cause the Loan or any exercise of
Lender’s rights under the Loan Documents to (i) constitute a non-exempt
prohibited transaction under ERISA or (ii) violate ERISA or any state statute
regulating governmental plans (collectively, a “Violation”). At least fifteen
(15) days before consummation of any of the foregoing, Borrower and Pledgor
shall (and cause Guarantor to) obtain from the proposed transferee or lienholder
(i) a certification to Lender that the representations and warranties of
Section 4.7 will be true after consummation and (ii) an agreement to comply with
Section 4.7.

Section 5.12 Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws.

(a) None of Borrower, Pledgor, Guarantor, or any Person or entity holding any
legal or beneficial interest whatsoever in Borrower, Pledgor, or Guarantor
(whether directly or indirectly), will knowingly conduct business with or engage
in any transaction with any Person or entity named on any of the OFAC Lists or
any Person or entity included in, owned by, controlled by, acting for or on
behalf of, providing assistance, support, sponsorship, or services of any kind
to, or otherwise associated with any of the persons or entities referred to or
described in the OFAC Lists.

 

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(b) Borrower and Pledgor hereby covenant and agree that they will comply at all
times with the requirements of Executive Order 13224; the International
Emergency Economic Powers Act, 50 U.S.C. Sections 1701-06; the United and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Pub. L. 107-56; the Iraqi Sanctions Act, Pub. L.
101-513, 104 Stat. 2047-55; the United Nations Participation Act, 22 U.S.C.
Section 287c; the Antiterrorism and Effective Death Penalty Act, (enacting 8
U.S.C. Section 219, 18 U.S.C. Section 2332d, and 18 U.S.C. Section 2339b); the
International Security and Development Cooperation Act, 22 U.S.C. Section 2349
aa-9; the Terrorism Sanctions Regulations, 31 C.F.R. Part 595; the Terrorism
List Governments Sanctions Regulations, 31 C.F.R. Part 596; and the Foreign
Terrorist Organizations Sanctions Regulations, 31 C.F.R. Part 597 and any
similar laws or regulations currently in force or hereafter enacted
(collectively, the “Anti-Terrorism Regulations”).

(c) Borrower and Pledgor hereby covenant and agree that if they become aware or
receive any notice that Borrower, Pledgor, Guarantor, the Equity Collateral or
the Property, or any person or entity holding any legal or beneficial interest
whatsoever (whether directly or indirectly) in Borrower, Pledgor, Guarantor, in
the Equity Collateral or in the Property, is named on any of the OFAC Lists
(such occurrence, an “OFAC Violation”), Borrower and Pledgor will immediately
(i) give notice to Lender of such OFAC Violation, and (ii) comply with all Laws
applicable to such OFAC Violation (regardless of whether the party included on
any of the OFAC Lists is located within the jurisdiction of the United States of
America), including, without limitation, the Anti-Terrorism Regulations, and
Borrower and Pledgor hereby authorizes and consents to Lender’s taking any and
all steps Lender deems necessary, in its discretion, to comply with all
applicable Legal Requirements to any such OFAC Violation, including, without
limitation, the requirements of the Anti-Terrorism Regulations (including the
“freezing” and/or “blocking” of assets).

(d) Upon Lender’s request from time to time during the term of the Loan,
Borrower and Pledgor agree to deliver (and cause Guarantor to deliver) a
certification confirming that the representations and warranties set forth in
Section 4.19 remain true and correct as of the date of such certificate and
confirming Borrower’s, Pledgor’s and Guarantor’s compliance with this
Section 5.12.

Section 5.13 Individual Property Environmental Indemnities. Upon an Event of
Default, Borrower and Pledgor shall assign, to the extent assignable, to Lender,
pursuant to an assignment agreement in form and substance satisfactory to
Lender, its interest in each and every environmental indemnity relating to the
Property (including the Forest Service Land) delivered in favor of Borrower or
Pledgor, including the Existing Environmental Indemnity Agreements.

Section 5.14 Vehicles. Upon Borrower’s acquisition or possession of any item,
the ownership of which is (or required by applicable Legal Requirements to be)
evidenced by a certificate of title or similar registration:

(a) None of Borrower and/or Pledgor shall change the jurisdiction in which the
certificate of title for each Vehicle is issued without the prior written
consent of Lender. None of Borrower and Pledgor shall permit the Vehicles to be
relocated to a jurisdiction outside the contiguous United States and Borrower
and/or Pledgor shall promptly notify Lender if any Vehicle is removed from its
current jurisdiction to another within the United States.

 

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(b) Borrower and/or Pledgor shall obtain and deliver to the Lender an original
certificate of title, accompanied by a copy of its respective duly executed
application for addition of first lienholder (collectively, the “Titling
Documentation”), for each of those items of the Property that is covered by
certificate of title under the law of any state. The Lender shall file or cause
to be filed the Titling Documentation at the Borrower’s sole cost and expense at
the appropriate Department of Motor Vehicles, establishing Lender’s interest as
a perfected first lienholder provided, however, that the failure of the Lender
to file or cause to be filed such Titling Documentation shall not affect any
right or remedy of the Lender contained herein. The new original certificates of
title stating Lender’s interest will be forwarded directly to Lender. Upon
payment in full of the Indebtedness, the Lender shall forward to the Borrower
the original certificate of title with the Lender’s interest having been fully
released.

(c) In the event Borrower or Pledgor have not received any one or more of the
certificates of title within 30 days from the Vehicle’s acquisition date, then
Borrower and/or Pledgor will make application to the appropriate registry of
motor vehicles for cancellation of the lost certificates and issuance of a
duplicate certificate of title (“Duplicate Certificates”) and will provide the
Lender with notice of such application. After the date of such notice to the
Lender (the “Vehicles Notice Date”), Borrower and/or Pledgor shall further
notify the Lender if it fails to obtain the Duplicate Certificates within 45
days of the Notice Date. Borrower and/or Pledgor shall specify in such
notification its actions taken and to be taken pursuant to this Section. If such
receipt cannot be accomplished as provided herein, the Lender may grant to
Borrower and/or Pledgor an additional 30 days to perform under this Section
unless in its reasonable judgment Lender determines that Borrower and/or Pledgor
has not diligently pursued receipt of the Duplicate Certificates. Borrower
and/or Pledgor covenant to deliver to the Lender, immediately upon Borrower’s
and/or Pledgor’s receipt, as applicable, the Duplicate Certificates.

(d) Borrower and/or Pledgor will, or will use commercially reasonable efforts to
cause Third Party Operator to, keep and maintain, plainly, distinctly,
permanently and conspicuously marked in the driver’s compartment of each Vehicle
at a location which would be clearly visible in the course of a routine
inspection of such Vehicle, in letters not less than one inch in height, on a
plate or plaque not less that 3” x 5” in dimension, the words “Subject to a
security interest in favor of [INSERT NAME OF THE THEN CURRENT HOLDER OF THE
NOTE] and its rights and remedies pursuant to a Mortgage or Deed of Trust” or
other appropriate words designated by Lender with appropriate changes or
additions as may be reasonably required to protect Lender’s right, title and
interest in and to each Vehicle.

Section 5.15 Property-Specific Covenants. Borrower and Pledgor shall comply with
the covenants and negative covenants set forth in Exhibit D.

Section 5.16 Debt Service Reserve. Effective January 1, 2010, Borrower agreed to
deposit with Lender the amounts set forth on Schedule 5.16 attached hereto
(each, a “Debt Service Deposit”) no later than the corresponding dates set forth
on Schedule 5.16. It shall be an Event of Default if Borrower fails to make any
required Debt Service Deposit within two (2) Business Days following the
corresponding date set forth on Schedule 5.16. Lender shall hold

 

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such Debt Service Deposits in a reserve account (the “Debt Service Reserve
Account”), and the Debt Service Deposits shall be deemed “Deposits”, as defined
in this Agreement. Unless otherwise directed by Borrower in writing, Borrower
hereby authorizes and directs that Lender withdraw from the Debt Service
Deposits, on each date that an Allocated Monthly Payment Amount becomes due, the
amount of such Allocated Monthly Payment Amount in satisfaction of the
Borrower’s obligation to make such Allocated Monthly Payment Amount, and
Lender’s failure to make such withdrawal shall not be deemed a default by
Borrower so long as the Debt Service Reserve Account has adequate funds for such
payment. In the alternative, Borrower shall have the right, at any time so long
as the then due Allocated Monthly Payment Amount has been delivered to Lender
(but in any event no more frequently than once per month), to request in writing
to Lender that Lender release to Borrower from the Debt Service Reserve Account
an amount equal to such Allocated Monthly Payment Amount (as shown on Schedule 2
of this Agreement) for each of Northstar and Sierra. Provided no Event of
Default has occurred and is continuing, Lender hereby agrees to promptly release
such Allocated Monthly Payment Amount to Borrower upon Lender’s receipt of such
request.

Section 5.17 Pledged Letter of Credit; Pledge of Additional Cash Collateral. The
parties acknowledge that Lender was in possession of original of Letter of
Credit No. SLCPPDX0378 issued by U.S. Bank, N.A. in the aggregate amount of
$5,290,000.00 (the “Pledged Letter of Credit”), which Pledged Letter of Credit
served as the security deposit required to be funded by TPO Northstar and TPO
Sierra under the Northstar Real Property Lease, Northstar Personal Property
Lease, Sierra Real Property Lease and Sierra Personal Property Lease, as
applicable. Pursuant to the terms of the Resolution Agreement, the equity owners
of Booth Creek Resort Properties were required to contribute/invest cash in the
aggregate amount of at least $3,000,000.00 in Booth Creek Resort Properties (the
“Booth Creek Equity Requirement”). Borrower has previously provided evidence
reasonably acceptable to Lender that the Booth Creek Equity Requirement has been
satisfied, and Lender has fully released the Pledged Letter of Credit to
Northstar and Sierra, and acknowledged and agreed that, it no longer has any
right or interest to, under or with respect to said Pledged Letter of Credit.
Borrower hereby agrees that if operations at the Northstar/Sierra Property (as
hereinafter defined) shall fail to meet the Earnings Threshold (as hereinafter
defined) during the term of the Loan, Borrower shall, within three (3) Business
Days after receipt of written notice from Lender, pledge to Lender additional
cash collateral in the amount of $5,290,000.00 (the “Additional Cash
Collateral”), which pledged Additional Cash Collateral shall (i) be held in an
account in the name of Borrower and in a financial institution reasonably
acceptable to Lender, and (ii) be subject to a first priority security interest
in favor of Lender, shall constitute additional security for the Indebtedness
and, upon the occurrence of an Event of Default may, at Lender’s option, be
applied to the Indebtedness in any order of priority. In such case, Borrower
agrees to fully cooperate with Lender with respect to the execution and delivery
of any and all documents and instruments reasonably requested by Lender to
evidence and perfect its security interest in the pledged Additional Cash
Collateral including, without limitation, a Deposit Account Control Agreement in
form and substance reasonably acceptable to Lender. In the event that Borrower
is required to pledge the Additional Cash Collateral to Lender pursuant to the
terms of this Section 5.17, (A) Lender’s security interest in the Additional
Cash Collateral shall remain in effect for the then remainder of the term of the
Loan, and (B) Lender shall no longer have any right, claim or interest in or to
a security interest in any future security deposit made under any of the
Northstar Real Property Lease, the Northstar Personal Property Lease, the Sierra
Real Property

 

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Lease and the Sierra Personal Property Lease, whether such security deposit is
funded in cash, by letter of credit or by other instrument. For purposes of this
Agreement, the “Earnings Threshold” shall mean EBITDA (as hereinafter defined)
for the 12-month period ending March 31 of the then-current year in the
aggregate amount of at least $13,600,000.00 for the operations of the Property
subject to the Northstar Real Property Lease and the Sierra Real Property Lease
(the “Northstar/Sierra Property”); and “EBITDA” shall mean earnings from all
Resort Operations (as such term is defined in the Northstar Real Property Lease
and Sierra Real Property Lease, respectively) before (i) interest expense,
amortization of debt discount and debt issuance costs and other costs and
expenses associated with TPO Northstar’s and TPO Sierra’s debt financing,
respectively, (ii) income taxes, (iii) depreciation, depletion and amortization
expense, (iv) amortization or write-downs of intangibles (including, without
limitation, good will), (v) non-cash impairment charges, (vi) non-cash expenses
(or contra expense) associated with stock compensation and other long-term
incentive plans, (vii) non-cash losses on disposals or sales of assets,
(viii) other income or expense, (ix) extraordinary, unusual or non-recurring
income or losses, (x) Minimum Rent and Additional Minimum Rent (as such terms
are defined in the Northstar Real Property Lease and Sierra Real Property Lease,
respectively), and (xi) the Reserve (as such term is defined in the Northstar
Real Property Lease and Sierra Real Property Lease, respectively). In connection
with the Earnings Threshold test, on or before April 30th of each calendar year,
Borrower shall furnish Lender financial statements reflecting the results of
operation of the Northstar/Sierra Property for the immediately preceding twelve
(12) month period ending March 31st of the same calendar year. Notwithstanding
anything in this Section 5.17 to the contrary, the financial statements
furnished by Borrower pursuant to the immediately preceding sentence shall
otherwise comply with Section 5.5(b) of this Agreement

Section 5.18 Stevens Pass Security Deposit; Other Matters.

(a) If at any time the Debt Service Coverage Ratio, calculated with respect to
the Individual Property known as Stevens Pass, taking into account NOI and TADS
allocable to such Individual Property, shall be less than 1.5:1, Borrower shall,
within three (3) Business Days after receipt of written notice from Lender,
either (A) pledge to Lender additional cash collateral in an amount equal to the
then current amount of the Security Deposit (as such term is defined in the
Stevens Pass Real Property Lease) that is required to have been funded by TPO
Stevens Pass pursuant to the terms of the Stevens Pass Real Property Lease (the
“Additional Stevens Pass Cash Collateral”), which pledged Additional Stevens
Pass Cash Collateral shall (i) be held in an account in the name of Borrower and
in a financial institution reasonably acceptable to Lender, and (ii) be subject
to a first priority security interest in favor of Lender, shall constitute
additional security for the Indebtedness and, upon the occurrence of an Event of
Default may, at Lender’s option, be applied to the Indebtedness in any order of
priority, or (B) provide Lender with a irrevocable letter of credit in an amount
equal to the amount of the Additional Stevens Pass Cash Collateral, which letter
of credit shall be in form and substance satisfactory to Lender in its sole
discretion. Borrower agrees to fully cooperate with Lender with respect to the
execution and delivery of any and all documents and instruments reasonably
requested by Lender to evidence and perfect its security interest in the pledged
Additional Stevens Pass Cash Collateral or in connection with the requirement of
the borrower to deliver the aforementioned letter of credit, including, without
limitation, a Deposit Account Control Agreement in form and substance reasonably
acceptable to Lender. In the event that Borrower pledges the Additional Stevens
Pass Cash Collateral to Lender pursuant to the terms of this Section 5.18,
Lender’s security interest in

 

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the Additional Stevens Pass Cash Collateral shall remain in effect for the
remainder of the term of the Loan. If instead of pledging the Additional Stevens
Pass Cash Collateral, Borrower delivers a letter of credit in satisfaction of
its obligations hereunder, such letter of credit shall remain in effect for the
remainder of the term of the Loan.

(b) Within ten (10) Business Days after the Closing Date, Borrower shall deliver
to TPO Stevens Pass a copy of the Mortgage executed by Stevens Pass with respect
to the Individual Property known as Stevens Pass.

ARTICLE 6

TRANSFERS AND CHANGE OF BUSINESS

Section 6.1 Transfer. It shall be an Event of Default and, at the option of
Lender, Lender may accelerate the Indebtedness and the entire Indebtedness
(including any Prepayment Premium) shall become immediately due and payable, if,
without Lender’s prior written consent (which consent may be given or withheld
for any or for no reason or given conditionally, in Lender’s sole and absolute
discretion) any Transfer occurs, except for a Transfer which satisfies any of
the following criteria (each, a “Permitted Transfer”):

(a) (i) the existence or imposition of mechanics’ or materialmans’ liens or
judgment liens being contested in accordance with Section 5.1(b) hereof,
(ii) the sale of damaged or obsolete property replaced with property of equal or
greater value, or (iii) the imposition of any Permitted Encumbrance; or

(b) a transfer of substantially all of the assets of Borrower to a CLP
Affiliate, provided that (i) such CLP Affiliate shall be a Single Purpose
Entity, and assume all of the obligations of Borrower under the Loan Documents,
(ii) the owner of such CLP Affiliate’s Equity Interests shall be a Single
Purpose Entity and assume all of the obligations of Pledgor under the Loan
Documents and (iii) such owner shall pledge one hundred percent (100%) of the
Equity Interests in such CLP Affiliate to Lender pursuant to the form of Pledge
Agreement delivered to Lender on the Closing Date; or

(c) any merger, consolidation, sale, transfer, assignment or dissolution
involving all or substantially all of the assets of Borrower or Pledgor where
the surviving entity assignee or transferee is a CLP Affiliate, provided that
(i) such CLP Affiliate shall be a Single Purpose Entity, and assume all of the
obligations of Borrower under the Loan Documents, (ii) the owner of such CLP
Affiliate’s Equity Interests shall be a Single Purpose Entity and assume all of
the obligations of Pledgor under the Loan Documents and (iii) such owner shall
pledge one hundred percent (100%) of the Equity Interests in such CLP Affiliate
to Lender pursuant to the form of Pledge Agreement delivered to Lender on the
Closing Date; or

(d) an assignment, transfer or sale to any CLP Affiliate of the direct or
indirect Equity Interests in any Borrower to a CLP Affiliate provided that
(i) such CLP Affiliate shall be a Single Purpose Entity, and assume all of the
obligations of Pledgor under the Loan Documents and (ii) such owner shall pledge
one hundred percent (100%) of the Equity Interests in such CLP Affiliate to
Lender pursuant to the form of Pledge Agreement delivered to Lender on the
Closing Date; or

 

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(e) the assignment, transfer or sale (but not a pledge or any other Lien):
(1) in the aggregate (at one time or over any period of time) of less than
forty-nine percent (49%) of the direct or indirect Equity Interests in Ski
Holding Pledgor or Northstar Pledgor (for purposes of clarification only, as of
the Closing Date, (i) the holders of the direct or indirect Equity Interests in
Ski Holding Pledgor include CLP Partners, CLP GP Corp., a Delaware corporation,
CLP LP Partners Corp., a Delaware corporation, and Guarantor, and (ii) the
holders of the direct or indirect Equity Interests in Northstar Pledgor include
CLP Holding, Inc., a Delaware corporation and Guarantor), provided no direct or
indirect change in the Control of Ski Holding Pledgor or Northstar Pledgor or
the management of the Property occurs in connection therewith (provided that
nothing set forth in this subsection (e) shall be deemed to restrict transfers
of interests in Third Party Operator or any sublessors at the Property),
(2) less than ten percent (10%) of the direct or indirect Equity Interests of
any corporation or limited liability company which is, respectively, general
partner or managing member of a Ski Holding Pledgor or Northstar Pledgor or any
corporation or limited liability company directly or indirectly owning ten
percent (10%) or more of any such general partner or managing member has been
sold in the aggregate (at one time or over any period of time); or

(f) transfers required under the TPO Leases as identified on Schedule 6.1
attached hereto;

(g) any transfer under any will or applicable law of descent; or

(h) the TPO Leases or any subleases entered into subject to and in accordance
with the TPO Leases and the Loan Documents.

In the event of any Permitted Transfer under the preceding clauses (b), (c) or
(d) then (A) Borrower, Pledgor, Guarantor, and any transferee shall execute and
deliver any and all documentation as may be reasonably required by Lender (or
required by the Rating Agencies after a Secondary Market Transaction) in form
and substance reasonably satisfactory to Lender (or satisfactory to the Rating
Agencies, if applicable) including assumption documents, (B) counsel to
transferee shall deliver to Lender (and the Rating Agencies, if applicable)
opinion letters relating to such transfer (including a non-consolidation
opinion, if a non-consolidation opinion was required in connection with the
closing of the Loan, and a tax opinion) in form. and substance reasonably
satisfactory to Lender (and the Rating Agencies, if applicable), (C) if the
Property is transferred, Borrower and Pledgor shall deliver (or cause to be
delivered) to Lender, an endorsement to Lender’s title insurance policy relating
to the change in the identity of the vestee and the execution and delivery of
the transfer documentation in form and substance reasonably acceptable to
Lender, (D) if the Equity Collateral is transferred, Borrower and Pledgor shall
deliver (or cause to be delivered) to Lender, an endorsement to Lender’s UCC
insurance policy relating to the change in the identity of the vestee and the
execution and delivery of the transfer documentation in form and substance
reasonably acceptable to Lender (E) Borrower and Pledgor pays all reasonable
expenses incurred by Lender in connection with such Transfer, including Lender’s
reasonable attorneys fees and expenses, all recording fees, and all fees payable
to the applicable title company for the delivery to Lender of the endorsement
referred to in clause (D) and (E) above, and (F) if required by Lender, after a
Secondary Market Transaction, Lender shall have received a Rating Agency
confirmation (at Lender’s expense) with respect to such Transfer.

 

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In the event of any Permitted Transfer under the preceding clauses (f) or (g),
then Borrower, Pledgor, Guarantor, and any transferee shall execute and deliver
any and all documentation as may be reasonably required by Lender (or required
by the Rating Agencies after a Secondary Market Transaction) in form and
substance reasonably satisfactory to Lender (or satisfactory to the Rating
Agencies, if applicable) including, without limitation, assumption documents.
With respect to Permitted Transfers described in the preceding clause (f), if
the documentation reasonably required by Lender is provided by Borrower, Lender
shall release or subordinate, as required under the TPO Leases, any Lien Lender
holds on the transferred portion of the Property.

Section 6.2 Other Indebtedness. Except for the Parent Debt and the Related
Guarantees, Borrower shall not incur, create, assume, allow to exist, become or
be liable in any manner with respect to any other indebtedness or monetary
obligations, except for (i) the Indebtedness, (ii) Permitted Trade Payables, and
(iii) monetary obligations of the Borrower as the landlord under any of the TPO
Leases, and otherwise as contemplated by any of the Material Agreements set
forth in Schedule 6, the agreements described in Schedule 4.22, or the
Acquisition Documentation. Except for the Parent Debt and the Related
Guarantees, Pledgor shall not incur, create, assume, allow to exist, become or
be liable in any manner with respect to any other indebtedness or monetary
obligations, except for the Permitted Trade Payables.

Section 6.3 Chance In Business. Each of Borrower and Pledgor shall not cease to
be a Single-Purpose Entity. Each of Borrower and Pledgor shall not modify,
amend, restate or replace its organizational documents in any manner without the
prior written consent of Lender.

ARTICLE 7

INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION

Section 7.1 Property and Time Element Insurance. Borrower shall keep the
Property insured for the benefit of Borrower and Lender (with Lender named as
mortgagee) by (i) an “all risk” property insurance policy with an agreed amount
endorsement for full replacement cost (defined below) without any coinsurance
provisions or penalties, or the broadest form of coverage available, in an
amount sufficient to prevent Lender from ever becoming a coinsurer under the
policy or applicable Legal Requirements, and with a deductible not to exceed
Fifty Thousand Dollars ($50,000.00); (ii) a policy or endorsement insuring
against acts of terrorism; (iii) [intentionally omitted]; (iv) a policy or
endorsement providing business income insurance (including business interruption
insurance and extra expense insurance and/or rent insurance) on an actual loss
sustained basis in an amount equal to at least one (1) year’s total income from
the Property including all Rents plus all other pro forma annual income such as
percentage rent and tenant reimbursements of fixed and operating expenses, which
business interruption insurance shall also provide coverage as aforesaid for any
additional hazards as may be required pursuant to the terms of the Loan
Documents; (v) a policy or endorsement insuring against damage by flood if the
Property is located in a Special Flood Hazard Area identified by the Federal
Emergency Management Agency or any successor or related government agency as a
100 year flood plain currently classified as Flood Insurance Rate Map Zones “A”,
“AO”, “AH”, “A1-A30”, “AE”, “A99”, “V”, “V1-V30”, and “VE” in an amount equal to
the Allocated Loan Amount for each Individual Property; (vi) a policy or
endorsement covering against damage or loss from (A) sprinkler system leakage
and (B) boilers, boiler tanks, HVAC systems, heating and

 

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air-conditioning equipment, pressure vessels, auxiliary piping, and similar
apparatus, in the amount reasonably required by Lender; (vii) during the period
of any construction, repair, restoration, or replacement of the Property, a
standard builder’s risk policy with extended coverage in an amount at least
equal to the full replacement cost of such Property, and worker’s compensation,
in statutory amounts; and (viii) a policy or endorsement covering against damage
or loss by earthquake and other natural phenomenon in the amounts reasonably
required by Lender. “Full replacement cost” shall mean the one hundred percent
(100%) replacement cost of the Property, without allowance for depreciation and
exclusive of the cost of excavations, foundations, footings, and value of land,
and shall be subject to verification by Lender. Full replacement cost will be
determined, at Borrower’s and Pledgor’s expense, periodically upon policy
expiration or renewal by the insurance company or an appraiser, engineer,
architect, or contractor approved by said company and Lender.

Section 7.2 Liability and Other Insurance. Borrower shall maintain commercial
general liability insurance with per occurrence limits of $1,000,000.00, a
products/completed operations limit of $2,000,000.00, and a general aggregate
limit of $2,000,000.00, with an excess/umbrella liability policy of not less
than $25,000,000.00 per occurrence and annual aggregate covering Borrower, with
Lender named as an additional insured, against claims for bodily injury or death
or property damage occurring in, upon, or about the Property or any street,
drive, sidewalk, curb, or passageway adjacent thereto. In addition to any other
requirements, such commercial general liability and excess/umbrella liability
insurance shall provide insurance against acts of terrorism and against claims
applicable to the presence of Hazardous Materials, or such coverages shall be
provided by separate policies or endorsements. The insurance policies shall also
include operations and blanket contractual liability coverage which insures
contractual liability under the indemnifications set forth in Section 12.25(b)
below (but such coverage or the amount thereof shall in no way limit such
indemnifications). Upon request, Borrower shall also carry additional insurance
or additional amounts of insurance covering Borrower or the Property as Lender
shall reasonably require.

Section 7.3 Form of Policy. All insurance required under this Article shall be
fully paid for, non-assessable, and the policies shall contain such provisions,
endorsements, and expiration dates as Lender shall reasonably require. The
policies shall be issued by insurance companies authorized to do business in the
State where the applicable Individual Property is located, approved by Lender,
and must have and maintain a current financial strength rating of “A-, X” (or
higher) from A.M. Best or equivalent (or if a rating by A.M. Best is no longer
available, a similar rating from a similar or successor service). In addition,
all policies shall (i) include a standard mortgagee clause, without
contribution, in the name of Lender, (ii) provide that they shall not be
canceled, amended, or materially altered (including reduction in the scope or
limits of coverage) without at least thirty (30) days’ prior written notice to
Lender except in the event of cancellation for non-payment of premium, in which
case only ten (10) days’ prior written notice will be given to Lender, and
(iii) include a waiver of subrogation clause substantially equivalent to the
following: “The Company may require from the Insured an assignment of all rights
of recovery against any party for loss to the extent that payment therefor is
made by the Company, but the Company shall not acquire any rights of recovery
which the Insured has expressly waived prior to loss, nor shall such waiver
affect the Insured’s rights under this policy.”

 

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Section 7.4 Original Policies. Borrower and/or Pledgor shall deliver to Lender
(i) original or certified copies of all policies (and renewals) required under
this Article and (ii) receipts evidencing payment of all premiums on such
policies at least thirty (30) days prior to their expiration. If original and
renewal policies are unavailable or if coverage is under a blanket policy,
Borrower and/or Pledgor shall deliver duplicate originals, or, if unavailable,
original ACORD 27 and ACORD 25-S certificates (or equivalent certificates)
evidencing that such policies are in full force and effect together with
certified copies of the original policies.

Section 7.5 General Provisions. Borrower and Pledgor shall not carry separate or
additional insurance concurrent in form or contributing in the event of loss
with that required under this Article unless endorsed in favor of Lender as per
this Article and approved by Lender in all respects. In the event of foreclosure
of the Mortgage or other transfer of title or assignment of the Property in
extinguishment, in whole or in part, of the Indebtedness, all right, title, and
interest of Borrower in and to all policies of insurance then in force regarding
the Property and all proceeds payable thereunder and unearned premiums thereon
shall immediately vest in the purchaser or other transferee of the Property. No
approval by Lender of any insurer shall be construed to be a representation,
certification, or warranty of its solvency. No approval by Lender as to the
amount, type, or form of any insurance shall be construed to be a
representation, certification, or warranty of its sufficiency. Borrower and
Pledgor shall each comply with all insurance requirements and shall not cause or
permit any condition to exist which would be prohibited by any insurance
requirement or would invalidate the insurance coverage on the Property.

Section 7.6 Waiver of Subrogation. A waiver of subrogation shall be obtained by
Borrower from its insurers and, consequently, Borrower for itself, and on behalf
of its insurers, hereby waives and releases any and all right to claim or
recover against Lender, its officers, employees, agents and representatives, for
any loss of or damage to Borrower, other Persons, the Property, Borrower’s
property or the property of other Persons from any cause required to be insured
against by the provisions of this Agreement or otherwise insured against by
Borrower.

Section 7.7 Restoration Proceeds.

(a) Any and all awards, compensation, reimbursement, damages, proceeds,
settlements, and other payments or relief paid or to be paid, together with all
rights and causes of action relating to or arising from, (i) any insurance
policy maintained by or on behalf of Borrower following any damage, destruction,
casualty or loss to all or any portion of the Property (a “Casualty”, and such
proceeds, “Insurance Proceeds”) or (ii) any temporary or permanent taking or
voluntary conveyance of all or part of the Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority whether or not the same shall have actually been commenced (a
“Taking”, and such proceeds, “Condemnation Proceeds”, and together with
Insurance Proceeds, collectively, “Restoration Proceeds”) are hereby assigned to
Lender as additional collateral security hereunder subject to the Lien of the
Mortgage, to be applied in accordance with this Article 7. Lender shall be
entitled to receive and collect all Restoration Proceeds, and Borrower shall
instruct and cause the issuer of each policy of insurance described herein and
any applicable Governmental Authority to deliver to Lender all Restoration
Proceeds. Borrower shall execute such further assignments of the Restoration

 

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Proceeds as Lender may from time to time reasonably require. Notwithstanding the
foregoing, if the Restoration Proceeds, less the amount of Lender’s costs and
expenses (including attorneys’ fees and costs) incurred in collecting the same
(the “Net Restoration Proceeds”), are $2,000,000 or less (the “Restoration
Proceeds Threshold”), provided no Event of Default then exists, Lender shall
deliver such Net Restoration Proceeds to Borrower. All Insurance Proceeds
received by Borrower or Lender in respect of business interruption coverage, and
all Condemnation Proceeds received with respect to a temporary Taking available
to Borrower exceeding $100,000 in the aggregate, shall be deposited in a
segregated escrow account with Lender or its servicer, as applicable, and Lender
shall estimate the number of months required for Borrower to restore the damage
caused by such Casualty or replace cash flow interrupted by such temporary
Taking, as applicable, and shall divide the aggregate proceeds by such number of
months, and, provided no Event of Default then exists, shall disburse a monthly
installment thereof to Borrower each such month. Subject to Lender’s rights
under Section 7.8, provided no Event of Default has occurred and is continuing
and the Restoration has been completed in accordance with this Agreement, any
Net Restoration Proceeds available to Borrower for Restoration, to the extent
not used by Borrower in connection with, or to the extent they exceed the cost
of such Restoration and any costs incurred by Lender, shall be retained by
Borrower.

(b) Lender shall be entitled at its option to participate in any compromise,
adjustment or settlement in connection with (i) any insurance policy claims
relating to any Casualty, and (ii) any Taking in an amount in controversy, in
either case, in excess of the Restoration Proceeds Threshold, and Borrower shall
within ten (10) Business Days after request therefor reimburse Lender for all
reasonable out-of-pocket expenses (including reasonable attorneys’ fees and
disbursements) incurred by Lender in connection with such participation.
Borrower shall not make any compromise, adjustment or settlement in connection
with any such claim in excess of the Restoration Proceeds Threshold or if an
Event of Default then exists without the prior written approval of Lender.
Borrower shall not make any compromise, adjustment or settlement in connection
with any claim unless same is commercially reasonable.

(c) If and to the extent Restoration Proceeds are not required to be made
available to Borrower to be used for the Restoration of the Improvements,
Equipment and Inventory affected by the Casualty or Taking, as applicable,
pursuant to this Agreement, Lender shall be entitled, without Borrower’s
consent, to apply such Restoration Proceeds or the balance thereof, at Lender’s
option either (i) to the full or partial payment or prepayment of the
Indebtedness in accordance with Section 5(b) of the Note; provided that such
payment or prepayment shall not require any defeasance of the Loan and shall be
without the payment of the Prepayment Premium, unless an Event of Default has
occurred and is then continuing, in which event, Borrower shall pay to Lender an
amount equal to the Prepayment Premium, if any, that may be required with
respect to the amount of Insurance Proceeds or Condemnation Proceeds applied to
the Indebtedness, or (ii) to the Restoration of all or any part of such
Improvements, Equipment and Inventory affected by the Casualty or Taking, as
applicable.

Section 7.8 Restoration. Borrower shall restore and repair the Improvements and
Equipment or any part thereof now or hereafter damaged or destroyed by any
Casualty or affected by any Taking; provided, however, that if the Casualty is
not insured against or insurable, Borrower shall so restore and repair even
though no Insurance Proceeds are received. Notwithstanding anything to the
contrary set forth in Section 7.7, Lender agrees that Lender shall

 

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make the Net Restoration Proceeds (other than business interruption insurance
proceeds, which shall be held and disbursed as provided in Section 7.7)
available to Borrower for Borrower’s restoration and repair of the Improvements,
Equipment and Inventory affected by the Casualty or Taking (a “Restoration”), as
applicable, on the following terms and subject to Borrower’s satisfaction of the
following conditions; provided, that Lender shall have the right to waive any of
the following conditions in its discretion:

(a) At the time of such Casualty or Taking, as applicable, and at all times
thereafter there shall exist no Event of Default;

(b) The Improvements, Equipment and Inventory affected by the Casualty or
Taking, as applicable, shall be capable of being restored (including
replacements) to substantially the same condition, utility, quality and
character, as existed immediately prior to such Casualty or Taking, as
applicable, in all material respects with a fair market value and projected cash
flow of the Property equal to or greater than prior to such Casualty or Taking,
as applicable;

(c) Borrower shall demonstrate to Lender’s reasonable satisfaction Borrower’s
ability to pay the Indebtedness coming due during such repair or restoration
period (after taking into account proceeds from business interruption insurance
carried by Borrower);

(d) Borrower shall have provided to Lender all of the following, and
collaterally assigned the same to Lender pursuant to assignment documents
acceptable to Lender; (i) an architect’s contract with an architect reasonably
acceptable to Lender and complete plans and specifications for the Restoration
of the Improvements, Equipment and Inventory lost or damaged to the condition,
utility and value required by Section 7.8(b); (ii) fixed-price or guaranteed
maximum cost construction contracts with contractors reasonably acceptable to
Lender for completion of the Restoration work in accordance with the
aforementioned plans and specifications; (iii) such additional funds (if any) as
are necessary from time to time, in Lender’s reasonable opinion, to complete the
Restoration (which funds shall be held by Lender as additional collateral
securing the Indebtedness and shall be disbursed, if at all, pursuant to this
Article 7); and (iv) copies of all permits and licenses necessary to complete
the Restoration in accordance with the plans and specifications and all Legal
Requirements.

(1) Borrower shall use commercially reasonable efforts to commence such work
within one hundred twenty (120) days after such Casualty or Taking, as
applicable, and shall diligently pursue such work to completion;

(e) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (A) the Maturity Date, (B) such time as may be
required under applicable Legal Requirements in order to repair and restore the
Property to the condition it was in immediately prior to such Casualty or such
Taking, as applicable, (C) the expiration of the business interruption insurance
coverage referred to in Section 7.1(d) (unless Borrower deposits funds with
Lender to cover the business interruption period not covered by such insurance),
and (D) earliest date required pursuant to the terms of any TPO Lease; and

(f) the Property and the use thereof after the Restoration will be in compliance
with all applicable Legal Requirements.

 

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Section 7.9 Disbursement.

(a) Each disbursement by Lender of such Restoration Proceeds shall be funded
subject to conditions and in accordance with disbursement procedures which a
commercial construction lender would typically establish in the exercise of
sound banking practices, including requiring lien waivers and any other
documents, instruments or items which may be reasonably required by Lender.

(b) In no event shall Lender be obligated to make disbursements of Restoration
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as determined by Lender,
less, as to each contractor, subcontractor or materialman engaged in a
Restoration, an amount equal to the greater of (i) ten percent (10%) of the
costs actually incurred for work in place as part of such Restoration, as
reasonably determined by Lender, and (ii) the amount actually withheld by
Borrower (the “Casualty Retainage”). The Casualty Retainage shall not be
released until Lender reasonably determines that the Restoration has been
completed in accordance with the provisions of this Agreement and that all
approvals necessary for the re-occupancy and use of the Property have been
obtained from all appropriate Governmental Authorities, and Lender receives
evidence satisfactory to Lender that the costs of the Restoration have been paid
in full or will be paid in full out of the Casualty Retainage.

ARTICLE 8

DEFAULTS

Section 8.1 Event of Default. The occurrence of one or more of the following
events shall be an “Event of Default” hereunder:

(a) if Borrower fails to (i) make any scheduled payment of principal, interest,
or amounts due under Article 3 on any Payment Date, or (ii) pay any other amount
payable pursuant to the Loan Documents when due;

(b) if Borrower fails to pay the outstanding Indebtedness on the Maturity Date;

(c) the occurrence of the events identified elsewhere in this Agreement or the
other Loan Documents as constituting an “Event of Default” hereunder or
thereunder;

(d) any breach or violation of Section 5.7(c) (Leases), Section 5.8 (Place of
Business; State of Organization), Article 6, Section 7.1 (Property and Time
Element Insurance);

(e) if any representation or warranty made herein or in any other Loan Document,
or in any report, certificate, financial statement or other Instrument,
agreement or document furnished by Borrower, Pledgor or Guarantor in connection
with this Agreement or any other Loan Document shall be false in any material
respect as of the date such representation or warranty was made or remade;

(f) if Borrower, Pledgor, or Guarantor (i) makes an assignment for the benefit
of creditors, (ii) has a receiver, liquidator or trustee appointed for it,
(iii) is adjudicated as

 

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bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law or any similar federal or state
law shall be filed by or against, consented to, solicited by, or acquiesced in
by it, or (iv) has any proceeding for its insolvency, dissolution or liquidation
instituted against it (any of the foregoing in clauses (i) through (iv), an
“Insolvency Action”); provided, however, that if such Insolvency Action was
involuntary and not consented to by Borrower, Pledgor, or Guarantor, as
applicable, such Insolvency Action shall not be an Event of Default unless the
same is not discharged, stayed or dismissed within ninety (90) days after the
filing or commencement thereof;

(g) the failure of Borrower or Pledgor to maintain the insurance required
pursuant to Article 7 (unless such failure results from the non-payment of
premiums at a time when sufficient amounts for the payment thereof have been
deposited with Lender pursuant to Section 3.1);

(h) if any guaranty given in connection with the Loan shall cease to be in full
force and effect or any guarantor shall deny or disaffirm its obligations
thereunder, or the death or legal incapacity of any such guarantor (provided,
however, the death or legal incapacity of a guarantor shall not constitute an
Event of Default or change in Control of Borrower or Pledgor provided that
Lender shall have received a guaranty from a replacement guarantor satisfactory
to Lender in its discretion within thirty (30) days following the death or legal
incapacity of such guarantor and the requirements this Agreement and any other
applicable provisions of the Loan Documents shall have been satisfied with
respect to the replacement guarantor and replacement guaranty);

(i) (i) the consummation by Borrower, Pledgor or Guarantor of any transaction
which would cause (A) the Loan or any exercise of Lender’s rights under the Loan
Documents to constitute a non-exempt prohibited transaction under ERISA or (B) a
violation of a state statute regulating governmental plans; (ii) the failure of
any representation in Section 4.7 to be true and correct in all respects; or
(iii) the failure of Borrower, Pledgor or Guarantor to provide Lender with the
written certifications required by Section 5.11;

(j) the consummation by Borrower, Pledgor or Guarantor of any transaction which
would cause (i) an OFAC Violation; (ii) the failure of any representation in
Section 4.19 to be true and correct in all respects; or (iii) the failure of
Borrower, Pledgor or Guarantor to comply with the provisions of Section 5.12,
unless such default is cured within the lesser of (A) fifteen (15) days after
written notice of such default to Borrower, Pledgor and Guarantor or (B) the
shortest cure period, if any, provided for under any Laws applicable to such
matters (including, without limitation, the Anti-Terrorism Regulations);

(k) (i) if the Property or Borrower Equity Collateral shall be taken, attached,
or sequestered on execution or other process of law in any action against
Borrower; or (ii) if the Pledgor Equity Collateral shall be taken, attached, or
sequestered on execution or other process of law in any action against Pledgor;

(l) Intentionally omitted;

 

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(m) if any claim of priority (except based upon a Permitted Encumbrance) to the
Loan Documents by title, lien, or otherwise shall be upheld by any court of
competent jurisdiction or shall be consented to by Borrower or Pledgor;

(n) if any one report, statement, or item required under Section 5.5 is not
received after the expiration of (y) thirty (30) days after written notice from
Lender (the “First Notice”) and (z) ten (10) days after delivery of a second
written notice from Lender (the “Second Notice”), which Second Notice shall not
be delivered before the date that is thirty (30) days after delivery of the
First Notice;

(o) any material default under the Ground Lease that is not cured within any
applicable cure period or any Ground Lease is amended, modified, terminated,
forfeited, or waived without Lender’s consent, or otherwise renewed, extended or
changed except in accordance with the Loan Documents;

(p) any loss, termination, forfeiture or revocation of any of the Forest Service
Permits or any Forest Service Permit is amended, modified, terminated,
forfeited, or waived without Lender’s consent, or otherwise renewed, extended or
changed except in accordance with the Loan Documents;

(q) any material default under any USFS Agreement that is not cured within any
applicable cure period, or waived by the USFS;

(r) (i) any termination of any TPO Lease or (ii) any material default by a
Borrower under any TPO Lease that is not cured within any applicable cure period
contained in the applicable TPO Lease or other material default under any TPO
Lease that could reasonably be expected to result in a Material Adverse Effect;

(s) any material default by a Borrower or Pledgor under any Material Agreement
that is not cured within any applicable cure period contained in the applicable
Material Agreement or other material default under any Material Agreement that
could reasonably be expected to result in a Material Adverse Effect;

(t) any Event of Default set forth on Exhibit D occurs;

(u) a default shall be continuing under any of the other obligations,
agreements, undertakings, terms, covenants, provisions or conditions of this
Agreement not otherwise referred to in this Section 8.1, or under any other Loan
Document, for ten (10) days after notice to Borrower (Pledgor, and Guarantor, if
applicable), in the case of any default which can be cured by the payment of a
sum of money or for thirty (30) days after written notice, in the case of any
other default (unless otherwise provided herein or in such other Loan Document);
provided, however, that if such non-monetary default under this clause (u) is
susceptible of cure but cannot reasonably be cured within such thirty (30) day
period and provided further that Borrower (Pledgor or Guarantor, if applicable)
shall have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for such time as is reasonably necessary for
Borrower (Pledgor, or Guarantor, if applicable) in the exercise of due diligence
to cure such default, but in no event shall such period exceed sixty (60) days
after the original notice, unless such longer period is approved by Lender in
its sole discretion;

 

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(v) if any default occurs under the Parent Debt Documents and such default is
not cured within any applicable grace or cure period; or if the trustee acting
on behalf of the holders of the Parent Debt and Related Guarantees ceases to be
Wilmington Trust, FSB, or an insurance company, bank, or other financial
institution, unrelated to Borrowers, Gatlinburg Obligor, and Parent, with assets
in excess of One Billion and 00/100 Dollars ($1,000,000,000.00); and

(w) if there is any change in any management company under a management
agreement relating to any Property or material change to a management agreement
relating to any Property, change in lessee under any operating lease, or any
other property operator under an operating agreement relating to any Property or
any material change in any related operating agreement relating to any Property,
in each case, without the prior written consent of Lender, which consent shall
not be unreasonably withheld, conditioned or delayed.

Section 8.2 Remedies. Upon the occurrence and during the continuance of an Event
of Default, all or any one or more of the rights, powers and other remedies
available to Lender against Borrower and/or Pledgor under any Loan Document, or
at law or in equity may be exercised by Lender at any time and from time to time
(including the right to accelerate and declare the outstanding Indebtedness to
be immediately due and payable), without notice or demand, whether or not all or
any portion of the Indebtedness shall be declared due and payable, and whether
or not Lender shall have commenced any foreclosure proceeding or other action
for the enforcement of its rights and remedies under any of the Loan Documents
with respect to all or any portion of the Property (including the Forest Service
Land) or the Equity Collateral. Notwithstanding anything contained to the
contrary herein, the outstanding Indebtedness shall be accelerated and
immediately due and payable, without any election by Lender upon the occurrence
of an Insolvency Action.

Section 8.3 Remedies Cumulative. The rights, powers and remedies of Lender under
this Agreement shall be cumulative and not exclusive of any other right, power
or remedy which Lender may have against Borrower and/or Pledgor pursuant to this
Agreement or the other Loan Documents executed by or with respect to Borrower
and/or Pledgor, or existing at law or in equity or otherwise. Lender’s rights,
powers and remedies may be pursued singly, concurrently or otherwise, at such
time and in such order as Lender may determine in Lender’s discretion. No delay
or omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of any Event of
Default shall not be construed to be a waiver of any subsequent Event of Default
or to impair any remedy, right or power consequent thereon. Any and all of
Lender’s rights with respect to the Property (including the Forest Service Land)
and the Equity Collateral shall continue unimpaired, and Borrower and Pledgor
shall be and remain obligated in accordance with the terms hereof,
notwithstanding (i) the release or substitution of Property or the Equity
Collateral at any time, or of any rights or interest therein or (ii) any delay,
extension of time, renewal, compromise or other indulgence granted by Lender in
the event of any Event of Default with respect to the Property (including the
Forest Service Land), the Equity

 

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Collateral, or otherwise hereunder. Notwithstanding any other provision of this
Agreement, Lender reserves the right to seek a deficiency judgment or preserve a
deficiency claim, in connection with the foreclosure of (x) the Mortgage on the
Property, to the extent necessary to foreclose on other parts of the Property or
(y) the Pledge Agreement on the Equity Collateral, to the extent necessary to
foreclose on other parts of the Equity Collateral, subject in any event to the
exculpation provisions of Section 17 of the Note.

Section 8.4 Lender Appointed Attorney-In-Fact. Borrower and Pledgor hereby
irrevocably and unconditionally constitute and appoint Lender as Borrower’s and
Pledgor’s true and lawful attorney-in-fact, with full power of substitution, at
any time after the occurrence and during the continuance of an Event of Default
to execute, acknowledge and deliver any documents, agreements or instruments and
to exercise and enforce every right, power, remedy, option and privilege of
Borrower and/or Pledgor under all Loan Documents, and do in the name, place and
stead of Borrower and/or Pledgor, all such acts, things and deeds for and on
behalf of and in the name of Borrower and/or Pledgor under any Loan Document,
which Borrower and/or Pledgor could or might do or which Lender may deem
necessary or desirable to more fully vest in Lender the rights and remedies
provided for under the Loan Documents and to accomplish the purposes thereof.
The foregoing powers of attorney are irrevocable and coupled with an interest.

Section 8.5 Lender’s Right to Perform. If Borrower or Pledgor fails to perform
any covenant or obligation contained herein for a period of five (5) Business
Days after Borrower’s or Pledgor’s receipt of notice thereof from Lender,
without in any way limiting Section 8.1, Lender may, but shall have no
obligation to, perform, or cause performance of, such covenant or obligation,
and the expenses of Lender incurred in connection therewith shall be payable by
Borrower and Pledgor to Lender upon demand, together with interest thereon at
the Default Rate. Notwithstanding the foregoing, Lender shall have no obligation
to send notice to Borrower or Pledgor of any such failure.

ARTICLE 9

ENVIRONMENTAL PROVISIONS

Section 9.1 Environmental Representations and Warranties. Each of Borrower and
Pledgor represents, warrants and covenants, as to itself and the Property
(including the Forest Service Land), other than as disclosed to Lender in the
Environmental Reports: (a) to Borrower’s and Pledgor’s knowledge, there are no
Hazardous Substances or underground storage tanks in, on, or under the Property
(including the Forest Service Land), except those that are both (i) in
compliance with all Environmental Laws and with permits issued pursuant thereto
and (ii) which do not require Remediation; (b) to Borrower’s and Pledgor’s
knowledge, there are no past, present or threatened Releases of Hazardous
Substances in, on, under, from or affecting the Property (including the Forest
Service Land) which have not been fully Remediated in accordance with
Environmental Law; (c) to Borrower’s and Pledgor’s knowledge, there is no
Release or threat of any Release of Hazardous Substances which has migrated or
is migrating to the Property (including the Forest Service Land); (d) to
Borrower’s and Pledgor’s knowledge, there is no past or present non-compliance
with Environmental Laws, or with permits issued pursuant thereto, in connection
with the Property (including the Forest Service Land) which has not been fully
Remediated in accordance with Environmental Law; (e) none of Borrower and
Pledgor knows of or has received any written notice or other communication from
any Person

 

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(including a Governmental Authority) relating to Hazardous Substances or the
Remediation thereof, of possible liability of any Person pursuant to any
Environmental Law, other environmental conditions in connection with the
Property (including the Forest Service Land), or any actual or potential
administrative or judicial proceedings in connection with any of the foregoing;
and (f) Borrower and Pledgor have truthfully and fully provided to Lender, in
writing, any and all information relating to conditions in, on, under or from
the Property (including the Forest Service Land) that is known to Borrower and
Pledgor (including information contained in files and records of Borrower and
Pledgor), including any reports relating to Hazardous Substances in, on, under
or from the Property (including the Forest Service Land) and/or to the
environmental condition of the Property (including the Forest Service Land).

Section 9.2 Environmental Covenants. Each of Borrower and Pledgor covenants and
agrees that: (a) all uses and operations on or of the Property (including the
Forest Service Land), whether by Borrower or any other Person, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto;
(b) there shall be no Hazardous Substances used, present or Released in, on,
under or from the Property (including the Forest Service Land), except those
that are (i) in compliance with all Environmental Laws and with permits issued
pursuant thereto; (ii) fully disclosed to Lender in the Environmental Reports;
and (iii) which do not require Remediation; (c) each of Borrower and Pledgor
shall, at its sole cost and expense, (i) fully and expeditiously cooperate in
all activities pursuant to Section 9.3, including providing all relevant
information and making knowledgeable Persons available for interviews;
(ii) expeditiously effectuate Remediation of any condition (including a Release
of a Hazardous Substance or violation of Environmental Laws) in, on, under or
from the Property (including the Forest Service Land) for which Remediation is
legally required and provide Lender with a copy of and a reasonable opportunity
to review, approval and/or comment upon all reports and plans related to
Remediation; (iii) comply with Environmental Laws; (iv) comply with any
directive from any Governmental Authority unless such directive is disputed by
Borrower or Pledgor in good faith and in compliance with applicable law;
(v) demand and use reasonable efforts to enforce the terms, covenants, and
conditions in the Existing Environmental Indemnity Agreements to be observed by
the indemnitors, including, the obligation to complete Compliance Activity (as
defined in the Existing Environmental Indemnity Agreements) within specified
periods for the Property Conditions (as defined in the Existing Environmental
Indemnity Agreements) identified on Exhibit B to each Existing Environmental
Indemnity Agreement; and (vi) if the indemnitors pursuant to any of the Existing
Environmental Indemnity Agreements fail to complete Compliance Activity within
the specified periods for the Property Conditions, then, upon written demand by
Lender, Borrower or Pledgor shall seek to enforce the indemnitors’ obligations,
and if unable to successfully enforce such indemnitors’ obligations within a
reasonable period of time, Borrower and/or Pledgor shall complete such
Compliance Activity; and (d) Borrower shall immediately upon Borrower or Pledgor
becoming aware notify Lender in writing of (A) any unlawful Releases or
threatened Releases of Hazardous Substances in, on, under, from or migrating
towards the Property (including the Forest Service Land); (B) any actual or
alleged non-compliance with any Environmental Laws related in any way to the
Property (including the Forest Service Land); (C) any actual or potential Lien
imposed on Borrower, Pledgor or the Property pursuant to any Environmental Law,
whether due to any act or omission of Borrower or any other person (an
“Environmental Lien”); (D) any required or proposed Remediation of environmental
conditions relating to the Property (including the Forest Service Land); and
(E) any written notice or other communication of which Borrower or Pledgor
becomes aware from

 

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any source whatsoever relating in any way to an actual or threatened Release of
Hazardous Substances in violation of Environmental Laws or the Remediation
thereof or to any claim that Borrower or Pledgor is liable for the Release of
Hazardous Substances or for the violation of Environmental Law; (e) Borrower and
Pledgor shall, as may reasonably be required by Lender from time to time, but in
no event more than twice yearly so long as no Event of Default exists, use its
commercially reasonable efforts to provide Lender with an update, in form and
substance reasonably satisfactory to Lender, as to the status of the Compliance
Activity pursuant to the Existing Environmental Indemnity Agreements and any
Remediation activities arising out of the Stevens Pass Environmental Issues;
provided, however, if Lender has a reasonable belief that any such Compliance
Activity or Remediation is not being completed in compliance with Environmental
Laws or is not being diligently pursued to completion, Lender may require such
reporting more frequently as it reasonably requires; and (f) neither Borrower
nor Pledgor shall agree to any deed restriction, deed notice, restrictive
covenant or other institutional control on the Property proposed as part of any
Remediation or Compliance Activity. Borrower and Pledgor shall provide Lender
with a copy of and a reasonable opportunity to review, approve and comment upon
all reports related to such Compliance Activity or Remediation and any plan
prepared with respect thereto regarding the Property Conditions and for which
and to the same extent that Borrower or Pledgor has an opportunity to review,
approve or comment upon prior to submission or implementation. Further, Borrower
and Pledgor shall immediately notify Lender in writing upon becoming aware or
receiving notice that (i) any Compliance Activity or Remediation is being
implemented in violation of Environmental Laws or any requirement of a
Governmental Authority, including, without limitation, any Voluntary Cleanup
Agreement; or (ii) there is any material change in the scope, duration or cost
of the Compliance Activity or Remediation which would be reasonably likely to
adversely affect the use, operation or value of the Property (including the
Forest Service Land), result in any liability to Borrower or Pledgor or any of
its tenants or other occupants at the Property, or materially delay, condition
or prevent the issuance of closure and/or no further action by the applicable
Governmental Authority with jurisdiction with respect to the Property
Conditions.

Section 9.3 Environmental Cooperation and Access. In the event any Indemnified
Party has a reasonable basis for believing that an environmental condition
exists on the Property (including the Forest Service Land) in violation of
Environmental Laws, upon reasonable notice from Lender, Borrower and Pledgor
shall, at Borrower’s and Pledgor’s sole cost and expense, promptly cause an
engineer or consultant reasonably satisfactory to Lender to conduct any
environmental assessment or audit (the scope of which shall be determined in the
sole and absolute discretion of Lender) and take any samples of soil,
groundwater or other water, air, or building materials or any other invasive
testing reasonably requested by Lender and promptly deliver to Lender the
results of any such assessment, audit, sampling or other testing; and provided,
further, that the Indemnified Parties and any other Person designated by the
Indemnified Parties, may at its option, enter upon the Property (including the
Forest Service Land) at all reasonable times to assess any and all aspects of
the environmental condition of the Property (including the Forest Service Land)
and its use.

Section 9.4 Environmental Indemnity. Each of Borrower and Pledgor covenants and
agrees, at its sole cost and expense, to protect, defend, indemnify, release and
hold each Indemnified Party harmless from and against any and all Losses imposed
upon or incurred by or asserted against any Indemnified Party and directly or
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relating to any one or more of the following: (a) any past, present or future,
actual or threatened Release of Hazardous Substances in, on, above, under, from
or affecting the Property (including the Forest Service Land), or any
Remediation thereof; (b) the imposition, recording or filing or the threatened
imposition, recording or filing of any Environmental Lien encumbering the
Property; (c) any misrepresentation or inaccuracy in any representation or
warranty concerning Hazardous Substances; and (d) any breach of Section 9.1 or
Section 9.2 of this Agreement (collectively, “Environmental Claims”); provided,
however, that this indemnity shall not apply if Borrower can conclusively prove
that (A) the contamination of the Property was caused solely by actions,
conditions, or events that occurred after the date that Lender (or any purchaser
at a foreclosure sale) actually acquired title to the Property, and (B) the
contamination of the Property was not caused by, contributed to, enhanced, or
exacerbated by the direct or indirect actions or inaction of Borrower, any
partner(s) of Borrower, any partner(s) of any partner(s) of Borrower, any
member(s) of Borrower, or any officer(s), shareholder(s), employee(s), or
agent(s) of Borrower.

Section 9.5 Duty to Defend. Solely regarding Environmental Claims and upon
request by any Indemnified Party, Borrower and Pledgor shall defend same (if
requested by any Indemnified Party, in the name of the Indemnified Party) by
attorneys and other professionals reasonably approved by such Indemnified Party.
Alternatively, any Indemnified Party may, in its reasonable discretion and at
its sole cost and expense, engage their own attorneys and other professionals to
defend or assist them, and, at the option of such Indemnified Party, its
attorneys shall control the resolution of any claim or proceeding, provided that
no compromise or settlement shall be entered without the consent of Borrower and
Pledgor, which consent shall not be unreasonably withheld. Upon demand, Borrower
and Pledgor shall pay or, in the sole discretion of any Indemnified Party,
reimburse, such Indemnified Party for the payment of reasonable fees and
disbursements of attorneys, engineers, environmental consultants, laboratories
and other professionals in connection therewith.

ARTICLE 10

SECONDARY MARKET TRANSACTIONS

Section 10.1 General. Each of Borrower and Pledgor hereby acknowledges that
Lender may in one or more transactions (a) sell or securitize the Loan or
portions thereof in one or more transactions through the issuance of securities,
which securities may be rated by the Rating Agencies, (b) sell or otherwise
transfer the Loan or any portion thereof one or more times (including selling or
assigning its duties, rights or obligations hereunder or under any Loan Document
in whole, or in part, to a servicer and/or a trustee), (c) sell participation
interests in the Loan one or more times, (d) re-securitize the securities issued
in connection with any securitization, and/or (e) further divide the Loan into
two or more separate notes or components and/or reallocate a portion of the Loan
to a mezzanine loan to be secured by direct and/or indirect Equity Interests in
Borrower or Pledgor (the transactions referred to in clauses (a) through
(e) above, each a “Secondary Market Transaction” and collectively “Secondary
Market Transactions”). With respect to any Secondary Market Transaction
described in clause (e) above, (i) such notes, note components, and mezzanine
loans may be assigned different principal amounts and interest rates, so long as
immediately after the effective date of such modification, the aggregate amount
of, and the weighted average of the interest rates payable under, any Loan and
such component note(s) or mezzanine loan, equal the outstanding Principal
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such Loan and applicable Interest Rate, respectively, immediately prior to such
modification, and (ii) each of Borrower and Pledgor agrees, at Lender’s expense,
to (A) modify its organizational structure to create one or more new
Single-Purpose Entities to be the mezzanine borrower(s) (and to be otherwise
satisfactory to Lender) and cause the same and any other owners of direct or
indirect Equity Interest in Borrower or Pledgor to enter into such agreements
deemed reasonably necessary by Lender to evidence and secure such mezzanine
loan, and (B) execute and deliver to Lender such amendments to the Loan
Documents, title insurance endorsements, legal opinions and other customary loan
documentation as Lender may reasonably require in connection therewith).

Section 10.2 Borrower and Pledgor Cooperation. Each of Borrower and Pledgor
shall execute and deliver to Lender such documents, instruments, certificates,
financial statements, assignments and other writings, do such other acts and
provide such information, and participate in such meetings and discussions, in
each case that are necessary to facilitate the consummation of each Secondary
Market Transaction, all at Lender’s expense.

Section 10.3 Dissemination of Information. If Lender determines at any time to
participate in a Secondary Market Transaction, Lender may forward to each
purchaser, transferee, assignee, servicer, participant or investor in such
securities (collectively, the “Investors”), any Rating Agency rating such
securities, any organization maintaining databases on the underwriting and
performance of commercial loans, trustee, counsel, accountant, and each
prospective Investor, all documents and information which Lender now has or may
hereafter acquire relating to the Loan, Borrower, any direct or indirect equity
owner of Borrower, Pledgor any direct or indirect equity owner of Pledgor, any
guarantor, any indemnitor, the Equity Collateral and the Property (including the
Forest Service Land), which shall have been furnished by Borrower, Pledgor, any
Affiliate of Borrower or Pledgor, any guarantor, any indemnitor, or any party to
any Loan Document, or otherwise furnished in connection with the Loan, as Lender
in its discretion determines necessary or desirable.

Section 10.4 Change of Payment Date. At any time prior to securitization of the
Loan by Lender, Lender shall have the right to change the Payment Date to a date
other than as set forth in the Note (such new date, the “New Payment Date”) on
thirty (30) days notice to Borrower; provided, however, that any such change in
the Payment Date: (i) shall not modify the amount of regularly scheduled monthly
principal and interest payments, except that the first payment of principal and
interest payable on the New Payment Date shall be accompanied by interest at the
Interest Rate for the period from the Payment Date in the month in which the New
Payment Date first occurs to the New Payment Date and (ii) shall extend the
Maturity Date to the New Payment Date occurring in the calendar month set forth
in the definition of Maturity Date.

Section 10.5 Register. For purposes of this Section 10.5, “Registrar” means The
Prudential Insurance Company of America unless the Loan is transferred and The
Prudential Insurance Company of America no longer owns any interest in the Loan,
in which case, the servicer of the Loan. The Registrar, as agent of Borrower,
shall maintain a record that identifies each owner (including successors,
assignees, and participants) of an interest in the Loan, including the name and
address of the owner, and each owner’s rights to principal and interest (the
“Register”), and shall record all transfers of an interest in the Loan,
including each assignment and participation, in the Register. Failure to make
any such recordation, or any error

 

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in such recordation shall not affect Borrower’s obligations in respect of such
rights. Interests in the Loan (including assignments and participations) may be
transferred only by notifying the Registrar, as agent of Borrower, of the
proposed transfer and the name of the transferee, assignee or participant, and
the Registrar, on behalf of Borrower, will update the Register to reflect the
transfer. The Registrar shall permit Borrower to review such information as
reasonably needed for Borrower to comply with its obligations under this
Agreement or under any Legal Requirements. The parties intend for the Loan to be
in registered form for tax purposes and this provision shall be construed in
accordance with that intent.

Section 10.6 Borrower and Pledgor Indemnification. In connection with any
Secondary Market Transaction, each of Borrower and Pledgor shall indemnify
(a) each Indemnified Party and (b) the party that has filed the registration
statement relating to the Secondary Market Transaction (the “Registration
Statement”), each of its directors and officers who have signed the Registration
Statement and each Person that controls such party within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
party named as depositor in any private placement memorandum and each of its
directors and officers who have signed the Registration Statement and each
Person that controls such party (collectively, the “Underwriter Group”), for any
Losses to which any of them may become subject (i) insofar as the Losses arise
out of or are based upon any untrue statement of any material fact made by
Borrower, Pledgor or Guarantor with respect to Borrower or Pledgor, any of
Borrower’s or Pledgor’s Affiliates, Guarantor, the Property (including the
Forest Service Land), the Equity Collateral or any Third Party Operator, or
arise out of or are based upon the omission by Borrower, Pledgor or Guarantor to
state therein a material fact required to be stated in order to make such
statements, in light of the circumstances under which they were made, not
misleading, or (ii) as a result of any untrue statement of material fact in any
of the financial statements of Borrower, Pledgor or Guarantor or the failure to
include in such financial statements any material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading; provided however, the indemnification described in this
Section 10.6 shall not apply to any matter described in the foregoing clauses
(i) and (ii) in the event that, (a) Lender fails to provide the applicable
Registration Statement (or drafts or excerpts thereof containing the statements
regarding which indemnity is sought hereunder) to Borrower and/or Pledgor for
review prior to the applicable Secondary Market Transaction, or (b) prior to the
applicable Secondary Market Transaction, Borrower and/or Pledgor inform Lender
in writing of the existence of any untrue statement of material fact or omission
of a material fact described in the preceding clauses (i) and (ii), and Lender
(or any applicable member of the Underwriter Group) fails to correct such untrue
statement or omission. In addition, in connection with the foregoing, each of
Borrower and Pledgor agrees to reimburse the Indemnified Party and the
Underwriter Group for any legal or other expenses reasonably incurred by the
Indemnified Party and the Underwriter Group in connection with investigating or
defending the Losses.

Section 10.7 Additional Financial Information.

(a) If requested by Lender in connection with a public securitization in which
the Loan constitutes at least ten percent (10%) of the assets of the
securitization, Borrower and Pledgor, at Lender’s expense, shall provide Lender
with all financial statements and other financial, statistical or operating
information, to the extent required pursuant to Regulation S-X

 

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of the Securities Act or any other Legal Requirements in connection with any
(1) preliminary or final private placement memorandum or other offering
documents or (2) preliminary or final prospectus, as applicable (each, a
“Disclosure Document”) or any filing under or pursuant to the Securities Act or
the Exchange Act in connection with or relating to a securitization (each, a
“Securities Filing”). All financial statements provided by Borrower and Pledgor
pursuant to this Section shall be prepared in accordance with GAAP and shall
meet the requirements of Regulation S-X and other applicable Legal Requirements.
All financial statements reporting for a full operating year (1) shall be
audited by the independent accountants in accordance with generally accepted
auditing standards, Regulation S-X and all other applicable Legal Requirements,
(ii) shall be accompanied by the manually executed report of the independent
accountants thereon, which report shall meet the requirements of Regulation S-X
and all other applicable Legal Requirements, and (iii) shall be accompanied by a
manually executed written consent of the independent accountants, acceptable to
Lender, that authorizes the inclusion of such financial statements in any
Disclosure Document or Securities Filing and permits the use of the name of such
independent accountants and reference to such independent accountants as
“experts” in any Disclosure Document and Securities Filing, all of which shall
be provided, at Borrower’s and Pledgor’s expense, at the same time as the
related financial statements are required to be provided. All other financial
statements shall be certified by the chief financial officer of the Borrower
and/or Pledgor, which certification shall state that such financial statements
meet the requirements set forth in the first sentence of this paragraph.

(b) If requested by Lender, Borrower and/or Pledgor shall provide Lender,
promptly upon request, with any other or additional financial statements or
financial, statistical or operating information as Lender determines to be
required pursuant to Regulation S-X or other legal requirements in connection
with any Disclosure Document or any Securities Filing.

ARTICLE 11

EXCULPATION

This Agreement and all obligations of Borrower hereunder, are and shall be
subject to the exculpation provisions of Section 17 of the Note.

ARTICLE 12

MISCELLANEOUS

Section 12.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the execution and delivery of this Agreement and
the execution and delivery by Borrower to Lender of the Note; and shall continue
in full force and effect so long as any portion of the Indebtedness is
outstanding and unpaid; provided, however, that the representations, warranties
covenants and indemnities set forth in Sections 4.7, 4.19, 5.11, 5.12, 12.19,
12.25(b)(vi), (vii), (viii) and (ix) and Article 9 shall survive in perpetuity.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party.
All covenants, promises and agreements in this Agreement contained, by or on
behalf of Borrower and Pledgor, shall inure to the benefit of the respective
successors and assigns of Lender. Nothing in this Agreement or in any other Loan
Document, express or implied, shall give to any Person other than the parties
and the holder(s) of the Note, the Mortgage, the Pledge Agreement and the other
Loan Documents, and their legal representatives, successors and assigns, any
benefit or any legal or equitable right, remedy or claim hereunder.

 

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Section 12.2 Lender’s Discretion. Whenever pursuant to this Agreement or any
other Loan Document, Lender exercises any right, option or election given to
Lender to approve or disapprove, or consent or withhold consent, or any
arrangement or term is to be satisfactory to Lender or is to be in Lender’s
discretion, the decision of Lender to approve or disapprove, consent or withhold
consent, or to decide whether arrangements or terms are satisfactory or not
satisfactory or acceptable or not acceptable to Lender in Lender’s discretion,
shall (except as is otherwise specifically herein provided) be in the sole and
absolute discretion of Lender and may be given or withheld for any or for no
reason or given conditionally.

Section 12.3 Governing Law; Venue.

(a) This Agreement and each of the other Loan Documents (except as set forth
therein) shall be interpreted and enforced according to the laws of the State of
New York (without giving effect to rules regarding conflict of laws).

(b) Each of Borrower and Pledgor hereby consents and submits to the exclusive
jurisdiction and venue of the Supreme Court of New York County, New York, and
the United States District Court for the Southern District of New York, with
respect to any legal action or proceeding arising with respect to the Loan
Documents and waives all objections which it may have to such jurisdiction and
venue. Nothing herein shall, however, preclude or prevent Lender from bringing
actions against Borrower and/or Pledgor in any other jurisdiction as may be
necessary to enforce or realize upon the security for the Loan provided in any
of the Loan Documents.

Section 12.4 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
the Note or any other Loan Document, or consent to any departure by Borrower or
Pledgor therefrom, shall in any event be effective unless the same shall be in a
writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on Borrower or Pledgor shall entitle Borrower or Pledgor to
any other or future notice or demand in the same, similar or other
circumstances.

Section 12.5 Delay Not a Waiver. Neither any failure nor any delay on the part
of Lender in insisting upon strict performance of any term, condition, covenant
or agreement, or exercising any right, power, remedy or privilege under any Loan
Document, or any other instrument given as security therefor, shall operate as
or constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under any Loan Document, Lender
shall not be deemed to have waived any right either to require prompt payment
when due of all other amounts due under any Loan Document, or to declare a
default for failure to effect prompt payment of any such other amount.

 

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Section 12.6 Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a) hand
delivery, with proof of attempted delivery, (b) certified or registered United
States mail, postage prepaid, (c) expedited prepaid delivery service, either
commercial or United States Postal Service, with proof of attempted delivery, or
(d) telecopier (with answerback acknowledged) provided that such telecopied
notice must also be delivered by one of the means set forth in (a), (b) or
(c) above, addressed to the parties as follows:

 

If to Lender:    THE PRUDENTIAL INSURANCE    COMPANY OF AMERICA    Prudential
Asset Resources    2200 Ross Avenue    Suite 4900E    Dallas, TX 75201   
Attention: Asset Management Department    Reference Loan Nos.: 706107211,
706107171 and 706108707 with a copy to:    THE PRUDENTIAL INSURANCE    COMPANY
OF AMERICA    Prudential Asset Resources    2200 Ross Avenue    Suite 4900E   
Dallas, TX 75201    Attention: Legal Department    Reference Loan Nos.:
706107211, 706107171 and 706108707 and:    THE PRUDENTIAL INSURANCE    COMPANY
OF AMERICA    Four Embarcadero Center    Suite 2700    San Francisco, CA 94111
   Attention: Regional Counsel    Reference Loan Nos.: 706107211, 706107171 and
706108707 and:    Seyfarth Shaw LLP    1075 Peachtree Street, N.E.    Suite 2500
   Atlanta, GA 30309    Attention: Newton J. Wardlaw, Esq.    Facsimile No.:
(404) 892-7056

 

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If to Borrower or Pledgor:    c/o CNL Lifestyle Properties, Inc.    450 South
Orange Avenue    Orlando, FL 32801    Attention: Joseph T. Johnson, SVP and CFO
   Attention: Holly Greer, Esq., SVP and General Counsel    Facsimile No.: (407)
540-2544 with a copy to:    Lowndes, Drosdick, Doster, Kantor & Reed, P.A.   
215 North Eola Drive    Orlando, FL 32801    Attention: William T. Dymond, Jr.,
Esq.    Facsimile No.: (407) 843-4444

A party receiving a notice which does not comply with the technical requirements
for notice under this Section 12.6 may elect to waive any deficiencies and treat
the notice as having been properly given. A notice shall be deemed to have been
given: (a) in the case of hand delivery, at the time of delivery; (b) in the
case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; (c) in the case of expedited prepaid delivery upon
the first attempted delivery on a Business Day; or (d) in the case of
telecopier, upon receipt of answerback confirmation, provided that such
telecopied notice was also delivered as required in this Section 12.6.

Section 12.7 Trial By Jury. EACH OF BORROWER, PLEDGOR AND LENDER, TO THE FULLEST
EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY
HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.

Section 12.8 Headings. The Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

Section 12.9 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

Section 12.10 Preferences. Lender shall have the continuing and exclusive right
to apply or reverse and reapply any and all payments by Borrower or Pledgor to
any portion of the obligations of Borrower and Pledgor hereunder. To the extent
Borrower or Pledgor makes a payment or payments to Lender for Borrower’s or
Pledgor’s benefit, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.

 

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Section 12.11 Waiver of Notice. Borrower and Pledgor shall not be entitled to
any notices of any nature whatsoever from Lender except with respect to matters
for which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and Pledgor and except
with respect to matters for which Borrower or Pledgor is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice. Each of
Borrower and Pledgor hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Agreement or the other
Loan Documents does not specifically and expressly provide for the giving of
notice by Lender to Borrower or Pledgor.

Section 12.12 Intentionally Omitted.

Section 12.13 Exhibits Incorporated. The information set forth on the cover,
heading and recitals hereof, the Schedules attached hereto, the Exhibits
attached hereto, are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.

Section 12.14 Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to the Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to the Loan, and the Loan
Documents which Borrower or Pledgor may otherwise have against any assignor, and
no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower or Pledgor in any action or proceeding brought by any such assignee
upon, the Loan Documents and any such right to interpose or assert any such
unrelated offset, counterclaim or defense in any such action or proceeding is
hereby expressly waived by Borrower and Pledgor.

Section 12.15 No Joint Venture or Partnership. Borrower and Lender intend that
the relationship created hereunder be solely that of borrower and lender.
Pledgor and Lender intend that the relationship created hereunder be solely that
of pledgor and pledgee. Nothing herein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between any of
Borrower, Pledgor, Third Party Operator, any contractor or Governmental
Authority and Lender nor to grant Lender any interest in the Property (including
the Forest Service Land) or the Equity Collateral other than that of mortgagee,
secured party or lender.

Section 12.16 Waiver of Marshalling of Assets Defense. To the fullest extent
that each of Borrower and Pledgor may legally do so, each of Borrower and
Pledgor waives all rights to a marshalling of the assets of Borrower, Pledgor,
of the Equity Collateral and of the Property, or to a sale in inverse order of
alienation in the event of foreclosure of the interests hereby created, and
agrees not to assert any right under any laws pertaining to the marshalling of
assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of the Property or the Equity Collateral for the collection of the Indebtedness
without any prior or different resort for collection, or the right of Lender or
any trustee under the Mortgage or the Pledge Agreement, as applicable, to the
payment of the Indebtedness in preference to every other claimant whatsoever.

 

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Section 12.17 Waiver of Counterclaim. Each of Borrower and Pledgor hereby waives
the right to assert a counterclaim, other than compulsory counterclaim, in any
action or proceeding brought against Borrower or Pledgor by Lender or Lender’s
agents.

Section 12.18 Construction of Documents. The parties hereto acknowledge that
they were represented by counsel in connection with the negotiation and drafting
of the Loan Documents and that the Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.

Section 12.19 Brokers and Financial Advisors. Each of Borrower and Pledgor
hereby represent that they have dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders (“Broker”) in connection with
the transactions contemplated by this Agreement except for Holliday Fenoglio
Fowler, LP. Each of Borrower and Pledgor hereby agrees to indemnify and hold
Lender harmless from and against any and all Losses in any way relating to,
arising out of or incurred as a result of the inaccuracy of such representation
or a claim by any Person that such Person acted on behalf of Borrower or Pledgor
in connection with the transactions contemplated herein. Notwithstanding
anything to the contrary in any Loan Document, Borrower shall have full recourse
liability for this indemnity. Borrower and Pledgor agree that Lender is not
responsible for any advise, assurances, waivers or recommendations given to
Borrower or Pledgor by Broker (including, without limitation, statements made
concerning the economic terms of the agreements between Lender and Broker) or
actions taken by Broker, that Lender and Borrower and Pledgor are dealing at
arm’s length with each other in a commercial lending transaction, and that no
fiduciary or other special relationship exists or shall exist between them.
Borrower and Pledgor acknowledge and agree that Lender may have a separate
compensation arrangement with Broker pursuant to which Lender may make payments
to Broker or other compensation may be earned by Broker. The payments may, among
others, take the form of (a) a direct, one-time payment and/or periodic
payments, and/or (b) incentive payments or other benefits based on various
factors, including, without limitation, the volume of business done with Lender
(which may include the Loan and other loans made by Lender), over a longer
period of time and/or (c) an ongoing interest strip in the Loan. Such
compensation may be in addition to the fees paid to Broker by Borrower. In
addition, Broker may act as a primary servicer or sub-servicer for (or retain
the right to service) the Loan and receive fees or compensation, as determined
by Lender, relating to (x) such servicing activity or (y) a buyout or other
termination of such servicing rights. The provisions of this Section 12.19 shall
survive the expiration and termination of this Agreement and the repayment of
the Indebtedness.

Section 12.20 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

Section 12.21 Certificates. Borrower, Pledgor and Lender each hereby agree at
any time and from time to time, but in no event more than one time per calendar
quarter, upon not less than fifteen (15) days prior written notice by Borrower,
Pledgor or Lender to execute, acknowledge and deliver to the party specified in
such notice, a statement, in writing, certifying that this Agreement is
unmodified and in full force and effect (or if there have been modifications,
that the same, as modified, is in full force and effect and stating the
modifications hereto), and stating whether or not, to the knowledge of such
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Default has occurred, and, if so, specifying each such Event of Default;
provided, however, that it shall be a condition precedent to Lender’s obligation
to deliver the statement pursuant to this Section 12.21, that Lender shall have
received, together with Borrower’s or Pledgor’s request for such statement, a
certificate of Borrower and/or Pledgor stating that no Event of Default exists
as of the date of such certificate (or specifying such Event of Default).

Section 12.22 Reserved.

Section 12.23 Bankruptcy Waiver. Each of Borrower and Pledgor hereby agrees
that, in consideration of the recitals and mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, if Borrower or Pledgor (i) files with any
bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the U.S. Code, as amended, (ii) is the subject of any order
for relief issued under Title 11 of the U.S. Code, as amended, (iii) files or is
the subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or law relating to bankruptcy, insolvency or other relief of debtors,
(iv) has sought or consents to or acquiesces in the appointment of any trustee,
receiver, conservator or liquidator or (v) is the subject of any order, judgment
or decree entered by any court of competent jurisdiction approving a petition
filed against such party for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency or other
relief for debtors, the automatic stay provided by the U.S. Bankruptcy Code
shall be modified and annulled as to Lender, so as to permit Lender to exercise
any and all of its rights and remedies, upon request of Lender made on notice to
Borrower and/or Pledgor and any other party in interest but without the need of
further proof or hearing. Borrower, Pledgor or any Affiliate of Borrower or
Pledgor shall not contest the enforceability of this Section 12.23.

Section 12.24 Entire Agreement. This Agreement, together with the Exhibits
hereto and the other Loan Documents constitutes the entire agreement among the
parties hereto with respect to the subject matter contained in this Agreement,
the Schedules hereto, the Exhibits hereto and the other Loan Documents and
supersedes all prior agreements, understandings and negotiations between the
parties.

Section 12.25 Liability and Indemnification.

(a) Lender shall not be liable for any loss sustained by Borrower or Pledgor
resulting from any act or omission of any Indemnified Party unless it is finally
judicially determined that such loss was solely caused by the fraud, gross
negligence or willful misconduct of Lender or any Indemnified Party. Lender
shall not be obligated to perform or discharge any obligation, duty or liability
with respect to the ownership, operation and/or maintenance of the Property or
the Forrest Service Land (including under any Lease, Contract, Permit or Forest
Service Permits) or the Equity Collateral or under or by reason of any Loan
Document. Unless and until Lender becomes the fee owner of the Property (and the
permit holder with respect to the Forest Service Land) following an Event of
Default, the Loan Documents shall not place responsibility for the control,
care, management or repair of the Property (including the Forest Service Land)
upon Lender, nor for complying with any Lease, Contract, Permit or Forest
Service Permits; nor shall it make Lender responsible or liable for any waste
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Property (including the Forest Service Land), or for any dangerous or defective
condition of the Property (including the Forest Service Land), or for any
negligence in the management, upkeep, repair or control of the Property
(including the Forest Service Land) resulting in loss or injury or death to any
tenant, licensee, guest, employee or stranger.

(b) Each of Borrower and Pledgor shall indemnify and hold each Indemnified Party
harmless against any and all Losses, and reimburse them for any costs and
expenses incurred, in connection with, arising out of or as a result of (i) the
negotiation, preparation, execution and delivery of the Loan Documents and the
documents and instruments referred to therein, (ii) the creation, perfection or
protection of Lender’s Liens in the Equity Collateral and the Property
(including fees and expenses for title and lien searches and filing and
recording fees, intangibles taxes, personal property taxes, mortgage recording
taxes, due diligence expenses, travel expenses, accounting firm fees, costs of
the appraisal, environmental report(s) (and an environmental consultant),
surveys and the engineering report(s) obtained by or delivered to Lender in
connection with the Loan, (iii) the negotiation, preparation, execution and
delivery of any amendment, waiver or consent relating to any of the Loan
Documents, (iv) the exercise of any of Lender’s or any Indemnified Party’s
remedies under any Loan Document, (v) any alleged or actual obligations or
undertakings to perform or discharge any obligation, duty or liability with
respect to the ownership, operation and/or maintenance of the Property and the
Forest Service Land (including under any Lease, Contract, Permit or Forest
Service Permit), except to the extent that it is finally judicially determined
that any such Loss resulted directly and solely from the fraud, gross negligence
or willful misconduct of such Indemnified Party, (vi) any Transaction Taxes,
(vii) (a) a Violation, (b) in the investigation, defense, and settlement of a
Violation, (c) as a result of a breach of the representations in Section 4.7,
(d) in correcting any prohibited transaction or the sale of a prohibited loan,
and (e) in obtaining any individual prohibited transaction exemption under ERISA
that may be required, in Lender’s discretion, (viii) an OFAC Violation, or
(ix) any Prior Taxes. If any Indemnified Party becomes involved in any action,
proceeding or investigation in connection with any matter described in clauses
(i) through (viii) above, Borrower and Pledgor shall upon request, defend such
Indemnified Party (in Borrower’s, Pledgor’s or the Indemnified Party’s names) by
attorneys and other professionals approved by such Indemnified Party.
Notwithstanding the foregoing, the Indemnified Parties may, in their sole and
absolute discretion and at their sole cost and expense, engage their own
attorneys and professionals to defend or assist them and, at their option, their
attorneys shall control the resolution of any claims or proceedings. Upon
demand, Borrower and/or Pledgor shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse and/or indemnify the
Indemnified Parties for all costs imposed on, incurred by, or asserted against
the Indemnified Parties by reason of any items set forth in this Section and/or
the enforcement or preservation of the Indemnified Parties’ rights under the
Loan Documents. Any amount payable to the Indemnified Parties under this Section
shall (a) be deemed a demand obligation, (b) be part of the Indebtedness,
(c) bear interest from the date of demand at the Default Rate, until paid if not
paid on demand, and (d) be secured by the Lien of the Loan Documents.

Section 12.26 Publicity. Lender shall have the right, with reasonable notice and
copies to the Borrower, to issue press releases, advertisements and other
promotional materials describing the Loan (including the amount and purpose of
the Loan) and Lender’s participation in the origination of the Loan or the
Loan’s inclusion in any Secondary Market Transaction effectuated or to be
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Borrower, Pledgor or their respective affiliates through any media intended to
reach the general public which refers to the Loan Documents or the financing
evidenced by the Loan Documents, to Lender or any of its Affiliates shall be
subject to the prior approval of Lender, except for disclosures required by law
which shall not require Lender approval but which shall require prior notice to
Lender.

Section 12.27 Time of the Essence. Time shall be of the essence in the
performance of all obligations of Borrower and Pledgor hereunder and under each
of the other Loan Documents.

Section 12.28 Taxes. All payments made under the Loan Documents shall be made
free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, and all liabilities with respect
thereto, now or hereafter imposed, levied, collected, withheld or assessed by
any Governmental Authority (“Transaction Taxes”). If Borrower or Pledgor is
required by law to deduct any Transaction Taxes from any sum payable under the
Loan Document, such sum shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 12.28), Lender receives an amount equal to the sum Lender
would have received had no such deductions been made. In the event of the
passage of any Legal Requirement subsequent to the date hereof in any manner
changing or modifying Legal Requirements now in force governing the taxation of
mortgages or security agreements or debts secured thereby or the manner of
collecting such taxes so as to adversely affect Lender or the Lien of the Loan
Documents, Borrower and/or Pledgor will pay any such tax on or before the due
date thereof. In the event Borrower or Pledgor is prohibited by Legal
Requirements from assuming liability for payment of any such taxes (or if any
Legal Requirement would penalize Lender if Borrower or Pledgor makes such
payment or if, in the reasonable opinion of Lender, the making of such payment
might result in the imposition of interest beyond the Maximum Amount) or from
paying any other Imposition, the outstanding Indebtedness shall, at the option
of Lender, become due and payable on the date that is one hundred twenty
(120) days after Lender provides notice to Borrower or Pledgor of such change in
law and its election to accelerate the Maturity Date; and failure to pay such
amounts on the date due shall be an Event of Default; provided, however, that
any such prepayment made under this Section 12.28 shall be made without the
payment of any Prepayment Premium.

Section 12.29 Further Assurances. Each of Borrower and Pledgor shall execute and
deliver to Lender such documents, instruments, certificates, assignments and
other writings, and do such other acts necessary or desirable in Lender’s
reasonable discretion, to (a) evidence, preserve or protect the Property and the
Equity Collateral at any time securing or intended to secure the Indebtedness,
(b) enable Lender to perfect, exercise and enforce Lender’s rights and remedies
under any Loan Document, (c) comply with any Legal Requirements, (d) resolve any
conflicts between the Loan Documents and other agreements or contracts to which
Borrower, Pledgor or the Property are subject, or (e) avoid, cure or mitigate
any Material Adverse Effect.

 

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Section 12.30 Certain Additional Rights of Lender (VCOC). Notwithstanding
anything to the contrary which may be contained in this Agreement, Lender and
any holder of any note representing all or any portion of the Loan
(“Noteholder”) shall have:

(a) the right to call annual meetings (at which meetings the Lender and the
other Noteholders who have similar rights under this Section may be permitted to
attend, and any Noteholder may attend other meetings at such other times as the
Lender or other Noteholders who have similar rights under this Section may be
entitled to have) with Borrower’s and/or Pledgor’s management regarding the
significant business activities and business and financial developments of the
Borrower and Pledgor, provided, however, that such meetings shall not include
discussions of environmental compliance programs or disposal of Hazardous
Substances. Consultation meetings should occur at a mutually agreeable time and
location; provided that the Borrower shall be under no obligation to follow or
implement any advice or recommendations of Lender or any Noteholder at any such
meeting. Otherwise, the Borrower shall not be required to hold any other
meetings with Lender or any Noteholder unless it demonstrates to the reasonable
satisfaction of the Borrower that other times (but not more frequently than
quarterly) are required under applicable law after the date of this Agreement
for Lender or any Noteholder to maintain its status as a “venture capital
operating company” (a “VCOC”) as such term is defined in the U.S. Department of
Labor Regulations codified at 29 C.F.R. Section 2510.3-101(d) (the “Plan Asset
Regulation”);

(b) the right, in accordance with the terms of this Agreement, subject to
compliance with applicable laws and confidentiality obligations to third
parties, to examine the books and records of Borrower at any time upon
reasonable notice and to a reasonable extent; provided that the rights granted
in this Section shall be exercised no more than once during any twelve-month
period or unless Lender or any Noteholder demonstrates to the reasonable
satisfaction of the Borrower that other times are required by applicable law
after the date of this Agreement for Lender or any Noteholder to maintain its
status as a VCOC; provided further that Lender’s rights under this paragraph
shall be at Lender’s cost unless Borrower is otherwise obligated to pay such
costs pursuant to the Loan Documents; and

(c) the right, in accordance with the terms of this Agreement, to receive all
financial reports required to be delivered to Lender under the Loan

The aforementioned consultation rights are intended by Lender and each
Noteholder to satisfy the requirement of management rights for purposes of the
Department of Labor “plan assets” regulation 29 C.F.R., Section 2510.3-101. The
rights described in this Section may be exercised by all of Lender, each
Noteholder and any Person which is intended to qualify as a VCOC and owns
directly or indirectly, substantially all of the interests in Lender or any
Noteholder.

Section 12.31 Co-Lenders. All copies of documents, reports, requests and other
delivery obligations of Borrower and Pledgor required in this Agreement or any
other Loan Document shall be delivered by Borrower to each Co-Lender. The
liabilities of each Co-Lender shall be several and not joint. Neither Co-Lender
shall be responsible for the obligations of the other Co-Lender. All indemnities
and similar agreements by Borrower or Pledgor and obligations for Losses, costs,
expenses, damages, advances and similar amounts set forth in this Agreement or
any other Loan Document shall run to and benefit each Co-Lender. Borrower and
Pledgor acknowledge and agree that all consent, approval and similar rights
(including, without limitation, all types mentioned in Section 12.2) may, at
Lender’s option in its discretion, require the consent, approval, determination,
and/or consultation of both Co-Lenders.

 

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ARTICLE 13

SPECIAL PROVISIONS

Section 13.1 Use of Terms. All references to “Borrower” in this Agreement shall
be deemed to refer to one or more Individual Borrowers, as the context requires.
All references to “Pledgor” in this Agreement shall be deemed to refer to one or
more Individual Pledgors, as the context requires. All references to “Property”
in this Agreement shall be deemed to refer to one or more of the properties
described in each Mortgage encumbering the property identified on Schedule 2
(each an “Individual Property”), as the context requires. All references to
“Equity Collateral” in this Agreement shall be deemed to refer to one or more of
the equity collateral described in each Pledge Agreement pursuant to which an
Individual Borrower or Individual Pledgor pledged its interest in the equity
interest identified on Schedule 3 and Schedule 4 (each an “Individual Equity
Collateral”), as the context requires. All references to “Borrower Equity
Collateral” in this Agreement shall be deemed to refer to one or more of the
equity collateral described in each Borrower Pledge Agreement pursuant to which
an Individual Borrower pledged its interest in the equity interest identified on
Schedule 3 (each an “Individual Borrower Equity Collateral” and collectively the
“Borrower Equity Collateral”), as the context requires. All references to
“Pledgor Equity Collateral” in this Agreement shall be deemed to refer to one or
more of the equity collateral described in each Pledgor Pledge Agreement
pursuant to which an Individual Pledgor pledged its interest in the equity
interest identified on Schedule 4 (each an “Individual Pledgor Equity
Collateral” and collectively the “Pledgor Equity Collateral”), as the context
requires. It is the intent of the parties hereto in making any determination
under the Loan Documents (including, without limitation, in determining whether
(a) a breach of a representation, warranty or a covenant has occurred, (b) there
has occurred an Event of Default, and (c) an event has occurred which would
create recourse obligations under Section 17 of the Note) that any breach,
occurrence or event with respect to any Individual Borrower, Individual Pledgor,
Individual Property or Individual Equity Collateral shall be deemed to be a
breach, occurrence or event with respect to all Individual Borrowers, all
Individual Pledgors, all Individual Properties, and all Individual Equity
Collateral and that all Individual Borrowers, all Individual Pledgors, all
Individual Properties and all Individual Equity Collateral need not have been
involved with or be the subject of such breach, occurrence or event in order for
the same to be deemed such a breach, occurrence or event with respect to every
Individual Borrower, every Individual Pledgor, every Individual Property, every
Individual Equity Collateral and the Loan.

Section 13.2 Cross-Default; Cross-Collateralization; Waiver of Marshalling of
Assets.

(a) Each Borrower acknowledges that Lender has made the Loan to Borrower upon
the security of its collective interest in the Property and the Borrower Equity
Collateral and each Pledgor’s interest in the Pledgor Equity Collateral and in
reliance upon the aggregate of the Property and the Equity Collateral taken
together being of greater value as collateral security than the sum of each
Individual Property and each Individual Equity Collateral taken separately. Each
Borrower and each Pledgor agrees that the Mortgages and the Pledge Agreements
are and will be cross-collateralized and cross-defaulted with each other so that
(i) an Event of Default under any of the Mortgages or the Pledge Agreements
shall constitute an Event of Default under each of the other Mortgages and
Pledge Agreements; (ii) an Event of Default under any Note, this Agreement or
any other Loan Document shall constitute an Event of Default under each

 

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Mortgage and each Pledge Agreement; (iii) each Mortgage shall constitute
security for each Note as if a single blanket lien were placed on all of the
Individual Properties as security for each Note; (iv) each Borrower Pledge
Agreement shall constitute security for each Note as if a single blanket lien
were placed on all of the Borrower Equity Collateral as security for each Note;
(v) each Pledgor Pledge Agreement shall constitute security for the obligations
of each Pledgor under the Loan Documents as if a single blanket lien were placed
on all of the Pledgor Equity Collateral as security for such obligations; and
(iv) such cross-collateralization shall in no event be deemed to constitute a
fraudulent conveyance.

(b) To the fullest extent permitted by law, each Borrower, for itself and its
successors and assigns, and each Pledgor, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower, Pledgor,
Borrower’s or Pledgor’s partners and others with interests in Borrower or
Pledgor, and of the Property or the Equity Collateral, or to a sale in inverse
order of alienation in the event of foreclosure of all or any of the Mortgages
or Pledge Agreements, and agrees not to assert any right under any laws
pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or
any other matters whatsoever to defeat, reduce or affect the right of Lender
under the Loan Documents to a sale of the Property or the Equity Collateral for
the collection of the Loan without any prior or different resort for collection
or of the right of Lender to the payment of the Indebtedness out of the net
proceeds of the Property or the Equity Collateral in preference to every other
claimant whatsoever. Each Borrower, for itself and its successors and assigns,
waives in the event of foreclosure of any or all of the Mortgages (or the
Borrower Pledge Agreements, as applicable), any equitable right otherwise
available to Borrower which would require the separate sale of any portion of
the Property (or the Borrower Equity Collateral, as applicable) or require
Lender to exhaust its remedies against any Individual Property (or Individual
Borrower Equity Collateral, as applicable) or any combination of the Individual
Properties (or Individual Borrower Equity Collateral, as applicable) before
proceeding against any other Individual Property (or Individual Borrower Equity
Collateral, as applicable) or combination of Individual Properties (or
Individual Borrower Equity Collateral, as applicable); and further in the event
of such foreclosure Borrower does hereby expressly consent to and authorize, at
the option of Lender, the foreclosure and sale either separately or together of
any combination of the Individual Properties (or Individual Borrower Equity
Collateral, as applicable). Each Pledgor, for itself and its successors and
assigns, waives in the event of foreclosure of any or all of the Pledgor Pledge
Agreements, any equitable right otherwise available to Pledgor which would
require the separate sale of any portion of the Pledgor Equity Collateral or
require Lender to exhaust its remedies against any Individual Pledgor Equity
Collateral or any combination of the Individual Pledgor Equity Collateral before
proceeding against any other Individual Pledgor Equity Collateral or combination
of Individual Pledgor Equity Collateral; and further in the event of such
foreclosure Pledgor does hereby expressly consent to and authorize, at the
option of Lender, the foreclosure and sale either separately or together of any
combination of the Individual Borrower Equity Collateral.

Section 13.3 Joint and Several Liability. Each Borrower shall be jointly and
severally liable for payment of the Indebtedness of the Original Loan and the
New Loan and performance of all other obligations of all Borrowers (or any of
them) under this Agreement and any other Loan Document, subject to the
exculpation provisions of Section 17 of the Note. Each Pledgor shall be jointly
and severally liable for payment of the Indebtedness (pursuant to the Pledgor
Pledge Agreements) and the performance of all other obligations of all Pledgors
(or any of them) under this Agreement and any other Loan Document.

 

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Section 13.4 Borrower Contribution.

(a) Each Individual Borrower will benefit, directly and indirectly, from each
Individual Borrower’s obligation to pay the aggregate Indebtedness and perform
its obligations under the Loan Documents. In consideration therefor, the
Individual Borrowers desire to enter into an allocation and contribution
agreement among themselves as set forth in this Section 13.4 to allocate such
benefits among themselves and to provide a fair and equitable agreement to make
contributions among each of the Individual Borrowers in the event any payment is
made by any Individual Borrower hereunder to Lender (any such payment, a
“Borrower Contribution”, including any exercise of recourse by Lender against
any Individual Property (or any portion thereof), or any Individual Borrower
Equity Collateral (or any portion thereof), of an Individual Borrower and
application of proceeds of such Individual Property (or any portion thereof) or
any Individual Borrower Equity Collateral (or any portion thereof) in
satisfaction of such Individual Borrower’s obligations to Lender under the Loan
Documents).

(b) Each Individual Borrower shall be liable hereunder with respect to the
aggregate Indebtedness only for such total maximum amount (if any) that would
not render its Indebtedness hereunder or under any of the Loan Documents subject
to avoidance under Section 548 of the Federal Bankruptcy Code or any comparable
provisions of any State law.

(c) In order to provide for a fair and equitable contribution among Individual
Borrowers in the event that any Borrower Contribution is made by an Individual
Borrower (a “Funding Borrower”), such Funding Borrower shall be entitled to a
reimbursement Borrower Contribution (“Borrower Reimbursement Contribution”) from
all other Individual Borrowers for all payments, damages and expenses incurred
by such Funding Borrower in discharging any of the aggregate Indebtedness, in
the manner and to the extent set forth in this Section.

(d) Each Individual Borrower shall be liable to a Funding Borrower in an amount
equal to the greater of (i) (A) the ratio of the Borrower Benefit Amount (as
defined below) of such Individual Borrower to the total amount of aggregate
Indebtedness, multiplied by (B) the amount of aggregate Indebtedness paid by
such Funding Borrower, and (ii) ninety-five percent (95%) of the excess of
(A) the fair saleable value of the Individual Property (or Individual Borrower
Equity Collateral, as applicable) owned by such Individual Borrower over (B) the
total liabilities of such Individual Borrower (including the maximum amount
reasonably expected to become due in respect of contingent liabilities)
determined as of the date on which the payment made by a Funding Borrower is
deemed made for purposes hereof (giving effect to all payments made by other
Funding Borrowers as of such date in a manner to maximize the amount of such
Borrower Contributions). For purposes hereof, the “Borrower Benefited Amount” of
any Individual Borrower as of any date of determination shall be the net value
of the benefits to such Individual Borrower and its Affiliates from extensions
of credit made by Lender to (1) such Individual Borrower and (2) the other
Individual Borrowers hereunder and the other Loan Document to the extent such
other Individual Borrowers have guaranteed, mortgaged, or pledged their
respective Individual Properties or Individual Borrower Equity Collateral to
secure the obligations of such Individual Borrower to Lender.

 

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(e) If at any time there exists more than one Funding Borrower with respect to
any Borrower Contribution (in any such case, the “Applicable Borrower
Contribution”), then Borrower Reimbursement Contributions from other Individual
Borrowers shall be allocated among such Funding Borrowers in proportion to the
total amount of the Borrower Contribution made for or on account of the other
Individual Borrowers by each such Funding Borrower pursuant to the Applicable
Borrower Contribution. If at any time any Individual Borrower pays an amount
hereunder in excess of the amount calculated pursuant to this Section 13.4, such
Individual Borrower shall be deemed to be a Funding Borrower to the extent of
such excess and shall be entitled to a Borrower Reimbursement Contribution from
the other Individual Borrowers in accordance with the provisions of this
Section.

(f) Each Individual Borrower acknowledges that the right to Borrower
Reimbursement Contribution hereunder shall constitute an asset in favor of such
Individual Borrower to which such Borrower Reimbursement Contribution is owing.

(g) No Borrower Reimbursement Contribution payments payable by an Individual
Borrower pursuant to the terms of this Section 13.4 shall be paid until all
amounts then due and payable by all of Individual Borrowers to Lender, pursuant
to the terms of the Loan Documents, are paid in full. Nothing contained in this
Section 13.4 shall limit or affect the Indebtedness of any Individual Borrower
to Lender under the Note or any other Loan Documents.

(h) Each Individual Borrower waives:

(i) any right to require Lender to proceed against any other Individual Borrower
or any other person or to proceed against or exhaust any security held by Lender
at any time or to pursue any other remedy in Lender’s power before proceeding
against such Individual Borrower;

(ii) any defense or rights based upon or arising out of: (A) any legal
disability or other defense of any other Individual Borrower, any guarantor of
any other person or by reason of the cessation or limitation of the liability of
any other Individual Borrower or any guarantor from any cause other than full
payment of all sums payable under the Note and the other Loan Documents; (B) any
lack of authority of the officers, directors, partners or agents acting or
purporting to act on behalf of any other Individual Borrower or any principal of
any other Individual Borrower or any defect in the formation of any other
Individual Borrower or any principal of any other Individual Borrower; (C) any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in any other respects more burdensome than that of
a principal; (D) any failure by Lender to obtain collateral for the Indebtedness
or failure by Lender to perfect a lien on any Individual Property (or any
portion thereof), or any Individual Borrower Equity Collateral (or any portion
thereof); (E) presentment, demand, protest and notice of any kind; (F) any
failure of Lender to give notice of sale or other disposition of any Individual
Property (or any portion thereof) or any Individual Borrower Equity Collateral
(or any portion thereof) to any other Individual Borrower or to any other Person
or any defect in any notice that may be given in connection with any such sale
or disposition; (G) intentionally omitted; (H) any use of cash collateral under
Section 363 of the Federal Bankruptcy Code; (I) any agreement or stipulation
entered into by Lender with respect to

 

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the provision of adequate protection in any bankruptcy proceeding; (J) any
borrowing or any grant of a security interest under Section 364 of the Federal
Bankruptcy Code; (K) the avoidance of any security interest in favor of Lender
for any reason; (L) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding, including any
discharge of, or bar or stay against collecting, all or any of the obligations
evidenced by the Note or owing under any of the Loan Documents; (M) such
Individual Borrower’s, or any other party’s, resignation of the portion of any
obligation secured by the Mortgages to be satisfied by any payment from any
other Individual Borrower or any such party; or (N) an election of remedies by
Lender even though the election of remedies, such as non - judicial foreclosure
with respect to security for the Loan or any other amounts owing under the Loan
Documents, has destroyed such Individual Borrower’s rights of subrogation and
reimbursement against any other Individual Borrower;

(iii) all rights and defenses that such Individual Borrower may have because any
of the Indebtedness is secured by real property. This means, among other things,
subject to the exculpation provisions of Section 17 of the Note: (A) Lender may
collect from such Individual Borrower without first foreclosing on any real or
personal property collateral pledged by any other Individual Borrower; (B) if
Lender forecloses on any real property collateral pledged by any other
Individual Borrower, (1) the amount of the aggregate Indebtedness may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price, and (2) Lender may
collect from such Individual Borrower even if any other Individual Borrower, by
foreclosing on the real property collateral, has destroyed any right such
Individual Borrower may have to collect from any other Individual Borrower. This
is an unconditional and irrevocable waiver of any rights and defenses such
Individual Borrower may have because any of the Indebtedness is secured by real
property; and

(iv) except as may be expressly and specifically permitted herein, any claim or
other right which such Individual Borrower might now have or hereafter acquire
against any other Individual Borrower or any other person that arises from the
existence or performance of any obligations under the Note or the other Loan
Documents, including any of the following: (A) any right of subrogation,
reimbursement, exoneration, contribution, or indemnification; or (B) any right
to participate in any claim or remedy of Lender against any other Individual
Borrower or any collateral security therefor, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law.

Section 13.5 Pledgor Contribution.

(a) Each Individual Pledgor will benefit, directly and indirectly, from each
Individual Pledgor’s obligation to pay the aggregate Indebtedness (pursuant to
the Pledgor Pledge Agreements) and perform its obligations under the Loan
Documents. In consideration therefor, Individual Pledgors desire to enter into
an allocation and contribution agreement among themselves as set forth in this
Section 13.5 to allocate such benefits among themselves and to provide a fair
and equitable agreement to make contributions among each of the Individual
Pledgor’s in the event any payment is made by any Individual Pledgor to Lender
pursuant to any Loan Document (any such payment, a “Pledgor Contribution”,
including any exercise of recourse by Lender against any Individual Pledgor
Equity Collateral (or any portion thereof) of

 

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an Individual Pledgor and application of proceeds of such Individual Pledgor
Equity Collateral (or any portion thereof) in satisfaction of such Individual
Pledgor’s obligations to Lender under the Loan Documents).

(b) Each Individual Pledgor shall be liable with respect to the aggregate
Indebtedness pursuant to Pledgor Pledge Agreements only for such total maximum
amount (if any) that would not render its obligations hereunder or under any of
the Loan Documents subject to avoidance under Section 548 of the Federal
Bankruptcy Code or any comparable provisions of any State law.

(c) In order to provide for a fair and equitable contribution among Individual
Pledgors in the event that any Pledgor Contribution is made by an Individual
Pledgor (a “Funding Pledgor”), such Funding Pledgor shall be entitled to a
reimbursement Pledgor Contribution (“Pledgor Reimbursement Contribution”) from
all other Individual Pledgor for all payments, damages and expenses incurred by
such Funding Pledgor in discharging any of the Indebtedness, in the manner and
to the extent set forth in this Section.

(d) Each Individual Pledgor shall be liable to a Funding Pledgor in an amount
equal to the greater of (i) (A) the ratio of the Pledgor Benefit Amount (as
defined below) of such Individual Pledgor to the total amount of Indebtedness,
multiplied by (B) the amount of Indebtedness paid by such Funding Pledgor, and
(ii) ninety-five percent (95%) of the excess of (A) the fair saleable value of
the Individual Pledgor Equity Collateral owned by such Individual Pledgor over
(B) the total liabilities of such Individual Pledgor (including the maximum
amount reasonably expected to become due in respect of contingent liabilities)
determined as of the date on which the payment made by a Funding Pledgor is
deemed made for purposes hereof (giving effect to all payments made by other
Funding Pledgor as of such date in a manner to maximize the amount of such
Pledgor Contributions). For purposes hereof, the “Pledgor Benefited Amount” of
any Individual Pledgor as of any date of determination shall be the net value of
the benefits to such Individual Pledgor and its Affiliates from extensions of
credit made by Lender to Borrower.

(e) If at any time there exists more than one Funding Pledgor with respect to
any Pledgor Contribution (in any such case, the “Applicable Pledgor
Contribution”), then Pledgor Reimbursement Contributions from other Individual
Pledgor shall be allocated among such Funding Pledgor in proportion to the total
amount of the Pledgor Contribution made for or on account of the other
Individual Pledgor by each such Funding Pledgor pursuant to the Applicable
Pledgor Contribution. If at any time any Individual Pledgor pays an amount
hereunder in excess of the amount calculated pursuant to this Section 13.5, such
Individual Pledgor shall be deemed to be a Funding Pledgor to the extent of such
excess and shall be entitled to a Pledgor Reimbursement Contribution from the
other Individual Pledgor in accordance with the provisions of this Section.

(f) Each Individual Pledgor acknowledges that the right to Pledgor Reimbursement
Contribution hereunder shall constitute an asset in favor of such Individual
Pledgor to which such Pledgor Reimbursement Contribution is owing.

 

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(g) No Pledgor Reimbursement Contribution payments payable by an Individual
Pledgor pursuant to the terms of this Section 13.5 shall be paid until all
amounts then due and payable by all of the Individual Pledgor to Lender,
pursuant to the terms of the Loan Documents, are paid in full. Nothing contained
in this Section 13.5 shall limit or affect the guaranty of the Indebtedness of
any Individual Pledgor to Lender under the Pledgor Pledge Agreements or any
other Loan Documents.

(h) Each Individual Pledgor waives:

(i) any right to require Lender to proceed against any other Individual Pledgor
or any other person or to proceed against or exhaust any security held by Lender
at any time or to pursue any other remedy in Lender’s power before proceeding
against such Individual Pledgor;

(ii) any defense or rights based upon or arising out of: (A) any legal
disability or other defense of any other Individual Pledgor, any guarantor of
any other person or by reason of the cessation or limitation of the liability of
any other Individual Pledgor or any guarantor from any cause other than full
payment of all sums payable under the Pledgor Pledge Agreements and the other
Loan Documents; (B) any lack of authority of the officers, directors, partners
or agents acting or purporting to act on behalf of any other Individual Pledgor
or any principal of any other Individual Pledgor or any defect in the formation
of any other Individual Pledgor or any principal of any other Individual
Pledgor; (C) any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in any other respects more
burdensome than that of a principal; (D) any failure by Lender to obtain
collateral for the Indebtedness or failure by Lender to perfect a lien on any
Individual Pledgor Equity Collateral (or any portion thereof); (E) presentment,
demand, protest and notice of any kind; (F) any failure of Lender to give notice
of sale or other disposition of any Individual Pledgor Equity Collateral (or any
portion thereof) to any other Individual Pledgor or to any other Person or any
defect in any notice that may be given in connection with any such sale or
disposition; (G) intentionally omitted; (H) any use of cash collateral under
Section 363 of the Federal Bankruptcy Code; (I) any agreement or stipulation
entered into by Lender with respect to the provision of adequate protection in
any bankruptcy proceeding; (J) any borrowing or any grant of a security interest
under Section 364 of the Federal Bankruptcy Code; (K) the avoidance of any
security interest in favor of Lender for any reason; (L) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding, including any discharge of, or bar or stay against
collecting, all or any of the obligations evidenced by the Note or owing under
the Pledgor Pledge Agreements or any of the Loan Documents; (M) such Individual
Pledgor’s, or any other party’s, resignation of the portion of any obligation
secured by the Pledgor Pledge Agreements to be satisfied by any payment from any
other Individual Pledgor or any such party; or (N) an election of remedies by
Lender even though the election of remedies, such as non - judicial foreclosure
with respect to security for the Loan or any other amounts owing under the Loan
Documents, has destroyed such Individual Pledgor’s rights of subrogation and
reimbursement against any other Individual Pledgor;

(iii) except as may be expressly and specifically permitted herein, any claim or
other right which such Individual Pledgor might now have or hereafter acquire
against any other Individual Pledgor or any other person that arises from the
existence or performance of

 

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any obligations under the Pledgor Pledge Agreements or the other Loan Documents,
including any of the following: (A) any right of subrogation, reimbursement,
exoneration, contribution, or indemnification; or (B) any right to participate
in any claim or remedy of Lender against any other Individual Pledgor or any
collateral security therefor, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law.

Section 13.6 Partial Release.

(a) Upon not less than sixty (60) days prior written notice from Borrower,
Lender shall release (a “Property Release”) an Individual Property from the Lien
of the Loan Documents (a “Released Property”), upon the satisfaction (as
determined by Lender in its discretion) of all of the following terms and
conditions:

(i) at the time of the request and the time of the proposed Property Release,
there shall exist no Event of Default, and there shall exist no condition or
state of facts which with the passage of time or the giving of notice or both,
would constitute a default under the Loan Documents;

(ii) any such request may be made no sooner than the later of (a) nine
(9) months after the Closing Date or (b) six (6) months after the completion of
the most recent Property Release or Substitution, and such written request must
be received no later than twelve (12) months prior to the Maturity Date (except
under the circumstances described in subsection (f) below with respect to the
Brighton Ski Resort);

(iii) each Released Property shall consist of an Individual Property, and each
Property Release shall involve no more than one Individual Property;

(iv) for each Released Property, Borrower shall have paid to Lender the “Release
Price”, which shall be equal to (a) one hundred ten percent (110%) of the then
unpaid principal balance of the Allocated Loan Amount applicable to the Released
Property (such amount shall herein be called the “Principal Payment Amount”)
plus (b) the applicable Prepayment Premium (based on the Principal Payment
Amount) plus (c) all accrued interest with respect to Allocated Loan Amount
applicable to the Released Property and all accrued and unpaid charges and other
amounts with respect to the Loan;

(v) the Principal Payment Amount shall be applied to pay in full the principal
balance due with respect to the Allocated Loan Amount applicable to the Released
Property, and Lender, in its discretion, shall apply the portion of the
Principal Payment Amount which is in excess of the then outstanding principal
balance of the Allocated Loan Amount applicable to the Released Property to one
of more of the other Allocated Loan Amounts applicable to the other Individual
Properties;

(vi) Lender shall have determined that following the Property Release, the Debt
Service Coverage Ratio, calculated with respect to the remaining Property
(excluding the Released Property) shall be at least equal to 2.00 to 1.00. In
the event the Debt Service Coverage Ratio of the remaining Property (excluding
the Released Property) is less than the required level, Borrower shall have the
right, subject to payment of the applicable Prepayment Premium, to pay Lender
the amount necessary to increase the Debt Service Coverage Ratio of the
remaining Property (excluding the Released Property) to the required level;

 

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(vii) Lender shall have determined that following the Property Release, the Loan
to Value Ratio, calculated with respect to the remaining Property (excluding the
Released Property), shall not exceed fifty percent (50%). In the event the Loan
to Value Ratio of the remaining Property (excluding the Released Property)
exceeds the required level, Borrower shall have the right, subject to payment of
the Prepayment Premium, to pay Lender the amount necessary to reduce the Loan to
Value Ratio of the remaining Property (excluding the Released Property) to the
required level;

(viii) at the time the Borrower makes its written request to Lender for a
Property Release, Borrower shall pay to Lender a non-refundable administrative
fee of $25,000. Such non-refundable administrative fee shall be deemed earned by
Lender upon its receipt by Lender and shall not be applied to the Principal
Payment Amount, the Prepayment Premium, or any other amount due under this
provision;

(ix) whether or not the Property Release actually closes, Borrower shall pay to
Lender all escrow, closing and recording charges and taxes including, but not
limited to, the cost of preparing and delivering releases, any re-conveyance
documentation and modifications of the Loan Documents, including legal fees and
costs, the cost of any title insurance endorsements that Lender may require, any
expenses incurred by the Lender in connection with the Property Release, and any
sums then due and payable under the Loan Documents;

(x) Lender has determined that, following the release of the Released Property,
the unpaid principal balance of the Loan shall be greater than sixty-one percent
(61%) of the original principal amount of the Loan;

(xi) In the event that Northstar is a party to a TPO Lease pertaining to an
Individual Property that is subject to a Property Release, Northstar shall be
released from liability under such TPO Lease; and

(xii) Such other terms and conditions as Lender shall reasonably require.

(b) Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, Borrower shall only have the right to a combined cumulative total
(during the entire term of the Loan) of two (2) Property Releases and
Substitutions; provided however, in the event that two (2) Individual Properties
other than the Brighton Ski Resort have been subject to a Property Release,
Borrower shall have the right to a third (3rd) Property Release for the Brighton
Ski Resort only, subject to the conditions of subsection (f) below.

(c) Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, in no event shall the Individual Property identified as “Northstar at
Tahoe” on Schedule 2 be eligible for a Property Release.

 

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(d) For each Property Release, the Release Property shall include (i) all
“Property” as defined in the applicable Mortgage encumbering the Individual
Property to be released and (ii) all “Equity Collateral” as defined in the
Pledge Agreement encumbering the Individual Pledgor Equity Collateral and the
Individual Borrower Equity Collateral relating to the Individual Property to be
released, as determined by Lender.

(e) Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, this Section 13.6 shall be personal to the Borrower, and no transferee
of Borrower shall have any rights under this Section 13.6.

(f) Borrower shall have the right to a third (3rd) Property Release for the
Brighton Ski Resort only, during the six months immediately preceding the
Maturity Date, provided that (i) the Principal Payment Amount with respect to a
Property Release of the Brighton Ski Resort during the six (6) months
immediately preceding the Maturity Date shall be equal to the greater of (a) the
Principal Payment Amount determined in accordance with Section 13.6(a)(iv)
hereof, or (b) one hundred percent (100%) of the net sales proceeds (after
payment of customary and reasonable closing costs reasonably approved by
Lender), and (ii) the Principal Payment Amount determined pursuant to the
preceding clause (i) shall be paid directly to Lender by the purchaser of the
Brighton Ski Resort or by the escrow agent for such Property Release. Except as
expressly provided in the immediately preceding sentence, any Property Release
of the Brighton Ski Resort occurring within six (6) months of the Maturity Date
shall comply with all other provisions of this Section 13.6.

(g) In the event that the Principal Payment Amount with respect to the Brighton
Ski Resort determined in accordance with the preceding Section 13.6(f) is
insufficient to (i) increase the Debt Service Coverage Ratio of the remaining
Property (excluding the Released Property) to the level required pursuant to
Section 13.6(a)(vi), and (ii) reduce the Loan to Value Ratio of the remaining
Property (excluding the Released Property) to the level required pursuant to
Section 13.6(a)(vii), then the Borrower shall pay to Lender the amounts
necessary to satisfy the requirements of Sections 13.6(a)(vi) and (vii). Without
limitation of the foregoing, in the event that Lender releases the Brighton Ski
Resort pursuant to Section 2 of that certain Subordination, Non-Disturbance,
Attornment and Estoppel Agreement of even date herewith by and among Lender,
Third Party Operator, and Brighton, Borrower covenants and agrees to satisfy and
perform the requirements of this Section 13.6.

Section 13.7 Substitution of Collateral.

(a) Upon prior written notice to Lender, Borrower shall be entitled to obtain a
release of a Mortgage on an Individual Property (an “Exiting Property”) upon
substituting therefore (a “Substitution”) another property (the “Substitute
Property”) satisfactory to Lender (in its discretion) upon satisfaction (as
determined by Lender in its discretion) of all of the following terms and
conditions:

(i) at the time of Borrower’s request for a Substitution and at the time of the
proposed Substitution, there shall exist no Event of Default, and there shall
exist no condition or state of facts, which with the passage of time or the
giving of notice, or both, would constitute a default under the Loan Documents;

 

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(ii) no Event of Default shall have occurred at any time from the Closing Date
to the date of consummation of the proposed Substitution;

(iii) a Substitution shall involve only one (1) Individual Property;

(iv) the Substitution shall be in conjunction with the sale of the Exiting
Property to a third party unrelated to the Borrower, and Lender shall not be
obligated to consummate the Substitution in the event the proposed sale of the
Exiting Property shall not actually be consummated;

(v) upon Borrower’s written request for a Substitution, Borrower shall deliver
to Lender a copy of the then current draft of the sale agreement pertaining to
the sale of the Exiting Property, and as soon as available after Borrower’s
written request for a Substitution, Borrower shall deliver to Lender a copy of
the fully executed sale agreement (along with a marked copy of such fully
executed sale agreement indicating all changes made after the draft of the sale
agreement previously delivered to Lender), but in no event shall the delivery of
such fully executed sale agreement and such marked sale agreement be later than
two (2) Business Days after Borrower’s execution of such sale agreement, and in
all events such delivery shall be made at least thirty (30) days prior to the
end of Lender’s period (as specified below) for processing such Substitution;

(vi) any written request by Borrower to Lender for a Substitution may be made no
sooner than the later of (i) nine (9) months after the Closing Date or (ii) six
(6) months after the completion of the most recent Property Release or
Substitution, and any such written request must be received no later than twelve
(12) months prior to the Maturity Date;

(vii) the proposed Substitute Property shall constitute the fee simple estate or
long term ground lease to such property, and no joint venture or partnership
interests shall be permitted;

(viii) the ownership entity and structure of the Substitute Property shall be
identical to the ownership entity and structure of the Exiting Property;

(ix) if requested by Lender, Lender shall receive a pledge of Equity Interests
in the ownership entities of the Substitute Property, such Equity Interests to
be pledged shall be determined by Lender, in Lender’s sole discretion. Such
pledge of Equity Interests shall be documented on the form of pledge agreement
delivered to Lender on the Closing Date, as may be modified in Lender’s sole and
absolute discretion;

(x) at the time of the Substitution, the Substitute Property shall not be less
than one-hundred percent (100%) occupied by third-party tenants in occupancy and
paying rent, and free rent or other rental concessions shall have been
extinguished except as may otherwise be approved in writing by Lender;

(xi) the credit of the tenants (or if a lease is guaranteed, the credit of the
guarantor so long as such lease is guaranteed pursuant to a guaranty
satisfactory to Lender) occupying the Substitute Property and the lease rollover
schedule for such tenants shall be satisfactory to Lender;

 

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(xii) Lender shall have received a physical condition report (conforming with
Lender’s then current underwriting standards) of the Substitute Property from an
engineer or architect chosen by Lender, which report shall be satisfactory in
all respects to Lender. In addition, Lender shall have received an environmental
report (conforming with Lender’s then current underwriting standards) of the
Substitute Property from an environmental consulting firm chosen by Lender,
which environmental report shall be satisfactory in all respects to Lender. The
cost of preparation of all such reports and all necessary inspections shall be
paid by Borrower;

(xiii) the Substitute Property (including, without limitation, the location, the
demographics of the market area, appearance, configuration, quality and age of
the Substitute Property) shall be satisfactory to Lender;

(xiv) the value and NOI of the Substitute Property shall equal or exceed the
then-market value and NOI of the Exiting Property, all as determined by Lender;

(xv) all conditions that Borrower was obligated to meet and satisfy under the
terms of the Original Loan Application in connection with the closing of the
Loan, or, if required by Lender, Lender’s then current closing and underwriting
requirements, shall be satisfied regarding the Substitute Property, including
without limitation, that (i) all Loan Documents shall be satisfactory to Lender,
(ii) Lender receives satisfactory legal opinions from Borrower’s counsel,
(iii) title to the Substitute Property shall be satisfactory in all respects to
Lender (including, without limitation, evidence that Lender shall have a first
and exclusive lien on the fee simple interest in the Substitute Property),
(iv) Lender shall receive a satisfactory survey and title insurance policy,
(v) Lender receives satisfactory evidence that the Substitute Property complies
with all applicable governmental requirements, (vi) Borrower’s current financial
condition shall be satisfactory, and (vii) if applicable, Borrower shall deliver
such tri-party agreements requested by Lender in connection with any USFS
permits;

(xvi) at the same time Borrower delivers its written notice to Lender requesting
a Substitution, Borrower shall pay to Lender a non-refundable administrative fee
of $50,000 (the “Substitution Administrative Fee”), and the Substitution
Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of
such fee. At the closing of the Substitution, Borrower shall pay to Lender a
non-refundable fee of 0.5% of the Allocated Loan Amount for the Exiting
Property, but Lender shall credit against such 0.5% fee (which fee shall not be
less than zero) the Substitution Administrative Fee Borrower previously paid to
Lender. Neither the Substitution Administrative Fee nor the 0.5% fee shall be
applied to the Allocated Loan Amount or the outstanding principal balance due
under the Loan;

(xvii) whether or not the Substitution actually closes, Borrower shall pay all
costs and expenses associated with the Substitution, including but not limited
to, title insurance and survey fees and expenses, recording charges and taxes,
documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’
fees and expenses for Lender’s staff attorneys and outside counsel), fees of
Lender’s architect and engineer, and fees related to any environmental report;

(xviii) Lender shall have determined after giving effect to the proposed
Substitution (excluding the Exiting Property, but including the Substitute
Property), the Loan to

 

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Value Ratio for the Property shall not exceed fifty percent (50%), and Lender
shall have determined that after giving effect to the proposed Substitution
(excluding the Exiting Property, but including the Substitute Property), the
Debt Service Coverage Ratio for the Property shall be at least 2.00 to 1.00, or
in Lender’s good faith discretion, as low as 1.80 to 1.00 depending on the
quality, size, operating history, industry reputation, purchase price or other
factors which Lender may take into account at that time;

(xix) Lender shall have determined, that following the Substitution, the
Allocated Loan Amounts of all Individual Properties that comprised part of the
Property on the Closing Date and that would remain as part of the Property,
shall be greater than 70% of the total original principal amount of the Loan;

(xx) Lender’s decision to accept or reject any proposed Substitute Property
shall be in Lender’s discretion, it being understood that, without limiting the
foregoing, under no circumstances shall the Substitute Property qualify for a
Substitution unless the value of the Substitute Property is, in Lender’s
judgment, equal to or greater than one hundred percent (100%) of the value of
the Property, as determined by Lender, and is at least equal to the Property in
each of the following respects: (a) stability of cash flow, taking into
consideration weighted average lease maturities; (b) tenant credit and quality
and diversification; (c) building quality and diversification; and (d) location
quality and diversification. Borrower acknowledges that Lender may reject a
property proposed as a Substitute Property for any reason or without giving a
reason, and Borrower assumes such risk notwithstanding that it may spend
substantial resources preparing the reports and other information required by
Lender with respect to the Substitute Property;

(xxi) Lender determines in its discretion that the Substitution would not result
in a violation of the ERISA provisions contained in Lender’s then current
underwriting guidelines, and Borrower delivers such certifications and other
documents as Lender may request in connection therewith; and

(xxii) Lender is satisfied, and Borrower shall deliver such assurances as may be
reasonably requested by Lender (including a reaffirmation certification or other
agreement) that any guaranty, indemnity or similar instrument delivered to
Lender in connection with the Loan remains in full force and effect,
notwithstanding and taking into consideration the Substitution.

(b) Lender shall have at least sixty (60) days in which to process any request
to effect a Substitution after receipt of (1) all materials and information
necessary to evaluate such request and (2) the Substitution Administrative Fee.

(c) The Substitute Property shall have the same unpaid principal balance
allocated to such Substitute Property as the then existing unpaid principal
balance allocated to the Exiting Property at the time of the closing of the
Substitution.

(d) Notwithstanding anything to the contrary in this Agreement or in any Loan
Documents, the Individual Property identified as “Northstar at Tahoe” on
Schedule 2 shall never be substituted for and shall remain a part of the
Property during the entire term of the Loan, unless Borrower substitutes a
property that is acceptable to Lender in Lender’s discretion;

 

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(e) Notwithstanding anything to the contrary in this Agreement or in any Loan
Document, Borrower shall only have the right to a combined cumulative total
(during the entire term of the Loan) of two (2) Substitutions and Property
Releases.

(f) For each Substitution, the Exiting Property shall include (i) all “Property”
as defined in the applicable Mortgage encumbering the Individual Property to be
Substituted and (ii) all “Equity Collateral” as defined in the Pledge Agreement
encumbering the Individual Pledgor Equity Collateral and the Individual Borrower
Equity Collateral relating to the Individual Property to be released, as
determined by Lender.

(g) Notwithstanding anything to the contrary in this Agreement or in any Loan
Document, this Section 13.7 shall be personal to the original Borrower under the
Loan, and no transferee shall have any rights under this Section 13.7.

Section 13.8 Ground Leases.

(a) Each of Borrower and Pledgor hereby covenants, represents and warrants to
Lender with respect to each Ground Lease as follows:

(i) There is and has been no default in the performance of the Ground Lease by
Borrower or landlord under the Ground Lease, nor has any event occurred or
condition arisen to the best knowledge of Borrower and Pledgor which, with the
passage of time, or the giving of notice, or both, would constitute a default
under or a breach of the Ground Lease by the Borrower or landlord under the
Ground Lease. Borrower is in quiet possession of the property demised under the
Ground Lease (provided however, Lender acknowledges that, as of the Closing
Date, Borrower does not maintain actual possession of the property demised under
the Ground Lease and that actual possession is maintained by the Third Party
Operator pursuant to the TPO Lease).

(ii) All rents, additional rents, percentage rents and all other charges due and
payable under the Ground Lease have been fully paid to the extent same were
payable prior to the date hereof.

(iii) Except as otherwise previously disclosed in writing by Borrower or Pledgor
to Lender, the Ground Lease covers one hundred percent (100%) of the leasehold
interest in and to the real property demised thereby, and Borrower is the owner
of the entire tenant’s interest in, to and under the Ground Lease and has the
right and authority under such Ground Lease to execute the Loan Documents and to
encumber Borrower’s interest therein.

(iv) Borrower shall, at its sole cost and expense, promptly and timely perform
and observe all the terms, covenants and conditions required to be performed and
observed by Borrower as tenant under the Ground Lease (including, but not
limited to, the payment of all rent, additional rent, percentage rent and other
charges required to be paid under the Ground Lease).

 

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(v) If Borrower shall violate any of the covenants specified in (iv) above,
Borrower grants to Lender the right (but not the obligation), without notice to
Borrower or Pledgor, to take any action as may be necessary to prevent or cure
any default of Borrower under the Ground Lease, if necessary to protect Lender’s
interest hereunder, and Lender shall have the right to enter all or any portion
of the Property at such times and in such manner as Lender deems necessary, in
order to prevent or to cure any such default.

(vi) The curing by Lender of any default by Borrower under the Ground Lease
shall not remove or waive, as between Borrower or Pledgor and Lender, the
default that occurred hereunder by virtue of the default by Borrower under the
Ground Lease. All sums expended by Lender in order to cure any such default
shall be paid by Borrower to Lender, upon demand, with interest thereon at the
Default Rate unless prohibited by applicable law. All such amounts shall be
added to the Indebtedness. No action or payment taken or made by Lender to
prevent or cure a default by Borrower under the Ground Lease shall waive or cure
the corresponding default by Borrower or Pledgor under the Loan Documents.

(vii) Borrower or Pledgor shall notify Lender promptly in writing of (a) the
occurrence of any material default by the landlord under the Ground Lease or the
occurrence of any event which, with the passage of time or service of notice, or
both, would constitute a material default by the landlord under the Ground
Lease, and/or (b) of the receipt by Borrower or Pledgor of any notice (written
or otherwise) from the landlord under the Ground Lease noting or claiming the
occurrence of any default by Borrower under the Ground Lease or the occurrence
of any event which, with the passage of time or service of notice, or both,
would constitute a default by Borrower under the Ground Lease.

(viii) Promptly upon demand by Lender from time to time, Borrower or Pledgor
shall use reasonable efforts (other than payment to the landlord under the
Ground Lease) to obtain from the landlord under the Ground Lease and furnish to
Lender the estoppel certificate of the landlord under the Ground Lease stating
the date through which rent has been paid and whether or not there are any
defaults under the Ground Lease and specifying the nature of such claimed
defaults, if any.

(ix) Borrower or Pledgor shall promptly notify Lender, in writing, of any
request made by either party to the Ground Lease for arbitration or appraisal
proceedings pursuant to the Ground Lease, and of the institution of any
arbitration or appraisal proceedings, as well as of all proceedings thereunder,
and shall promptly deliver to Lender a copy of the determination of the
arbitrators or appraisers in each such arbitration or appraisal proceeding.
Lender shall have the right (but not the obligation), following the delivery of
written notice of Borrower or Pledgor, to participate in the appointment of any
arbitrator or appraiser to be appointed by Borrower and to participate in such
arbitration or appraisal proceedings in association with Borrower or on its own
behalf as an interested party. Borrower or Pledgor shall promptly notify Lender,
in writing, of the institution of any legal proceedings involving obligations
under the Ground Lease. Lender may intervene in any such legal proceedings and
be made a party to them. Borrower or Pledgor shall promptly provide Lender with
a copy of any decisions rendered in connection with such proceedings.

 

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(x) Borrower shall promptly execute, acknowledge and deliver to Lender such
instruments as may be reasonably required to permit Lender to cure any default
under the Ground Lease or permit Lender to take such other action as may be
necessary to cure or remedy the matter in default and preserve the security
interest of Lender under the Loan Documents. Borrower hereby irrevocably
appoints Lender as its true and lawful attorney-in-fact to do, in its name or
otherwise, any and all acts and to execute any and all documents which are
necessary to preserve any rights of Borrower under or with respect to the Ground
Lease, including, without limitation, the right to effectuate any extension or
renewal of the Ground Lease, or to preserve any rights of Borrower whatsoever in
respect of any part of the Ground Lease (and the above powers granted to Lender
are coupled with an interest and shall be irrevocable).

(xi) Borrower shall not, without Lender’s prior written consent, surrender,
terminate, forfeit, or suffer or permit, by acquiescence or otherwise, the
surrender, termination or forfeiture of, or change, modify or amend, the Ground
Lease. Consent to one amendment, change, agreement or modification shall not be
deemed to be a waiver of the right to require consent to other, future or
successive amendments, changes, agreements or modifications.

(xii) Any acquisition of the landlord’s interest in the Ground Lease by Borrower
or any affiliate of Borrower shall be accomplished by Borrower in such a manner
as will avoid a merger of the interests of the landlord and tenant under the
Ground Lease. In the event both the landlord’s and tenant’s estate under the
Ground Lease or any portion thereof shall at any time become vested in one
owner, the Mortgage and the lien created thereby shall not be destroyed or
terminated by application of the doctrine of merger unless Lender so elects as
evidenced by recording a written declaration so stating and, unless and until
Lender so elects, Lender shall continue to have and enjoy all of the rights and
privileges of lender and mortgagee as to the separate estates. In addition, upon
the foreclosure of the lien created by the Mortgage, any leases or subleases
then existing and affecting all or any portion of the Property shall not be
destroyed or terminated by application of the law of merger or as a matter of
law or as a result of such foreclosure unless Lender or any purchaser at such
foreclosure shall so elect. No act by or on behalf of Lender or any such
purchaser shall constitute a termination of any lease or sublease unless Lender
or such purchaser shall give written notice thereof to such tenant or subtenant.
If Borrower shall acquire fee title to the real property subject to the Ground
Lease, the Mortgage shall automatically be a lien on the fee title.

(xiii) Notwithstanding anything to the contrary herein contained with respect to
the Ground Lease:

(1) The Lien created by the Loan Documents attaches to all of Borrower’s rights
and remedies at any time arising under or pursuant to subsection 365(h) of the
Bankruptcy Code, including, without limitation, all of Borrower’s rights to
remain in possession of the Property.

(2) Borrower shall not, without Lender’s written consent, elect to treat the
Ground Lease as terminated under subsection 365(h)(1) of the Bankruptcy Code.
Any such election made without Lender’s prior written consent shall be void.

 

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(3) Borrower shall object promptly and as and when required under the Bankruptcy
Code in order to prevent a sale of all or a portion of the real property
underlying the Property free and clear of the Ground Lease under subsection
363(f) of the Bankruptcy Code. Lender shall have the right to act on Borrower’s
behalf in connection with any such attempted sale.

(4) Borrower shall affirmatively assert and pursue its right to adequate
protection under subsection 363(e) of the Bankruptcy Code in the event of any
sale of all or a portion of the real property underlying the Property under
subsection 363(f) of the Bankruptcy Code. Lender shall have the right to act on
Borrower’s behalf in connection with the assertion of any such rights of
adequate protection.

(5) As security for the Indebtedness, Borrower hereby unconditionally assigns,
transfers and sets over to Lender all of Borrower’s claims and rights to the
payment of damages arising under any claim or cause of action under the
Bankruptcy Code. Lender and Borrower shall proceed jointly or in the name of
Borrower in respect of any claim, suit, action or proceeding relating to the
rejection or other termination of the Ground Lease, including, without
limitation, the right to file and prosecute any proofs of claim, complaints,
motions, applications, notices and other documents in any case in respect of
such landlord under the Bankruptcy Code. Lender shall have the right to file all
pleadings, claims, notices, proofs, objections, acceptances, and rejections on
behalf of Borrower and Borrower shall not take any action in contravention of
any such filings or contest any of Lender’s actions or filings in connection
with any and all claims relating to a filing by the lessor under the Ground
Lease under the Bankruptcy Code. Without limiting the foregoing, Borrower hereby
authorizes Lender, and assigns Borrower’s rights, to vote or consent in any
proceedings concerning the Ground Lease under the Bankruptcy Code. This
assignment constitutes a present, irrevocable and unconditional assignment of
the foregoing claims, rights and remedies, and shall continue in effect until
all of the Indebtedness secured by the Loan Documents shall have been satisfied
and discharged in full. Any amounts received by Lender or Borrower as damages
arising under the Bankruptcy Code as aforesaid shall be applied first to all
costs and expenses of Lender (including, without limitation, attorneys’ fees and
costs) incurred in connection with the exercise of any of its rights or remedies
under this Section 13.8 and then in accordance with the other applicable
provisions of the Mortgage.

(6) If, pursuant to subsection 365(h)(2) of the Bankruptcy Code, Borrower seeks
to offset, against the rent reserved in the Ground Lease, the amount of any
damages caused by the nonperformance by the landlord thereunder of any of such
landlord’s obligations under the Ground Lease after the rejection by the
landlord under the Ground Lease under the Bankruptcy Code, Borrower shall, prior
to effecting such offset, notify Lender in writing of its intent so to do,
setting forth the amounts proposed to be so offset, and, in the event Lender
objects, Borrower shall not effect any offset of the amounts so objected to by
Lender.

(7) If any action, proceeding, motion or notice shall be commenced or filed in
respect of any landlord under the Ground Lease or the real property demised by
the Ground Lease or any portion thereof in connection with any case under the
Bankruptcy Code, Lender and Borrower shall cooperatively conduct and control any
such litigation with counsel agreed upon between Borrower and Lender in
connection therewith.

 

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Borrower shall, upon demand, pay to Lender all costs and expenses (including
reasonable attorneys’ fees and costs) paid or incurred by Lender in connection
with the cooperative prosecution or conduct of any such proceedings. All such
costs and expenses shall be secured by the Lien created by the Loan Documents.

(8) Borrower shall promptly, after obtaining knowledge thereof, notify Lender
orally of any filing by or against the landlord under the Ground Lease of a
petition under the Bankruptcy Code. Borrower shall thereafter promptly give
written notice of such filing to Lender, setting forth any information available
to Borrower, including, without limitation, the date of such filing, the court
in which such petition was filed, and the relief sought therein. Borrower shall
promptly deliver to Lender, following its receipt thereof, any and all notices,
summonses, pleadings, applications and other documents received by Borrower in
connection with any such petition and any proceedings relating thereto.

(xiv) To the extent permitted by law, the price payable by Borrower or any other
party in the exercise of the right of redemption, if any, from any sale under or
decree of foreclosure of the Mortgage shall include all rents and other amounts
paid and other sums advanced by Lender on behalf of Borrower as the tenant under
the Ground Lease.

(xv) Borrower hereby grants and assigns to Lender a security interest in all
prepaid rent and security deposits and all other security that the landlord
under the Ground Lease may hold now or later for the performance of Borrower’s
obligations as the tenant under the Ground Lease.

(xvi) Borrower shall not, without Lender’s written consent, fail to exercise any
option or right to renew or extend the term of the Ground Lease at least six
(6) months prior to the date of termination of any such option or right, shall
give immediate written notice thereof to Lender, and shall execute, acknowledge,
deliver and record any document requested by Lender to evidence the Lien created
by the Loan Documents on such extended or renewed lease term; provided, however,
that Borrower shall not be required to exercise any particular such option or
right to renew or extend to the extent Borrower shall have received the prior
written consent of Lender (which consent may be withheld by Lender in its
discretion) allowing Borrower to forego exercising such option or right to renew
or extend. If Borrower shall fail to exercise any such option or right as
aforesaid, Lender may exercise the option or right as Borrower’s agent and
attorney-in-fact pursuant to subsection (x) above, or in Lender’s own name or in
the name of and on behalf of a nominee of Lender, as Lender may determine in the
exercise of its discretion.

(xvii) Borrower shall notify Lender in writing prior to exercising any option or
right to acquire fee title to the real property subject to the Ground Lease. In
the event such right is exercisable by Borrower, Borrower shall give immediate
written notice thereof to Lender. Upon Borrower’s exercise of such right,
Borrower shall (a) execute an amendment to the Mortgage in recordable form and
such other Loan Documents as Lender may require, which amendments shall spread
the lien of the Mortgage to encumber the real property acquired pursuant to
Borrower’s exercise of such option or right, (ii) deliver to Lender such title
insurance endorsements as Lender may reasonably require, reflecting the addition
of the real property to the Property, and (iii) pay all costs and expenses
associated with the foregoing.

 

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(xviii) All subleases entered into by Borrower (and all existing subleases
modified or amended by Borrower) shall provide that such subleases are
subordinate to the Lien created by the Loan Documents and any extensions,
replacements and modifications of the Loan Documents and the Indebtedness and
that if Lender forecloses under the Mortgage or enters into a new lease with any
landlord under the Ground Lease, then the sublessee shall attorn to Lender or
its assignee and the sublease will remain in full force and effect in accordance
with its terms notwithstanding the termination of the Ground Lease.

(xix) The Ground Lease has not been amended, modified, extended, renewed,
substituted or assigned and Borrower has delivered to Lender true, accurate and
complete copies thereof. Upon the request of Lender, Borrower shall deposit with
Lender the original fully executed Ground Lease (or a certified copy if original
is no longer available), as further security to the Lender, until all of the
Indebtedness is fully paid and performed. Borrower hereby represents that the
Ground Lease or a legally valid memorandum thereof has been properly filed or
recorded in the city, town, county or parish records (as appropriate) in which
the real property covered thereby is located and that the filing and recording
data for the same shall be accurately set forth in the Mortgage.

(xx) Borrower shall not waive, excuse, condone or in any way release or
discharge the landlord under the Ground Lease from such landlord’s obligations
and/or covenants under the Ground Lease, or any other conditions under the
Ground Lease, without the prior written consent of Lender.

(xxi) The generality of the provisions of this Section relating to the Ground
Lease shall not be limited by other provisions of the Loan Documents setting
forth particular obligations of Borrower which are also required of Borrower
with respect to the Ground Lease or the real property which is the subject
thereof.

(xxii) Each of Lender’s rights contained in this Section 13.8 shall be without
limitation of any other rights granted to Lender pursuant to the provisions of
the Loan Documents.

Section 13.9 Forest Service Permits.

(a) Each of Borrower and Pledgor hereby covenants, represents and warrants to
Lender with respect to each Forest Service Permit as follows:

(i) Borrower has obtained (in its own name) all permits issued by the USFS
necessary to use, operate and manage the Property (including the Forest Service
Land), and all the Forest Service Permits are in full force and effect. There
exists no permit issued by the USFS in the name of the Borrower or Pledgor other
than those set forth on Schedule 5 attached hereto. There is and has been no
default in the performance of the Forest Service Permits by Borrower or the
USFS, nor has any event occurred or condition arisen to the best knowledge of
Borrower and Pledgor which, with the passage of time, or the giving of notice,
or both, would constitute a default under or a breach of the Forest Service
Permits by the Borrower or USFS.

 

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(ii) All rents, additional rents, percentage rents and all other charges due and
payable under the Forest Service Permits have been fully paid to the extent same
were payable prior to the date hereof.

(iii) Borrower is the sole holder of the entire interest in, to and under the
Forest Service Permits. No Person, other than Borrower, the Third Party
Operators and parties set forth on the rent roll attached hereto as Exhibit E
(subject to the terms and conditions of their respective leases) has any rights
to use and/or operate the real property described in the legal description and
map attached to the Forest Service Permits.

(iv) Borrower shall, at its sole cost and expense, promptly and timely perform
and observe all the terms, covenants and conditions required to be performed and
observed by Borrower as under the Forest Service Permits (including, but not
limited to, the payment of all rent, additional rent, percentage rent and other
charges required to be paid under the Forest Service Permits).

(v) If Borrower shall violate any of the covenants specified in (iv) above,
Borrower grants to Lender the right (but not the obligation), without notice to
Borrower or Pledgor, to take any action as may be necessary to prevent or cure
any default of Borrower under any Forest Service Permit, if necessary to protect
Lender’s interest hereunder, and Lender shall have the right to enter all or any
portion of the Property at such times and in such manner as Lender deems
necessary, in order to prevent or to cure any such default.

(vi) The curing by Lender of any default by Borrower under any Forest Service
Permit shall not remove or waive, as between Borrower or Pledgor and Lender, the
default that occurred hereunder by virtue of the default by Borrower under the
Forest Service Permit. All sums expended by Lender in order to cure any such
default shall be paid by Borrower to Lender, upon demand, with interest thereon
at the Default Rate unless prohibited by applicable law. All such amounts shall
be added to the Indebtedness. No action or payment taken or made by Lender to
prevent or cure a default by Borrower under any Forest Service Permit shall
waive or cure the corresponding default by Borrower or Pledgor under the Loan
Documents.

(vii) Borrower or Pledgor shall notify Lender promptly in writing of (a) the
occurrence of any material default by the USFS or the occurrence of any event
which, with the passage of time or service of notice, or both, would constitute
a material default by the USFS, and/or (b) of the receipt by Borrower or Pledgor
of any notice (written or otherwise) from the USFS noting or claiming the
occurrence of any default by Borrower under any Forest Service Permit or the
occurrence of any event which, with the passage of time or service of notice, or
both, would constitute a default by Borrower under any Forest Service Permit.

(viii) Promptly upon demand by Lender from time to time, Borrower or Pledgor
shall use reasonable efforts (other than payment to the USFS) to obtain from the
USFS and furnish to Lender the estoppel certificate of the USFS stating the date
through which rent has been paid and whether or not there are any defaults under
the Forest Service Permits and specifying the nature of such claimed defaults,
if any.

 

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(ix) Borrower shall promptly execute, acknowledge and deliver to Lender such
instruments as may be reasonably required to permit Lender to cure any default
under the Forest Service Permits or permit Lender to take such other action as
may be necessary to cure or remedy the matter in default and preserve the
security interest of Lender under the Loan Documents. Borrower hereby
irrevocably appoints Lender as its true and lawful attorney-in-fact to do, in
its name or otherwise, any and all acts and to execute any and all documents
which are necessary to preserve any rights of Borrower under or with respect to
the Forest Service Permits, including, without limitation, the right to
effectuate any extension or renewal of any Forest Service Permit, or to preserve
any rights of Borrower whatsoever in respect of any part of any Forest Service
Permit (and the above powers granted to Lender are coupled with an interest and
shall be irrevocable).

(x) Borrower shall not, without Lender’s prior written consent, surrender,
terminate, forfeit, or suffer or permit, by acquiescence or otherwise, the
surrender, termination or forfeiture of, or change, modify or amend, any Forest
Service Permit. Consent to one amendment, change, agreement or modification
shall not be deemed to be a waiver of the right to require consent to other,
future or successive amendments, changes, agreements or modifications.

(xi) Notwithstanding anything to the contrary herein contained with respect to
the Forest Service Permits:

(1) If and to the extent allowed under the terms of the Forest Service Permit,
the Lien created by the Loan Documents will attach to all of Borrower’s rights
and remedies at any time arising under or pursuant to subsection 365(h) of the
Bankruptcy Code, including, without limitation, all of Borrower’s rights to
remain in possession of the Property.

(2) Borrower shall not, without Lender’s written consent, elect to treat the
Forest Service Permit as terminated under subsection 365(h)(1) of the Bankruptcy
Code. Any such election made without Lender’s prior written consent shall be
void.

(3) Borrower shall object promptly and as and when required under the Bankruptcy
Code in order to prevent a sale of all or a portion of the real property
underlying the Property free and clear of the Forest Service Permit under
subsection 363(f) of the Bankruptcy Code. Lender shall have the right to act on
Borrower’s behalf in connection with any such attempted sale.

(4) Borrower shall affirmatively assert and pursue its right to adequate
protection under subsection 363(e) of the Bankruptcy Code in the event of any
sale of all or a portion of the real property underlying the Property under
subsection 363(f) of the Bankruptcy Code. Lender shall have the right to act on
Borrower’s behalf in connection with the assertion of any such rights of
adequate protection.

(xii) To the extent permitted by law, the price payable by Borrower or any other
party in the exercise of the right of redemption, if any, from any sale under or
decree of foreclosure of the Mortgage shall include all rents and other amounts
paid and other sums advanced by Lender on behalf of Borrower as holder of the
Forest Service Permit.

 

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(xiii) Subject to the rights of the USFS therein, Borrower hereby grants and
assigns to Lender a security interest in all prepaid rent and security deposits
and all other security that the USFS may hold now or later for the performance
of Borrower’s obligations as holder of the Forest Service Permits.

(xiv) Borrower shall not, without Lender’s written consent, exercise any option
or right to acquire fee title to the Forest Service Land. In the event such
right is exercisable by Borrower, Borrower shall give immediate written notice
thereof to Lender. Upon Borrower’s exercise of such right, Borrower shall
(a) execute an amendment to the Mortgage in recordable form and such other Loan
Documents as Lender may require, which amendments shall spread the lien of the
Mortgage to encumber the real property acquired pursuant to Borrower’s exercise
of such option or right, (ii) deliver to Lender such title insurance
endorsements as Lender may reasonably require, reflecting the addition of the
real property to the Property, and (iii) pay all costs and expenses associated
with the foregoing.

(xv) All permits and concessions entered into by Borrower (and all existing
permits and concessions modified or amended by Borrower) which grant any rights
relating to the Forest Service Land shall provide that such permits and
concessions are subordinate to the Lien created by the Loan Documents and any
extensions, replacements and modifications of the Loan Documents and the
Indebtedness and that if Lender forecloses under the Mortgage and enters into a
new permit with the USFS, then the permit and concession holders shall attorn to
Lender or its assignee and the permit or concession will remain in full force
and effect in accordance with its terms notwithstanding the termination of the
Forest Service Permit.

(xvi) No Forest Service Permit has been amended, modified, extended, renewed,
substituted or assigned and Borrower has delivered to Lender true, accurate and
complete copies thereof.

(xvii) Borrower shall not waive, excuse, condone or in any way release or
discharge the USFS from USFS’s obligations and/or covenants under the Forest
Service Permits, or any other conditions under the Forest Service Permits,
without the prior written consent of Lender.

(xviii) Borrower and Pledgor shall do or cause to be done all things necessary
to preserve, renew and keep in full force and effect the Forest Service Permits.

(xix) The generality of the provisions of this Section relating to the Forest
Service Permits shall not be limited by other provisions of the Loan Documents
setting forth particular obligations of Borrower which are also required of
Borrower with respect to the Forest Service Permits or the real property which
is the subject thereof.

(xx) Each of Lender’s rights contained in this Section 13.9 shall be without
limitation of any other rights granted to Lender pursuant to the provisions of
the Loan Documents.

 

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ARTICLE 14

DUE ON SALE AND APPLICATION OF PROCEEDS

Section 14.1 Parent Debt Documents. The Parent Debt Documents shall permit, that
upon a sale of a respective Individual Property (not including, however, the
Stevens Pass Resort, as described on Schedule 2 hereof, which is not included in
the Parent Debt Documents), the proceeds of such sale (the “Sale Proceeds”) may
first be used to pay the applicable Release Price plus any additional required
payments under the Loan Documents, including the Prepayment Premium, and other
charges due under the Loan Documents in connection therewith (collectively, the
“Loan Paydown”), before being available for application to the Parent Debt and
Related Guarantees. Borrower hereby agrees to apply all Sale Proceeds first to
the Loan Paydown, before using the Sale Proceeds for application to the Parent
Debt and Related Guarantees.

[Signatures on the following pages]

 

103

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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.

 

LENDER: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
By:  

/s/ Paul Geyer

Name:   Paul Geyer Title:   Vicer President

[Signatures continued on following pages]

--------------------------------------------------------------------------------

BORROWER:

CLP NORTHSTAR, LLC,

a Delaware limited liability company

   

CLP NORTHSTAR TRS CORP.,

a Delaware corporation

By:  

/s/ Joshua J. Taube

    By:  

/s/ Joshua J. Taube

Name:   Joshua J. Taube     Name:   Joshua J. Taube Title:   Vice President    
Title:   Vice President

Organizational Identification Number: 4212330

    Organizational Identification Number: 4226475

CLP SNOQUALMIE, LLC,

a Delaware limited liability company

    CLP SNOQUALMIE TRS CORP., a Delaware corporation By:  

/s/ Joshua J. Taube

    By:  

/s/ Joshua J. Taube

Name:   Joshua J. Taube     Name:   Joshua J. Taube Title:  

Vice President

    Title:   Vice President

Organizational Identification Number: 4212331

    Organizational Identification Number: 4226479

CLP SIERRA, LLC,

a Delaware limited liability company

   

CLP SIERRA TRS CORP.,

a Delaware corporation

By:  

/s/ Joshua J. Taube

    By:  

/s/ Joshua J. Taube

Name:   Joshua J. Taube     Name:   Joshua J. Taube Title:   Vice President    
Title:   Vice President Organizational Identification Number: 4212332    
Organizational Identification Number: 4226480

CLP LOON MOUNTAIN, LLC,

a Delaware limited liability company

    CLP LOON MOUNTAIN TRS CORP., a Delaware corporation By:  

/s/ Joshua J. Taube

    By:  

/s/ Joshua J. Taube

Name:   Joshua J. Taube     Name:   Joshua J. Taube Title:   Vice President    
Title:   Vice President Organizational Identification Number: 4212333    
Organizational Identification Number: 4226486 CLP BRIGHTON, LLC, a Delaware
limited liability company     CLP BRIGHTON TRS CORP., a Delaware corporation By:
 

/s/ Joshua J. Taube

    By:  

/s/ Joshua J. Taube

Name:   Joshua J. Taube     Name:   Joshua J. Taube Title:   Vice President    
Title:   Vice President Organizational Identification Number: 4229446    
Organizational Identification Number: 4229454 CLP STEVENS PASS, LLC, a Delaware
limited liability company     CLP STEVENS PASS TRS CORP., a Delaware corporation
By:  

/s/ Joshua J. Taube

    By:  

/s/ Joshua J. Taube

Name:   Joshua J. Taube     Name:   Joshua J. Taube Title:   Vice President    
Title:   Vice President Organizational Identification Number: 5053428    
Organizational Identification Number: 5053430

--------------------------------------------------------------------------------

PLEDGOR:     GUARANTOR:

CLP SKI II, LLC,

a Delaware limited liability company

   

CNL LIFESTYLE PROPERTIES, INC.,

a Maryland corporation

By:  

/s/ Joshua J. Taube

    By:  

/s/ Joshua J. Taube

Name:   Joshua J. Taube     Name:   Joshua J. Taube Title:   Vice President    
Title:   Vice President Organizational Identification Number: 4212329    
Organizational Identification Number: D07526049

CLP SKI III, LLC,

a Delaware limited liability company

      By:  

/s/ Joshua J. Taube

      Name:   Joshua J. Taube       Title:   Vice President       Organizational
Identification Number: 4229441      

CLP SKI IV, LLC,

a Delaware limited liability company

      By:  

/s/ Joshua J. Taube

      Name:   Joshua J. Taube       Title:   Vice President       Organizational
Identification Number: 4353083      

CLP SKI HOLDING, LLC,

a Delaware limited liability company

      By:  

/s/ Joshua J. Taube

      Name:   Joshua J. Taube       Title:   Vice President       Organizational
Identification Number: 4165187       CLP NORTHSTAR TRS PARENT, INC., a Delaware
corporation       By:  

/s/ Joshua J. Taube

      Name:   Joshua J. Taube       Title:   Vice President       Organizational
Identification Number: 4320917      

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SCHEDULE A

Description of the Mortgages

[Intentionally Omitted]

SCHEDULE 1A

Original Loan Documents

[Intentionally Omitted]

SCHEDULE 1B

Certain New Loan Documents

[Intentionally Omitted]

SCHEDULE 2

Individual Properties For Original Loan:

And

Individual Property For New Loan:

[Intentionally Omitted]

SCHEDULE 3

Individual Borrower Equity Collateral

[Intentionally Omitted]

--------------------------------------------------------------------------------

SCHEDULE 4

Individual Pledgor Equity Collateral

[Intentionally Omitted]

SCHEDULE 4.4

Litigation

[Intentionally Omitted]

SCHEDULE 4.6

Compliance

[Intentionally Omitted]

SCHEDULE 4.13

Separate Tax Lot

[Intentionally Omitted]

SCHEDULE 4.18

Interests that are not Subordinate to the Loan Documents

[Intentionally Omitted]

--------------------------------------------------------------------------------

SCHEDULE 4.18(d)

Possessory Interest(s) in Property

[Intentionally Omitted]

SCHEDULE 4.22

Property Management

[Intentionally Omitted]

SCHEDULE 4.28A

Bills of Sale - Original Borrower

[Intentionally Omitted]

SCHEDULE 4.28B

Bills of Sale – Stevens Pass

[Intentionally Omitted]

SCHEDULE 4.30(h)

Booth Creek APA Purchase Options

[Intentionally Omitted]

--------------------------------------------------------------------------------

SCHEDULE 4.31(e)

Brighton APA Purchase Options

[Intentionally Omitted]

SCHEDULE 5

Forest Service Permits

[Intentionally Omitted]

SCHEDULE 5.16

Debt Service Deposit

[Intentionally Omitted]

SCHEDULE 5.2

Third Party Operator Work

[Intentionally Omitted]

SCHEDULE 6

Material Agreements

[Intentionally Omitted]

--------------------------------------------------------------------------------

SCHEDULE 6.1

Permitted Transfers

[Intentionally Omitted]

SCHEDULE 7

Acquisition Documentation

[Intentionally Omitted]

EXHIBIT A

Organizational Chart of Borrower

[Intentionally Omitted]

EXHIBIT B

[Intentionally Omitted]

EXHIBIT C

Definition of Single-Purpose Entity

[Intentionally Omitted]

--------------------------------------------------------------------------------

EXHIBIT D

Additional Representations, Covenants, Negative Covenants and

Events of Default Relating to each Individual Property

1. Northstar at Tahoe:

a. Representations and Warranties. Each of Borrower and Pledgor represents and
warrants to Lender as of the Closing Date as follows:

i. Reconveyance Obligations. CLP Northstar is the beneficiary of the ESP
Reconveyance Obligation and the Unit 7A Reconveyance Obligation (as such terms
are defined in the Essential Ski Property Deed of Trust), and such obligations
have not been previously assigned or otherwise encumbered.

ii. Essential Ski Property Deed of Trust. Borrower and/or Pledgor have not
previously granted any security interest in, or collateral assignment of, the
Essential Ski Property Deed of Trust.

iii. Northstar Capex Funding Obligation. (A) Pursuant to the Northstar Letter
Agreement, Borrower is obligated to fund certain capital expenditures, and
(B) pursuant to the Northstar Real Property Lease, CLP Northstar is obligated to
fund certain other capital expenditures, with such modifications thereto as
Borrower and the Third Party Operator may agree upon as to timing, budget and
the details of the specific capital expenditures with contemporaneous notice to
Lender of any such modifications (collectively, the “Northstar Capex Funding
Obligation”).

b. Covenants. Each of Borrower and Pledgor covenant and agree that, from the
Closing Date and until payment in full of the Indebtedness;

i. Northstar Capex Funding Obligation. Borrower and/or Pledgor shall fund the
Northstar Capex Funding Obligation in accordance with the provisions of the
Northstar Letter Agreement and the Northstar Real Property Lease, with such
modifications thereto as Borrower and the Third Party Operator may agree upon as
to timing, budget and the details of the specific capital expenditures with
contemporaneous notice to Lender of any such modifications.

ii. Letter Agreement. In the event Borrower receives a collateral assignment of
the construction contracts, plans and specifications as provided in the Letter
Agreement, Borrower or Pledgor shall notify Lender of such collateral assignment
and shall further collaterally assign such construction contracts, plans and
specifications to Lender as further security for the Indebtedness and shall
execute such documents and agreements evidencing such collateral assignment to
Lender as Lender may reasonably require. Borrower shall pay all costs and
expenses associated with the foregoing.

iii. Employee Housing Agreement. In the event Borrower receives a promissory
note as consideration for any property to be conveyed by Borrower pursuant to
the Employee Housing Agreement, Borrower shall collaterally assign such
promissory note to

 

D-1

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Lender as further security for the Indebtedness and shall execute such documents
and agreements evidencing such collateral assignment to Lender as Lender may
reasonably require. Borrower shall pay all costs and expenses associated with
the foregoing.

iv. Essential Ski Property Deed of Trust. In the event that Borrower shall
acquire fee title to the Essential Ski Property (as such term is defined in the
Essential Ski Property Deed of Trust), Borrower shall (i) execute an amendment
to the Mortgage in recordable form and such other Loan Documents as Lender may
require, which amendments shall spread the lien of the Mortgage to encumber the
Essential Ski Property, (ii) deliver to Lender such title insurance endorsements
as Lender may reasonably require, reflecting the addition of the Essential Ski
Property to the Property, and (iii) pay all costs and expenses associated with
the foregoing.

2. Summit at Snoqualmie:

a. Representations, Warranties and Covenants Regarding the Snoqualmie Licenses.
Each of Borrower and Pledgor hereby covenants, represents and warrants to Lender
with respect to each Snoqualmie License as follows:

i. There is and has been no default in the performance of the Snoqualmie License
by Borrower or, to the knowledge of Borrower and/or Pledgor, the licensor under
the Snoqualmie License, nor has any event occurred or condition arisen to the
best knowledge of Borrower and Pledgor which, with the passage of time, or the
giving of notice, or both, would constitute a default under or a breach of the
Snoqualmie License by the Borrower or the licensor under the Snoqualmie License.

ii. All rents, additional rents, percentage rents and all other charges due and
payable under the Snoqualmie License have been fully paid to the extent same
were payable prior to the date hereof.

iii. The Snoqualmie License covers one hundred percent (WO%) of the licensed
interest in and to the real property demised therein, and Borrower is the owner
of the entire licensee interest in, to and under the Snoqualmie License and has
the right and authority under such Snoqualmie License to execute the Loan
Documents and to encumber Borrower’s interest therein, subject to Borrower
obtaining the consent of the Plum Creek licensor.

iv. Borrower shall, at its sole cost and expense, promptly and timely perform
and observe, or enforce the obligation of TPO Snoqualmie to perform, all the
terms, covenants and conditions required to be performed and observed by
Borrower as licensee under the Snoqualmie License (including, but not limited
to, the payment of all rent, additional rent, percentage rent and other charges
required to be paid under the Snoqualmie License).

v. If Borrower shall violate any of the covenants specified in (iv) above,
Borrower grants to Lender the right (but not the obligation), with reasonable
notice to Borrower or Pledgor, in the case of an emergency, to take any action
as may be necessary to prevent or cure any default of Borrower under the
Snoqualmie License, if necessary to protect Lender’s interest hereunder, and,
subject to the rights of TPO Snoqualmie, Lender shall have the right to enter
all or any portion of the Property at such times and in such manner as Lender
deems necessary, in order to prevent or to cure any such default.

 

D-2

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vi. The curing by Lender of any default by Borrower under the Snoqualmie License
shall not remove or waive, as between Borrower or Pledgor and Lender, the
default that occurred hereunder by virtue of the default by Borrower under the
Snoqualmie License. All sums expended by Lender in order to cure any such
default shall be paid by Borrower to Lender, upon demand, with interest thereon
at the Default Rate unless prohibited by applicable law. All such amounts shall
be added to the Indebtedness. No action or payment taken or made by Lender to
prevent or cure a default by Borrower under the Snoqualmie License shall waive
or cure the corresponding default by Borrower or Pledgor under the Loan
Documents.

vii. Borrower or Pledgor shall notify Lender promptly in writing of (a) the
occurrence of any material default by the licensor under the Snoqualmie License
or the occurrence of any event which, with the passage of time or service of
notice, or both, would constitute a material default by the licensor under the
Snoqualmie License, and/or (b) of the receipt by Borrower or Pledgor of any
notice (written or otherwise) from the licensor under the Snoqualmie License
noting or claiming the occurrence of any default by Borrower under the
Snoqualmie License or the occurrence of any event which, with the passage of
time or service of notice, or both, would constitute a default by Borrower under
the Snoqualmie License.

viii. Promptly upon demand by Lender from time to time, but no more frequently
than annually, Borrower or Pledgor shall use reasonable efforts (other than
payment to the licensor under the Snoqualmie License) to obtain from the
licensor under the Snoqualmie License and furnish to Lender the estoppel
certificate of the licensor under the Snoqualmie License stating the date
through which rent has been paid and whether or not there are any defaults under
the Snoqualmie License and specifying the nature of such claimed defaults, if
any.

ix. Borrower or Pledgor shall promptly notify Lender, in writing, of any request
made by either party to the Snoqualmie License for arbitration or appraisal
proceedings pursuant to the Snoqualmie License, and of the institution of any
arbitration or appraisal proceedings, as well as of all proceedings thereunder,
and shall promptly deliver to Lender a copy of the determination of the
arbitrators or appraisers in each such arbitration or appraisal proceeding.
Lender shall have the right (but not the obligation), following the delivery of
written notice of Borrower or Pledgor, to advise and recommend candidates for
the appointment of any arbitrator or appraiser to be appointed by Borrower and
to participate in such arbitration or appraisal proceedings in association with
Borrower or on its own behalf as an interested party. Borrower or Pledgor shall
promptly notify Lender, in writing, of the institution of any legal proceedings
involving obligations under the Snoqualmie License. Lender may intervene in any
such legal proceedings and be made a party to them. Borrower or Pledgor shall
promptly provide Lender with a copy of any decisions rendered in connection with
such proceedings.

x. Borrower shall promptly execute, acknowledge and deliver to Lender such
instruments as may be reasonably required to permit Lender to cure any default
under the Snoqualmie License or permit Lender to take such other action as may
be necessary to cure or remedy the matter in default and preserve the security
interest of Lender under the Loan Documents. Borrower hereby irrevocably
appoints Lender as its true and lawful attorney-in-fact

 

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to do, in its name or otherwise, any and all acts and to execute any and all
documents which are necessary to preserve any rights of Borrower under or with
respect to the Snoqualmie License, including, without limitation, the right to
effectuate any extension or renewal of the Snoqualmie License, or to preserve
any rights of Borrower whatsoever in respect of any part of the Snoqualmie
License (and the above powers granted to Lender are coupled with an interest and
shall be irrevocable).

xi. Borrower shall not (A) without Lender’s prior written consent, surrender,
terminate, forfeit, or suffer or permit, by acquiescence or otherwise, the
surrender, termination or forfeiture of the Snoqualmie License, or (B) except as
permitted pursuant to the Loan Documents, otherwise change, modify or amend the
Snoqualmie License. Consent to one amendment, change, agreement or modification
shall not be deemed to be a waiver of the right to require consent to other,
future or successive amendments, changes, agreements or modifications.

xii. Notwithstanding anything to the contrary herein contained with respect to
the Snoqualmie License, Borrower agrees that:

1. The Lien created by the Loan Documents attaches to all of Borrower’s rights
and remedies at any time arising under or pursuant to subsection 365(h) of the
Bankruptcy Code, including, without limitation, all of Borrower’s rights to
remain in possession of the Property.

2. Borrower shall not, without Lender’s written consent, elect to treat the
Snoqualmie License as terminated under subsection 365(h)(1) of the Bankruptcy
Code. Any such election made without Lender’s prior written consent shall be
void.

3. Borrower shall object promptly and as and when required under the Bankruptcy
Code in order to prevent a sale of all or a portion of the real property
underlying the Property free and clear of the Snoqualmie License under
subsection 363(f) of the Bankruptcy Code. Lender shall have the right to act on
Borrower’s behalf in connection with any such attempted sale.

4. Borrower shall affirmatively assert and pursue its right to adequate
protection under subsection 363(e) of the Bankruptcy Code in the event of any
sale of all or a portion of the real property underlying the Property under
subsection 363(f) of the Bankruptcy Code. Lender shall have the right to act on
Borrower’s behalf in connection with the assertion of any such rights of
adequate protection.

5. As security for the Indebtedness, Borrower hereby unconditionally assigns,
transfers and sets over to Lender all of Borrower’s claims and rights to the
payment of damages arising under any claim or cause of action under the
Bankruptcy Code. Lender and Borrower shall proceed jointly or in the name of
Borrower in respect of any claim, suit, action or proceeding relating to the
rejection or other termination of the Snoqualmie License, including, without
limitation, the right to file and prosecute any proofs of claim, complaints,
motions, applications, notices and other documents in any case in respect of
such landlord under the Bankruptcy Code. Lender shall have the right to file all
pleadings, claims, notices, proofs,

 

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objections, acceptances, and rejections on behalf of Borrower and Borrower shall
not take any action in contravention of any such filings or contest any of
Lender’s actions or filings in connection with any and all claims relating to a
filing by the licensor under the Snoqualmie License under the Bankruptcy Code.
Without limiting the foregoing, Borrower hereby authorizes Lender, and assigns
Borrower’s rights, to vote or consent in any proceedings concerning the
Snoqualmie License under the Bankruptcy Code. This assignment constitutes a
present, irrevocable and unconditional assignment of the foregoing claims,
rights and remedies, and shall continue in effect until all of the Indebtedness
secured by the Loan Documents shall have been satisfied and discharged in full.
Any amounts received by Lender or Borrower as damages arising under the
Bankruptcy Code as aforesaid shall be applied first to all costs and expenses of
Lender (including, without limitation, attorneys’ fees and costs) incurred in
connection with the exercise of any of its rights or remedies under this Section
and then in accordance with the other applicable provisions of the Mortgage.

6. If, pursuant to subsection 365(h)(2) of the Bankruptcy Code, Borrower seeks
to offset, against the rent reserved in the Snoqualmie License, the amount of
any damages caused by the nonperformance by the licensor thereunder of any of
such licensor’s obligations under the Snoqualmie License after the rejection by
the licensor under the Snoqualmie License under the Bankruptcy Code, Borrower
shall, prior to effecting such offset, notify Lender in writing of its intent so
to do, setting forth the amounts proposed to be so offset, and, in the event
Lender reasonably objects, Borrower shall not effect any offset of the amounts
so objected to by Lender.

7. If any action, proceeding, motion or notice shall be commenced or filed in
respect of any licensor under the Snoqualmie License or the real property
demised by the Snoqualmie License or any portion thereof in connection with any
case under the Bankruptcy Code, Lender and Borrower shall cooperatively conduct
and control any such litigation with counsel agreed upon between Borrower and
Lender in connection therewith. Borrower shall, upon demand, pay to Lender all
costs and expenses (including reasonable attorneys’ fees and costs) paid or
incurred by Lender in connection with the cooperative prosecution or conduct of
any such proceedings. All such costs and expenses shall be secured by the Lien
created by the Loan Documents.

8. Borrower shall promptly, after obtaining knowledge thereof, notify Lender
orally of any filing by or against the licensor under the Snoqualmie License of
a petition under the Bankruptcy Code. Borrower shall thereafter promptly give
written notice of such filing to Lender, setting forth any information available
to Borrower, including, without limitation, the date of such filing, the court
in which such petition was filed, and the relief sought therein. Borrower shall
promptly deliver to Lender, following its receipt thereof, any and all notices,
summonses, pleadings, applications and other documents received by Borrower in
connection with any such petition and any proceedings relating thereto.

xiii. To the extent permitted by law, the price payable by Borrower or any other
party in the exercise of the right of redemption, if any, from any sale under or
decree of foreclosure of the Mortgage shall include all rents and other amounts
paid and other sums advanced by Lender on behalf of Borrower as the licensor
under the Snoqualmie License.

 

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xiv. Borrower hereby grants and assigns to Lender a security interest in all
prepaid rent and security deposits and all other security that the licensor
under the Snoqualmie License may hold now or later for the performance of
Borrower’s obligations as the tenant under the Snoqualmie License.

xv. The Snoqualmie License has not been amended, modified, extended, renewed,
substituted or assigned by Borrower and Borrower has delivered to Lender true,
accurate and complete copies thereof. Upon the request of Lender, Borrower shall
deposit with Lender the original fully executed Snoqualmie License (or a
certified copy if original is no longer available), as further security to the
Lender, until all of the Indebtedness is fully paid and performed.

xvi. Borrower shall not waive, excuse, condone or in any way release or
discharge the licensor under the Snoqualmie License from such licensor’s
obligations and/or covenants under the Snoqualmie License, or any other
conditions under the Snoqualmie License, without the prior written consent of
Lender.

xvii. Borrower shall not, without prior written notice to Lender exercise any
option or right to acquire fee title to the real property subject to the Plum
Creek License. In the event such right is exercisable by Borrower, Borrower
shall give immediate written notice thereof to Lender. Upon Borrower’s exercise
of such right, Borrower shall (a) execute an amendment to the Mortgage in
recordable form and such other Loan Documents as Lender may require, which
amendments shall spread the lien of the Mortgage to encumber the real property
acquired pursuant to Borrower’s exercise of such option or right, (ii) deliver
to Lender such title insurance endorsements as Lender may reasonably require,
reflecting the addition of the real property to the Property, and (iii) pay all
costs and expenses associated with the foregoing.

xviii. Borrower and/or Pledgor shall provide Lender with (x) thirty (30) days’
written notice after the Plum Creek Optionor (as defined in the Plum Creek
Option Agreement) obtains the approval of the HCP Removal Contingency (as
defined in the Plum Creek Option Agreement) from the United States Fish and
Wildlife Service or (y) thirty days’ prior written notice of the termination by
CLP Snoqualmie of the Plum Creek Option Agreement in the event that the Plum
Creek Optionor is unable to remove the HCP Removal Contingency within the Option
Term (as defined in the Plum Creek Option Agreement), as may be extended.

xix. Each of Lender’s rights contained in this Section shall be without
limitation of any other rights granted to Lender pursuant to the provisions of
the Loan Documents.

b. Events of Default. The occurrence of one or more of the following events
shall be an “Event of Default” hereunder:

i. any material default by Borrower under the Snoqualmie Licenses that is not
cured within any applicable cure period provided in the applicable Snoqualmie
License or waived by the licensor thereunder.

ii. any loss, termination, forfeiture or revocation of any of the Snoqualmie
Licenses or any Snoqualmie License is amended, modified, waived or otherwise
changed without Lender’s consent.

 

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3. Loon Mountain Resort:

a. Representations and Warranties. Each of Borrower and Pledgor represents and
warrants to Lender as of the Closing Date as follows:

i. Loon Mountain Capex Funding Obligation. Pursuant and subject to the terms of
the Loon Mountain Real Property Lease, Borrower is obligated to fund certain
capital expenditures, with such modifications thereto as Borrower and the Third
Party Operator may agree upon as to timing, budget and the details of the
specific capital expenditures with contemporaneous notice to Lender of any such
modifications (the “Loon Mountain Capex Funding Obligation” and together with
the Northstar Capex Funding Obligation, the “Northstar and Loon Mountain Capex
Funding Obligation”).

ii. Hallisey Option Agreement. Borrower is not in default, and to Borrower’s
knowledge licensor is not in default and no events or circumstances exist which
with or without the giving of notice, the passage of time or both may constitute
a default or event of default) under the Hallisey Option Agreement.

iii. Centex Mortgage. Borrower and/or Pledgor have not previously granted any
security interest in, or collateral assignment of, the Centex Mortgage.

b. Covenants. Each of Borrower and Pledgor covenant and agree that, from the
Closing Date and until payment in full of the Indebtedness:

i. Loon Mountain Capex Funding Obligation. Borrower and/or Pledgor shall fund
the Loon Mountain Capex Funding Obligation subject to the terms and conditions
and in accordance with the provisions of the Loon Mountain Real Property Lease
and the Centex Operating Agreement.

ii. Centex Operating Agreement

1. Escrow. In the event CLP Loon Mountain (or any Borrower or Pledgor) is
required to deposit any portion of the Loon Mountain Capex Funding Obligation
(or a letter of credit in lieu of such amounts) with any Person, (i) Borrower
and/or Pledgor shall provide Lender notice of the amount of funds (or letter of
credit) to be deposited and (ii) Borrower shall provide to Lender an assignment
all of Borrower’s right, title and interest in any escrow agreement executed
pursuant to the Centex Operating Agreement, pursuant to an assignment agreement
in a form reasonably acceptable to Lender.

2. Budget. Concurrently with the delivery to Centex, Borrower and/or Pledgor
shall deliver to Lender any annual budget for Reimbursable Expenses (as such
term is defined in the Centex Operating Agreement). Such annual budget is
subject to the provisions of Section 5.5 of this Agreement.

 

D-7

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3. Permanent Lease. Prior to execution of the proposed Permanent Lease (as
defined in the Centex Operating Agreement), Borrower and/or Pledgor shall
provide Lender a copy of such proposed Permanent Lease to Lender for review and
approval. Borrower and/or Pledgor shall provide Lender such title insurance
endorsements as Lender may reasonably require and pay all costs and expenses
associated with the foregoing.

iii. Hallisey Option Agreement.

1. Notice to Convey. Borrower and/or Pledgor shall provide Lender with
contemporaneous notice of any notice to Centex to convey any property to be
conveyed pursuant to the Hallisey Option Agreement.

2. Conveyance. Prior to the conveyance of any property to CLP Loon Mountain
pursuant to the Hallisey Option Agreement, Borrower and/or Pledgor shall
(i) execute an amendment to the Mortgage in recordable form and such other Loan
Documents as Lender may require, which amendments shall spread the lien of the
Mortgage to encumber such property, (ii) deliver to Lender such title insurance
endorsements as Lender may reasonably require, reflecting the addition of such
property to the Property, and (iii) pay all costs and expenses associated with
the foregoing.

iv. Crossing Agreement. Borrower and/or Pledgor shall use commercially
reasonable and diligent efforts to (or to cause TPO Loon Mountain to) obtain a
new Crossing Agreement that runs to the benefit of CLP Loon Mountain from the
New Hampshire Department of Transportation. Prior to Borrower and/or Pledgor’s
execution of the new Crossing Agreement, Lender shall approve, in its reasonable
discretion, the form and content of the new Crossing Agreement. In the event
that Borrower and/or Pledgor are unable to procure a new Crossing Agreement, the
Borrower and/or Pledgor shall use commercially reasonable efforts to provide for
alternate arrangements satisfactory to Lender in Lender’s reasonable discretion.

v. Water Barrier. Borrower and/or Pledgor shall notify Lender in the event that
Borrower becomes aware that any “water barrier” construction is completed
pursuant to the Loon Mountain Ground Lease, such notice shall also include the
amount Borrower is obligated to fund in connection with such construction, if
Borrower has such information at the time of said notice.

c. Events of Default. The occurrence of one or more of the following events
shall be an “Event of Default” hereunder:

i. Borrower’s or Pledgor’s failure to fund the Loon Mountain Capex Funding
Obligation in accordance with and subject to the terms of the Loon Mountain Real
Property Lease.

 

D-8

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EXHIBIT E

Rent Roll

[Intentionally Omitted]

 

E-1