Exhibit 10.1

EXECUTION VERSION

 

MASTER LEASE

 

 

 

 

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ARTICLE I LEASED PROPERTY

     1  

Section 1.1

     Leased Property      1  

Section 1.2

     Single, Indivisible Lease      4  

Section 1.3

     Term      5  

Section 1.4

     Renewal Terms      5  

Section 1.5

     Separation of Leases      5  

ARTICLE II DEFINITIONS

     8  

Section 2.1

     Definitions      8  

ARTICLE III RENT

     43  

Section 3.1

     Rent      43  

Section 3.2

     Late Payment of Rent      43  

Section 3.3

     Method of Payment of Rent      44  

Section 3.4

     Net Lease      44  

Section 3.5

     Fair Market Rent      44  

ARTICLE IV IMPOSITIONS

     45  

Section 4.1

     Impositions      45  

Section 4.2

     Utilities and other Matters      46  

Section 4.3

     Compliance Certificate      47  

Section 4.4

     Impound Account      47  

ARTICLE V NO ABATEMENT

     47  

Section 5.1

     No Termination, Abatement, etc      47  

ARTICLE VI OWNERSHIP OF LEASED PROPERTY

     48  

Section 6.1

     Ownership of the Leased Property      48  

Section 6.2

     Tenant’s Property      49  

Section 6.3

     Tenant’s Intellectual Property      50  

Section 6.4

     Landlord’s Security Interest in Tenant’s Pledged Property      51  

ARTICLE VII CONDITION AND USE OF LEASED PROPERTY

     52  

Section 7.1

     Condition of the Leased Property      52  

Section 7.2

     Use of the Leased Property      53  

Section 7.3

     Additional Facilities      55  

ARTICLE VIII REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH LAW

     56  

Section 8.1

     Representations and Warranties      56  

Section 8.2

     Compliance with Legal and Insurance Requirements, etc      56  

Section 8.3

     Zoning and Uses      57  

Section 8.4

     Intentionally Omitted      58  

Section 8.5

     Third-Party Reports      58  

ARTICLE IX MAINTENANCE AND REPAIR

     58  

Section 9.1

     Maintenance and Repair      58  

Section 9.2

     Encroachments, Restrictions, Mineral Leases, etc      62  

 

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ARTICLE X CAPITAL IMPROVEMENTS      63  

Section 10.1

     Construction of Capital Improvements to the Leased Property      63  

Section 10.2

     Construction Requirements for Capital Improvements      65  

Section 10.3

     Intentionally Omitted      66  

Section 10.4

     Ownership of Tenant Capital Improvements      66  

Section 10.5

     Funding of Tenant Capital Improvements      66  

Section 10.6

     Self Help      67   ARTICLE XI NO LIENS      68  

Section 11.1

     Liens      68  

Section 11.2

     Landlord Encumbrance Obligations      71   ARTICLE XII PERMITTED CONTESTS
     71  

Section 12.1

     Permitted Contests      71   ARTICLE XIII INSURANCE      72  

Section 13.1

     Property Insurance Requirements      72  

Section 13.2

     Workers’ Compensation      75  

Section 13.3

     Waiver of Subrogation      75  

Section 13.4

     Policy Requirements      76  

Section 13.5

     Increase in Limits      76  

Section 13.6

     Blanket Policy      77  

Section 13.7

     No Separate Insurance      77  

Section 13.8

     Captive Insurance Company Requirements      77  

Section 13.9

     Insurance Side Letter      77   ARTICLE XIV CASUALTY      77  

Section 14.1

     Property Insurance Proceeds      77  

Section 14.2

     Tenant’s Obligations Following Casualty      78  

Section 14.3

     No Abatement of Rent      79  

Section 14.4

     Waiver      79  

Section 14.5

     Insurance Proceeds Paid to Fee Mortgagee      79  

Section 14.6

     Termination of Lease; Abatement of Rent      80  

Section 14.7

     Multiple Fee Mortgagees      80   ARTICLE XV CONDEMNATION      80  

Section 15.1

     Condemnation      80  

Section 15.2

     Award Distribution      81  

Section 15.3

     Temporary Taking      81  

Section 15.4

     No Abatement of Rent      82  

Section 15.5

     Waiver      82  

Section 15.6

     Award Paid to Fee Mortgagee      82   ARTICLE XVI DEFAULT; REMEDIES      82
 

Section 16.1

     Events of Default      82  

Section 16.2

     Certain Remedies      85  

 

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Section 16.3

     Damages      86  

Section 16.4

     Receiver      87  

Section 16.5

     Waiver      87  

Section 16.6

     Application of Funds      87  

Section 16.7

     Landlord’s Right to Cure Tenant’s Default      88  

Section 16.8

     Miscellaneous      88   ARTICLE XVII TENANT’S FINANCING      89  

Section 17.1

     Permitted Leasehold Mortgagees      89  

Section 17.2

     Landlord’s Right to Cure Tenant’s Default      97  

Section 17.3

     Tenant’s Debt Agreements      97  

Section 17.4

     Landlord Cooperation      97   ARTICLE XVIII SALE OF LEASED PROPERTY     
97  

Section 18.1

     Sale of the Leased Property      97   ARTICLE XIX HOLDING OVER      98  

Section 19.1

     Holding Over      98   ARTICLE XX RISK OF LOSS      98  

Section 20.1

     Risk of Loss      98   ARTICLE XXI INDEMNIFICATION      99  

Section 21.1

     General Indemnification      99   ARTICLE XXII SUBLETTING AND ASSIGNMENT   
  100  

Section 22.1

     Subletting and Assignment      100  

Section 22.2

     Permitted Assignments      100  

Section 22.3

     Permitted Sublease Agreements      101  

Section 22.4

     Required Assignment and Subletting Provisions      103  

Section 22.5

     Costs      104  

Section 22.6

     No Release of Tenant’s Obligations      104  

Section 22.7

     Intentionally Omitted      104  

Section 22.8

     Management Agreements      104  

Section 22.9

     Bookings      106  

Section 22.10

     Termination of Affiliate Agreements      106   ARTICLE XXIII REPORTING;
CONFIDENTIALITY      106  

Section 23.1

     Estoppel Certificates and Financial Statements      106  

Section 23.2

     Confidentiality; Public Offering Information      112  

Section 23.3

     Financial Covenants      114  

Section 23.4

     Landlord Obligations      115   ARTICLE XXIV LANDLORD’S RIGHT TO INSPECT   
  116  

Section 24.1

     Landlord’s Right to Inspect      116   ARTICLE XXV NO WAIVER      116  

Section 25.1

     No Waiver      116  

 

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ARTICLE XXVI REMEDIES CUMULATIVE      117  

Section 26.1

     Remedies Cumulative      117   ARTICLE XXVII ACCEPTANCE OF SURRENDER     
117  

Section 27.1

     Acceptance of Surrender      117   ARTICLE XXVIII NO MERGER      117  

Section 28.1

     No Merger      117   ARTICLE XXIX CONVEYANCE BY LANDLORD      117  

Section 29.1

     Conveyance by Landlord      117   ARTICLE XXX QUIET ENJOYMENT      118  

Section 30.1

     Quiet Enjoyment      118   ARTICLE XXXI LANDLORD’S FINANCING      118  

Section 31.1

     Landlord’s Financing      118  

Section 31.2

     Attornment      119  

Section 31.3

     Compliance with Fee Mortgage Documents      119   ARTICLE XXXII HAZARDOUS
SUBSTANCES      120  

Section 32.1

     Hazardous Substances      120  

Section 32.2

     Notices      120  

Section 32.3

     Remediation      120  

Section 32.4

     Indemnity      121  

Section 32.5

     Environmental Inspections      122   ARTICLE XXXIII MEMORANDUM OF LEASE   
  122  

Section 33.1

     Memorandum of Lease      122   ARTICLE XXXIV APPOINTING EXPERTS      122  

Section 34.1

     Expert Dispute Resolution Process      122   ARTICLE XXXV NOTICES      125
 

Section 35.1

     Notices      125  

Section 35.2

     Deemed Approval Period with respect to certain Items Requiring Consent     
127  

Section 35.3

     Unavoidable Delays      128   ARTICLE XXXVI TRANSITION UPON EXPIRATION OR
TERMINATION      128  

Section 36.1

     Transfer of Tenant’s Property at the Facilities      128  

Section 36.2

     Transition Services      129  

Section 36.3

     Replacement of Certain Excluded Assets      129   ARTICLE XXXVII ATTORNEY’S
FEES      129  

Section 37.1

     Attorneys’ Fees      129   ARTICLE XXXVIII BROKERS      130  

Section 38.1

     Brokers      130  

 

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ARTICLE XXXIX OFAC      130  

Section 39.1

     Anti-Terrorism Representations      130   ARTICLE XL REIT REQUIREMENTS     
130  

Section 40.1

     REIT Protection      130   ARTICLE XLI MISCELLANEOUS      131  

Section 41.1

     Survival      131  

Section 41.2

     Severability      131  

Section 41.3

     Non-Recourse      132  

Section 41.4

     Successors and Assigns      132  

Section 41.5

     Governing Law      132  

Section 41.6

     Waiver of Trial by Jury      132  

Section 41.7

     Entire Agreement      133  

Section 41.8

     Headings; Consent      133  

Section 41.9

     Counterparts      133  

Section 41.10

     Interpretation      133  

Section 41.11

     Time of Essence      133  

Section 41.12

     Further Assurances      134  

Section 41.13

     Gaming Regulations      134  

Section 41.14

     Certain Provisions of Nevada Law      134  

Section 41.15

     Savings Clause      134  

Section 41.16

     Agency Relationship with respect to Water Rights      135  

Section 41.17

     Operating Subleases      136  

 

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EXHIBITS AND SCHEDULES

EXHIBIT A – DESCRIPTION OF THE FACILITIES

EXHIBIT B – LEGAL DESCRIPTIONS

EXHIBIT C – INTENTIONALLY OMITTED

EXHIBIT D – GAMING LICENSES

EXHIBIT E – FORM OF GUARANTY

EXHIBIT F-1 – FORM OF NONDISTURBANCE AND ATTORNMENT AGREEMENT (SUBLEASE)

EXHIBIT F-2 – FORM OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

EXHIBIT G – FORM OF MEMORANDUM OF LEASE

EXHIBIT H – FORM OF NEVADA WAIVER

EXHIBIT I – WATER PERMITS

EXHIBIT J – FINANCIAL COVENANT COMPLIANCE REPORT

EXHIBIT K – EXAMPLE REQUIRED CAPEX REPORT

EXHIBIT L – EBITDA CALCULATION

EXHIBIT M – QUARTERLY REPORTING PACKAGE

EXHIBIT N – CAPTIVE INSURANCE COMPANY REQUIREMENTS

SCHEDULE 1 – EXCLUDED ASSETS

SCHEDULE 2 – INITIAL OPERATING SUBTENANTS

SCHEDULE 3-A – GRAND PROPERTY SPECIFIC IP

SCHEDULE 3-B – MB PROPERTY SPECIFIC IP

SCHEDULE 4 – EXISTING ACCOUNTING GUIDELINES

SCHEDULE 5 – INTENTIONALLY OMITTED

SCHEDULE 6 – INITIAL FEE MORTGAGEE REQUIRED REPAIRS

SCHEDULE 7 – CORPORATE ALLOCATION SCHEDULE

SCHEDULE 8 – PERMITTED CAPITAL IMPROVEMENTS

SCHEDULE 9 – RESERVE DISBURSEMENT REQUIREMENTS

SCHEDULE 10 – EXISTING SUBLEASES

SCHEDULE 11 – EXISTING MANAGEMENT AGREEMENTS

SCHEDULE 12 – ESCALATED BASE RENT

SCHEDULE 13 – LAND USE MATTERS

 

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MASTER LEASE

This MASTER LEASE (the “Lease”) is entered into as of February 14, 2020 by and
among Mandalay PropCo, LLC, a Delaware limited liability company, (together with
its permitted successors and assigns, “MB Landlord”), MGM Grand PropCo, LLC, a
Delaware limited liability company (together with its permitted successors and
assigns, “Grand Landlord” and, individually or together with the MB Landlord, as
the context may require, “Landlord”), and MGM Lessee II, LLC, a Delaware limited
liability company (together with its permitted successors and assigns,
“Tenant”).

RECITALS

A.    Capitalized terms used in this Lease and not otherwise defined herein are
defined in Article II hereof.

B.    Pursuant to that certain Master Transaction Agreement, dated as of
January 14, 2020 among MGM Growth Properties Operating Partnership LP, MGM
Resorts International, and BCORE Windmill Parent LLC and certain other parties
(the “Master Transaction Agreement”), (a) MB Landlord desires to lease the MB
Leased Property to Tenant and Tenant desires to lease the MB Leased Property
from MB Landlord, and (b) Grand Landlord desires to lease the Grand Leased
Property to Tenant and Tenant desires to lease the Grand Leased Property from
Grand Landlord, in each case, upon the terms set forth in this Lease.

C.    The two (2) facilities covered by this Lease as of the date hereof are
described on Exhibit A attached hereto (each a “Facility,” and collectively, the
“Facilities”). Each of the Facilities (and if determined by Tenant, a portion of
either Facility) may be subleased by Tenant to Operating Subtenants pursuant to
certain subleases (the “Operating Subleases”) between Tenant and each Operating
Subtenant.

D.    Tenant and Landlord intend this Lease to constitute one indivisible lease
of the Facilities and not separate leases governed by similar terms. The
Facilities constitute one economic unit, and the Rent and all other provisions
of this Lease have been negotiated and agreed to based on a demise of the
Facilities to the respective Tenants as a single, composite, inseparable
transaction and would have been substantially different had separate leases or a
divisible lease been intended.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

LEASED PROPERTY

1.1    Leased Property. (a) Upon and subject to the terms and conditions
hereinafter set forth, MB Landlord leases to Tenant and Tenant accepts and
leases from MB Landlord all of MB Landlord’s rights and interests in and to the
following with respect to the MB Facility (collectively, the “MB Leased
Property”):

(i)    the real property or properties described in Part I of Exhibit B attached
hereto (collectively, the “MB Land”);

 

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(ii)    all buildings, structures, and other improvements of every kind now or
hereafter located on the MB Land or connected thereto including, but not limited
to, alleyways and connecting tunnels, sidewalks, utility pipes, conduits and
lines (on-site and off-site to the extent MB Landlord has obtained any interest
in the same), parking areas and roadways appurtenant to such buildings and
structures of the MB Facility (collectively, the “MB Leased Improvements”);
provided, however, that the foregoing shall not affect or contradict the
provisions of this Lease which specify that Tenant shall be entitled to certain
benefits of and rights with respect to the Tenant Capital Improvements;

(iii)    all easements, rights and appurtenances, covenants, development rights,
mineral, gas and oil rights, conveyed pursuant to the Master Transaction
Agreement and other rights appurtenant to the MB Land and the MB Leased
Improvements, all right, title and interest of MB Landlord, if any, in and to
any land lying in the bed of any street, road, avenue or alley, open or closed,
relating to, in front of or adjoining the MB Land and the MB Leased Improvements
and to the center line thereof;

(iv)     all equipment, machinery, fixtures, and other items of property,
including all components thereof, that are now or hereafter located in, on or
used in connection with and permanently affixed to or otherwise incorporated
into the MB Leased Improvements, together with all replacements, modifications,
alterations and additions thereto (collectively, the “MB Fixtures”); provided,
however, that the foregoing shall not affect Tenant’s rights with respect to
Tenant Capital Improvements pursuant to Section 11.1(b);

(v)     all other properties or rights, real, personal or otherwise, conveyed to
MB Landlord or MB Landlord’s Subsidiaries pursuant to the Master Transaction
Agreement; and

(vi)    all rights in and related to the beneficial use of the water rights
(collectively, the “MB Water Rights”) pursuant to the permits issued by the
Nevada State Engineer described on Exhibit I attached hereto and incorporated
herein by this reference (collectively, the “MB Water Permits”), which consist
of approximately 5.3 acre-feet annually of underground water, together with all
existing water related infrastructure, facilities, equipment and fixtures,
including, without limitation, pumps, pump stations, pipes, reservoirs and
vaults used to extract the water rights from their permitted points of diversion
and to place the Water Rights appropriated under the Water Permits to beneficial
use at their permitted places of use (collectively, the “MB Water
Infrastructure”).

The MB Leased Property shall not, for any purposes under this Lease, include
those assets described on Schedule 1 attached hereto (collectively, “MB Excluded
Assets”).

(b) Upon and subject to the terms and conditions hereinafter set forth, Grand
Landlord leases to Tenant and Tenant accepts and leases from Grand Landlord all
of Grand Landlord’s rights and interests in and to the following with respect to
the Grand Facility (collectively, the “Grand Leased Property” and, together with
the MB Leased Property, collectively, the “Leased Property”):

(i)    the real property or properties described in Part II of Exhibit B
attached hereto (collectively, the “Grand Land” and, together with the MB Land,
collectively, the “Land”);

 

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(ii)    all buildings, structures, and other improvements of every kind now or
hereafter located on the Grand Land or connected thereto including, but not
limited to, alleyways and connecting tunnels, sidewalks, utility pipes, conduits
and lines (on-site and off-site to the extent Grand Landlord has obtained any
interest in the same), parking areas and roadways appurtenant to such buildings
and structures of the Grand Facility (collectively, the “Grand Leased
Improvements” and, together with the MB Leased Improvements, collectively, the
“Leased Improvements”); provided, however, that the foregoing shall not affect
or contradict the provisions of this Lease which specify that Tenant shall be
entitled to certain benefits of and rights with respect to the Tenant Capital
Improvements;

(iii)    all easements, rights and appurtenances, covenants, development rights,
mineral, gas and oil rights, conveyed pursuant to the Master Transaction
Agreement and other rights appurtenant to the Grand Land and the Grand Leased
Improvements, all right, title and interest of Grand Landlord, if any, in and to
any land lying in the bed of any street, road, avenue or alley, open or closed,
relating to, in front of or adjoining the Grand Land and the Grand Leased
Improvements and to the center line thereof;

(iv)     all equipment, machinery, fixtures, and other items of property,
including all components thereof, that are now or hereafter located in, on or
used in connection with and permanently affixed to or otherwise incorporated
into the Grand Leased Improvements, together with all replacements,
modifications, alterations and additions thereto (collectively, the “Grand
Fixtures” and, together with the MB Fixtures, collectively, the “Fixtures”);
provided, however, that the foregoing shall not affect Tenant’s rights with
respect to Tenant Capital Improvements pursuant to Section 11.1(b);

(v)     all other properties or rights, real, personal or otherwise, conveyed to
Grand Landlord or Grand Landlord’s Subsidiaries pursuant to the Master
Transaction Agreement; and

(vi)    all rights in and related to the beneficial use of the water rights
(collectively, the “Grand Water Rights” and, together with the MB Water Rights,
the “Water Rights”) pursuant to the permits issued by the Nevada State Engineer
described on Exhibit I attached hereto and incorporated herein by this reference
(collectively, the “Grand Water Permits” and, together with the MB Water
Permits, the “Water Permits”), which consist of approximately 366.10 acre-feet
annually of underground water, together with all existing water related
infrastructure, facilities, equipment and fixtures, including, without
limitation, pumps, pump stations, pipes, reservoirs and vaults used to extract
the water rights from their permitted points of diversion and to place the Water
Rights appropriated under the Water Permits to beneficial use at their permitted
places of use (collectively, the “Grand Water Infrastructure” and, together with
the MB Water Infrastructure, the “Water Infrastructure”).

 

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The Grand Leased Property shall not, for any purposes under this Lease, include
those assets described on Schedule 1 attached hereto (collectively, “Grand
Excluded Assets” and, together with the MB Excluded Assets, collectively, the
“Excluded Assets”).

The Leased Property is leased subject to all covenants, conditions,
restrictions, easements and other matters affecting the Leased Property as of
the Commencement Date and such subsequent covenants, conditions, restrictions,
easements and other matters permitted by this Lease or as may be agreed to by
Landlord or Tenant in accordance with the terms of this Lease, whether or not of
record, including any matters which would be disclosed by an inspection or
accurate survey of the Leased Property.

Notwithstanding the foregoing, following (a) the removal of any Facility from
this Lease pursuant to Section 1.5, (b) the termination of this Lease with
respect to any Facility pursuant to Section 14.2, or (c) the termination of this
Lease with respect to any Facility pursuant to Section 15.1, such Facility shall
no longer constitute Leased Property hereunder, and the Lease shall otherwise
remain in full force and effect.

1.2    Single, Indivisible Lease. (a) This Lease constitutes one indivisible
lease of the Leased Property and not separate leases governed by similar terms.
The Leased Property constitutes one economic unit, and the Rent and all other
provisions have been negotiated and agreed to based on a demise of all of the
Leased Property to the respective Tenants as a single, composite, inseparable
transaction and would have been substantially different had separate leases or a
divisible lease been intended. Except as expressly provided in this Lease for
specific, isolated purposes (and then only to the extent expressly otherwise
stated), all provisions of this Lease apply equally and uniformly to all
components of the Leased Property collectively as one unit. The parties intend
that the provisions of this Lease shall at all times be construed, interpreted
and applied so as to carry out their mutual objective to create an indivisible
lease of all of the Leased Property and, in particular but without limitation,
that, for purposes of any assumption, rejection or assignment of this Lease
under 11 U.S.C. Section 365, or any successor or replacement thereof or any
analogous state law, this is one indivisible and non-severable lease and
executory contract dealing with one legal and economic unit and that this Lease
must be assumed, rejected or assigned as a whole with respect to all (and only
as to all) of the Leased Property. The parties may elect to amend this Lease
from time to time to modify the boundaries of the Land and/or to exclude one or
more components or portions thereof, and/or to include one or more additional
components as part of the Leased Property, and any such future addition to the
Leased Property shall not in any way change the indivisible and nonseverable
nature of this Lease and all of the foregoing provisions shall continue to apply
in full force. For the avoidance of doubt, the parties acknowledge and agree
that this Section 1.2 is not intended to and shall not be deemed to limit,
vitiate or supersede anything contained in Section 41.15 hereof.

(b)    Without limiting the generality of the foregoing, Landlord and Tenant
acknowledge and agree that (x) neither (1) Tenant’s or Landlord’s ability to
terminate this Lease with respect to an affected Facility following certain
Casualty Events pursuant to Section 14.2 nor (2) Tenant’s or Landlord’s ability
to terminate this Lease with respect to an affected Facility following certain
Condemnation events pursuant to Section 15.1 shall in any way change the
indivisible and nonseverable nature of this Lease (as set forth in this
Section 1.2) and (y) following any such removal, assignment or termination, this
Lease shall continue as a single indivisible lease with respect to the remaining
Leased Property.

 

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1.3    Term. The “Term” of this Lease is the Initial Term plus all Renewal
Terms, to the extent exercised. The initial term of this Lease (the “Initial
Term”) shall commence on the date of execution of this Lease (the “Commencement
Date”) and end on the last day of the calendar month in which the thirtieth
(30th) anniversary of the Commencement Date occurs, subject to renewal as set
forth in Section 1.4 below.

1.4    Renewal Terms. (a) The term of this Lease may be extended for two
(2) separate terms (each a “Renewal Term”) of ten (10) years each if: (i) at
least thirty six (36) months prior to the end of the then current Term, Tenant
delivers to Landlord an irrevocable written notice that Tenant is exercising its
right to extend this Lease for one (1) Renewal Term (a “Renewal Notice”); and
(ii) no Event of Default shall have occurred and be continuing on the date
Landlord receives the Renewal Notice (the “Exercise Date”) or on the last day of
the then current Term; provided, however, that if Tenant fails to deliver to
Landlord a Renewal Notice prior to the date that is thirty six (36) months prior
to the then current expiration date of the Term that Tenant does not intend to
renew in accordance with this Section 1.4, then it shall automatically and
without further action be deemed for all purposes that Tenant has delivered the
Renewal Notice required by this Section 1.4(a)(i). During any such Renewal Term,
except as otherwise specifically provided for herein, all of the terms and
conditions of this Lease shall remain in full force and effect. After the last
Renewal Term, Tenant shall have no further right to renew or extend the Term.

(b)    Tenant may exercise such options to renew with respect to all (and in no
event fewer than all) of the Facilities which are subject to this Lease as of
such Exercise Date.

(c)    During each Renewal Term, Base Rent shall continue to be determined
pursuant to the definition of such term set forth in this Lease.

1.5    Separation of Leases

(a)    From time to time, at the election of Landlord, but only (i) in
connection with the sale of a Facility that is permitted under this Lease or
(ii) as required by one or more Fee Mortgagees (either in a single or separate
financing), Landlord may remove such Facility (a “Removal Facility”) from this
Lease and place such Removal Facility in a separate lease on terms and
conditions substantially similar to, and in any case no less favorable to Tenant
than, those set forth in this Lease and as otherwise provided in this
Section 1.5 (a “Separate Lease”) to facilitate the sale of such Removal
Facility.

(b)    If Landlord elects to remove a Removal Facility, Landlord shall give
Tenant not less than thirty (30) days’ Notice thereof (a “Removal Notice”), and
Tenant shall thereafter, within said thirty (30) day period (or such other
period of time as Landlord may reasonably require; it being understood that
Landlord may delay removal or cancel the Removal Notice in the event that the
underlying sale of a Removal Facility is delayed or cancelled for any reason),
execute, acknowledge and deliver to the new owner of the Removal Facility
(“Separate Lease Landlord”), as designated by Landlord, at no cost or expense to
Tenant, a Separate Lease

 

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with respect to the Removal Facility effective as of the date the Separate Lease
is fully executed and delivered by the parties thereto (“Removal Date”) for the
remaining Term and on substantially the same terms and conditions as, and in any
case no less favorable to Tenant than the terms and conditions of, this Lease,
except for appropriate adjustments (including to Exhibits and Schedules),
including as follows:

(i) Rent. The initial Base Rent for the Removal Facility shall be equal to the
Base Rent amount in respect of such Removal Facility at the time of the Removal
Date and thereafter shall be adjusted on the same basis as provided in this
Lease; it being understood that the specification in this Section 1.5(b)(i) of
the methodology for determining the initial Base Rent for a Removal Facility
shall not in any way change the indivisible and nonseverable nature of this
Lease (as set forth in Section 1.2).

(ii) Liabilities and Obligations. The Separate Lease shall provide that the
applicable Landlord and Tenant shall be responsible for the payment, performance
and satisfaction of all of the duties, obligations and liabilities of such
Landlord and Tenant, respectively, arising under this Lease, with respect to the
Removal Facility, that were not paid, performed and satisfied in full prior to
the commencement date of the Separate Lease, and shall further provide that
(x) Separate Lease Landlord and tenant under the Separate Lease shall not be
responsible for the payment, performance or satisfaction of any duties,
obligations or liabilities of the applicable Landlord or Tenant under this Lease
first arising after the Removal Date and (y) none of the applicable Landlord,
Tenant, any Operating Subtenant, or Guarantor shall be responsible for the
payment, performance or satisfaction of any duties, obligations or liabilities
of the Separate Lease Landlord or tenant under the Separate Lease, except to the
extent it is a party to or as set forth in such Separate Lease. Except as
provided in clause (iv) below, the applicable Landlord and Tenant’s obligations
under this Lease with respect to the remaining Facility shall remain unaffected
and shall continue in accordance with the terms of this Lease.

(iii) Deletion of REIT Provisions. At the election of Landlord or any Separate
Lease Landlord, any one or more of the provisions of the Separate Lease
pertaining to the REIT status of any member of Landlord (or any Affiliate of any
member of Landlord) shall be deleted.

(iv) Amendment to this Lease. Upon execution of a Separate Lease, and effective
as of the effective date of such Separate Lease, this Lease shall be deemed to
be amended as follows: (i) the Removal Facility shall be excluded from the
Leased Property hereunder and (ii) Base Rent hereunder shall be reduced by the
Base Rent amount in respect of such Removal Facility at the time of the Removal
Date. Such amendment shall occur automatically and without the necessity of any
further action by Landlord or Tenant, but, at Landlord’s or Tenant’s election,
the same shall be reflected in a formal amendment to this Lease, which amendment
shall be promptly executed by Landlord and Tenant.

(v) Other Undertakings. Landlord and Tenant shall each take such actions and
execute and deliver such documents, including, without limitation, a Separate
Lease and a new or amended memorandum of lease and, if requested by the other,
an

 

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amendment to this Lease, as are reasonably necessary and appropriate to
effectuate fully the provisions and intent of this Section 1.5, and as otherwise
are appropriate or as Landlord, Tenant or any title insurer may reasonably
request to evidence such removal and new leasing of the Removal Facility,
including a memorandum of lease with respect to such Separate Lease and an
amendment of the existing memorandum of lease with respect to this Lease and an
amendment of this Lease.

(c)    Cross Default. If this Lease is severed in accordance with this Lease, no
default under a Separate Lease shall be a default under this Lease and no
default or Event of Default under this Lease shall be a default under a Separate
Lease; provided however, if this Lease is severed in accordance with one or more
Fee Mortgages pursuant to Section 1.5(a)(ii), for as long as the Landlord and
the Separate Lease Landlord are Affiliates of each other, a default under such
Separate Lease shall be a default under this Lease and an Event of Default under
this Lease shall be a default under such Separate Lease. In all cases, so long
as any Facility Mortgage shall apply to the Removal Facility or Separate Lease,
the Removal Facility and/or Separate Lease shall continue to be subject either
to any existing subordination, nondisturbance and attornment agreement (“SNDA”)
with respect to this Lease, or subject to a new SNDA to be delivered by Facility
Mortgagee, any Separate Lease Landlord and Tenant on substantially the same
terms and conditions as the existing SNDA (having regard for the terms and
conditions of the Separate Lease).

(d)    Guaranty. Upon execution of a Separate Lease, Guarantor and the
applicable Operating Subtenant(s) shall each execute and deliver to Separate
Lease Landlord a new guaranty and operating subtenant guaranty, respectively, of
Tenant’s obligations with respect to the Removal Facility, which guaranty shall
be in the form of guaranty attached as Exhibit E hereto (the “Separate Lease
Guaranty”) and which operating subtenant guaranty shall be in the form of the
Operating Subtenant Guaranty (the “Separate Lease Operating Sublease Guaranty”).
Upon execution and delivery of the Separate Lease Guaranty and the Separate
Lease Operating Sublease Guaranty, the Guaranty and Operating Subtenant Guaranty
delivered to Landlord in connection with the execution of this Lease shall be of
no further force or effect with respect to any future obligations of Guarantor
and the applicable Operating Subtenant(s), respectively, related to the Removal
Facility; provided that the Guaranty and Operating Subtenant Guaranty shall
remain in full force and effect with respect to any existing or pending
obligations of Guarantor and the applicable Operating Subtenant(s),
respectively, related to the Removal Facility arising or accruing prior to the
execution and delivery of the Separate Lease.

(e)    Costs and Expenses. All costs and expenses relating to a Separate Lease
(including reasonable attorneys’ fees and other reasonable, documented
out-of-pocket costs incurred by Tenant, any Operating Subtenant or Guarantor for
outside counsel, if any) shall be borne by Landlord and not Tenant.

(f)    Cooperation. Landlord and Tenant shall cooperate with Gaming Authorities
in all reasonable respects to facilitate all necessary regulatory reviews,
approvals and/or authorization of the Separate Lease in accordance with
applicable Gaming Regulations.

 

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(g)    Calculation of Required CapEx. If this Lease is severed in accordance
with one or more Fee Mortgages pursuant to Section 1.5(a)(ii), for as long as
the Landlord and the Separate Lease Landlord are Affiliates of each other, the
calculation of Required CapEx shall be computed on an aggregate basis for both
of the Facilities combined.

ARTICLE II

DEFINITIONS

2.1    Definitions. For all purposes of this Lease, except as otherwise
expressly provided or unless the context otherwise requires, (i) the terms
defined in this Article II have the meanings assigned to them in this Article
and include the plural as well as the singular; all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
GAAP; (ii) all references in this Lease to designated “Articles,” “Sections” and
other subdivisions are to the designated Articles, Sections and other
subdivisions of this Lease; (iii) the word “including” shall have the same
meaning as the phrase “including, without limitation,” and other similar
phrases; (iv) the words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Lease as a whole and not to any particular Article,
Section or other subdivision; (v) for the calculation of any financial ratios or
tests referenced in this Lease (including the EBITDAR to Rent Ratio), this
Lease, regardless of its treatment under GAAP, shall be deemed to be an
operating lease and the Rent and Additional Charges payable hereunder shall be
treated as Operating Expenses; (vi) all uses of the term “EBITDA” herein shall
have the meaning of the definition of “EBITDA” in this Lease; (vii) all
references herein to items to be prepared or determined “in accordance with
GAAP” are intended to mean “in accordance with GAAP and the Existing Accounting
Guidelines”; and (viii) all Exhibits, Schedules and other attachments annexed to
the body of this Lease are hereby deemed to be incorporated into and made an
integral part of this Lease.

“Accounts”: All accounts, including deposit accounts, all rents, profits,
income, revenues or rights to payment or reimbursement derived from the use of
any space within the Leased Property and/or from goods sold or leased or
services rendered from the Leased Property (including, without limitation, from
goods sold or leased or services rendered from the Leased Property by any
subtenant) and all accounts receivable, in each case whether or not evidenced by
a contract, document, instrument or chattel paper and whether or not earned by
performance, including without limitation, the right to payment of management
fees and all proceeds of the foregoing.

“Additional Charges”: All Impositions and all other amounts, liabilities and
obligations which Tenant assumes or agrees to pay under this Lease and, in the
event of any failure on the part of Tenant to pay (or cause to be paid) any of
those items (except (i) where such failure is due to the wrongful or negligent
acts or omissions of Landlord and (ii) where Tenant shall have furnished
Landlord with no less than ten (10) days’ notice of such act or omission of
which Tenant is aware), every fine, penalty, interest and cost which may be
added for non-payment or late payment of such items pursuant to the terms
hereof, applicable law or otherwise.

 

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“Affiliate”: When used with respect to any corporation, limited liability
company, partnership or any other Person, the term “Affiliate” shall mean any
Person which, directly or indirectly, controls or is controlled by or is under
common control with such other Person. For the purposes of this definition,
“control” (including the correlative meanings of the terms “controlled by” and
“under common control with”), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, partnership interests or other Equity Interests.

“Affiliate Agreements”: Any contract between Affiliates of Tenant’s Parent with
respect to any Facility.

“Affiliate SNDA”: As defined in Section 22.10.

“Ancillary Space”: Those portions of a Facility that are not Primary Space.

“ANI”: As defined in Section 13.1(j).

“Annual Certificate”: A certificate of Tenant, signed by an authorized officer
of Tenant, certifying to Tenant’s knowledge in all material respects as to the
matters described in Sections 8.5 and 22.3(d) to be included in such
certificate.

“Applicable Coverage Ratio”: As defined in Section 23.3.

“Applicable CPI Adjustment Factor”: For any Lease Year beginning with the
sixteenth Lease Year, the quotient of (A) the CPI as of the date which is thirty
(30) days prior to the commencement of such Lease Year divided by (B) the CPI as
of the date which is one year prior to the date described in the preceding
clause (A).

“Appraiser”: As defined in Section 3.5.

“Approved Accounting Firm”: (1) Any “big four” accounting firm designated by
Tenant or (2) one of the other largest independent public accounting firms in
the United States selected by Tenant’s Parent or Tenant and reasonably approved
by Landlord.

“Architect”: As defined in Section 10.1(b)(iii).

“Award”: All compensation, sums or anything of value awarded, paid or received
with respect to a total or partial Condemnation.

“Bank Secrecy Act”: As defined in Section 8.2(c).

“Base Rent”: An annual amount equal to Two Hundred Ninety-Two Million Dollars
($292,000,000) allocated between the Grand Leased Property and the MB Leased
Property as follows: $159,000,000 shall be allocated to the Grand Leased
Property (the “Initial Grand Base Rent”) and $133,000,000 shall be allocated to
the MB Leased Property (the “Initial MB Base Rent”); provided, however, that
commencing on the first day of the calendar month immediately following the
first anniversary of the Commencement Date and continuing at the

 

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beginning of each Lease Year thereafter during the Term, the Base Rent shall
increase to an annual amount equal to the sum of (i) the Base Rent for the
immediately preceding Lease Year, and (ii) the Escalation. The Base Rent shall
continue to be allocated to each Facility, as illustrated on Schedule 12 hereto.

At the commencement of each Renewal Term, Base Rent of each Facility shall be
reset to be equal to the greater of (i) the amount determined pursuant to the
immediately preceding paragraph, and (ii) the Fair Market Rent of each Facility
as determined pursuant to Section 3.5 hereof. The Base Rent determined in
accordance with the preceding sentence shall be payable throughout the remainder
of the Renewal Term except that the Base Rent shall increase on the first day of
each Lease Year to an amount equal to the sum of (x) the Base Rent for the
immediately preceding Lease Year, and (y) the Escalation.

“Blackstone REIT”: BREIT and any Subsidiary of BREIT that is a “real estate
investment trust” (within the meaning of Section 856(a) of the Code) through
which BREIT holds an interest in Landlord.

“Bookings”: Reservations, bookings, exhibitions or other short-term arrangements
with conventions, conferences, hotel guests, tours, vendors and other groups or
individuals (it being understood that whether or not such arrangements or
agreements are short-term or temporary shall be determined without regard to how
long in advance such arrangements or agreements are entered into).

“BREIT”: Blackstone Real Estate Income Trust Inc., a Delaware corporation.

“BREIT OP”: BREIT Operating Partnership L.P., a Delaware limited partnership.

“Business Day”: Each Monday, Tuesday, Wednesday, Thursday and Friday which, in
each case, is not a day on which national banks in the City of New York, New
York are authorized, or obligated, by law or executive order, to close.

“CapEx Certification Date”: As defined in Section 9.1(e)(i).

“CapEx Disbursement Request”: As defined in Section 9.1(e)(v).

“CapEx Grace Period”: As defined in Section 9.1(e)(iii).

“CapEx Reserve”: As defined in Section 9.1(e)(iv).

“CapEx Reserve Funds”: As defined in Section 9.1(e)(iv).

“CapEx Testing Period”: Each five (5) year period (on a rolling basis) through
the Term, with the first period commencing on January 1, 2020 and expiring on
December 31, 2024 and the second period commencing on January 1, 2021 and
expiring on December 31, 2025.

“CapEx Testing Period Certificate”: As defined in Section 9.1(e)(i).

 

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“CapEx Testing Period Net Revenues”: As defined in Section 9.1(e)(i).

“Capital Improvement Notice”: As defined in Section 10.5(a).

“Capital Improvements”: With respect to any Facility, any improvements or
alterations or modifications of the Leased Improvements, including without
limitation capital improvements and structural alterations, modifications or
improvements, or one or more additional structures annexed to any portion of any
of the Leased Improvements of such Facility or the expansion of existing
improvements, which are constructed on any parcel or portion of the Land of such
Facility, during the Term, including construction of a new wing or new story, in
each case which are permanently affixed to the Leased Property such that they
constitute real property under applicable Legal Requirements.

“Capital Improvements Threshold”: As defined in Section 10.1(b)(vi).

“Cash”: Cash and cash equivalents and all instruments evidencing the same or any
right thereto and all proceeds thereof.

“Casualty Event”: Any loss of title or any loss of or damage to or destruction
of, or any Condemnation or other taking (including by any governmental
authority) of, any portion of the Leased Property. “Casualty Event” shall
include, but not be limited to, any taking of all or any portion of the Leased
Property, in or by Condemnation or other eminent domain proceedings pursuant to
any applicable law, or by reason of the temporary requisition of the use or
occupancy of all or any part of any real property of or any part thereof by any
governmental authority, civil or military.

“Code”: The Internal Revenue Code of 1986 as amended from time to time.

“Commencement Date”: As defined in Section 1.3.

“Competitor Restriction Open Date”: As defined in Section 18.1.

“Competitor Restriction Termination Date”: The earlier to occur of (x) the
Competitor Restriction Open Date and (y) an Event of Default.

“Condemnation”: A taking by the exercise of any governmental power, whether by
legal proceedings or otherwise, by a Condemnor or a voluntary sale or transfer
by Landlord to any Condemnor, either under threat of condemnation or while legal
proceedings for condemnation are pending.

“Condemnor”: Any public or quasi-public authority, or private corporation or
individual, having the power of Condemnation.

“Confidential Information”: Any and all financial, technical, proprietary,
confidential, and other information, including data, reports, interpretations,
forecasts, analyses, compilations, studies, summaries, extracts, records,
know-how, statements (written or oral) or other documents of any kind, that
contain information concerning the business and affairs of Landlord or Tenant or
their respective Related Persons, whether furnished before or after the

 

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date of this Lease, and regardless of the manner in which it was furnished, and
any material prepared by either Landlord or Tenant or their respective Related
Persons, in whatever form maintained, containing, reflecting or based upon, in
whole or in part, any such information; provided, however, that “Confidential
Information” shall not include information which: (i) was or becomes generally
available to the public other than as a result of a disclosure by either
Landlord or Tenant or their respective Related Persons in breach of this Lease;
(ii) was or becomes available to either Landlord or Tenant or their respective
Related Persons on a non-confidential basis prior to its disclosure hereunder as
evidenced by the written records of Landlord or Tenant or their Related Persons,
provided, that the source of the information is not bound by a confidentiality
agreement with respect to such information or otherwise prohibited from
transmitting such information by a contractual, legal or fiduciary duty; or
(iii) was independently developed by the other without the use of any
Confidential Information, as evidenced by its written records.

“Construction Security”: (A) cash, (B) cash equivalents, (C) a Letter of Credit
or (D) an alternative security reasonably acceptable to Landlord (or a
combination thereof), in an amount equal to (x) in the case of Capital
Improvements, the cost by which the budgeted cost of such Capital Improvements
exceeds the Capital Improvements Threshold, and (y) in the case of a Restoration
Deficiency, the amount of such deficiency.

“Construction Security Escrow Account”: As defined in Section 10.1(c).

“Control”: The ability, directly or indirectly, whether through the ownership of
voting securities or other Equity Interests, by contract, or otherwise
(including by being the managing member or general partner of the Person in
question), to direct or cause the direction of the management and policies of a
Person.

“Covenant Failure Period”: The period beginning upon the failure of the
Financial Covenant or the Listing Covenant and ending upon a Covenant Security
Coverage Cure with respect to such failure.

“Covenant Security Coverage Cure”: (1) Following the failure of the Financial
Covenant, (A) (i) as of the last day of the most recent Test Period and the last
day of the Test Period immediately preceding the most recent Test Period, the
EBITDAR to Rent Ratio shall have been equal to or greater than the Applicable
Coverage Ratio or (ii) Tenant’s Parent’s Market Capitalization, on the last day
of the most recent Test Period and the last day of the Test Period immediately
preceding the most recent Test Period, shall exceed $6,000,000,000; and
(B) Tenant’s satisfaction of the Listing Covenant; or (2) following the failure
of the Listing Covenant, as of the last day of the most recent Test Period and
the last day of the Test Period immediately preceding the most recent Test
Period, the EBITDAR to Rent Ratio shall have been greater than 2:1.

“Covenant Security Escrow Account”: An escrow account established by Tenant with
a reputable, nationally recognized title insurance company selected by Tenant
and approved by Landlord (such approval not to be unreasonably withheld,
conditioned or delayed) with an office located in Las Vegas, Nevada. Fidelity
Title Insurance Company is hereby preapproved by Landlord and Tenant.

 

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“Covenant Security Escrow Instructions”: Whenever Tenant has deposited sums as
required hereunder into a Covenant Security Escrow Account, irrevocable escrow
instructions (reasonably satisfactory to Tenant and Landlord) to the title
company holding the Covenant Security Escrow Account to hold such funds in
escrow, and to release them directly to Landlord promptly upon written demand by
Landlord certifying that an Event of Default exists hereunder, without any
further instructions, action or approval from Tenant, or to release them to
Tenant upon the joint written instructions of Tenant and Landlord (which, upon
Tenant’s request, Landlord shall execute and deliver when a Covenant Security
Coverage Cure shall have occurred or following the expiration of this Lease).

“CPI”: The United States Department of Labor, Bureau of Labor Statistics Revised
Consumer Price Index for All Urban Consumers (1982-84=100), U.S. City Average,
All Items, or, if that index is not available at the time in question, the index
designated by such Department as the successor to such index, and if there is no
index so designated, an index for an area in the United States that most closely
corresponds to the entire United States, published by such Department, or if
none, by any other instrumentality of the United States, all as reasonably
determined by Landlord and Tenant.

“Customary Hotel Art”: All art, artwork, paintings, sculptures or other artistic
installments or displays which are (x) generally affixed to the walls of guest
rooms, hallways, convention rooms, casino areas and ancillary spaces which are
consistent with the Operating Standard or (y) otherwise located at any Facility,
and, in each case, not costing in excess of $10,000 for any individual item.

“Data”: As defined in the definition of Intellectual Property.

“Date of Taking”: The date the Condemnor has the right to possession of the
property being condemned.

“Debt Agreement”: If designated by Tenant to Landlord in writing to be included
in the definition of “Debt Agreement,” one or more (A) debt facilities or
commercial paper facilities, providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to lenders or
to special purpose entities formed to borrow from lenders against such
receivables) or letters of credit, (B) debt securities, indentures or other
forms of debt financing (including convertible or exchangeable debt instruments
or bank guarantees or bankers’ acceptances), or (C) instruments or agreements
evidencing any other indebtedness, in each case, with the same or different
borrowers or issuers and, in each case, (i) entered into from time to time by
Tenant, any Operating Subtenant and/or their respective Subsidiaries, (ii) as
amended, supplemented, modified, extended, restructured, renewed, refinanced,
restated, replaced or refunded in whole or in part from time to time,
(iii) which are secured by assets of Tenant, any Operating Subtenant and/or
their respective Subsidiaries, including, but not limited to, their Cash,
Accounts, Tenant’s Property, real property and leasehold estates in real
property (including this Lease) and (iv) which shall provide Landlord, (x), the
right to receive copies of notices of Specified Debt Agreement Defaults
thereunder in accordance with Section 17.3 hereof and (y) the right to cure such
defaults in accordance with Section 17.2 hereof.

 

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“Debt Facilities”: One or more (A) debt facilities or commercial paper
facilities, providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to lenders or to special
purpose entities formed to borrow from lenders against such receivables) or
letters of credit, (B) debt securities, indentures or other forms of debt
financing (including convertible or exchangeable debt instruments or bank
guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing
any other indebtedness, in each case, with the same or different borrowers or
issuers.

“Delano Agreement”: License Agreement dated August 8, 2012 by and between
Morgans Hotel Group Management LLC and Mandalay Corp. d/b/a Mandalay Bay Resort
and Casino, as modified or amended as of the date hereof or from time to time in
accordance with this Agreement.

“Designated Tenant’s Property”: As defined in Section 36.1.

“Disclosure Documents”: Collectively, any written materials used or provided to
any prospective investors and/or the rating agencies in connection with any
public offering or private placement in connection with a securitization
(including, without limitation, a prospectus, prospectus supplement, private
placement memorandum, offering memorandum, offering circular, term sheet, road
show presentation materials or other offering documents, marketing materials or
information provided to prospective investors), in each case in preliminary or
final form and including any amendments, supplements, exhibits, annexes and
other attachments thereto.

“Dispute Notice”: As defined in Section 16.1(b).

“Dollars” and “$”: The lawful money of the United States.

“EBITDA”: For any Test Period and with respect to any Person or Facility (as
applicable), the sum of (a) Net Income of such Person or Facility for that
period, plus or minus the following (without duplication in each case) to the
extent reflected in Net Income for that period, plus (b) any extraordinary loss,
and, without duplication, any loss associated with the early retirement of
Indebtedness and with any disposition not in the ordinary course of business,
minus (c) any extraordinary gain, and, without duplication, any gains associated
with the early retirement of Indebtedness and with any disposition not in the
ordinary course of business, plus (d) interest charges of such Person or
Facility for that period, less (e) interest income of such Person or Facility
for that period, plus (f) the aggregate amount of expense for federal, foreign,
state and local taxes on or measured by income of such Person or Facility for
that period excluding Gaming taxes (whether or not payable during that period),
minus (g) the aggregate amount of benefit for federal, foreign, state and local
taxes on or measured by income of such Person or Facility for that period
excluding Gaming taxes (whether or not receivable during that period), plus
(h) depreciation, amortization, plus (i) all non-recurring and/or other non-cash
expenses which shall be limited to third party expenses in connection with an
acquisition or disposition of an asset, plus (j) loss on sale or disposal of an
asset, and write downs and impairments of an asset, minus (k) all non-recurring
and/or other non-cash income in connection with an acquisition or disposition,
and gain on sale of an asset, plus (l) expenses classified as “pre-opening and
start-up expenses” on the applicable financial statements of that Person or

 

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Facility for that fiscal period which shall be limited to costs related directly
to such Facility’s Primary Intended Use, minus (m) non-cash reversal of an
accrual or reserve not recorded in the ordinary course, plus or minus (n) the
impact of any foreign currency gains or losses and related swaps, plus (o) all
long-term non-cash expenses realized in connection with or resulting from equity
or equity-linked compensation plans, employee benefit plans or agreements or
post-employment benefit plans or agreements, stock appreciation or similar
rights, stock options, restricted stock, preferred stock, stock appreciation or
other similar rights, plus or minus (p) any equity income from the earnings of
an equity method investee and plus (q) any equity loss from the earnings of an
equity method investee, in each case as determined in accordance with GAAP,
consistently applied using the Existing Accounting Guidelines. For the avoidance
of doubt, (x) the revenues and expenses of the Signature Entities arising out of
the Signature Hotel Units (including from any Signature Rental Management
Operations) shall be included for purposes of calculating the EBITDA of the
Grand Facility (or Grand Operating Subtenant (or Tenant with respect to any
portion of the Grand Facility that is not subject to an Operating Sublease)) and
(y) other than as set forth in the immediately preceding clause (x), no revenues
and expenses of Tenant or any Operating Subtenant other than those derived from
the Facilities shall be included for purposes of calculating EBITDA.

“EBITDAR”: For any Test Period, with respect to any Person or Facility, EBITDA
plus, without duplication, any rent associated with this Lease (as may be
amended from time to time) reflected in Net Income, and, without duplication, in
each case as determined in accordance with GAAP, consistently applied using the
Existing Accounting Guidelines.

“EBITDAR to Rent Ratio”: For any date, the ratio of (i) EBITDAR derived from the
Facilities by Tenant, any Operating Subtenant or their Affiliates (without
duplication) for the Test Period most recently ended prior to such date to
(ii) Rent for the Test Period most recently ended prior to such date. For
purposes of the calculation of Rent in clause (ii) above for the first year
following the Commencement Date, Rent shall be $292,000,000.

“EIL”: As defined in Section 13.1(j).

“Eligible Account”: A separate and identifiable account from all other funds
held by the holding institution that is either (a) an account or accounts
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (b) a
segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity that has a Moody’s rating of at least “Baa2” and which, in the case of
a state chartered depository institution or trust company, is subject to
regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a
combined capital and surplus of at least Fifty Million and No/100 Dollars
($50,000,000.00) and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.

“Eligible Institution”: Either (a) a depository institution or trust company
insured by the Federal Deposit Insurance Corporation, the short-term unsecured
debt obligations or commercial paper of which are rated at least “A-1+” by S&P
and “P-1” by Moody’s in the case of accounts in which funds are held for thirty
(30) days or less (or, in the case of letters of credit and accounts in which
funds are held for more than thirty (30) days, the long-term unsecured

 

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debt obligations of which are rated at least “A+” by S&P and “Aa3” by Moody’s),
or (b) Wells Fargo Bank, National Association, JPMorgan Chase Bank, N.A. or Bank
of America, N.A. or any of their affiliates or successors provided that the
rating by S&P and Moody’s for the short term unsecured debt obligations or
commercial paper and long term unsecured debt obligations of the same does not
decrease below the ratings set forth in clause (a) hereof.

“Encumbrance”: Any mortgage, deed of trust, lien, encumbrance or other matter
affecting title to the Leased Property, or any portion thereof or interest
therein.

“End of Term Asset Transfer Notice”: As defined in Section 36.1.

“Environmental Costs”: As defined in Section 32.4.

“Environmental Laws”: Any and all federal, state, municipal and local laws,
statutes, ordinances, rules, regulations, guidances, policies, orders, decrees
or judgments, whether statutory or common law, as amended from time to time, now
or hereafter in effect, or promulgated, pertaining to the environment, public
health and safety and industrial hygiene, including the use, generation,
manufacture, production, storage, release, discharge, disposal, handling,
treatment, removal, decontamination, cleanup, transportation or regulation of
any Hazardous Substance, including the Industrial Site Recovery Act, the Clean
Air Act, the Clean Water Act, the Toxic Substances Control Act, the
Comprehensive Environmental Response Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide,
Rodenticide Act, the Safe Drinking Water Act and the Occupational Safety and
Health Act, NRS Chapters 444, 445A, 445B, 445C, 445D, 459, 590 and NRS Sections
618.750 to 618.850.

“Equity Interests”: With respect to any Person, any and all shares, interests,
participations or other equivalents, including ownership or membership interests
(however designated, whether voting or non-voting), of equity of such Person,
including, if such Person is a partnership, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership.

“ERISA Affiliate”: Any entity which, together with another entity, would be
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code
or Section 4001 of the Employee Retirement Income Security Act of 1974, as
amended from time to time.

“Escalated Base Rent”: For each of the first fifteen (15) Lease Years (other
than the first Lease Year), an amount equal to one hundred and two percent
(102%) of the Base Rent as of the end of the immediately preceding Lease Year,
as set forth on Schedule 12 hereto. Thereafter, “Escalated Base Rent” for each
Lease Year shall mean (A) the greater of (1) an amount equal to one hundred and
two percent (102%) of the Base Rent as of the end of the immediately preceding
Lease Year, and (2) the Applicable CPI Adjustment Factor multiplied by the Base
Rent as of the end of the immediately preceding Lease Year; provided, however,
that in no event shall the Escalated Base Rent for any Lease Year increase by
more than three percent (3%) of the Base Rent payable for the immediately
preceding Lease Year (the “Escalation Cap”), as shown in the Theoretical Example
of Year 16 Rent Calculation attached hereto in Schedule 12.

 

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“Escalation”: For any Lease Year (other than the first Lease Year), an amount
equal to the difference between (i) the Escalated Base Rent for such Lease Year
and (ii) the Base Rent for the immediately preceding Lease Year. For purposes of
determining the Escalations pursuant to Section 23.3, the Escalated Base Rent
during the 16th Lease Year until the expiration of the Term shall be calculated
using the Escalation Cap.

“Escalation Cap”: As defined in the definition of “Escalated Base Rent.”

“Essential Property Charges”: As defined in Section 4.3.

“Estoppel Certificate”: As defined in Section 23.1(a).

“Event of Default”: As defined in Section 16.1(a).

“Event of Default Notice”: As defined in Section 16.2(b).

“Exchange Act”: The U.S. Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

“Excluded Assets”: As defined in Section 1.1(b).

“Exercise Date”: As defined in Section 1.4.

“Existing Accounting Guidelines”: Tenant’s accounting guidelines and policies in
effect as of the Commencement Date, as more particularly set forth on Schedule 4
hereto and which shall be subject to change to the extent not material or to the
extent needed to reflect changes in GAAP.

“Existing Management Agreement”: Any management agreement with a third party not
affiliated with Tenant with respect to a portion of a Facility in effect as of
the date of this Lease and described on Schedule 11 hereto.

“Existing Sublease”: Any sublease with respect to a portion of a Facility in
effect as of the date of this Lease and described on Schedule 10 hereto.

“Expert”: An independent third party professional, with expertise in respect of
a matter at issue, appointed by the agreement of Landlord and Tenant or
otherwise in accordance with Article XXXIV hereof.

“Expert Fair Market Rent”: As defined in Section 34.1(b)(i).

“Facilit(y)(ies)”: As defined in the Recitals. “Facility” shall not include any
off-track betting facilities located off-site or other offsite Gaming
facilities.

“Facility Mortgage”: As defined in Section 13.1.

 

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“Facility Mortgage Documents”: With respect to each Facility Mortgage and
Facility Mortgagee, the applicable Facility Mortgage, loan agreement, debt
agreement, credit agreement or indenture, lease, note, collateral assignment
instruments, guarantees, indemnity agreements and other documents or instruments
evidencing, securing or otherwise relating to the loan made, credit extended, or
lease or other financing vehicle entered into pursuant thereto.

“Facility Mortgagee”: As defined in Section 13.1.

“Fair Market Rent”: With respect to the Leased Property or any Facility, at any
time in question and as the context may require, the prevailing fair market Base
Rent which would be determined in an arm’s-length negotiation by Landlord and
Tenant if neither party were under any compulsion to enter into a lease, taking
into account all of the material terms and conditions of this Lease (including
the obligation to pay Additional Charges and the presence of any remaining
Renewal Terms) and, taking into account the fact that Landlord will not be
entitled to the benefit of any of Tenant’s Property other than its rights with
respect to Tenant’s Property pursuant to Section 6.4 and Article XXXVI for a ten
(10) year term beginning as of the commencement of the applicable Renewal Term,
such Fair Market Rent to be determined by mutual agreement by the parties or in
accordance with Section 3.5.

“Fair Market Rent Assumptions”: The Expert shall assume the following
(1) neither the tenant nor landlord is under any compulsion to lease and that
both have reasonable knowledge of all relevant facts, are acting prudently and
knowledgeably in a competitive and open market, and assuming price is not
affected by undue stimulus, (2) such lease contains terms and conditions
identical to the terms and conditions of this Lease, other than with respect to
the length of term and payment of Rent, (3) neither party is paying any broker a
commission in connection with the transaction, (4) that the tenant thereunder
will pay such Fair Market Rent for the entire term of such demise (i.e., no
early termination)), (5) the Leased Property to be valued pursuant hereto (as
improved by all then existing Leased Improvements, and all Capital Improvements
thereto), shall be valued as (or as part of) a fully-permitted Facility operated
in accordance with the provisions of this Lease for the Primary Intended Use,
free and clear of any lien or encumbrance evidencing a debt (including any
Permitted Leasehold Mortgage) or judgment (including any mortgage, security
interest, tax lien, or judgment lien), (6) in determining the Fair Market Rent
with respect to damaged or destroyed Leased Property, such value shall be
determined as if such Leased Property had not been so damaged or destroyed,
(7) the Fair Market Rent shall represent the normal rent for the Leased Property
unaffected by sales (or leasing) concessions granted by anyone associated with
the transaction, (8) the following specific matters shall be factored in or out,
as appropriate, in determining Fair Market Rent as the case may be: (i) the
negative value of (x) any deferred maintenance or other items of repair or
replacement of the Leased Property to the extent arising from breach or failure
of Tenant to perform or observe its obligations hereunder, (y) any then current
or prior Gaming or other licensure violations by Tenant, Guarantor or any of
their Affiliates, and (z) any breach or failure of Tenant to perform or observe
its obligations hereunder (in each case with respect to the foregoing clauses
(x), (y) and (z), without giving effect to any applicable cure periods
hereunder), shall not be taken into account; rather, the Leased Property and
every part thereof shall be deemed to be in the condition required by this Lease
and Tenant shall at all times be deemed to have operated the Facilities in
compliance with and to have performed all obligations of Tenant under this
Lease, and (ii) such determination shall be without reference to any savings

 

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Landlord may realize as a result of any extension of the Term of this Lease,
such as savings in free rent and tenant concessions, and without reference to
any “start-up” costs a new tenant would incur were it to replace the existing
Tenant for any Renewal Term or otherwise, and (9) the Leased Property will be
leased as a whole or substantially as a whole to a single user.

“FASB”: As defined in the definition of GAAP.

“Fee Mortgage”: Any mortgage, pledge agreement, security agreement, assignment
of leases and rents, fixture filing or similar document creating or evidencing a
lien on Landlord’s interest in the Leased Property or any portion thereof (or an
indirect interest therein, including without limitation, a lien on direct or
indirect interests in Landlord pursuant to a mezzanine loan or otherwise) in
accordance with the provisions of Article XXXI hereof.

“Fee Mortgage Documents”: With respect to each Fee Mortgage and Fee Mortgagee,
the applicable Fee Mortgage, loan agreement, debt agreement, credit agreement or
indenture, lease, note, collateral assignment instruments, guarantees, indemnity
agreements and other documents or instruments evidencing, securing or otherwise
relating to the loan made, credit extended, or lease or other financing vehicle
entered into pursuant thereto.

“Fee Mortgagee”: The holder(s) or lender(s) under any Fee Mortgage (which for
the avoidance of doubt may include the holder(s) or lender(s) under any
mezzanine loan secured by a direct or indirect interest in Landlord’s interest
in the Leased Property) or the agent or trustee acting on behalf of any such
holder(s) or lender(s).

“Fee Mortgagee Securitization”: Any sale or financing by a Fee Mortgagee
(including, without limitation, issuing one or more participations) of all or a
portion of the loan secured by a Fee Mortgage, including, without limitation, a
public or private securitization of rated single- or multi-class securities
secured by or evidencing ownership interests in all or any portion of the loan
secured by a Fee Mortgage or a pool of assets that includes such loan.

“Fee Mortgagee Securitization Indemnitee”: Any Fee Mortgagee, any Affiliate of a
Fee Mortgagee that has filed any registration statement relating to a Fee
Mortgagee Securitization or has acted as the sponsor or depositor in connection
with a Fee Mortgagee Securitization, any Affiliate of a Fee Mortgagee that acts
as an underwriter, placement agent or initial purchaser of securities issued in
a Fee Mortgagee Securitization, any other co-underwriters, co-placement agents
or co-initial purchasers of securities issued in a Fee Mortgagee Securitization,
in each case under or relating to the Fee Mortgage, and each of their respective
officers, directors and Affiliates and each Person or entity who “controls” any
such Person within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act.

“FF&E”: Collectively, furnishings, fixtures, inventory, and equipment located in
the guest rooms, hallways, lobbies, restaurants, lounges, meeting and banquet
rooms, parking facilities, public areas or otherwise in any portion of any
Facility, including (without limitation) all beds, chairs, bookcases, tables,
carpeting, drapes, couches, luggage carts, luggage racks, bars, bar fixtures,
radios, television sets, intercom and paging equipment, electric and electronic
equipment, heating, lighting and plumbing fixtures, fire prevention and
extinguishing apparatus, cooling and air-conditioning systems, elevators,
escalators, stoves, ranges, refrigerators laundry

 

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machines, tools, machinery, boilers, incinerators, switchboards, conduits,
compressors, vacuum cleaning systems, floor cleaning, waxing and polishing
equipment, cabinets, lockers, shelving, dishwashers, garbage disposals, washer
and dryers, Gaming Equipment and other casino equipment and all other hotel and
casino resort equipment, supplies and other tangible property owned by Tenant or
any Operating Subtenant, or in which Tenant or any Operating Subtenant has or
shall have an interest, now or hereafter located at the Leased Property or used
or held for use in connection with the present or future operation and occupancy
of any Facility; provided, however, that FF&E shall not include Excluded Assets
or items owned by subtenants that are neither Tenant or Operating Subtenants nor
Affiliates of Tenant or Operating Subtenants, by guests or by other third
parties.

“FF&E Disbursement Request”: As defined in Section 9.1(f).

“FF&E Reserve”: As defined in Section 9.1(f).

“FF&E Reserve Funds”: As defined in Section 9.1(f).

“Final Financial Covenant Compliance Report”: As defined in Section 23.1(b)(iv).

“Finance Lease”: As applied to any Person, any lease of any Property by that
Person as lessee that is required to be classified and accounted for as a
finance lease in conformity with GAAP; and provided, that, for the avoidance of
doubt, this Lease will not be deemed to be a Finance Lease.

“Financial Covenant”: As defined in Section 23.3.

“Financial Statements”: (i) For a Fiscal Year, consolidated statements of
operations, shareholders’ equity and cash flows of Tenant’s Parent and its
Subsidiaries for such Fiscal Year and the related consolidated balance sheet as
at the end of such Fiscal Year, prepared in accordance with GAAP as at such date
and audited by an Approved Accounting Firm, and (ii) for each fiscal quarter
(other than the fourth fiscal quarter in any Fiscal Year), the consolidated
statements of operations and cash flows of Tenant’s Parent and its Subsidiaries
for such fiscal quarter and for the portion of the Fiscal Year ended with such
fiscal quarter, and the related consolidated balance sheet as at the end of such
fiscal quarter, prepared in accordance with GAAP and Existing Accounting
Guidelines.

“Fiscal Year”: The annual period commencing January 1 and terminating
December 31 of each year.

“Fixtures”: As defined in Section 1.1(b)(iv).

“Four Seasons Agreement”: Hotel Management Agreement dated March 10, 1998 by and
among Four Seasons Hotels Limited, Mandalay Corp. and Circus Circus Enterprises,
Inc., as modified or amended as of the date hereof or from time to time in
accordance with this Agreement.

“Foreclosure Assignment”: As defined in Section 22.2(a)(i).

 

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“Foreclosure COC”: As defined in Section 22.2(a)(i).

“Foreclosure Purchaser”: As defined in Section 31.1.

“Foreclosure Transferee”: A transferee that meets all of the following
requirements:

(a) such transferee is or has engaged or is otherwise Controlled by a Qualified
Operator with respect to the operation of the Facilities;

(b) such transferee (directly or through one or more of its Subsidiaries) is
licensed or certified by each Gaming Authority with jurisdiction over any
portion of the Leased Property as of the date of any proposed assignment or
transfer to such entity (or will be so licensed upon its assumption of this
Lease);

(c) such transferee is Solvent, and, other than in the case of a Permitted
Leasehold Mortgagee Foreclosing Party or a Permitted Credit Facility Lender, if
such transferee has a Parent Company, the Parent Company of such transferee is
Solvent, and

(d) such transferee is, or is Controlled by, a Qualified Transferee and such
Qualified Transferee has executed and delivered a Guaranty.

“GAAP”: Generally accepted accounting principles in the United States set forth
in the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification® and rules and interpretive releases of the SEC under authority of
federal securities laws, that are applicable to the circumstances as of the date
of determination, consistently applied; provided, that if any change in
accounting principles is required by the promulgation of any rule, regulation,
pronouncement or opinion by the FASB or the SEC and such change results in a
change in the method of calculation of any financial ratio or term in this
Lease, then Tenant and Landlord shall negotiate in good faith in order to amend
such provision so as to equitably reflect such change with the desired result
that the criteria for evaluation of the relevant Person’s financial condition
shall be the same after such change as if such change had not occurred; provided
further that until such time as an amendment shall have been executed, all such
financial covenants and terms in this Lease shall continue to be calculated or
construed as if such change had not occurred.

“Gaming”: Casino, racetrack racing, video lottery terminal or other gaming
activities, including, but not limited to, the operation of slot machines, video
lottery terminals, table games, pari-mutuel wagering or other applicable types
of wagering (including, but not limited to, sports wagering). For avoidance of
doubt, the terms “gaming” and “gambling” as used in this Lease are intended to
include the meanings of such terms under NRS Section 463.0153.

“Gaming Authorities”: Any of the Nevada Gaming Commission, the Nevada Gaming
Control Board, the Clark County Liquor and Gaming Licensing Board, and any other
gaming regulatory body or any agency or governmental authority which has, or may
at any time after the Commencement Date have, jurisdiction over the gaming
activities at the Leased Property or any successor to such authority.

 

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“Gaming Corridor”: The greater Las Vegas Strip area bounded on the south by St.
Rose Parkway (but, for the avoidance of doubt, including the M Resort), the
north by US 95, on the east by Paradise Road or Maryland Parkway, as applicable,
and on the west by Decatur Boulevard.

“Gaming Equipment”: All equipment, software systems and/or gaming devices,
gaming devices parts inventory and other related gaming equipment and supplies
used to conduct gambling games authorized by applicable Gaming Regulations at a
Gaming Facility including without limitation, all slot machines, video lottery
terminals, table games, cards, dice, chips, tables, player tracking systems,
cashless wagering systems, electronic betting systems, mobile gaming systems,
gaming kiosks, pari-mutuel wagering systems, and/or other software systems and
devices used now or in the future (including any variation or derivative of any
of the foregoing, or any newly created equipment, software system or gaming
device) for the purposes of conducting gambling games, slot machines, gaming
devices and live games.

“Gaming Facility”: The portion of any property upon which Gaming Equipment is
utilized to generate Gaming revenues in accordance with a required Gaming
License.

“Gaming License”: Any license, permit, approval, finding of suitability, finding
of qualification or other authorization issued by Gaming Authorities to operate,
carry on or conduct any gambling game, race book or sports pool, pari-mutuel
wagering and/or offer to play any Gaming Equipment on the Leased Property, as
required by any Gaming Regulation, including each of the licenses, permits or
other authorizations set forth on Exhibit D, as amended from time to time, and
those related to any Facility that are added to this Lease after the date
hereof.

“Gaming Regulation(s)”: Any and all laws, statutes, ordinances, rules,
regulations, policies, orders, resolutions, codes, decrees or judgments, and
Gaming License conditions or restrictions, and requirements of any agreement
with a local municipality, as amended from time to time, now or hereafter in
effect or promulgated, pertaining to the operation, control, maintenance or
Capital Improvement of a Gaming Facility or the conduct of a Person holding a
Gaming License, including, without limitation, any contractual requirements or
requirements imposed by a regulatory agency, commission, board, municipality,
county, parish or other governmental body (including any Gaming Authority)
pursuant to the jurisdiction and authority granted to it under applicable law.

“Government List”: (1) any list or annex to Presidential Executive Order 13224
issued on September 24, 2001 (“EO13224”), including any list of Persons who are
determined to be subject to the provisions of EO13224 or any other similar
prohibitions contained in the rules and regulations of OFAC (as defined below)
or in any enabling legislation or other Presidential Executive Orders in respect
thereof, (2) the Specially Designated Nationals and Blocked Persons Lists
maintained by OFAC, (3) any other list of terrorists, terrorist organizations or
narcotics traffickers maintained pursuant to any of the Rules and Regulations of
OFAC, or (4) any similar lists maintained by the United States Department of
State, the United States Department of Commerce or any other governmental
authority or pursuant to any Executive Order of the President of the United
States of America.

 

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“Grand Excluded Assets”: As defined in Section 1.1(b).

“Grand Facility”: As defined in Exhibit A attached hereto.

“Grand Fixtures”: As defined in Section 1.1(b)(iv).

“Grand Land”: As defined in Section 1.1(b)(i).

“Grand Landlord”: As defined in the preamble.

“Grand Landlord Collateral Assignment of Management Agreement”: That certain
Collateral Assignment of Management Agreement dated of even date herewith,
between MGM Grand Hotel and Grand Landlord and joined for limited purposes by
Signature Owner, pursuant to which MGM Grand Hotel has collaterally assigned its
right, title and interest under the Signature Management Agreement to Grand
Landlord.

“Grand Leased Improvements”: As defined in Section 1.1(b)(ii).

“Grand Leased Property”: As defined in Section 1.1(b).

“Grand Operating Subtenant”: MGM Grand Hotel, or any successor Operating
Subtenant of the Grand Leased Property in accordance with this Lease (including,
without limitation pursuant to Section 41.17).

“Grand Trademarks”: (i) The “MGM Grand” and “Grand Garden” (or any Trademark
that replaces “MGM Grand” or “Grand Garden” as the primary brand name used to
identify the Grand Facility) brands and Trademarks containing “MGM Grand”,
“Grand Garden” and the MGM lion logo and all variations and derivations thereof,
in any format, font, style or design, whether alone or in combination with any
other terms, phrases, symbols, logos, styles or designs, including all
registrations and applications therefor, and (ii) associated copyrights.

“Grand Water Infrastructure”: As defined in Section 1.1(b)(vi).

“Grand Water Permits”: As defined in Section 1.1(b)(vi).

“Grand Water Rights”: As defined in Section 1.1(b)(vi).

“Guarantor”: Tenant’s Parent or any Qualified Transferee which delivers a
Guaranty in accordance with this Lease or consented to by Landlord.

“Guaranty”: That certain Guaranty of Lease dated as of the date hereof by and
between Guarantor and Landlord, a form of which is attached as Exhibit E hereto,
as the same may be amended or supplemented or restated from time to time in
accordance with the terms of this Lease and the Guaranty, and any other form of
guaranty in form and substance satisfactory to Landlord in its sole discretion
(it being acknowledged by Landlord that a Guaranty in the form of Exhibit E
attached hereto is satisfactory) executed by a Guarantor in favor of Landlord
(as the same may be amended or supplemented or restated from time to time in
accordance with this Lease and the Guaranty) pursuant to which such Guarantor
agrees to guaranty all of the obligations of Tenant hereunder.

 

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“Guest Data”: Any and all information and data identifying, describing,
concerning or generated by website visitors or prospective, actual or past
guests or customers of casinos, hotels, retail locations, restaurants, bars,
spas, entertainment venues, or other facilities or services, including without
limitation any and all guest or customer profiles, contact information (e.g.
addresses, phone numbers, facsimile numbers and email addresses), histories,
preferences, game play and patronage patterns, experiences, results and
demographic information, whether or not any of the foregoing constitutes
personally identifiable information, together with any and all other guest or
customer information in any database of Tenant, Tenant’s Parent or their
respective Affiliates, regardless of the source or location thereof, and
including without limitation such information obtained or derived by Tenant,
Tenant’s Parent or any of their respective Affiliates from (i) guests or
customers of the Facilities (for the avoidance of doubt, including Property
Specific Guest Data); or (ii) any other sources and databases, including
websites, central reservations databases, operational data bases (ODS) and any
player loyalty programs (e.g. the Tenant Rewards Program).

“Handling”: As defined in Section 32.4.

“Hazardous Substances”: Collectively, any petroleum, petroleum product or by
product or any substance, material or waste that is defined, regulated or
classified pursuant to any applicable Environmental Law as “hazardous,” “toxic,”
a “pollutant,” a “contaminant,” or words of similar meaning and regulatory
effect.

“Hotel Trademarks”: Collectively, the MB Trademarks and the Grand Trademarks.

“Impositions”: All taxes, special and general assessments, including assessments
for public improvements or benefits, whether or not commenced or completed prior
to the date hereof and whether or not to be completed within the Term, rents or
other amounts payable under any Property Documents, water rents, rates and
charges, commercial rent taxes, sewer and other utility rents, rates and
charges, excise tax levies, fees including license, permit, inspection,
authorization and similar fees, and other governmental impositions, levies and
charges of every kind and nature whatsoever, that may be assessed, levied,
confirmed, imposed or become a lien on the Leased Property or any part thereof
or any rent therefore or any estate, right, title or interest therein or any
occupancy, operation, use or possession of, or sales from or activity conducted
on or in connection with the Leased Property or the leasing or use of the Leased
Property or any part thereof prior to, during or with respect to any period
during the Term hereof through the expiration or earlier termination of this
Lease together with (i) any taxes and assessments that may be levied, assessed
or imposed upon the gross income arising from any Rent or in lieu of or as a
substitute, in whole or in part, for any Imposition and (ii) all interest and
penalties on the foregoing attributable to any failure in payment by Tenant
(other than failures arising from the wrongful or negligent acts of Landlord
where Tenant shall have furnished Landlord with no less than ten (10) days’
notice of such act which Tenant is aware). Except as described in clause
(ii) above, the term “Impositions” shall, however, not include any of the
following, all of which the parties agree shall be the responsibility of (and
paid, before any fine,

 

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penalty, interest or cost may be added for non-payment, by) Landlord: (a) any
franchise, income, excess profits, estate, inheritance, succession, transfer,
gift, corporation, business, capital levy, or profits tax of Landlord, (b) any
tax imposed with respect to the sale, exchange or other disposition by Landlord
of the fee estate in the Leased Property or Landlord Change of Control, and
(c) interest, penalties and other charges with respect to the foregoing items
(a) and (b).

“Indebtedness”: Of any Person, without duplication, (a) all obligations of such
Person for borrowed money; (b) all obligations of such Person evidenced by
bonds, debentures, notes, loan agreements or similar instruments; (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person; (d) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services (excluding (x) trade accounts payable and accrued obligations incurred
in the ordinary course of business or other accounts payable in the ordinary
course of business in accordance with ordinary trade terms, (y) financing of
insurance premiums and (z) any earn-out obligation or purchase price adjustment
until such obligation becomes a liability on the balance sheet (excluding the
footnotes thereto) in accordance with GAAP); (e) all Indebtedness of others to
the extent secured by any Lien on property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed; provided, that
if such obligations have not been assumed, the amount of such Indebtedness
included for the purposes of this definition will be the amount equal to the
lesser of the fair market value of such property and the amount of the
Indebtedness secured; (f) with respect to any Finance Lease of such Person, the
amount thereof that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP; (g) the net amount of the obligations of
such Person in respect of interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements
(including swap contracts); (h) all obligations of such Person as an account
party in respect of letters of credit and bankers’ acceptances, except
obligations in respect of letters of credit issued in support of obligations not
otherwise constituting Indebtedness shall not constitute Indebtedness except to
the extent such letter of credit is drawn and not reimbursed within ten
(10) Business Days; and (i) all guaranty obligations of such Person in respect
of Indebtedness of others of the kinds referred to in clauses (a) through (h)
above (other than, for the avoidance of doubt, in connection with any completion
guarantee); provided, that for purposes of this definition, deferred purchase
price obligations shall be calculated based on the net present value thereof.
The Indebtedness of any Person shall include the Indebtedness of any partnership
in which such Person is a general partner unless recourse is limited, in which
case the amount of such Indebtedness shall be the amount such Person is liable
therefor (except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor). The amount of Indebtedness of the type
described in clause (d) shall be calculated based on the net present value
thereof. The amount of Indebtedness of the type referred to in clause (g) above
of any Person shall be zero unless and until such Indebtedness becomes due, in
which case the amount of such Indebtedness shall be the amount due that is
payable by such Person. For the avoidance of doubt, it is understood and agreed
that (x) unredeemed casino chips and tokens and gaming winnings of customers,
(y) any obligations of such Person in respect of cash management agreements and
(z) any obligations of such Person in respect of employee deferred compensation
and benefit plans shall not constitute Indebtedness. For all purposes hereof,
the Indebtedness of the Tenant shall exclude (i) any obligations under this
Lease and any similar lease and (ii) intercompany liabilities arising from the
Tenant’s cash management, tax, and accounting operations and intercompany loan
advances.

 

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“Initial Grand Base Rent”: As defined in the definition of Base Rent.

“Initial MB Base Rent”: As defined in the definition of Base Rent.

“Initial Term”: As defined in Section 1.3.

“Insurance Requirements”: The terms of any insurance policy required by this
Lease and all requirements of the issuer of any such policy and of any insurance
board, association, organization or company necessary for the maintenance of any
such policy.

“Intellectual Property” or “IP”: All rights, title and interests in, to and
under any intellectual property, as they exist anywhere in the world, whether
registered or unregistered, including: (i) all patents and applications therefor
and all reissues, divisions, divisionals, renewals, extensions, provisionals,
continuations and continuations-in-part thereof, (ii) all inventions (whether or
not patentable), invention disclosures, improvements, business information,
know-how, trade secrets, Confidential Information, designs, plans, blueprints,
formulas, drawings, research and development, business and marketing plans,
proposals and surveys, customer lists, tangible and intangible proprietary
information, and all documentation relating to any of the foregoing, (iii) all
copyrights, works of authorship, copyrightable works, copyright registrations
and applications therefor, and all other rights corresponding thereto, (iv) all
industrial designs and any registrations and applications therefor, (v) all
trademarks, service marks, trade dress, trade styles, logos, trade names, brand
names, assumed names, corporate names, Internet domain names and other indicia
of commercial source or origin (whether registered, arising under common law or
statutory law, or otherwise) and general intangibles of like nature, together
with all translations, adaptations, derivations and combinations thereof and
including all goodwill associated therewith, and all applications, registrations
and renewals in connection therewith (collectively, “Trademarks”), (vi) all
databases and data collections (including all Guest Data) and all rights therein
(collectively, “Data”), (vii) all moral and economic rights of authors and
inventors, however denominated, (viii) all social media user names and accounts,
(ix) all computer software, firmware, microcode, operating systems, embedded
applications or other programs, including all source code, object code,
specifications, databases, designs and documentation related thereto
(collectively, “Software”), (x) all Internet addresses, electronic addresses,
uniform resource locators and alphanumeric designations associated therewith and
all registrations for any of the foregoing, (xi) all rights of privacy and
publicity, (xii) any other similar intellectual property and proprietary rights
of any kind, nature or description and (xiii) any copies of tangible embodiments
therefrom (in whatever form or medium).

“Intercreditor Agreement”: As defined in Section 17.1(a).

“Investment Fund”: A bona fide private equity fund or bona fide investment
vehicle arranged by and managed by or controlled by, or under common control
with, a private equity fund (excluding any private equity fund investment
vehicle the primary assets of which are Tenant and its Subsidiaries and/or this
Lease and assets related thereto) that is engaged in making, purchasing, funding
or otherwise investing in a diversified portfolio of businesses and companies
and is organized primarily for the purpose of making equity investments in
companies.

 

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“IP Licenses”: Collectively, any agreements or arrangements pursuant to which
Tenant, any Operating Subtenant or any of their respective Subsidiaries is
granted a license to use any System-wide IP other than readily available
off-the-shelf software.

“Item Subject to Deemed Consent”: As defined in Section 35.2.

“Land”: As defined in Section 1.1(b)(i).

“Landlord”: As defined in the preamble.

“Landlord Approved Capital Improvements”: As defined in Section 10.1(b).

“Landlord Change of Control”: If any Person other than MGP OP or BREIT OP shall
Control or hold any direct or indirect beneficial ownership of fifty percent
(50%) or more on a fully diluted basis of the direct or indirect voting power in
the Equity Interests of Landlord entitled to vote in an election of directors of
Landlord; provided, however, any change in the direct or indirect ownership in
Landlord’s Parents, MGP REIT, MGP OP, BREIT OP or BREIT or any other publicly
reporting Person in one or more transactions shall not constitute a Landlord
Change of Control.

“Landlord Indemnified Party” As defined in Section 21.1.

“Landlord’s Parents”: MGP OP and BREIT OP, and their respective successors from
time to time.

“Landlord Party”: As defined in the definition of Licensing Event.

“Landlord Representatives”: As defined in Section 23.4.

“Landlord Tax Returns”: As defined in Section 4.1(b).

“Landlord Work”: As defined in Section 10.6.

“Lease”: As defined in the preamble.

“Lease Year”: The first Lease Year shall be the period commencing on the
Commencement Date and ending on the last day of the twelfth (12th) full calendar
month following the Commencement Date, and each subsequent Lease Year shall be
each period of twelve (12) full calendar months thereafter.

“Leased Improvements”: As defined in Section 1.1(b)(ii).

“Leased Property”: As defined in Section 1.1(b).

“Leased Property Rent Adjustment Event”: As defined in Section 14.6.

“Leasehold Estate”: As defined in Section 17.1(a).

 

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“Legal Requirements”: All applicable federal, state, county, municipal and other
governmental statutes, laws, rules, policies, guidance, codes, orders,
regulations, ordinances, permits, licenses, covenants, conditions, restrictions,
judgments, decrees and injunctions (including common law, Gaming Regulations and
Environmental Laws) affecting any parties to this Lease (or the Guaranty), the
Leased Property, Tenant’s Property or Capital Improvements or the construction,
use or alteration thereof, whether now or hereafter enacted and in force,
including any which may (i) require repairs, modifications or alterations in or
to the Leased Property and Tenant’s Property, (ii) in any way adversely affect
the use and enjoyment thereof, or (iii) regulate the transport, handling, use,
storage or disposal or require the cleanup or other treatment of any Hazardous
Substance.

“Lessor Lien”: Any lien, encumbrance, attachment, title retention agreement or
claim (other than any of the foregoing that arise as a result of a Facility
Mortgage (or other security interest filing in relationship to a Facility
Mortgage), or result from the transactions contemplated by this Lease, or that
consist of liens and encumbrances of record or based on facts or occurrences
affecting or relating to the any of the Facilities as of the Commencement Date
or liens or encumbrances which are consented to by Tenant in writing, which
consent shall not be unreasonably withheld, conditioned or delayed as provided
in Section 7.2(c)) encumbering the Leased Property and that arises after the
Commencement Date solely as a result of (a) any act or omission of Landlord or
any of its Affiliates which is in violation of any of the terms of this Lease
after notice from Tenant and failure to cure within all applicable cure periods,
(b) any third-party claim against Landlord or its Affiliates that is unrelated
to the use, ownership, operation or maintenance of the Leased Property and
(i) for which Tenant is not required to indemnify Landlord pursuant to this
Lease, and (ii) that is unrelated to the acts or omissions of Tenant, Tenant’s
Subsidiaries or any of their respective Affiliates, or (c) any third-party claim
against Landlord arising out of any transfer, sale, assignment, encumbrance or
disposition by Landlord of all or any portion of the interest of Landlord in the
Leased Property or any portion thereof (or any Landlord Change of Control) in
violation of this Lease.

“Letter of Credit”: An irrevocable, unconditional, clean sight draft letter of
credit reasonably acceptable to Landlord and Fee Mortgagee (as applicable) in
favor of Landlord or, at Landlord’s direction, Fee Mortgagee and entitling
Landlord or Fee Mortgagee (as applicable) to draw thereon based solely on a
statement executed by an officer of Landlord or Fee Mortgagee (as applicable)
stating that it has the right to draw thereon under this Lease in a location in
the United States reasonably acceptable to Landlord or Fee Mortgagee (as
applicable), issued by one or more domestic Eligible Institutions or the U.S.
agency or branch of a foreign Eligible Institution, and upon which letter of
credit Landlord or Fee Mortgagee (as applicable) shall have the right to draw in
full: (a) if Landlord or Fee Mortgagee (as applicable) has not received at least
thirty (30) days prior to the date on which the then outstanding letter of
credit is scheduled to expire, a notice from the issuing financial institution
that it has renewed the applicable letter of credit; (b) thirty (30) days or
less prior to the date of termination following receipt of notice from the
issuing financial institution that the applicable letter of credit will be
terminated; and/or (c) thirty (30) days after Landlord or Fee Mortgagee (as
applicable) has given a proper notice to Tenant that any of the financial
institutions issuing the applicable letter of credit ceases to either be an
Eligible Institution or meet the rating requirement set forth above.

 

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“Licensing Event”: A communication (whether oral or in writing) by or from any
Gaming Authority to Tenant or any of its Affiliates (each, a “Tenant Party”) or
to a Landlord Party (as defined below) or other action by any Gaming Authority
that indicates that (i) such Gaming Authority has found that the association of
a Tenant Party with Landlord is likely to (A) result in a disciplinary action
relating to, or the loss of, inability to reinstate or failure to obtain, any
Gaming License or any other rights or entitlements held or required to be held
by Landlord or any of its Affiliates (each, a “Landlord Party”) under any Gaming
Regulations or (B) violate any Gaming Regulations to which a Landlord Party is
subject; or (ii) a Tenant Party is required to be licensed, registered,
qualified or found suitable under any Gaming Regulations, and such Tenant Party
does not remain so licensed, registered, qualified or found suitable or, after
becoming so licensed, registered, qualified or found suitable, fails to remain
so, and, solely for purposes of determining whether an Event of Default has
occurred under Section 16.1(a)(xii), the same causes cessation of Gaming
activity at any Facility and would reasonably be expected to have a material
adverse effect on any Facility.

“Lien”: As defined in Section 11.1(a).

“Liquor Authority”: As defined in Section 41.13(a).

“Liquor Laws”: As defined in Section 41.13(a).

“Listing Covenant”: As defined in Section 23.3.

“Market Capitalization”: With respect to a Person, the number of shares
outstanding as reflected on the balance sheet included in such Person’s
Financial Statements for the applicable fiscal quarter multiplied by the closing
price of such Person’s shares on the applicable stock exchange on the last
trading day of the applicable fiscal quarter.

“Master Transaction Agreement”: As defined in the Recitals.

“Material Indebtedness”: Any Indebtedness of the type referenced in clauses (a),
(b), or (e) of the definition of Indebtedness of Tenant or the Operating
Subtenants, the outstanding principal amount of which is in excess of One
Hundred Million Dollars ($100,000,000).

“MB Excluded Assets”: As defined in Section 1.1(a).

“MB Facility”: As defined in Exhibit A attached hereto.

“MB Fixtures”: As defined in Section 1.1(a)(iii).

“MB Hotel Facility”: Means that portion of the MB Facility subleased to Mandalay
Bay, LLC as of the date hereof.

“MB Land”: As defined in Section 1.1(a)(i).

“MB Landlord”: As defined in the preamble.

 

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“MB Leased Improvements”: As defined in Section 1.1(a)(ii).

“MB Leased Property”: As defined in Section 1.1(a).

“MB Place Facility”: Means that portion of the MB Facility subleased to Mandalay
Place, LLC as of the date hereof.

“MB Trademarks”: (i) The “Mandalay Bay” and “Mandalay Place” (or any Trademark
that replaces “Mandalay Bay” or “Mandalay Place” as the primary brand name used
to identify the MB Facility) brands and Trademarks containing “Mandalay Bay” and
“Mandalay Place” and all variations and derivations thereof, in any format,
font, style or design, whether alone or in combination with any other terms,
phrases, symbols, logos, styles or designs, including all registrations and
applications therefor, and (ii) associated copyrights.

“MB Water Infrastructure”: As defined in Section 1.1(a)(vi).

“MB Water Permits”: As defined in Section 1.1(a)(vi).

“MB Water Rights”: As defined in Section 1.1(a)(vi).

“MGM Grand Hotel”: MGM Grand Hotel, LLC, a Nevada limited liability company.

“MGP OP”: MGM Growth Properties Operating Partnership LP, a Delaware limited
partnership.

“MGP REIT”: MGM Growth Properties LLC, a Delaware limited liability company.

“Net Income”: With respect to any fiscal period and with respect to any Person,
the net income (or net loss) of that Person, determined in accordance with GAAP,
consistently applied using the Existing Accounting Guidelines.

“Net Revenue”: With respect to any fiscal period, the net revenue derived from
the Facilities and/or the Signature Hotel Units (including any net revenue
derived from any Signature Rental Management Operations) (or, if expressly
stated, from a particular Facility) by any Operating Subtenant (or Tenant with
respect to any portion of the Facility that is not subject to an Operating
Sublease) or its Affiliates (without duplication) for that period, determined in
accordance with GAAP, consistently applied using the Existing Accounting
Guidelines; provided that with respect to the space operated as a sports book
and the MGM Grand Garden Arena, “Net Revenue” shall only include the net revenue
derived from such space by Operating Subtenant (or Tenant with respect to any
portion of such space that is not subject to an Operating Sublease) or its
Subsidiaries.

“Net Worth”: (i) An entity’s equity as its total assets (including any available
uncalled or unfunded capital commitments of investors) minus its total actual
liabilities including the capitalization of any operating lease rent obligations
at ten times (10x) the rent amount but excluding any operating lease liability
recorded in total actual liabilities, in each case calculated in accordance with
GAAP, and (ii) as it relates to an entity publicly traded and listed on the New
York Stock Exchange, AMEX or NASDAQ, its Market Capitalization.

 

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“New Lease”: As defined in Section 17.1(f).

“Non-Discriminatory”: Consistent, commercially reasonable treatment of all
Persons regardless of the ownership, control or affiliations of any such Persons
(i) subject to the same or substantially similar policies and procedures,
including policies and procedures related to the standards of service and
quality required to be provided by such Persons or (ii) participating jointly in
the same transactions or relationships or participating in separate, but
substantially similar, transactions or relationships for the procurement of
goods or services (and whether such goods are purchased or leased), in each
case, including, without limitation, the unbiased and consistent allocation of
costs, expenses, savings and benefits of any such policies, procedures,
relationships or transactions on the basis of a reasonable methodology;
provided, however, that goods and services shall not be required to be provided
in a manner that exceeds the standard of service required to be provided at the
Leased Property under the terms of this Agreement to be deemed
“Non-Discriminatory” nor shall the standard of service and quality provided at
the facilities owned or operated by each such Person be required to be similar
so long as, in each case, both (x) a commercially reasonable business
justification (without giving effect to Lease economics) that is not
discriminatory to Landlord or the Leased Property exists for the manner in which
such goods and services are provided, as reasonably determined by Tenant in good
faith, and (y) the manner in which such goods and services are provided is not
intended or designed to frustrate, vitiate or reduce the rights of Landlord
under this Lease, as reasonably determined by Tenant in good faith.

“Notice”: A notice given in accordance with Section 35.1.

“Notice of Termination”: As defined in Section 17.1(f).

“NRS”: As defined in Section 41.14.

“OFAC”: As defined in Section 8.2(c).

“Officer’s Certificate”: A certificate of Tenant or Landlord, as the case may
be, signed by an authorized officer of such party.

“Operating Expenses”: With respect to any fiscal period, the operating expenses
of the Facilities (without duplication) for that period, determined in
accordance with GAAP, consistently applied using the Existing Accounting
Guidelines.

“Operating Standard”: Operation of the Leased Property for the Primary Intended
Use in a first class manner and at least substantially consistent with the
standard of operations of the Facilities on the date hereof and which shall be
performed in a Non-Discriminatory manner with other assets owned, leased,
managed or operated by Tenant’s Parent or its Subsidiaries, including without
limitation, with respect to the usage and allocation of proprietary information
and systems related to the operating of Gaming, hotel and related businesses,
Tenant Rewards Program, centralized services, purchasing programs, insurance
programs, Intellectual Property, Guest Data, complimentaries, room rates and
cross-marketing and cross-promotional activities with other properties owned,
leased or operated by Tenant’s Parent and its Subsidiaries.

 

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“Operating Subleased Property”: Means the Grand Facility and, with respect to
the MB Facility, each of the MB Hotel Facility and MB Place Facility.

“Operating Subleases”: As defined in the Recitals.

“Operating Subtenant”: Initially, individually or collectively as the context
may require, each entity listed on Schedule 2 attached hereto, each of which is
and shall continue to be a Subsidiary of Tenant’s Parent, and any other
Subsidiary of Tenant’s Parent that subleases any Operating Subleased Property in
accordance with Section 41.17.

“Operating Subtenant Attornment Agreement”: As defined in Section 41.17(a).

“Operating Subtenant Guaranty”: That certain Subtenant Guaranty dated as of the
date hereof by and among the Operating Subtenants, jointly and severally, and
Landlord, delivered to Landlord in connection with the execution of this Lease,
as the same may be amended or supplemented or restated from time to time in
accordance with the terms of this Lease and the Operating Subtenant Guaranty.

“Overdue Rate”: On any date, a rate equal to five (5) percentage points above
the Prime Rate, but in no event greater than the maximum rate then permitted
under Legal Requirements.

“Parent Company”: With respect to any Person in question, any other Person
(other than an Investment Fund) (x) as to which such Person in question is a
Subsidiary; and (y) which other Person is not a Subsidiary of any other Person
(other than an Investment Fund, which shall be deemed not to have any Parent
Company and, in the case of a Foreclosure Transferee that is an Investment Fund,
no parent of such Investment Fund shall be required to provide a Guaranty
pursuant to Section 22.2, if applicable).

“Patriot Act Offense”: Any violation of the criminal laws of the United States
of America or of any of the several states, or that would be a criminal
violation if committed within the jurisdiction of the United States of America
or any of the several states, relating to terrorism or the laundering of
monetary instruments, including any offense under (A) the criminal laws against
terrorism, (B) the criminal laws against money laundering, (C) the Bank Secrecy
Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or
(E) the U.S.A. Patriot Act. “Patriot Act Offense” also includes the crimes of
conspiracy to commit, or aiding and abetting another to commit, a Patriot Act
Offense.

“Payment Date”: Any due date for the payment of the installments of Rent or any
other sums payable under this Lease.

“PCAOB”: The Public Company Accounting Oversight Board.

 

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“Permitted Affiliate Agreement”: Any Affiliate Agreement entered into prior to
the date of this Lease or after the date hereof, in each case which (i) is for a
bona fide purpose consistent with the Operating Standard and not used by Tenant
to evade or avoid the Financial Covenant or the Listing Covenant or to distort
the economic performance of any Facility in any material respect, (ii) does not
subject Landlord to any obligations or liabilities with respect thereto,
(iii) will not bind Landlord upon expiration or earlier termination of this
Lease, (iv) is not otherwise designed to frustrate Landlord’s ability to enter
into a new lease or management agreement at the expiration of this Lease and
(v) will not result in a violation of Legal Requirements.

“Permitted Capital Improvements”: As defined in Section 10.1(a).

“Permitted Credit Facility Lender”: The lender or agent or trustee or similar
representative on behalf of one or more lenders or noteholders or other
investors under a Debt Agreement secured in part by a Permitted Credit Facility
Pledge, in each case as and to the extent such Person has the power to act on
behalf of all lenders under such Debt Agreement pursuant to the terms thereof;
provided, such lender, agent or trustee or similar representative (but not
necessarily the lenders, noteholders or other investors which it represents) is
a banking institution or other eligible indenture trustee under the Trust
Indenture Act of 1940, as amended, in each case, in the business of generally
acting as a lender, agent or trustee or similar representative (in each case, on
behalf of a group of lenders) under debt agreements or instruments similar to
the Debt Agreement.

“Permitted Credit Facility Pledge”: A pledge or similar agreement creating a
security interest in the direct or indirect interests in Tenant (or any
Operating Subtenant), granted to or for the benefit of a Permitted Credit
Facility Lender as collateral for the obligations under a Debt Agreement;
provided, however, such Debt Agreement must be a bona fide corporate credit
facility of Tenant’s Parent which is recourse to Tenant’s Parent.

“Permitted FF&E Expenditures”: As defined in Section 9.1(f).

“Permitted Leasehold Mortgage”: A document creating or evidencing an encumbrance
on Tenant’s leasehold interest (or an Operating Subtenant’s subleasehold
interest) in the Leased Property, granted to or for the benefit of a Permitted
Leasehold Mortgagee as security for the obligations under a Debt Agreement;
provided, however, so long as, at the time of entering into such Permitted
Leasehold Mortgage, (i) such Debt Agreement is, or will be pursuant to the terms
thereof, secured by assets of Tenant’s Parent and any subsidiaries thereof
acting as borrowers and guarantors of such Debt Agreement and (ii) the fair
market value (as reasonably determined by Tenant’s Parent in good faith and
after giving effect to the terms of this Lease) of Tenant’s interest (or an
Operating Subtenant’s subleasehold interest) in the Leased Property does not
exceed one-third of the fair market value (as reasonably determined by Tenant’s
Parent in good faith) of all of the assets of Tenant’s Parent, the borrowers and
guarantors, taken as a whole, providing collateral for such Debt Agreement at
the time such Debt Agreement is executed.

“Permitted Leasehold Mortgage Excluded Collateral”: As defined in
Section 17.1(n).

 

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“Permitted Leasehold Mortgagee”: The lender or agent or trustee or similar
representative on behalf of one or more lenders or noteholders or other
investors under a Permitted Leasehold Mortgage, in each case as and to the
extent such Person has the power to act on behalf of all lenders under such
Permitted Leasehold Mortgage pursuant to the terms thereof; provided, such
lender, agent or trustee or similar representative (but not necessarily the
lenders, noteholders or other investors which it represents) is a banking
institution or other eligible indenture trustee under the Trust Indenture Act of
1940, as amended, in each case, in the business of generally acting as a lender,
agent or trustee or similar representative (in each case, on behalf of a group
of lenders) under debt agreements or instruments similar to the Debt Agreement.

“Permitted Leasehold Mortgagee Designee”: An entity designated by a Permitted
Leasehold Mortgagee and acting for the benefit of the Permitted Leasehold
Mortgagee, or the lenders, noteholders or investors represented by the Permitted
Leasehold Mortgagee.

“Permitted Leasehold Mortgagee Foreclosing Party”: A Permitted Leasehold
Mortgagee or Permitted Leasehold Mortgagee Designee that forecloses on this
Lease and assumes this Lease or a Subsidiary of a Permitted Leasehold Mortgagee
or Permitted Leasehold Mortgagee Designee that assumes this Lease in connection
with a foreclosure on this Lease by a Permitted Leasehold Mortgagee.

“Permitted Management Agreement”: Any (x) Existing Management Agreement or
(y) new management agreement or amendment or modification of an Existing
Management Agreement which is entered into after the date of this Lease and
which (i) is for a bona fide purpose consistent with the Operating Standard,
(ii) in the event of any new management agreement or an amendment or renewal
which could extend the term of an Existing Management Agreement (including any
grants of additional renewal or extension options), is expressly subject and
subordinate to this Lease (with Landlord having no obligations or liabilities
with respect thereto and such manager having no rights after expiration or
termination of this Lease, except to the extent provided by any subordination,
non-disturbance and attornment agreement delivered by Landlord in accordance
with this Lease), (iii) is not otherwise designed to frustrate Landlord’s
ability to enter into a new lease or management agreement at the expiration or
earlier termination of this Lease, (iv) does not grant any right to purchase,
right of first offer or right of first refusal with respect to the purchase of
any portion of the Leased Property, and (v) does not result in a violation of
any Legal Requirements.

“Permitted Sublease”: Any (x) Existing Sublease or (y) any new sublease or
amendment or renewal of an Existing Sublease which is entered into after the
date of this Lease and which, (i) if the sublessee is not an Affiliate of
Tenant, is on commercially reasonable, arms’ length terms and with respect to
Primary Space only, with market rent as determined by Tenant in good faith,
(ii) is for a bona fide purpose consistent with the Operating Standard, (iii) in
the event of any new sublease or an amendment or renewal which could extend the
term of an Existing Sublease (including any grants of additional renewal or
extension options), is expressly subject and subordinate to this Lease (with
Landlord having no obligations or liabilities with respect thereto and such
subtenant having no rights after expiration or termination of this Lease, except
to the extent provided by any subordination, non-disturbance and attornment
agreement delivered by Landlord in accordance with this Lease), (iv) is not
otherwise designed to frustrate

 

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Landlord’s ability to enter into a new lease or management agreement at the
expiration of this Lease, (v) does not grant any right to purchase, right of
first offer or right of first refusal with respect to the purchase of any
portion of the Leased Property, and (vi) does not result in a violation of any
Legal Requirements.

“Person” or “person”: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other form of entity.

“PLL”: As defined in Section 13.1(j).

“Preliminary Financial Covenant Compliance Report”: As defined in
Section 23.1(b)(iii).

“Primary Intended Use”: Hospitality, entertainment, entertainment venues, Gaming
and/or pari-mutuel use generally consistent with prevailing hospitality,
entertainment or Gaming industry use at any time, together with all ancillary or
complementary uses consistent with such use and operations (including hotels,
resorts, convention centers, retail facilities, restaurants, spas, clubs, bars,
etc.), together with any other uses in effect on the date hereof and together
with any other uses otherwise generally consistent with the Operating Standard.

“Primary Space”: Those portions of a Facility that are used primarily for hotel,
casino or convention purposes as of the Commencement Date (as may be reasonably
adjusted from time to time in accordance with the Primary Intended Use).

“Prime Rate”: On any date, a rate equal to the annual rate on such date publicly
announced by JPMorgan Chase Bank, N.A. (provided, that if JPMorgan Chase Bank,
N.A. ceases to publish such rate, the Prime Rate shall be determined according
to the Prime Rate of another nationally known money center bank reasonably
selected by Landlord), to be its prime rate for ninety (90)-day unsecured loans
to its corporate borrowers of the highest credit standing, but in no event
greater than the maximum rate then permitted under applicable law.

“Proceeding”: As defined in Section 23.1(b)(ix).

“Prohibited Persons”: As defined in Section 39.1(a).

“Property”: Any right, title or interest in or to property or assets of any kind
whatsoever, whether real, Personal (as defined in the UCC) or mixed and whether
tangible or intangible and including all contract rights, income or revenue
rights, real property interests, trademarks, trade names, equipment and proceeds
of the foregoing and, with respect to any Person, equity interests or other
ownership interests of any other Person owned by the first Person.

“Property Charges”: As defined in Section 4.3.

“Property Documents”: Reciprocal easement and/or operating agreements,
easements, covenants, exceptions, conditions and restrictions in each case
affecting the Leased Property or any portion thereof (i) that are listed on the
title policies obtained on or about the Commencement Date, or (ii) made after
the date hereof in accordance with the terms of this Lease, but excluding, in
any event, all Fee Mortgage Documents.

 

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“Property Specific Guest Data”: Any and all Guest Data, to the extent owned by
or under the possession or control of Tenant, Tenant’s Parent or their
respective Affiliates, identifying, describing, concerning or generated by
website visitors or prospective, actual or past guests and/or customers, in each
case, of the Facilities and which is used with respect to the Facilities,
including retail locations, restaurants, bars, casino and Gaming Facilities,
spas and entertainment venues therein, but excluding, in all cases, (i) Guest
Data that has been integrated into analytics, reports, or other similar forms,
including in connection with the Tenant Rewards Program (it being understood
that this exception shall not apply to such Guest Data itself, i.e., in its
original form prior to integration into such analytics, reports, or other
similar forms in connection with the Tenant Rewards Program), (ii) Guest Data
that concerns facilities other than the Facilities and (iii) Guest Data that
concerns proprietary information and systems related to the operation of Gaming,
hotel and related businesses and is not related to any of the Facilities.

“Property Specific IP”: All Intellectual Property (other than Data) that is both
(i) exclusively related to any Facility and (ii) currently or hereafter owned by
Tenant, Tenant’s Parent or any of their respective Affiliates, including the
Intellectual Property set forth on Schedule 3-A and Schedule 3-B attached
hereto, but excluding the Hotel Trademarks.

“Qualified Operator”: A Person that (A) has revenues derived from hotels or
facilities for gaming (or both), in accordance with GAAP, of not less than One
Billion and No/100 Dollars ($1,000,000,000.00) per year for each of the
preceding three (3) years as of the date of determination and (B) leases,
operates or manages resorts with at least 2,500 rooms and casino operations of
at least 100,000 square feet of gaming area, 1,300 slots and 100 gaming
tables.    At the time of appointment, such Person (a) shall not be subject to a
bankruptcy, insolvency or similar proceeding, (b) shall have never been
convicted of, or pled guilty or no contest to, a Patriot Act Offense and shall
not be on any Government List, (c) shall not be, and shall not be controlled by,
a Prohibited Person or a person that has been found “unsuitable,” for any
reason, by any applicable Gaming Authority, (d) shall have not been the subject
of a material governmental or regulatory investigation which resulted in a
conviction for criminal activity involving moral turpitude, (e) shall have not
been found liable pursuant to a non-appealable judgment in a civil proceeding
for attempting to hinder, delay or defraud creditors, and (f) shall have all
required licenses and approvals required under applicable law (including Gaming
Regulations), including all required Gaming Licenses for itself, its officers,
directors, and Affiliates (including officers and directors of its Affiliates)
to manage the Facilities or the applicable Facility.

“Qualified Transferee”: A Person that satisfies each of the following
requirements: (a) a Net Worth (exclusive of the Leased Property) of no less than
Five Billion Dollars ($5,000,000,000.00) of which at least Two Billion Dollars
($2,000,000,000.00) relates to assets located in the United States (exclusive of
the Leased Property), (b) such transferee and all of its applicable officers,
directors and Affiliates (including the officers and directors of its
Affiliates), to the extent required under applicable Gaming Regulations or other
Legal Requirements, are licensed by the Gaming Authority or otherwise found
suitable to lease the Leased Property in accordance herewith, (c) such
transferee has not been the subject of a

 

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material governmental or regulatory investigation which resulted in a conviction
for criminal activity involving moral turpitude and has not been found liable
pursuant to a non-appealable judgment in a civil proceeding for attempting to
hinder, delay or defraud creditors, (d) such transferee has never been convicted
of, or pled guilty or no contest to, a Patriot Act Offense and is not on any
Government List; (e) such transferee has not been the subject of a voluntary or
involuntary (to the extent the same has not been discharged) bankruptcy
proceeding during the prior five (5) years from the applicable date of
determination; (f) such transferee is not, and is not Controlled by a Prohibited
Person or a person that has been found “unsuitable” for any reason or has had
any application for a Gaming License withdrawn “with prejudice” by any
applicable Gaming Authority; (g) such transferee complies with any Fee
Mortgagee’s customary “know your customer” requirements applicable to such
transferee and its equity holders; and (h) such transferee is not associated
with a person who has been found “unsuitable”, denied a Gaming License or
otherwise precluded from participation in the Gaming industry by any Gaming
Authority where such association would reasonably be expected to adversely
affect any of Landlord’s or its Affiliates’ Gaming Licenses or Landlord’s or its
Affiliates’ then-current standing with any Gaming Authority.

“Qualifying CapEx”: Expenditures relating to the installation or restoration of
Capital Improvements or FF&E with respect to the Leased Property or Signature
Hotel Units, which shall (x) exclude any costs incurred that (A) are related to
ordinary course maintenance and repairs and not capitalized in accordance with
GAAP, (B) are included in Operating Expenses, determined in accordance with
GAAP, consistently applied using the Existing Accounting Guidelines, (C) relate
to Permitted Leasehold Mortgages, purchase money financing, equipment financing,
equipment lease, or financing secured by liens on Capital Improvements or FF&E
(but excluding any Permitted Credit Facility Pledge), or (D) would constitute
capitalized interest, and (y) be limited to costs which are with third parties
dealing at arms’ length or with Affiliates dealing on arms’ length terms (with
any costs paid to Affiliates not exceeding market rates) and capitalized in
accordance with GAAP, consistently applied using the Existing Accounting
Guidelines. Notwithstanding anything to the contrary contained herein, with
respect to the Signature Hotel Units, only Qualifying CapEx in an amount not to
exceed 2.5% of the actual Net Revenue derived from the Signature Hotel Units
(including from any Signature Rental Management Operations) during any CapEx
Testing Period shall be applied toward the minimum Required CapEx for such CapEx
Testing Period under Section 9.1(e).

“Radius”: As defined in Section 13.6.

“Recharacterization”: As defined in Section 11.1(c).

“Recharacterization Deed of Trust”: As defined in Section 11.1(c).

“Related Persons”: With respect to a party, such party’s Affiliates and
Subsidiaries and the directors, officers, employees, agents, partners, managers,
members, advisors and controlling persons of such party and its Affiliates and
Subsidiaries.

“Removal Date”: As defined in Section 1.5(b).

“Removal Facility”: As defined in Section 1.5(a).

 

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“Removal Notice”: As defined in Section 1.5(b).

“Renewal Notice”: As defined in Section 1.4.

“Renewal Term”: As defined in Section 1.4(a).

“Rent”: The Base Rent.

“Representative”: With respect to the lenders or holders under a Debt Agreement,
a Person designated as agent or trustee or a Person acting in a similar capacity
or as representative for such lenders or holders.

“Required CapEx”: An aggregate amount of Qualifying CapEx spent during the
applicable CapEx Testing Period equal to 3.5% of the actual Net Revenue during
such CapEx Testing Period; provided, however, the Required CapEx for any
Facility (and, with respect to the Grand Facility, together with the Signature
Hotel Units) during any CapEx Testing Period on an aggregate basis shall not be
less than 2.5% of the actual Net Revenue of such Facility (and, with respect to
the Grand Facility, together with the Signature Hotel Units), during such CapEx
Testing Period.

“Required CapEx Funding Deadline”: As defined in Section 9.1(e)(i).

“Reserve Control Trigger Period”: (A) Any Covenant Failure Period, or (B) any
period during which an Event of Default exists (provided that, with respect to
Sections 16.1(a)(v) and (vi), for purposes of this definition only, the cure
periods provided in Sections 16.1(a)(v) and (vi), respectively, shall not be
taken into account).

“Reserve Disbursement Requirements”: The requirements for disbursements of CapEx
Reserve Funds and FF&E Reserve Funds identified on Schedule 9.

“Responsible Officer”: Tenant’s or Tenant’s Parent’s, as applicable, chief
executive officer, chief operating officer, treasurer, assistant treasurer,
secretary, assistant secretary, executive vice presidents and senior vice
presidents and, regardless of designation, the chief financial officer of
Tenant’s Parent, provided, that Tenant’s Parent may designate one or more other
officers as Responsible Officers.

“Restricted Information”: As defined in Section 23.1(c).

“Restricted Reserve Accounts”: As defined in Section 9.1(g).

“Restoration Deficiency”: As defined in Section 14.2(c).

“Schedule 8 Capital Improvements”: As defined in Section 10.1(a).

“SEC”: The United States Securities and Exchange Commission.

“SEC Filing Deadline”: As defined in Section 23.1(b)(i).

 

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“SEC Reports”: All quarterly and annual reports required under the Exchange Act
and related rules and regulations to be filed with the SEC on Forms 10-Q and
10-K.

“Section 4.3 Certification”: As defined in Section 4.3.

“Section 4.3 Waiver”: As defined in Section 4.3.

“Securities Act”: The Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

“Separate Lease”: As defined in Section 1.5(a).

“Separate Lease Guaranty”: As defined in Section 1.5(d).

“Separate Lease Operating Sublease Guaranty”: As defined in Section 1.5(d).

“Signature Entities”: Signature Owner, Signature Tower I, LLC, Signature Tower
2, LLC, and Signature Tower 3, LLC.

“Signature Hotel Units”: The units at the Signature Property described as the
Hotel Units under the Signature Management Agreement.

“Signature Management Agreement”: That certain Management Agreement dated of
even date herewith by and between Signature Owner and MGM Grand Hotel, as the
same may be modified from time to time.

“Signature Owner”: The Signature Condominiums, LLC, a Nevada limited liability
company.

“Signature Property”: That certain residential condominium project commonly
known as “The Signature at MGM Grand”.

“Signature Rental Management Operations”: The operations at the Signature
Property pursuant to which any owners of residential units at the Signature
Property participate in the periodic renting of their respective units to third
parties whether by entering into a rental management agreement or other
agreement with Signature Owner (or its affiliates or agents).

“SNDA”: As defined in Section 1.5(c).

“Software”: As defined in the definition of Intellectual Property.

“Solvent”: With respect to any Person on a particular date, that on such date
(a) the fair value of the property of such Person, on a going-concern basis, is
greater than the total amount of liabilities (including contingent liabilities)
of such Person, (b) the present fair salable value of the assets of such Person,
on a going-concern basis, is not less than the amount that will be required to
pay the probable liability of such Person on its debts (including contingent
liabilities) as they become absolute and matured, (c) such Person has not
incurred, and does not intend to, and does not believe that it will, incur,
debts or liabilities beyond such Person’s ability

 

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to pay such debts and liabilities as they mature, (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute an unreasonably
small capital and (e) such Person is “solvent” within the meaning given that
term and similar terms under applicable laws relating to fraudulent transfers
and conveyances. For purposes of this definition, the amount of any contingent
liability shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under Accounting
Standards Codification No. 450).

“Specified Debt Agreement Default”: Any event or occurrence under a Debt
Agreement that enables or permits the lenders or holders (or Representatives of
such lenders or holders) to accelerate the maturity of the Indebtedness
outstanding under a Debt Agreement.

“Specified Tenant Securitization Matters”: Those portions of the Disclosure
Documents for a Fee Mortgage which specifically describe (i) Tenant, (ii)
Tenant’s Parent or (iii) historical financial performance of the Facilities
(including occupancy, ADR, Revpar, revenues by department, departmental
expenses, operating expenses and fixed expenses), (iv) the gaming overview of
the Facilities (including slot units, table units and historical hold
percentage) and (v) historical capital expenditures at the Facilities.

“State”: Nevada.

“Subsidiary”: As to any Person, (i) any corporation at least fifty percent (50%)
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time of determination owned by such
Person and/or one or more Subsidiaries of such Person, and (ii) any partnership,
limited liability company, association, joint venture or other entity in which
such Person and/or one or more Subsidiaries of such Person has at least a fifty
percent (50%) equity interest at the time of determination. Unless otherwise
qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Lease
shall refer to a Subsidiary or Subsidiaries of Tenant, except to the extent
expressly stated to be with respect to a Subsidiary or Subsidiaries of Landlord.

“System-wide IP”: All of the Intellectual Property (in each case, excluding
Property Specific IP, Property Specific Guest Data and Hotel Trademarks) that
(i) Tenant’s Parent or any of its Affiliates (other than Tenant or its
Subsidiaries) currently license or otherwise provide to Tenant or its
Subsidiaries pursuant to a written agreement or otherwise in order to provide
services to any Facility or (ii) is otherwise licensed to, but not owned by,
Tenant or its Subsidiaries for their respective properties, including any and
all such Intellectual Property comprising and/or related to the Tenant Rewards
Program.

“Tenant”: As defined in the preamble.

“Tenant Capital Improvement”: A Capital Improvement constructed by or at the
direction of Tenant or any applicable Operating Subtenant at any Facility after
the date hereof.

 

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“Tenant Change of Control”: (i) Any Person or “group” (within the meaning of
Rules 13d-3 and 13d-5 under the Exchange Act) other than Tenant’s Parent and its
Affiliates, shall have acquired direct or indirect beneficial ownership or
control of thirty-five percent (35%) or more on a fully diluted basis of the
direct or indirect voting power in the Equity Interests of Tenant entitled to
vote in an election of directors of Tenant or Tenant’s Parent, (ii) the direct
or indirect sale by Tenant or Tenant’s Parent of all or substantially all of
Tenant’s assets, whether held directly or through Subsidiaries, relating to the
Facilities in one transaction or in a series of related transactions (excluding
sales to Tenant or its Subsidiaries) to a Person that is not wholly owned and
controlled (directly or indirectly) by Tenant’s Parent, or (iii) Tenant ceasing
to be a wholly-owned and Controlled Subsidiary (directly or indirectly) of
Tenant’s Parent. Notwithstanding the foregoing, no acquisition of shares of or
transfer of any interest in Tenant’s Parent or any other publicly traded Person
in one or more transactions shall result in a Tenant Change of Control, provided
that after giving effect to such Tenant Change of Control, Tenant would be able
to make the representations in Section 39.1 of this Lease without qualification.

“Tenant Competitor”: A Person or Affiliate of any Person (other than an
Affiliate of Tenant) which (i) is among the top 10 global gaming companies by
annual revenues or (ii) operates, leases or manages resorts with at least 1,000
rooms in the Gaming Corridor; provided, that notwithstanding anything to the
contrary contained herein, “Tenant Competitor” shall not include (x) commercial
or corporate banks, pension funds, mutual funds and any other funds that are
managed or controlled by a commercial or corporate bank which funds principally
invest in commercial loans or debt securities or (y) any Person that has elected
to be treated as a real estate investment trust and whose primary business
activity is limited to acting as a landlord of properties under long-term
triple-net leases that may include Gaming Facilities.

“Tenant Information”: Information concerning Tenant, Tenant’s Parent or their
respective Affiliates, or any of their respective assets or businesses,
including, without limitation, the operation of the Leased Property.

“Tenant Party”: As defined in the definition of Licensing Event.

“Tenant Representatives”: As defined in Section 23.4.

“Tenant Rewards Program”: The “M-Life Rewards” program or any other customer
loyalty program of Tenant’s Parent and its Affiliates to the extent used at, or
in connection with the marketing, advertising or promotion of, the Leased
Property.

“Tenant’s Parent”: (i) MGM Resorts International, (ii) any successor by
operation of law (whether through a merger, consolidation or similar
transaction) to the obligations of MGM Resorts International under the Guaranty,
(iii) any other entity that acquires all or substantially all of the assets of
MGM Resorts International and delivers a Guaranty to Landlord (with any such
entity being required hereunder to deliver a Guaranty to Landlord), or (iv) in
connection with any Foreclosure Assignment or Foreclosure COC, the Qualified
Transferee that delivers a Guaranty to Landlord (with any such Qualified
Transferee being required hereunder to deliver a Guaranty to Landlord).

 

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“Tenant’s Pledged Property”: Tenant’s Property but excluding (a) any cash,
securities or investments, (b) all products and proceeds of Tenant’s Pledged
Property, (c) all Intellectual Property, and (d) any Gaming Licenses.
Notwithstanding the foregoing, in no event shall Tenant’s Pledged Property
include (i) any asset or property to the extent the grant of a security interest
is prohibited by any Legal Requirements or requires a consent not obtained by
any governmental authority pursuant to any Legal Requirements; (ii) any asset or
property subject to shared services on a Non-Discriminatory basis consistent
with past practice and in accordance with the Operating Standard; and (iii) any
lease, license or other agreement or contract (including joint venture
agreements) or any property subject to a purchase money security interest or
similar arrangement (including equipment financing) entered into in the ordinary
course of business consistent with the Operating Standard and does not impair in
any material respect Landlord’s rights under Section 36.1. For the avoidance of
doubt, Tenant’s Pledged Property shall include, among other things, all rights
of MGM Grand Hotel under the Signature Management Agreement and such other
collateral collaterally assigned or pledged by MGM Grand Hotel to Grand Landlord
under the Grand Landlord Collateral Assignment of Management Agreement.

“Tenant’s Property”: All assets which, in each case are (i) owned by Tenant or
any Operating Subtenant, (ii) located at the Leased Property and (iii) primarily
related to or used in connection with the operation of the business conducted on
or about the Leased Property, together with all replacements, modifications,
additions, alterations and substitutes therefor, but specifically excluding the
Excluded Assets.

“Tenant’s Property FMV”: As defined in Section 36.1.

“Term”: As defined in Section 1.3.

“Termination Notice”: As defined in Section 17.1(d).

“Test Period”: With respect to any Person or Facility, for any date of
determination, the period of the four (4) most recently ended consecutive fiscal
quarters of such Person or Facility for which financial statements are available
or are required to have been delivered hereunder. By way of example, with
respect to the Preliminary Financial Covenant Compliance Report and the Final
Financial Covenant Compliance Report to be delivered on April 15, 2020 and
May 30, 2020, the Test Period shall be April 1, 2019 through March 31, 2020.

“Trademarks”: As defined in the definition of Intellectual Property.

“Transition Services Agreement”: That certain Transition Services Agreement,
dated as of the date hereof, by and among Tenant, Landlord and MGM Resorts
International, Mandalay Bay, LLC and Mandalay Resort Group.

“Treasury Regulations”: The regulations promulgated under the Code, as such
regulations may be amended from time to time.

 

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“UCC”: Uniform Commercial Code as in effect in the State of New York; provided,
that, if perfection or the effect of perfection or non-perfection or the
priority of any security interest in any collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

“Unavoidable Delay”: Delays due to strikes, lock-outs, inability to procure
materials, power failure, acts of God, governmental restrictions, enemy action,
civil commotion, fire, unavoidable casualty or other causes beyond the
reasonable control of the party responsible for performing an obligation
hereunder; provided, that lack of funds shall not be deemed a cause beyond the
reasonable control of a party.

“Unsuitable for Its Primary Intended Use”: A state or condition of a Facility
such that by reason of damage or destruction, or a partial Condemnation, a
Facility cannot, following restoration thereof (to the extent commercially
practical), be operated on a commercially practicable basis for its Primary
Intended Use, taking into account, among other relevant factors, the amount of
square footage and the estimated revenue affected by such damage or destruction.

“U.S.A. Patriot Act”: As defined in Section 8.2(c).

“Water Assets”: As defined in Section 41.16.

“Water Infrastructure”: As defined in Section 1.1(b)(vi).

“Water Permits”: As defined in Section 1.1(b)(vi).

“Water Rights”: As defined in Section 1.1(b)(vi).

ARTICLE III

RENT

3.1    Rent. During the Term, Tenant will pay to Landlord the Rent and
Additional Charges in lawful money of the United States of America and legal
tender for the payment of public and private debts, in the manner provided in
Section 3.3. The Base Rent during any Lease Year is payable in advance in
consecutive equal monthly installments on the first (1st) Business Day of each
calendar month during that Lease Year. Unless otherwise agreed by the parties,
Rent and Additional Charges shall be prorated as to any partial months at the
beginning and end of the Term. Rent payable during any Lease Year consisting of
more or less than twelve (12) calendar months shall be adjusted such that the
portion of the Rent for each calendar month in any such Lease Year is equal to
the Rent divided by twelve (12).

3.2    Late Payment of Rent. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Rent or Additional Charges will cause Landlord to incur
costs not contemplated hereunder, the exact amount of which is presently
anticipated to be extremely difficult to ascertain. Accordingly, if any
installment of Rent or Additional Charges (other than Additional Charges payable
to a Person other than Landlord) shall not be paid within five (5) days after
its due date, Tenant will pay Landlord on demand a late charge equal to the
lesser of (a) five percent (5%) of the amount of such installment or (b) the
maximum amount permitted by

 

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law. The parties agree that this late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of late payment by
Tenant. The parties further agree that such late charge is Rent and not interest
and such assessment does not constitute a lender or borrower/creditor
relationship between Landlord and Tenant. Thereafter, if any installment of Rent
or Additional Charges shall not be paid within ten (10) days after its due date,
the amount unpaid, including any late charges previously accrued, shall bear
interest at the Overdue Rate from the due date of such installment to the date
of payment thereof, and Tenant shall pay such interest to Landlord on demand.
The payment of such late charge or such interest shall not constitute waiver of,
nor excuse or cure, any default under this Lease, nor prevent Landlord from
exercising any other rights and remedies available to Landlord.

3.3    Method of Payment of Rent. Rent and Additional Charges to be paid to
Landlord shall be paid by electronic funds transfer debit transactions through
wire transfer of immediately available funds and shall be initiated by Tenant
for settlement on or before the Payment Date; provided, however, if the Payment
Date is not a Business Day, then settlement shall be made on the next succeeding
day which is a Business Day. Landlord shall provide Tenant with appropriate wire
transfer information in a Notice from Landlord to Tenant. If Landlord directs
Tenant to pay any Rent to any party other than Landlord, Tenant shall send to
Landlord, simultaneously with such payment, a copy of the transmittal letter or
invoice and a check whereby such payment is made or such other evidence of
payment as Landlord may reasonably require.

3.4    Net Lease. Landlord and Tenant acknowledge and agree that (i) this Lease
is and is intended to be what is commonly referred to as a “net, net, net” or
“triple net” lease, and (ii) the Rent shall be paid absolutely net to Landlord,
so that this Lease shall yield to Landlord the full amount or benefit of the
installments of Rent and Additional Charges throughout the Term with respect to
each Facility, all as more fully set forth in Article IV and subject to any
other provisions of this Lease which expressly provide for adjustment or
abatement of Rent or other charges. If Landlord commences any proceedings for
non-payment of Rent, Tenant will not interpose any counterclaim or cross
complaint or similar pleading of any nature or description in such proceedings
unless Tenant would lose or waive such claim by the failure to assert it. This
shall not, however, be construed as a waiver of Tenant’s right to assert such
claims in a separate action brought by Tenant. The covenants to pay Rent and
other amounts hereunder are independent covenants, and Tenant shall have no
right to hold back, offset or fail to pay any such amounts for default by
Landlord or for any other reason whatsoever.

3.5    Fair Market Rent. In the event that it becomes necessary to determine the
Fair Market Rent of a Facility for any purpose of this Lease, and the parties
cannot agree among themselves on such Fair Market Rent within twenty (20) days
after the first request made by one of the parties to do so, then either party
may notify the other of a Person selected to act as appraiser (such Person, and
each other Person selected as provided herein, an “Appraiser”) on its behalf.
Within fifteen (15) days after receipt of any such Notice, the other party
shall, by notice to the first party, appoint a second Person as Appraiser on its
behalf. The Appraisers thus appointed, each of whom must be a member of The
Appraisal Institute/American Institute of Real Estate Appraisers (or any
successor organization thereto, or, if no such organization exists, a similarly
nationally recognized real estate appraisal organization) with at least ten
(10) years of experience appraising properties similar to such Facility, shall,
within forty-five (45) days after

 

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the date of the notice appointing the first Appraiser, proceed to appraise the
applicable Facility to determine the Fair Market Rent thereof as of the relevant
date; provided, that if one Appraiser shall have been so appointed, or if two
Appraisers shall have been so appointed but only one such Appraiser shall have
made such determination within fifty (50) days after the making of the initial
appointment, then the determination of such Appraiser shall be final and binding
upon the parties. If two (2) Appraisers shall have been appointed and shall have
made their determinations within the respective requisite periods set forth
above and if the difference between the amounts so determined shall not exceed
five percent (5%) of the lesser of such amounts, then the Fair Market Rent shall
be an amount equal to fifty percent (50%) of the sum of the amounts so
determined. If the difference between the amounts so determined shall exceed
five percent (5%) of the lesser of such amounts, either party may request the
appointment of Experts pursuant to Article XXXIV to determine Fair Market Rent.

ARTICLE IV

IMPOSITIONS

4.1    Impositions. (a) Subject to Article XII relating to permitted contests,
Tenant shall pay, or cause to be paid, all Impositions as and when due before
any fine, penalty, interest or cost may be added for non-payment. Tenant shall
make, or cause to be made, such payments directly to the taxing authorities (or
such other party imposing the same), and, on a quarterly basis, as part of the
certification required under Section 4.3 of this Lease, shall promptly, where
feasible, furnish to Landlord copies of official receipts or other satisfactory
proof evidencing such payments. If Tenant is not permitted to, or it is
otherwise not feasible for Tenant to, make (or cause to be made) such payments
directly to the taxing authorities or other applicable party, then Tenant shall
make (or cause to be made) such payments to Landlord at least ten (10) Business
Days prior to the due date, and Landlord shall make such payments to the taxing
authorities or other applicable party prior to the due date. Tenant’s obligation
to pay (or cause to be paid) Impositions shall be absolutely fixed upon the date
such Impositions become a lien upon the Leased Property or any part thereof
subject to Article XII. If any Imposition may, at the option of the taxpayer,
lawfully be paid in installments, whether or not interest shall accrue on the
unpaid balance of such Imposition, Tenant may pay (or cause to be paid) the
same, and any accrued interest on the unpaid balance of such Imposition, in
installments as the same respectively become due and before any fine, penalty,
premium, further interest or cost may be added thereto.

(b)    Landlord or Landlord’s Parents shall prepare and file all tax returns and
reports as may be required by Legal Requirements with respect to Landlord’s net
income, gross receipts, franchise taxes and taxes on its capital stock and any
other returns required to be filed by or in the name of Landlord with respect to
or relating to the Leased Property (the “Landlord Tax Returns”), and Tenant or
Tenant’s Parent shall prepare and file all other tax returns and reports as may
be required by Legal Requirements with respect to or relating to the Leased
Property (including all Capital Improvements) and Tenant’s Property.

(c)    Any refund due from any taxing authority in respect of any Imposition
paid by or on behalf of Tenant or any Operating Subtenant shall be paid over to
or retained by Tenant or such Operating Subtenant (and any refund due from any
taxing authority in

 

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respect of any Imposition paid by or on behalf of Landlord, if any, shall be
paid over to or retained by Landlord (unless Tenant has subsequently reimbursed
Landlord therefor)) if no Event of Default has occurred and is continuing. If an
Event of Default shall have been declared by Landlord and be continuing, any
such refund shall be paid over to or retained by Landlord.

(d)    Landlord and Tenant shall, upon request of the other, provide such data
as is maintained by the party to whom the request is made with respect to the
Leased Property as may be necessary to prepare any required returns and reports.
If any property covered by this Lease is classified as personal property for tax
purposes, Tenant shall file, or cause to be filed, all personal property tax
returns in such jurisdictions where it must legally so file. Landlord, to the
extent it possesses the same, and Tenant, to the extent it possesses the same,
shall provide the other party, upon request, with cost and depreciation records
necessary for filing returns for any property so classified as personal
property. Where Landlord is legally required to file personal property tax
returns, Tenant shall be provided with copies of assessment notices indicating a
value in excess of the reported value in sufficient time for Tenant to file a
protest.

(e)    Billings for reimbursement by Tenant to Landlord of personal property or
real property taxes and any taxes due under Landlord Tax Returns, if and to the
extent Tenant is responsible for such taxes under the terms of this Section 4.1,
shall be accompanied by copies of a bill therefor and payments thereof which
identify the personal property or real property or other tax obligations of
Landlord with respect to which such payments are made.

(f)    Impositions imposed or assessed in respect of the tax-fiscal period
during which the Term terminates shall be adjusted and prorated between Landlord
and Tenant, whether or not such Imposition is imposed or assessed before or
after such termination, and Tenant’s obligation to pay its prorated share
thereof in respect of a tax-fiscal period during the Term shall survive such
termination. Landlord will not voluntarily enter into agreements that will
result in additional Impositions without Tenant’s consent, which shall not be
unreasonably withheld, conditioned or delayed (it being understood that it shall
not be reasonable to withhold consent to customary additional Impositions that
other property owners of properties similar to the Leased Property customarily
consent to in the ordinary course of business); provided, Tenant is given
reasonable opportunity to participate in the process leading to such agreement.
Impositions imposed or assessed in respect of any tax fiscal period occurring
(in whole or in part) prior to the Commencement Date shall be Tenant’s
obligation to pay or cause to be paid.

4.2    Utilities and other Matters. Tenant shall pay or cause to be paid when
due and payable all charges for electricity, power, gas, oil, water and other
utilities used in the Leased Property (including all Capital Improvements).
Tenant shall also pay or caused to be paid when due and payable, or promptly
reimburse Landlord for, all costs and expenses of any kind whatsoever with
respect to any Facility and with respect to the Term hereof which at any time
may be imposed against Landlord by reason of any of the Property Documents,
including any and all costs and expenses associated with any utility, drainage
and parking easements.

 

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4.3    Compliance Certificate. Landlord shall deliver to Tenant, promptly
following Landlord’s receipt thereof, any bills received by Landlord for items
required to be paid by Tenant hereunder, including, without limitation,
Impositions, utilities and insurance. Tenant shall furnish to Landlord on a
quarterly basis (at the time of the quarterly reporting contemplated to be
delivered pursuant to Section 23.1(b)(iii)), a certification (together with
reasonable evidence of payment) stating that in all material respects all or a
specified portion of Impositions, utilities, insurance premiums or, to the
extent specified by Landlord, any other amounts payable by Tenant hereunder that
have, in each case, come due prior to the date of such certification
(collectively, “Property Charges”) have been paid (or that such payments are
being contested in good faith by Tenant in accordance with Article XII hereof)
(each, a “Section 4.3 Certification”). Notwithstanding the foregoing or anything
to the contrary contained in this Lease, Landlord hereby waives any obligation
of Tenant to provide evidence of payment of any Property Charges (including any
Property Charges otherwise constituting Impositions) other than (a) real
property taxes and assessments, (b) water and sewer rents, (c) insurance
premiums, and (d) ground lease rents (collectively, the “Essential Property
Charges”), and confirms that evidence of payment during the applicable calendar
quarter of any Essential Property Charges shall be the only evidence of payment
required to be provided with any Section 4.3 Certification furnished to Landlord
pursuant to the terms of this Lease (the “Section 4.3 Waiver”). Tenant
acknowledges and agrees that the Section 4.3 Waiver may be modified or revoked,
in whole or in part, by Landlord for any reason on at least three (3) months’
prior written notice to Tenant, provided that, (i) if the Section 4.3 Waiver is
so modified or revoked, Landlord will specify in any such written notice to
Tenant those additional Property Charges for which evidence of payment should
thereafter be provided to Landlord, and (ii) evidence of payment for Property
Charges other than Essential Property Charges will initially be required to be
provided with the first Section 4.3 Certification that is furnished to Landlord
after the expiration of such 3-month notice period.

4.4    Impound Account. At Landlord’s option following the occurrence and during
the continuation of an Event of Default (to be exercised by thirty (30) days’
Notice to Tenant), Tenant shall be required to deposit with Landlord (or its Fee
Mortgagee), at the time of any payment of Base Rent, an amount equal to
one-twelfth of the sum of (i) Tenant’s estimated annual Impositions required
pursuant to Section 4.1 hereof (as reasonably determined by Landlord), and
(ii) Tenant’s estimated annual maintenance expenses and insurance premium costs
pursuant to Articles IX and XIII hereof (as reasonably determined by Landlord).
Such amounts shall be applied to the payment of the obligations in respect of
which said amounts were deposited in such order of priority as Landlord shall
reasonably determine on or before the respective dates on which the same or any
of them would become delinquent. The reasonable cost of administering such
impound account shall be paid by Tenant. Nothing in this Section 4.4 shall be
deemed to affect any right or remedy of Landlord hereunder.

ARTICLE V

NO ABATEMENT

5.1    No Termination, Abatement, etc. Except as specifically provided in
Article XIV and Article XV in this Lease, Tenant shall remain bound by this
Lease in accordance with its terms and shall not seek or be entitled to any
abatement, deduction, deferment or reduction of Rent, or set-off against the
Rent. Except as expressly provided in Article XIV and Article XV in this Lease,
the respective obligations of Landlord and Tenant shall not be affected by
reason

 

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of (i) any damage to or destruction of the Leased Property or any portion
thereof from whatever cause or any Condemnation of the Leased Property or any
portion thereof, or any Capital Improvement or any portion thereof; (ii) other
than to the extent arising as a result of Landlord’s willful misconduct or gross
negligence (which Landlord does not cure after notice from Tenant), the lawful
or unlawful prohibition of, or restriction upon, Tenant’s use of the Leased
Property, any Capital Improvement or any portion thereof, or the interference
with such use by any Person or by reason of eviction by paramount title;
(iii) any claim that Tenant has or might have against Landlord by reason of any
default or breach of any warranty by Landlord hereunder or under any other
agreement between Landlord and Tenant or to which Landlord and Tenant are
parties; (iv) any bankruptcy, insolvency, reorganization, consolidation,
readjustment, liquidation, dissolution, winding up or other proceedings
affecting Landlord or any assignee or transferee of Landlord; or (v) for any
other cause, whether similar or dissimilar to any of the foregoing. Tenant
hereby specifically waives all rights arising from any occurrence whatsoever
which may now or hereafter be conferred upon it by law (a) to modify, surrender
or terminate this Lease or quit or surrender the Leased Property or any portion
thereof, or (b) which may entitle Tenant to any abatement, deduction, reduction,
suspension or deferment of or defense, counterclaim, claim or set-off against
the Rent or other sums payable by Tenant hereunder except in each case as may be
otherwise specifically provided in Article XIV and Article XV in this Lease.
Notwithstanding the foregoing, nothing in this Article V shall preclude Tenant
from bringing a separate action against Landlord for any matter described in the
foregoing clauses (ii), (iii) or (v) and Tenant is not waiving other rights and
remedies not expressly waived herein, subject to Tenant’s indemnification
obligations in this Lease and Section 41.3 of this Lease. The obligations of
Landlord and Tenant hereunder shall be separate and independent covenants and
agreements, and the Rent and all other sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provisions of this Lease or by
termination of this Lease as to all or any portion of the Leased Property other
than by reason of an Event of Default. Tenant’s agreement that, except as may be
otherwise specifically provided in this Lease, any eviction by paramount title
as described in item (ii) above shall not affect Tenant’s obligations under this
Lease, shall not in any way discharge or diminish any obligation of any insurer
under any policy of title or other insurance and, to the extent the recovery
thereof is not necessary to compensate Landlord for any damages incurred by any
such eviction, Tenant shall be entitled to a credit for any sums recovered by
Landlord under any such policy of title or other insurance up to the maximum
amount paid by Tenant to Landlord under this Section 5.1.

ARTICLE VI

OWNERSHIP OF LEASED PROPERTY

6.1    Ownership of the Leased Property. (a) Landlord and Tenant acknowledge and
agree that they have executed and delivered this Lease with the understanding
that (1) the Leased Property (including any Tenant Capital Improvements) is the
property of Landlord, (2) Tenant has only the right to the possession and use of
the Leased Property upon the terms and conditions of this Lease, (3) this Lease
is intended to be a “true lease” for all applicable legal and federal state and
local tax purposes and is not a financing lease, finance lease, mortgage,
equitable mortgage, deed of trust, trust agreement, security agreement or other
financing or trust arrangement, and the economic realities of this Lease are
those of a “true lease”, (4) the business

 

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relationship created by this Lease and any related documents is and at all times
shall remain that of landlord and tenant, (5) this Lease has been entered into
by each party in reliance upon the mutual covenants, conditions and agreements
contained herein, and (6) none of the agreements contained herein is intended,
nor shall the same be deemed or construed, to create a partnership between
Landlord and Tenant, to make them joint venturers, to make Tenant an agent,
legal representative, partner, subsidiary or employee of Landlord, or to make
Landlord in any way responsible for the debts, obligations or losses of Tenant.
Notwithstanding anything to the contrary herein, Landlord is the fee and record
owner of the Leased Property.

(b)    Each of the parties hereto covenants and agrees not to (1) file any
income tax return or other associated documents; (2) file any other document
with or submit any document to any governmental body or authority; (3) enter
into any written contractual arrangement with any Person; or (iv) release any
financial statements of Tenant, in each case that takes a position other than
that this Lease is a “true lease” for federal, state and local tax purposes with
Landlord as owner of the Leased Property and Tenant as the tenant of the Leased
Property unless otherwise required by a final “determination” within the meaning
of Section 1313 of the Code. The parties agree that the foregoing includes the
agreement of the parties that (x) Landlord will be treated as the owner of such
Leased Property eligible to claim depreciation deductions under Sections 167 or
168 of the Code with respect to such Leased Property (except as otherwise
provided in Section 11.1(b)), (y) Tenant will report its Rent payments as rent
expense under Section 162 of the Code, and (z) Landlord will report the Rent
payments as rental income under Section 61 of the Code.

(c)    Landlord and Tenant acknowledge and agree that the Rent is the fair
market rent for the use of the Leased Property and was agreed to by Landlord and
Tenant on that basis, and the execution and delivery of, and the performance by
Tenant of its obligations under, this Lease does not constitute a transfer of
all or any part of the Leased Property but rather the creation of the Leasehold
Estate subject to the terms and conditions of this Lease.

(d)    Tenant waives any claim or defense based upon the characterization of
this Lease as anything other than a “true lease” for all applicable legal and
federal, state and local tax purposes and as a lease of all of the Leased
Property. Tenant stipulates and agrees (1) not to challenge the validity,
enforceability or characterization of the lease of the Leased Property as a
“true lease” and/or a single, unseverable instrument pertaining to the lease of
all, but not less than all, of the Leased Property, and (2) not to assert or
take or omit to take any action inconsistent with the agreements and
understandings set forth in Section 3.4 or this Section 6.1. The expressions of
intent, the waivers, the representations and warranties, the covenants, the
agreements and the stipulations set forth in this Section 6.1 are a material
inducement to Landlord and Tenant entering into this Lease.

6.2    Tenant’s Property. Tenant, any Operating Subtenant and their respective
Subsidiaries may sell, transfer, convey or otherwise dispose of Tenant’s
Property (including in connection with selling, replacing or disposing of
Tenant’s Property as it becomes surplus, worn or obsolete or as a part of a
refurbishment or renovation of any Facility or portion thereof that contemplates
replacement of certain items of Tenant’s Property with newly purchased Tenant’s
Property, or if the same is no longer used, useful or economically practicable)
in their discretion in the ordinary course of business in a manner that does not
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Facility with the Operating Standard and Landlord shall have no rights to such
disposed Tenant’s Property except as set forth herein (including in Section 6.4,
Section 36.1 and Section 41.17, and Landlord’s lien with respect to such
property will be automatically released as set forth in Section 6.4(f)). In the
event that any Tenant’s Property is owned by an Operating Subtenant, such
Operating Subtenant shall be required to transfer such Tenant’s Property to
Tenant (or its successor Operating Subtenant) upon the expiration or earlier
termination of its Operating Sublease. Pursuant to Section 36.1, at the end of
the Term, Tenant (i) shall (or shall cause any Operating Subtenant to) transfer
and assign to Landlord certain portions of Tenant’s Property (as and only to the
extent provided for in, and in accordance with the terms of, Section 36.1) and
(ii) shall remove, or cause to be removed, the remaining portion of Tenant’s
Property from the Leased Property at the end of the Term at Tenant’s sole cost
and expense to the extent it may be removed without damaging the Leased Property
or to the extent Tenant repairs such damage. Subject to Section 36.1, any
Tenant’s Property left on the Leased Property at the end of the Term whose
ownership was not transferred to a successor tenant or landlord shall be deemed
abandoned by Tenant and shall become the property of Landlord. Notwithstanding
anything in the foregoing to the contrary, any transfer, conveyance or other
disposition by Landlord or Tenant of any Gaming Equipment will be subject to the
approval, to the extent required, of any applicable Gaming Authority. For the
avoidance of doubt, all references to Tenant’s Property in this Section 6.2
shall exclude Intellectual Property. Notwithstanding anything to the contrary
contained herein, during the Initial Term (x) the Signature Entities shall
remain direct or indirect wholly owned Subsidiaries of Grand Operating
Subtenant, and (y) the Signature Hotel Units (and the right to receive all
revenues generated thereby, including from or with respect to any Signature
Rental Management Operations) shall remain owned and controlled by Signature
Owner, unless the same are transferred with Landlord’s consent to a Successor
Owner (as such term is defined in the Signature Management Agreement) in
accordance with the terms of the Signature Management Agreement. Landlord’s
consent shall be required in connection with any transfer or action which would
result in a breach of the immediately preceding sentence.

6.3    Tenant’s Intellectual Property. Except as otherwise specifically provided
in this Lease or in the Transition Services Agreement, Landlord and Tenant
acknowledge and agree that (a) as between Tenant, Tenant’s Parent and their
respective Affiliates, and the Landlord and its Affiliates, Tenant, Tenant’s
Parent and their respective Affiliates, as applicable, shall be the sole and
exclusive owners of all Property Specific IP, the Hotel Trademarks and their
respective rights to the System-wide IP, (b) Tenant, Tenant’s Parent and their
respective Affiliates may sell, transfer, convey or otherwise dispose of,
modify, use or discontinue use of, Property Specific IP, the Hotel Trademarks
and System-wide IP in their sole discretion in the ordinary course of business
in a manner that does not materially adversely affect any Facility’s compliance
with the Operating Standard, (c) Landlord shall have no rights in or to the
Property Specific IP, Hotel Trademarks or System-wide IP, (d) Landlord shall not
claim any rights in or to, or challenge, contest or otherwise interfere with
Tenant’s, Tenant’s Parent’s or their respective Affiliates’, as applicable, sole
and exclusive ownership of the Property Specific IP, Hotel Trademarks or their
respective rights to the System-wide IP and (e) Tenant may remove or otherwise
dispose of Property Specific IP, Hotel Trademarks and System-wide IP from the
Leased Property at the end of the Term, or may modify the Leased Property at the
end of the Term such that Landlord’s or any successor tenant’s use of the Leased
Property does not infringe upon, dilute, or adversely affect Tenant’s, Tenant’s
Parent’s or their respective Affiliates’ rights in the Property Specific IP,
Hotel Trademarks or System-wide IP. Notwithstanding the foregoing, Tenant shall,
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the entire Term, undertake commercially reasonable efforts to abide by (or cause
its Subsidiaries, if any, to abide by) the terms and conditions of any IP
Licenses. For the avoidance of doubt, no Intellectual Property shall be included
in the provisions of Section 36.1. Notwithstanding the foregoing, Landlord’s
prior written consent (not to be unreasonably withheld, conditioned or delayed)
shall be required in order for Tenant to take any action that would, or could
reasonably be expected to, result in the Grand Leased Property no longer being
identified as “MGM Grand” or the MB Leased Property no longer being identified
as “Mandalay Bay”.

6.4    Landlord’s Security Interest in Tenant’s Pledged Property.

(a)    Tenant represents and warrants that as of the date hereof, substantially
all of Tenant’s Pledged Property (except Tenant’s Pledged Property used in
providing shared services and/or Tenant’s Pledged Property owned by an Affiliate
not wholly-owned by Tenant) that is primarily related to the Leased Property and
reasonably necessary to operate the Leased Property in accordance with the
Operating Standard is owned by Tenant or any Operating Subtenant. Following the
date hereof, Tenant shall use commercially reasonable efforts to cause to be
transferred to Tenant or any Operating Subtenant any Tenant’s Pledged Property
that is not owned by Tenant or any Operating Subtenant as of the date hereof but
is primarily related to the Leased Property and reasonably necessary to operate
the Leased Property in accordance with the Operating Standard on a
Non-Discriminatory basis consistent with past practice as soon as reasonably
practical, but in no event later than one (1) year after the date hereof.

(b)    Tenant covenants and agrees that any replacements, substitutions and
additions of FF&E and all personal property (including all Gaming Equipment),
licenses, permits, subleases, concessions, and contracts, in each case, to be
located at the Leased Property and primarily used or held for use in connection
with the operation of the business conducted by Tenant or any Operating
Subtenant on or about the Leased Property as then being operated (excluding
property used in providing shared services to other assets of Affiliates of
Tenant’s Parent on a Non-Discriminatory basis and specifically excluding any
Intellectual Property) shall be acquired by and owned by Tenant or any Operating
Subtenant (and not by any other Affiliate of Tenant) and all such items shall be
included in Tenant’s Pledged Property (except, for the avoidance of doubt, to
the extent excluded in the definition of Tenant’s Pledged Property).

(c)    To secure the performance of Tenant’s obligations under this Lease,
including, without limitation, Tenant’s obligation to pay Rent hereunder, Tenant
and Operating Subtenant, each as debtor, hereby grant to Landlord, as secured
party, a first priority security interest in all of Tenant’s and Operating
Subtenant’s right, title and interest in and to Tenant’s Pledged Property now
owned or in which Tenant or Operating Subtenant hereafter acquires an interest
or right. This Lease constitutes a security agreement covering all such Tenant’s
Pledged Property. Tenant and Operating Subtenant shall grant no other security
interest in Tenant’s Pledged Property except pursuant to a Permitted Leasehold
Mortgage. The Parties acknowledge that any security interest granted pursuant to
a Permitted Leasehold Mortgage shall be a subordinate lien and subject to the
terms of any Intercreditor Agreement.

(d)    Tenant shall pay all filing fees and record search fees and other
reasonable costs for such additional security agreements, financing statements,
fixture filings, and other documents as Landlord may reasonably require to
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Landlord’s security interest in Tenant’s Pledged Property. Landlord shall have
the right to collaterally assign such security interest granted to Landlord in
Tenant’s Pledged Property to any Fee Mortgagee.

(e)    Notwithstanding anything herein to the contrary, the lien and security
interest granted to Landlord pursuant to this Lease in the Tenant’s Pledged
Property and the exercise of any right or remedy by Landlord hereunder against
the Tenant’s Pledged Property are subject to the provisions of any Intercreditor
Agreement and Tenant’s right to operate the Property in the ordinary course of
business consistent with the Operating Standard. In the event of any conflict
between the terms of the Intercreditor Agreement and this Lease, the terms of
the Intercreditor Agreement shall govern and control.

(f)    Any Tenant’s Pledged Property that is sold, transferred, conveyed or
otherwise disposed of in accordance with Section 6.2 or Section 6.3 or in a
manner not otherwise prohibited by this Lease shall be automatically released
from the security interest granted to Landlord in Tenant’s Pledged Property and
Landlord shall, at Tenant’s request, execute such documents and instruments to
evidence, acknowledge and/or confirm such release. Landlord acknowledges that a
Permitted Leasehold Mortgagee may have a subordinate lien on Tenant’s Pledged
Property, provided that such lien in favor of a Permitted Leasehold Mortgagee is
subject and subordinate to the first-priority lien thereon in favor of Landlord
on the terms and conditions set forth in any Intercreditor Agreement.

(g)    The security interest granted to Landlord in Tenant’s Pledged Property
shall not apply to any Tenant’s Pledged Property which is subject to a bona fide
purchase money financing with respect thereto (including equipment leases or
equipment financing) permitted pursuant to Section 11.1(a)(i). Any funds spent
by Tenant from purchase money financing (including equipment leases or equipment
financing) permitted pursuant to Section 11.1(a)(i), which is superior to the
security interest granted to Landlord in Tenant’s Pledged Property, shall not be
applied toward the minimum Required CapEx set forth in Section 9.1(e).

(h)    Notwithstanding the foregoing or anything herein to the contrary,
Landlord shall have no right to foreclose upon (or commence any foreclosure
proceedings) or exercise any remedies against or in respect of Landlord’s
security interest in Tenant’s Pledged Property at any time prior to the
effective date of termination of this Lease pursuant to Section 16.2(a)(i).

ARTICLE VII

CONDITION AND USE OF LEASED PROPERTY

7.1    Condition of the Leased Property. Tenant acknowledges receipt and
delivery of possession of the Leased Property and confirms that Tenant has
examined and otherwise has knowledge of the condition of the Leased Property
prior to the execution and delivery of this Lease and has found the same to be
in good order and repair and, to the best of Tenant’s knowledge, free from
Hazardous Substances not in compliance with Legal Requirements and satisfactory
for its purposes hereunder, it being understood and acknowledged by Tenant that,

 

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immediately prior to the applicable Landlord’s acquisition of the applicable
Leased Property and contemporaneous entry into this Lease, Tenant (or its
Affiliates) was the owner of all of the applicable Landlord’s interest in and to
the applicable Leased Property and, accordingly, Tenant is charged with, and
deemed to have, full and complete knowledge of all aspects of the condition and
state of the Leased Property as of the Commencement Date. Regardless, however,
of any examination or inspection made by Tenant and whether or not any patent or
latent defect or condition was revealed or discovered thereby, Tenant is leasing
the Leased Property “as is” in its present condition. Tenant waives any claim or
action against Landlord in respect of the condition of the Leased Property
including any defects or adverse conditions not discovered or otherwise known by
Tenant as of the Commencement Date. LANDLORD MAKES NO WARRANTY OR REPRESENTATION
OF ANY KIND, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART
THEREOF, INCLUDING AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO THE NATURE OR QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREIN, OR THE STATUS OF TITLE TO THE LEASED PROPERTY
OR THE PHYSICAL CONDITION OR STATE OF REPAIR THEREOF, OR THE ZONING OR OTHER
LAWS, ORDINANCES, BUILDING CODES, REGULATIONS, RULES AND ORDERS APPLICABLE
THERETO OR TO ANY CAPITAL IMPROVEMENTS WHICH MAY BE NOW OR HEREAFTER
CONTEMPLATED, THE IMPOSITIONS LEVIED IN RESPECT OF THE LEASED PROPERTY OR ANY
PART THEREOF, OR THE USE THAT MAY BE MADE OF THE LEASED PROPERTY OR ANY PART
THEREOF, THE INCOME TO BE DERIVED FROM THE FACILITIES OR THE EXPENSE OF
OPERATING THE SAME, OR THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, IT BEING AGREED
THAT ALL SUCH RISKS, LATENT OR PATENT, ARE TO BE BORNE SOLELY BY TENANT
INCLUDING ALL RESPONSIBILITY AND LIABILITY FOR ANY ENVIRONMENTAL REMEDIATION AND
COMPLIANCE WITH ALL ENVIRONMENTAL LAWS.

7.2    Use of the Leased Property. (a) Tenant shall use or cause to be used the
Leased Property and the improvements thereon for its Primary Intended Use in
accordance with the Operating Standard. Tenant shall not use or permit the use
of the Leased Property or any portion thereof or any Capital Improvement thereto
for any other use without the prior written consent of Landlord, which consent
Landlord may withhold in its sole discretion. Landlord acknowledges that
operation of each Gaming Facility for its Primary Intended Use generally
requires a Gaming License under applicable Gaming Regulations and that without
such a license neither Landlord nor any Affiliate of Landlord may operate,
control or participate in the conduct of a Gaming Facility. Tenant acknowledges
that operation of each Facility for its Primary Intended Use generally may
require a Gaming License under applicable Gaming Regulations and that without
such a license, if applicable, Tenant may not operate, control or participate in
the conduct of the gaming operations at the Facilities.

(b)    Tenant shall not commit or suffer to be committed any waste on the Leased
Property (including any Capital Improvement thereto) or cause or permit any
nuisance thereon or to, except as required by law, take or suffer any action or
condition that will diminish the ability of the Leased Property to be used as a
Gaming Facility or otherwise for the Primary Intended Use (except in connection
with any use, or change of use, permitted pursuant to Section 7.2(a) above)
during the Term or after the expiration or earlier termination of the Term.

 

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(c)     Tenant shall neither suffer nor permit the Leased Property or any
portion thereof to be used in such a manner as (i) would reasonably be expected
to impair Landlord’s title thereto or to any portion thereof or (ii) would
reasonably be expected to result in a claim of adverse use or possession, or an
implied dedication of the Leased Property or any portion thereof. Without the
prior written consent of Landlord, Tenant may not impose or permit the
imposition of any restrictive covenants, easements or other encumbrances which
would encumber Landlord’s interest in the Leased Property. Landlord shall have
the right to approve any restrictive covenant, easement or other encumbrance on
the Leased Property if such matter would survive the expiration or termination
of this Lease or requires any signature or other action by Landlord, such
approval not to be unreasonably withheld, conditioned or delayed unless in
Landlord’s good faith judgment (x) there is more than a de minimis effect on the
value or use of the Leased Property or (y) such matter benefits a Tenant
Competitor or Affiliate of Tenant or Tenant’s Parent. Tenant may impose or
permit the imposition of any restrictive covenants, easements or other similar
encumbrances (excluding, for the avoidance of doubt, any mortgages unless such
mortgage is a Permitted Leasehold Mortgage) which would encumber Tenant’s
leasehold estate and shall (x) expressly provide that they do not affect
Landlord’s interest in the Leased Property and (y) not result in any physical
structures or other matters which may need to be removed or restored after the
expiration of the Lease. Other than any liens or other encumbrances granted to a
Fee Mortgagee, Landlord will not enter into agreements that will encumber the
Leased Property without Tenant’s consent, which shall not be unreasonably
withheld, conditioned or delayed if the proposed matter would not reasonably be
expected to interfere with Tenant’s conduct of its business on the Leased
Property or with the use of the Leased Property for its Primary Intended Use (it
being agreed and understood that any proposed encumbrance related to, or for the
benefit of, any Tenant Competitor, would require Tenant’s consent, which Tenant
may grant or withhold in its sole discretion), provided, that, Tenant is given
reasonable opportunity to participate in the process leading to such agreement.
Nothing in the foregoing is intended to vitiate or supersede Tenant’s right to
enter into Permitted Leasehold Mortgages or Landlord’s right to enter into Fee
Mortgages in each case as and to the extent provided herein. In addition, each
of Landlord and Tenant agrees to, at the sole cost and expense of the other,
reasonably cooperate with the other party and all applicable authorities in
connection with the foregoing, including the provision and execution of such
documents and other information as may be requested by such other party or such
authorities relating to the Leased Property and which are within such party’s
reasonable control to obtain and provide. Landlord further agrees to use
commercially reasonable efforts (at Tenant’s sole cost and expense) to obtain
the consent of the Fee Mortgagee should Fee Mortgagee’s consent be required in
connection with any restrictive covenant, easement or other encumbrance.

(d)    Except as a result of a Casualty Event or other Unavoidable Delay, Tenant
shall continuously operate the Facilities for the Primary Intended Use in
accordance with the Operating Standard.

(e)    Subject to Article XII regarding permitted contests, Tenant, at its sole
cost and expense, shall promptly (i) comply in all material respects with all
Legal Requirements and Insurance Requirements affecting the Facilities and the
business conducted

 

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thereat (taking into account any “grandfather” rights with respect to any
applicable Legal Requirements), including those regarding the use, operation,
maintenance, repair and restoration of the Leased Property or any portion
thereof (including all Capital Improvements) and Tenant’s Property whether or
not compliance therewith may require structural changes in any of the Leased
Improvements or interfere with the use and enjoyment of the Leased Property or
any portion thereof (taking into account any “grandfather” rights with respect
to any applicable Legal Requirements), and (ii) procure, maintain and comply in
all material respects with all Gaming Regulations and Gaming Licenses, and other
authorizations required for the use of the Leased Property (including all
Capital Improvements) and Tenant’s Property for the applicable Primary Intended
Use and any other use of the Leased Property (and Capital Improvements then
being made) and Tenant’s Property, and for the proper erection, installation,
operation and maintenance of the Leased Property and Tenant’s Property.

(f)    Notwithstanding anything to the contrary contained herein, Landlord’s
prior written consent (not to be unreasonably withheld, conditioned or delayed)
shall be required in order for Tenant to take any action that would, or could
reasonably be expected to, result in the Grand Leased Property no longer being
identified as “MGM Grand” or the MB Leased Property no longer being identified
as “Mandalay Bay”.

(g)    Without limitation of any of the other provisions of this Lease, Tenant
shall comply in all material respects with all Property Documents and Landlord
shall reasonably cooperate with Tenant (at Tenant’s sole cost and expense) to
the extent necessary for Tenant to so comply.

(h)    Any Affiliate Agreements relating to the Leased Property between Tenant
and its Affiliates (or between any Facility and Tenant’s Affiliates) must be
Permitted Affiliate Agreements. Any other Affiliate Agreements entered into
after the date of this Lease shall require Landlord’s consent, such consent not
to be unreasonably withheld, conditioned or delayed.

7.3    Additional Facilities.

Nothing contained in this Lease shall restrict Tenant’s or Tenant’s Affiliates’
ability to develop, acquire, operate or sell any new Gaming Facilities (or any
other property) which are not owned or operated by Tenant as of the date hereof
and not subject to this Lease, provided that (x) Tenant and Tenant’s Affiliates’
are not permitted to brand another Gaming Facility in Nevada as “Mandalay Bay”
or “MGM Grand” (or any Trademark confusingly similar thereto or any Trademark
that replaces such brand name as the primary brand name for any Facility) until
the expiration of the Term and (y) except as provided in Section 7.2(d), at all
times Tenant shall operate the Facilities in accordance with the Operating
Standard. Notwithstanding anything to the contrary contained herein, Landlord
shall not have any right to purchase, nor shall Tenant have any obligation to
make any offer to Landlord, in connection with any such other property or asset
referenced in the preceding sentence. Further, neither Landlord nor any
Affiliates of Landlord shall be restricted from participating in opportunities,
including, without limitation, developing, building, purchasing or operating
Gaming Facilities or any other property or asset, at any time; provided,
however, that in no event shall Landlord at any time during the Term own or
operate any Gaming Facility. For the avoidance of doubt, Affiliates of Landlord
shall not be restricted from developing, building, purchasing, owning or opening
Gaming Facilities.

 

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ARTICLE VIII

REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH LAW

8.1    Representations and Warranties.    Each party represents and warrants to
the other that: (i) this Lease and all other documents executed or to be
executed by it in connection herewith have been duly authorized and shall be
binding upon it; (ii) it is duly organized, validly existing and in good
standing under the laws of the state of its formation and is duly authorized and
qualified to perform this Lease within the State; and (iii) neither this Lease
nor any other document executed or to be executed in connection herewith
violates the terms of any other agreement of such party.

8.2    Compliance with Legal and Insurance Requirements, etc.

(a)    Subject to Article XII regarding permitted contests, Tenant, at its
expense, shall promptly (a) comply in all material respects with all Legal
Requirements and Insurance Requirements affecting each Facility and the business
conducted therein, including those regarding the use, operation, maintenance,
repair and restoration of the Leased Property (including all Capital
Improvements thereto) and Tenant’s Property whether or not compliance therewith
may require structural changes in any of the Leased Improvements or interfere
with the use and enjoyment of the Leased Property, and (b) procure, maintain and
comply in all material respects with all Gaming Regulations and Gaming Licenses,
and other authorizations required for the use of the Leased Property (including
all Capital Improvements) and Tenant’s Property for the applicable Primary
Intended Use and any other use of the Leased Property (including Capital
Improvements then being made) and Tenant’s Property, and for the proper
erection, installation, operation and maintenance of the Leased Property and
Tenant’s Property. In an emergency which Landlord determines is not being
reasonably addressed by Tenant or in the event of a breach by Tenant of its
obligations under this Section 8.2 which is not cured within any applicable cure
period, Landlord or its representatives (and any Fee Mortgagee) may, but shall
not be obligated to, subject to all Legal Requirements, applicable Gaming
Regulations and the rights of subtenants, enter upon the Leased Property and
take such reasonable actions and incur such reasonable costs and expenses to
effect such compliance as it reasonably deems advisable to protect its interest
in the Leased Property, and Tenant shall reimburse Landlord for all such
reasonable costs and expenses incurred by Landlord in connection with such
actions. Tenant covenants and agrees that the Leased Property and Tenant’s
Property shall not be used for any unlawful purpose. Tenant (or any applicable
Operating Subtenant) shall comply with any Gaming Regulations or other
regulatory requirements required of it in all material respects as a tenant of
each of the Facilities taking into account their Primary Intended Use. In the
event that a Gaming Authority notifies Tenant (or any Operating Subtenant) that
Tenant (or such Operating Subtenant) is in jeopardy of losing a Gaming License
material to this Lease or the continued operation of the Facilities, Tenant
shall immediately notify Landlord and, assuming no Event of Default has occurred
and is continuing, Tenant shall be given reasonable time to address (or cause
such Operating Subtenant to address) the regulatory issue, after which period
(but in all events prior to an actual revocation of such Gaming License), Tenant
shall take (or cause such Operating Subtenant to take) reasonable steps to avoid
the loss of such Gaming License (subject to the provisions of Section 7.2(d)).

 

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(b)    Landlord shall comply with any Gaming Regulations or other regulatory
requirements required of it as owner of the Facilities taking into account their
Primary Intended Use (except to the extent Tenant fulfills or is required to
fulfill any such requirements hereunder). In the event that a Gaming Authority
notifies Landlord that Landlord is in jeopardy of failing to comply with any
such Gaming Regulation or other regulatory requirements material to the
continued operation of the Facilities for their Primary Intended Use, Landlord
shall be given reasonable time to address the regulatory issue, after which
period (but in all events prior to an actual cessation of the use of any
Facility for its Primary Intended Use as a result of the failure by Landlord to
comply with such regulatory requirements) Landlord shall be required to sell the
Leased Property relating to such Facility to a buyer that is in compliance with
all Gaming Regulations and subject to this Lease. In the event during the period
in which Landlord is complying with the preceding sentence, such regulatory
agency notifies Landlord and Tenant that Tenant may not pay any portion of the
Rent to Landlord, Tenant shall be entitled to fund such amount into an escrow
account, to be released to Landlord or the party legally entitled thereto at or
upon resolution of such regulatory issues and otherwise on terms reasonably
satisfactory to the parties. Notwithstanding anything in the foregoing to the
contrary, no transfer of Tenant’s Property used in the conduct of Gaming
(including the purported or attempted transfer of a Gaming License) or the
operation of a Gaming Facility shall be effected or permitted without receipt of
all necessary approvals and/or Gaming Licenses in accordance with applicable
Gaming Regulations.

(c)    In connection with this Agreement, Tenant shall not take any action,
directly or indirectly, that would result in a violation of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the “U.S.A. Patriot Act”), the Bank Secrecy Act
of 1970 (the “Bank Secrecy Act”), the regulations or orders issued by the Office
of Foreign Assets Control of the United States Department of the Treasury
(“OFAC”), or any other law that is designed to prevent bribery, terrorism, drug
trafficking or money laundering.

8.3    Zoning and Uses. Tenant shall not, without the prior written consent of
Landlord (i) initiate or support any limiting change in the permitted uses of
the Leased Property (or to the extent applicable, limiting zoning
reclassification of the Leased Property); (ii) seek any variance under existing
land use restrictions, laws, rules or regulations (or, to the extent applicable,
zoning ordinances) applicable to the Leased Property; (iii) execute or file any
subdivision plat affecting the Leased Property, or institute, or permit the
institution of, proceedings to alter any tax lot comprising the Leased Property;
or (iv) knowingly permit or suffer the Leased Property or any portion thereof to
be used by the public or any Person in such manner as might make possible a
claim of adverse usage or possession or of any implied dedication or easement;
provided, however, such consent shall not be unreasonably withheld, conditioned
or delayed with respect to clauses (i)-(iv) provided that there is no more than
a de minimis effect on the value or use of the Leased Property; and, provided,
further, that Tenant may take, or cause to be taken by any Operating Subtenant,
an action described in the foregoing clauses (i) and (ii) if the same and any
effect on a Facility and the Leased Property is de minimis and limited in the
duration such that it would expressly not survive the expiration or earlier
termination of this Lease. In the event any

 

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matter expressly permitted or consented to by Landlord requires any signature or
other action by Landlord, Landlord agrees to, at Tenant’s sole cost and expense,
reasonably cooperate with Tenant (or any Operating Subtenant) and all applicable
authorities in connection with the foregoing clauses (i)-(iv), including the
provision and execution of such customary documents and other information as may
be requested by Tenant (or any Operating Subtenant) or such authorities relating
to the Leased Property and which are within Landlord’s reasonable control to
obtain and provide, provided that Tenant acknowledges and agrees that any
third-party claims arising under such documents are expressly covered by
Tenant’s indemnification obligations under Section 21.1. Landlord further agrees
to use commercially reasonable efforts (at Tenant’s sole cost and expense) to
obtain the consent of the Fee Mortgagee should Fee Mortgagee’s consent be
required in connection with the foregoing clauses (i)-(iv). Notwithstanding the
foregoing or anything to the contrary contained herein, no Landlord approval
shall be required in connection with the matters listed on Schedule 13.

8.4    Intentionally Omitted.

8.5    Third-Party Reports. Upon Landlord’s reasonable request from time to
time, but not more frequently than once each year in connection with the Annual
Certificate, Tenant shall provide Landlord with copies of any final third-party
surveys, environmental, engineering, zoning, seismic or property condition
reports (other than any which are subject to privilege) obtained by Tenant or
any Operating Subtenant with respect to the Leased Property.

ARTICLE IX

MAINTENANCE AND REPAIR

9.1    Maintenance and Repair. (a) Subject to Landlord’s right to approve
certain Capital Improvements in Section 10.1, Tenant, at its expense and without
the prior consent of Landlord, shall maintain, or cause to be maintained, the
Leased Property and every portion thereof, and all private roadways, sidewalks
and curbs appurtenant to the Leased Property, and which are under Tenant’s or
any subtenant’s control in reasonably good order and repair whether or not the
need for such repairs occurs as a result of Tenant’s or any subtenant’s use, any
prior use, the elements or the age of the Leased Property, and, with reasonable
promptness, make all reasonably necessary and appropriate repairs thereto of
every kind and nature, including those necessary to ensure continuing compliance
in all material respects with all Legal Requirements, (including, without
limitation, all Gaming Regulations and Environmental Laws) (to the extent
required hereunder), Insurance Requirements and Property Documents whether now
or hereafter in effect, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, foreseen or unforeseen or arising by
reason of a condition existing prior or after the Commencement Date. All repairs
shall be at least equivalent in quality to the original work in the aggregate.
Tenant will not take or omit to take any action the taking or omission of which
would reasonably be expected to materially impair the value or the usefulness of
the Leased Property or any part thereof or any Capital Improvement thereto for
its Primary Intended Use. Tenant shall (i) maintain, or cause to be maintained,
Tenant’s Property (except Intellectual Property, which is subject to
Section 6.3) (x) in a manner consistent with the Operating Standard throughout
the Term, and (y) as necessary for conduct of the Primary Intended Use at the
Facilities throughout the Term and (ii) not take any action which is intended or
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or reduce the rights of Landlord under Section 36.1 of this Lease. Landlord
acknowledges that the condition of the Facilities and the other matters
described in the first sentence of this Section 9.1 on the date hereof satisfies
the requirements of this Article IX.

(b)    Landlord shall not under any circumstances be required to (i) build or
rebuild any improvements on the Leased Property; (ii) make any repairs,
replacements, alterations, restorations or renewals of any nature to the Leased
Property, whether ordinary or extraordinary, structural or non-structural,
foreseen or unforeseen, or to make any expenditure whatsoever with respect
thereto; or (iii) maintain the Leased Property in any way. Tenant hereby waives,
to the extent permitted by law, the right to make repairs at the expense of
Landlord pursuant to any law in effect at the time of the execution of this
Lease or hereafter enacted.

(c)    Subject to the specific provisions of Section 41.14, nothing contained in
this Lease and no action or inaction by Landlord shall be construed as
(i) constituting the consent or request of Landlord, expressed or implied, to
any contractor, subcontractor, laborer, materialman or vendor to or for the
performance of any labor or services or the furnishing of any materials or other
property for the construction, alteration, addition, repair or demolition of or
to the Leased Property or any part thereof or any Capital Improvement thereto;
or (ii) giving Tenant any right, power or permission to contract for or permit
the performance of any labor or services or the furnishing of any materials or
other property in such fashion as would permit the making of any claim against
Landlord in respect thereof or to make any agreement that may create, or in any
way be the basis for, any right, title, interest, lien, claim or other
encumbrance upon the estate of Landlord in the Leased Property, or any portion
thereof or upon the estate of Landlord in any Capital Improvement thereto.

(d)    Tenant shall, upon the expiration or earlier termination of the Term,
vacate and surrender and relinquish in favor of Landlord all rights to the
Leased Property (including all Capital Improvements) in each case with respect
to such Facility, to Landlord in the condition in which such Leased Property was
originally received from Landlord and Capital Improvements were originally
introduced to such Facility, except as repaired, rebuilt, restored, altered or
added to as permitted or required by the provisions of this Lease and except for
ordinary wear and tear, subject to casualty and Condemnation as provided in
Article XIV and Article XV.

(e)    (i) Without limiting Tenant’s obligations to maintain the Leased Property
and Tenant’s Property under this Lease, Tenant is required to expend or cause
any Operating Subtenant to expend the Required CapEx during each CapEx Testing
Period. To enable Landlord to monitor and confirm compliance with the foregoing
within thirty (30) days after the end of each calendar year (the “CapEx
Certification Date”), commencing with the calendar year ending December 31,
2024, Tenant shall provide Landlord with an Officer’s Certificate (a “CapEx
Testing Period Certificate”) certifying in reasonable detail to (A) the
aggregate amount expended by Tenant and/or any Operating Subtenant on Qualifying
CapEx during the immediately preceding CapEx Testing Period and (B) the actual
Net Revenue (collectively and with respect to each Facility (and, with respect
to the Grand Facility, together with the Signature Hotel Units)) during such
CapEx Testing Period (the “CapEx Testing Period Net Revenues”), including a
certification of the information delivered to Landlord substantially in the form
attached hereto as Exhibit K, together with evidence satisfactory to Landlord in
the

 

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reasonable exercise of Landlord’s discretion documenting the amount of the
Qualifying CapEx during the CapEx Testing Period. Commencing on January 1, 2025,
Tenant shall be required to deposit, or cause to be deposited, additional funds
into the CapEx Reserve in an amount equal to the deficiency between the Required
CapEx for a CapEx Testing Period and the aggregate amount expended on Qualifying
CapEx during such CapEx Testing Period, with such deposit to occur no later than
the date (the “Required CapEx Funding Deadline”) which is the earliest to occur
of (x) the date that Tenant delivers a CapEx Testing Period Certificate
indicating a deficiency, (y) the CapEx Certification Date if Tenant fails to
timely deliver the CapEx Testing Period Certificate, in which event, until a
CapEx Testing Period Certificate is actually delivered, Landlord shall determine
the deficiency (and the Qualifying CapEx for any period for which a CapEx
Testing Period Certificate has not previously been delivered shall be deemed to
equal zero), and (z) after delivery of a CapEx Testing Period Certificate, the
date that it is reasonably determined by the parties that a CapEx Testing Period
Certificate inaccurately reflected that a deficiency did not exist (and in the
event of any dispute regarding an alleged deficiency, either party shall be
entitled to submit such dispute to the Experts for determination).

(ii)    The Parties acknowledge that Tenant’s agreement to satisfy the Required
CapEx during the CapEx Testing Period as required in this Lease is a material
inducement to Landlord’s agreement to enter into this Lease, and, accordingly,
if Tenant and/or any Operating Subtenant fails to expend Qualifying CapEx (or
deposit the required funds into the CapEx Reserve) as and when required by this
Lease (including for the avoidance of doubt, any failure to expend funds in the
CapEx Reserve on Qualifying CapEx by the CapEx Grace Period as provided in
Section 9.1(e)(iii)), then the same shall constitute an Event of Default
hereunder subject to the notice and cure rights specified in
Section 16.1(a)(xv), and without limitation of any of Landlord’s other rights
and remedies, Landlord shall have the right in its discretion to exercise its
rights and remedies under this Lease, including without limitation, (x) seek the
remedy of specific performance to require Tenant to expend or cause any
Operating Subtenant to expend the Required CapEx (or to deposit funds into the
CapEx Reserve and to utilize funds in the CapEx Reserve on Qualifying CapEx) and
(y) withdraw funds from the CapEx Reserve and retain such funds after an Event
of Default. Furthermore, for the avoidance of doubt, and without limitation of
Guarantor’s obligations under the Guaranty, Tenant acknowledges and agrees that
the obligation of Tenant to expend (or cause any Operating Subtenant to expend)
the Required CapEx (or deposit, or cause to be deposited, funds into the CapEx
Reserve) as provided in this Lease in each case constitutes a part of the
monetary obligations of Tenant under this Lease and shall be guaranteed by the
Guarantor under the Guaranty (together with all other obligations of Tenant
under this Lease).

(iii)    Notwithstanding anything to the contrary set forth in this Lease, if
Tenant and the Operating Subtenants collectively fail to make at least the
amount of expenditures required by this Section 9.1(e), then, so long as, as of
the Required CapEx Funding Deadline, there are CapEx Reserve Funds on deposit in
the CapEx Reserve in an aggregate amount at least equal to such deficiency, then
Tenant shall not be deemed to be in breach or default of its obligations
hereunder to satisfy the Required CapEx, provided that Tenant and the Operating
Subtenants shall collectively spend such amounts so deposited in the CapEx
Reserve on Qualifying CapEx within six (6) months after the Required CapEx
Funding Deadline (subject to extension in the event of an Unavoidable Delay
during such six (6) month period, on a day-for-day basis, for the same amount of
time that such Unavoidable Delay affects Tenant’s ability

 

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to perform (or cause any Operating Subtenant to perform) the required Qualifying
CapEx) (the “CapEx Grace Period”). For the avoidance of doubt, any funds
disbursed from the CapEx Reserve and spent on required Qualifying CapEx as
described in this Section shall be applied to the Required CapEx for the period
for which such funds were deposited (and shall be deemed to be the funds that
have been in the CapEx Reserve for the longest period of time) and shall not be
applied to the Required CapEx for the subsequent period in which they are
actually spent.

(iv)    Tenant (x) shall, if required by this Section 9.1(e) and (y) may, at its
election, at any other time, deposit, or cause to be deposited, funds (the
“CapEx Reserve Funds”) into a segregated Eligible Account held by an Eligible
Institution (the “CapEx Reserve”). All interest on CapEx Reserve Funds shall be
for the benefit of Tenant (or any Operating Subtenant) and added to and become a
part of the CapEx Reserve and shall be disbursed in the same manner as other
monies deposited in the CapEx Reserve. Tenant shall be responsible for payment
of any federal, state or local income or other tax applicable to the interest
earned on the CapEx Reserve Funds credited or paid to Tenant.

(v)    Tenant shall be entitled to use CapEx Reserve Funds solely for the
purpose of paying for (or reimbursing Tenant or any Operating Subtenant for) the
cost of Qualifying CapEx. So long as no Event of Default exists, Tenant shall be
entitled to receive within ten (10) days of submitting a request in writing
directly to Landlord and the Eligible Institution a disbursement of CapEx
Reserve Funds from the CapEx Reserve to pay for Qualifying CapEx or a
reimbursement for Qualifying CapEx, and any such request shall specify the
amount of the requested disbursement and a general description of the type of
Qualifying CapEx to be paid or reimbursed using such CapEx Reserve Funds (a
“CapEx Disbursement Request”). So long as no Event of Default exists, any CapEx
Reserve Funds remaining in the CapEx Reserve following the satisfaction of the
Required CapEx for which such CapEx Reserve Funds were deposited shall be
returned by Landlord or the Eligible Institution to Tenant. In the event that as
of the expiration or earlier termination of the Lease the Required CapEx for
which such CapEx Reserve Funds were deposited has not be satisfied, then
Landlord shall be entitled to receive and retain such CapEx Reserve Funds to the
extent not satisfied and any remainder shall be released to and retained by
Tenant.

(f)    Tenant shall deposit, or cause to be deposited by one or more Operating
Subtenant, monthly, in arrears, on the first (1st) Business Day of each calendar
month, with an Eligible Institution an aggregate amount equal to one and
one-half percent (1.5%) of the Net Revenue during the second preceding calendar
month (e.g., the FF&E Reserve Funds to be deposited on April 1, 2020 shall be
calculated using Net Revenue for February 2020) (the “FF&E Reserve Funds”) into
one or more segregated Eligible Accounts held by an Eligible Institution
(collectively, the “FF&E Reserve”). All interest on FF&E Reserve Funds shall be
for the benefit of Tenant (or any Operating Subtenant) and added to and become a
part of the FF&E Reserve and shall be disbursed in the same manner as other
monies deposited in the FF&E Reserve. Tenant (or an Operating Subtenant) shall
be responsible for payment of any federal, state or local income or other tax
applicable to the interest earned on the FF&E Reserve Funds credited or paid to
Tenant (or any such Operating Subtenant). Tenant (or any Operating Subtenant)
shall be entitled to use FF&E Reserve Funds solely for the purpose of paying for
(or reimbursing Tenant or any Operating Subtenant for) the cost of any
Qualifying CapEx and FF&E (the “Permitted FF&E Expenditures”). So long as no
Event of Default exists, Tenant (or any

 

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Operating Subtenant) shall be entitled to receive within ten (10) days of Tenant
(or the applicable Operating Subtenant) submitting a request in writing directly
to Landlord and the Eligible Institution a disbursement of FF&E Reserve Funds
from the FF&E Reserve to pay for Permitted FF&E Expenditures or a reimbursement
for Permitted FF&E Expenditures, and any such request shall specify the amount
of the requested disbursement and a general description of the type of Permitted
FF&E Expenditures to be paid or reimbursed using such FF&E Reserve Funds (an
“FF&E Disbursement Request”). For the avoidance of doubt, any funds disbursed
from the FF&E Reserve and spent on and/or as reimbursement for the costs of
Permitted FF&E Expenditures shall be applied toward the minimum Required CapEx
set forth in Section 9.1(e). So long as no Event of Default exists and Tenant
has satisfied the Required CapEx, any FF&E Reserve Funds remaining in the FF&E
Reserve on the expiration or earlier termination of this Lease shall be released
to Tenant (or any Operating Subtenant) and Tenant (or any Operating Subtenant)
shall be entitled to retain such funds.

(g)    Tenant (and each Operating Subtenant) grants to Landlord a first-priority
security interest in the CapEx Reserve and all CapEx Reserve Funds and the FF&E
Reserve and all FF&E Reserve Funds in each case as additional security for
performance of Tenant’s obligations under this Lease during the existence of an
Event of Default. Landlord shall have the right to collaterally assign the
security interest granted to Landlord in the CapEx Reserve and CapEx Reserve
Funds and FF&E Reserve and FF&E Reserve Funds to any Fee Mortgagee.
Notwithstanding anything to the contrary contained in Section 9.1(e) and
Section 9.1(f), following the execution of this Lease, Landlord, Tenant (or any
Operating Subtenant) and the applicable Eligible Institution shall promptly
enter into a customary and reasonable deposit account control agreement with
respect to the FF&E Reserve and the CapEx Reserve (the “Restricted Reserve
Accounts”) which shall provide that (x) Landlord has “control” over the account
within the meaning of Section 9-104 of the New York Uniform Commercial Code,
(y) the Eligible Institution shall disburse funds to Tenant (or the applicable
Operating Subtenant) pursuant to a CapEx Disbursement Request or FF&E
Disbursement Request (as applicable) in accordance with Section 9.1(e) and
Section 9.1(f) (as applicable) except during a Reserve Control Trigger Period
and (z) during the Reserve Control Trigger Period, Eligible Institution shall
only make disbursements from the account upon written direction from Landlord.
During the Reserve Control Trigger Period, so long as no Event of Default has
occurred Landlord shall request disbursements of funds from the Restricted
Reserve Accounts to Tenant (or the applicable Operating Subtenant) within five
(5) Business Days of (i) Tenant’s (or any Operating Subtenant’s) delivery of a
CapEx Disbursement Request or FF&E Disbursement Request (as applicable) in
connection with Section 9.1(e) and Section 9.1(f) (as applicable) and
(ii) Tenant’s (or any applicable Operating Subtenant’s) satisfaction of the
Reserve Disbursement Requirements.

9.2    Encroachments, Restrictions, Mineral Leases, etc. If any of the Leased
Improvements shall, at any time, encroach upon any property, street or
right-of-way, or shall violate any restrictive covenant or other agreement
affecting the Leased Property, or any part thereof or any Capital Improvement
thereto, or shall impair the rights of others under any easement or right-of-way
to which the Leased Property is subject, or the use of the Leased Property or
any Capital Improvement thereto is impaired, limited or interfered with by
reason of the exercise of the right of surface entry or any other provision of a
lease or reservation of any oil, gas, water or other minerals, then promptly
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affected by any such encroachment, violation or impairment, Tenant shall,
subject to its right to contest the existence of any such encroachment,
violation or impairment, protect, indemnify, save harmless and defend Landlord
from and against, all losses, liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including reasonable
attorneys’, consultants’ and experts’ fees and expenses) based on or arising by
reason of any such encroachment, violation or impairment. In the event of an
adverse final determination with respect to any such encroachment, violation or
impairment, either (a) each of Tenant and Landlord shall be entitled to obtain
valid and effective waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, violation or impairment, whether
the same shall affect Landlord or Tenant or (b) Tenant shall (i) make, or cause
to be made, such changes in the Leased Improvements, and take such other
actions, as Tenant in the good faith exercise of its judgment deems reasonably
practicable, to remove such encroachment or to end such violation or impairment,
including, if necessary, the alteration of any of the Leased Improvements, and
(ii) in any event take all such actions as may be necessary in order to be able
to continue the operation of the Leased Improvements for the Primary Intended
Use substantially in the manner and to the extent the Leased Improvements were
operated prior to the assertion of such encroachment, violation or impairment.
Tenant’s obligations under this Section 9.2 shall be in addition to and shall in
no way discharge or diminish any obligation of any insurer under any policy of
title or other insurance and, to the extent the recovery thereof is not
necessary to compensate Landlord for any damages incurred by any such
encroachment, violation or impairment. Landlord agrees to use reasonable efforts
to seek recovery under any policy of title or other insurance under which
Landlord is an insured party for all losses, liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including reasonable
attorneys’, consultants’ and experts’ fees and expenses) based on or arising by
reason of any such encroachment, violation or impairment as set forth in this
Section 9.2; provided, however, that in no event shall Landlord be obligated to
institute any litigation, arbitration or other legal proceedings in connection
therewith unless Landlord is reasonably satisfied that Tenant has the financial
resources needed to fund such litigation and Tenant and Landlord have agreed
upon the terms and conditions on which such funding will be made available by
Tenant, including, but not limited to, the mutual approval of a litigation
budget.

ARTICLE X

CAPITAL IMPROVEMENTS

10.1    Construction of Capital Improvements to the Leased Property.

(a)    Tenant or any subtenant shall, with respect to the Facilities, have the
right to make Capital Improvements, including, without limitation, any Capital
Improvement required by Section 8.2 or 9.1(a), without the consent of, or any
notice to, Landlord if the Capital Improvement (i) does not involve the removal
of any material existing structures (unless Tenant reasonably promptly proceeds
to replace such removed structures with structures of at least reasonably
comparable value or utility), (ii) does not have a material adverse effect on
the structural integrity of any remaining Leased Improvements (other than as
contemplated to be maintained or improved in connection with such Capital
Improvement), (iii) is not reasonably likely to reduce the value of the
applicable Facility when completed, (iv) is consistent with the Primary Intended
Use, and (v) does not involve a total budgeted cost in excess of One Hundred

 

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Fifty Million and No/100 Dollars ($150,000,000); each of the foregoing (i)-(v)
as reasonably determined by Tenant, subject to Landlord’s reasonable review and
approval of such determination. Any Capital Improvements (1) described in the
preceding sentence and/or (2) which are described on Schedule 8 (for purposes of
clarity or otherwise) (the “Schedule 8 Capital Improvements”) are referred to
as, “Permitted Capital Improvements”.

(b)    If Tenant or any subtenant desires to make a Capital Improvement that is
not a Permitted Capital Improvement (a “Landlord Approved Capital Improvement”),
Tenant shall submit to Landlord in reasonable detail a general description of
the proposal, the projected cost of construction and such plans and
specifications, permits, licenses, contracts and other information concerning
the proposal as Landlord may reasonably request. Such description shall indicate
the use or uses to which such Capital Improvement will be put and the impact, if
any, on current and forecasted Net Revenue and EBITDA for the applicable
Facility attributable thereto. All proposed Landlord Approved Capital
Improvements shall be subject to Landlord’s review and approval, which approval
shall not be unreasonably withheld, conditioned or delayed. It shall be
reasonable for Landlord to condition its approval of any Capital Improvement
upon any or all of the following terms and conditions:

(i)    Such construction shall be effected substantially in accordance with
detailed plans and specifications approved by Landlord, which approval shall not
be unreasonably withheld, conditioned or delayed;

(ii)    No Capital Improvement will result in the Leased Property becoming a
“limited use” property for purposes of United States federal income taxes as of
the date such Capital Improvement is placed in service;

(iii)    the work shall be conducted under the supervision of a licensed
architect or engineer selected by Tenant (the “Architect”) and, for purposes of
this Section 10.1 only, approved by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed;

(iv)    Landlord’s receipt of reasonable evidence of Tenant’s or Tenant’s
Parent’s financial ability to complete the work without materially and adversely
affecting Tenant’s cash flow position or financial viability;

(v)    All Capital Improvements will become Landlord’s property when made;
provided, however, that the foregoing shall not affect the provisions of
Section 11.1(b); and

(vi)    Any Capital Improvement which exceeds a total budgeted cost in excess of
One Hundred Fifty Million and No/100 Dollars ($150,000,000.00) (the “Capital
Improvements Threshold”) (x) may be subject to the approval of Fee Mortgagee,
which Landlord agrees it will use commercially reasonable efforts to obtain and
(y) shall require that Tenant deliver Construction Security to Landlord,
provided no Construction Security shall be required in connection with the
Schedule 8 Capital Improvements.

 

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(c)    If the Construction Security is in the form of cash, if required by Fee
Mortgagee, such security may be deposited into the FF&E Reserve or an Eligible
Account of Landlord (or Fee Mortgagee) (a “Construction Security Escrow
Account”). On a monthly basis during the construction of any such Capital
Improvement for which Construction Security has been deposited, Tenant shall be
entitled (either pursuant to a separate agreement to be entered into directly
between Tenant and Fee Mortgagee, in form and substance reasonably acceptable to
Tenant, or, if no such agreement is entered into, then as an obligation of
Landlord hereunder) to receive a portion of such Construction Security, to be
disbursed to Tenant (in the case of cash or cash equivalents) or reduced (in the
case of a Letter of Credit), as applicable, on a dollar-for-dollar basis, in the
amount required to reimburse Tenant (or any Operating Subtenant) for (or to
enable Tenant (or any Operating Subtenant) to pay) the cost of such Capital
Improvement in amounts equal to the actual costs incurred by Tenant (or any
Operating Subtenant) for such Capital Improvement, subject to delivery by Tenant
to Landlord of the Reserve Disbursement Requirements related to the work
performed, and subject: (a) to compliance by Tenant with the applicable
provisions of any Fee Mortgage Documents then in effect to the extent and only
to the extent Tenant is required to comply therewith pursuant to Article XXXI
hereof, and (b) in the event no Fee Mortgage then exists and Landlord is holding
the Construction Security, to the condition that no Event of Default exist at
the time of determination and subject to the other applicable provisions of this
Article X. To the extent a construction consultant is required by any Fee
Mortgagee, Landlord shall have the right (in addition to any construction
consultant engaged by Tenant or any Operating Subtenant) to also select and
engage (subject to any Fee Mortgagee requirements), at Landlord’s cost and
expense, construction consultants to conduct inspections of the Leased Property
during the construction of any Capital Improvements, provided that (x) such
inspections shall be conducted in a manner as to not unreasonably interfere with
such construction or the operation of the applicable Facility and Tenant (or any
Operating Subtenant) may have Tenant’s (or such Operating Subtenant’s)
representative escort such consultant at all times, (y) prior to entering the
Leased Property, such consultants shall deliver to Tenant evidence of insurance
reasonably satisfactory to Tenant and (z) (irrespective of whether the
consultant was engaged by Landlord, Tenant or otherwise) Landlord and Tenant
shall be entitled to receive copies of such consultants’ work product and shall
have direct access to and communication with such consultants.

10.2    Construction Requirements for Capital Improvements. Tenant’s or any
subtenant’s construction of Capital Improvements shall be performed in
compliance with the following requirements which shall be applicable to
Permitted Capital Improvements and Landlord Approved Capital Improvements except
as indicated below:

(a)    Such construction shall not be commenced until Tenant (or any Operating
Subtenant) shall have procured and paid for all municipal and other governmental
permits and authorizations required to be obtained prior to such commencement,
including those permits and authorizations required pursuant to any Gaming
Regulations, and Landlord shall join in the application for such permits or
authorizations whenever such action is necessary; provided, however, that
(i) any such joinder shall be at no cost or expense to Landlord; and (ii) any
plans required to be filed in connection with any such application in respect of
any Landlord Approved Capital Improvements shall have been so approved by
Landlord;

(b)    Such construction shall not and, if an Architect has been engaged for
such work, the Architect shall certify to Landlord that such construction shall
not, impair the structural strength of any component of the applicable Facility
or overburden the electrical, water, plumbing, HVAC or other building systems of
any such component in a manner that would violate applicable building codes or
prudent industry practices;

 

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(c)    If an Architect has been engaged for such work and if plans and
specifications have been obtained in connection with such work, the Architect
shall certify to Landlord that the plans and specifications conform to, and
comply with, in all material respects all applicable building, subdivision and
zoning codes, laws, ordinances and regulations imposed by all governmental
authorities having jurisdiction over the Leased Property;

(d)    During and following completion of such construction, the parking and
other amenities which are located in the applicable Facility or on the Land of
such Facility shall remain adequate for the operation of such Facility for its
Primary Intended Use and in no event shall such parking be less than that which
is required by law (including any variances with respect thereto); provided,
however, that to the extent additional parking is not already a part of a
Capital Improvement, Tenant (or any Operating Subtenant) may construct
additional parking on the applicable Land in accordance with Section 10.1(a); or
Tenant (or any Operating Subtenant) may acquire off-site parking to serve such
Facility as long as such parking shall be reasonably proximate to, and dedicated
to, or otherwise made available to serve, such Facility;

(e)    All work done in connection with such construction shall be done as soon
as reasonably practicable and using materials and resulting in work that is at
least as good product and condition as the remaining areas of the applicable
Facility and in conformity with all Legal Requirements, including, without
limitation, any applicable non-discrimination laws; and

(f)    Promptly following the completion of any Landlord Approved Capital
Improvements only, Tenant shall deliver to Landlord “as built” drawings of such
addition (or written confirmation from the relevant general contractor or
architect that such Capital Improvement has been built in accordance with the
plans and specifications), certified as accurate by the licensed architect or
engineer selected by Tenant, and copies of any new or revised certificates of
occupancy.

10.3    Intentionally Omitted.

10.4    Ownership of Tenant Capital Improvements. Subject to Section 11.1(b),
all Tenant Capital Improvements shall be the property of Landlord upon
completion and upon the expiration or earlier termination of this Lease, all
Tenant Capital Improvements shall remain the property of Landlord (without any
obligation to reimburse Tenant for the costs thereof).

10.5    Funding of Tenant Capital Improvements.

(a)    Tenant shall notify Landlord of any proposed Tenant Capital Improvements
for which Landlord’s prior approval is required, which notice (the “Capital
Improvement Notice”) shall be accompanied by (i) a reasonably detailed
description of the proposed Tenant Capital Improvements, (ii) the then-projected
cost of construction of the proposed Tenant Capital Improvements, (iii) copies
of the plans and specifications, permits, licenses, contracts and preliminary
studies concerning the proposed Tenant Capital Improvements, to the extent
then-available, (iv) reasonable evidence that such proposed Tenant Capital
Improvements will, upon completion, comply with all applicable Legal
Requirements,

 

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and (v) reasonably detailed information regarding the terms upon which Tenant is
considering seeking financing therefor, if any. To the extent in Tenant’s
possession or control, Tenant shall provide to Landlord any additional
information about such proposed Tenant Capital Improvements which Landlord may
reasonably request. Landlord (or Landlord’s Affiliate) shall have the right (but
not the obligation) to fund the cost of any proposed Tenant Capital Improvements
on such arms-length terms and conditions as may be agreed to by Landlord and
Tenant.

(b)    Within thirty (30) days of receipt of a Capital Improvement Notice
pursuant to this Section 10.5, Landlord shall have the right to notify Tenant as
to whether it would be willing to fund all or a portion of such proposed Capital
Improvement and, if so, the terms and conditions upon which it would do so. Any
waiver of the right to fund or any failure to fund with respect to a specific
Tenant Capital Improvements shall not affect Landlord’s rights under this Lease,
including, without limitation, any continued rights under this Section 10.5. If
Landlord proposes to fund such proposed Capital Improvements, Tenant shall have
ten (10) Business Days to accept or reject Landlord’s funding proposal.

(c)    In connection with any funding of Capital Improvements by Landlord,
Landlord and Tenant may make agreed upon modifications to the Rent to reflect
Landlord’s funding of the cost of such Tenant Capital Improvements.

10.6    Self Help. In order to facilitate Landlord’s completion of any work,
repairs or restoration of any nature that are required to be performed by Tenant
in accordance with any provisions hereof, upon the occurrence of the earlier of
(i) an Event of Default by Tenant hereunder and (ii) any default by Tenant in
the performance of such work under this Lease (so long as in the case of this
clause (ii) Landlord has provided Tenant thirty (30) days’ prior written notice
thereof and Tenant has not cured such default within such thirty day period),
Landlord shall have the right, from and after such occurrence, to enter onto the
Leased Property in compliance with all applicable laws and perform any and all
such work and labor necessary as reasonably determined by Landlord to complete
any work required by Tenant hereunder or expend any sums therefor and/or employ
watchmen to protect the Leased Property from damage (collectively, the “Landlord
Work”). In connection with the foregoing, Landlord shall have the right, in each
case, in its reasonable discretion: (i) to use any funds in the FF&E Reserve,
CapEx Reserve, or the Construction Security (as applicable) for the purpose of
making or completing such Landlord Work; (ii) to employ such contractors,
subcontractors, agents, architects and inspectors as shall be required for such
purposes; (iii) to pay, settle or compromise all existing bills and claims which
are or may become Liens against the Leased Property, or as may be necessary or
desirable for the completion of such Landlord Work, or for clearance of title;
(iv) to execute all applications and certificates in the name of Tenant which
may be required by any of the contract documents; (v) to prosecute and defend
all actions or proceedings in connection with the Leased Property or the
rehabilitation and repair of the Leased Property; (vi) to do any and every act
which Tenant might do in its own behalf to complete the Landlord Work; and
(vii) charge Tenant with any costs incurred in connection with such Landlord
Work and the exercise of Landlord’s rights under this Section 10.6 as Additional
Charges. Nothing in this Lease shall: (1) make Landlord responsible for making
or completing any Landlord Work; (2) require Landlord to expend funds from or in
addition to the FF&E Reserve, CapEx Reserve, or Construction Reserve (as
applicable) to make or complete any Landlord Work; (3) obligate

 

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Landlord to proceed with any Landlord Work; or (4) obligate Landlord to demand
from Tenant additional sums to make or complete any Landlord Work (but nothing
herein shall prevent Landlord from demanding such amounts from Tenant as
Additional Charges).

ARTICLE XI

NO LIENS

11.1    Liens. (a) Subject to the provisions of Article XII relating to
permitted contests and Article XVII with respect to Tenant’s financing, Tenant
will not directly or indirectly create and will promptly discharge at its
expense any lien, encumbrance, attachment, title retention agreement or claim
(“Lien”) upon the Leased Property or any Capital Improvement thereto or upon the
Gaming Licenses or upon Tenant’s Property (other than Intellectual Property,
which is governed by Section 6.3) to be transferred and assigned to Landlord
pursuant to Section 6.4 and Section 36.1 or any attachment, levy, claim or
encumbrance in respect of the Rent, excluding, however, (i) this Lease and the
Liens granted to Landlord pursuant hereto; (ii) the Property Documents;
(iii) restrictions, liens and other encumbrances which are expressly permitted
by this Lease or consented to in writing by Landlord (such consent not to be
unreasonably withheld unless otherwise provided herein); (iv) [reserved]; (v)
Permitted Subleases and Permitted Management Agreements and related matters
permitted by Article XXII; (vi) liens for Impositions not yet delinquent or
being contested in accordance with Article XII, provided that Tenant has
provided appropriate reserves as required under GAAP and any foreclosure or
similar remedies with respect to such Impositions have not been instituted and
no notice as to the institution or commencement thereof has been issued except
to the extent such institution or commencement is stayed no later than sixty
(60) days after such notice is issued; (vii) liens of mechanics, laborers,
materialmen, suppliers or vendors for sums either not yet due or being contested
in accordance with Article XII; (viii) any Lessor Liens or other liens created
by Landlord; (i) liens related to purchase money financing and equipment leases
or equipment financing for Tenant’s Property which are used or useful in
Tenant’s (or any Operating Subtenant’s) business on the Leased Property and
consistent with the Operating Standard, and do not impair in any material
respect Landlord’s rights under Section 36.1; (j) liens of any Permitted
Leasehold Mortgage or Permitted Credit Facility Pledge; provided, however, in no
event shall the foregoing be deemed or construed to permit Tenant to encumber
its leasehold interest (or any Operating Subtenant to encumber its subleasehold
interest) in the Leased Property or its direct or indirect interest (or the
interest of any of its Subsidiaries or subtenants) in the Gaming Licenses (other
than, in each case, to a Permitted Leasehold Mortgagee or a Permitted Credit
Facility Pledge), without the prior written consent of Landlord, which consent
may be granted or withheld in Landlord’s sole discretion; and provided, further,
that Tenant shall be required to provide Landlord with fully executed copies of
any and all Permitted Leasehold Mortgages, Permitted Credit Facility Pledges,
and related principal Debt Agreements; (k) provisions of any easement
agreements, street dedications or vacations, entitlements, public and/or private
utility easements, licenses, declarations of covenants, conditions and
restrictions, and other similar provisions, in each case expressly permitted or
consented to pursuant to this Lease; and (l) non-exclusive licenses or
sublicenses of patents, patent applications, trademarks, trademark applications,
service marks, service mark applications, trade names, URLs, copyrights,
computer software, trade secrets, know-how and processes granted by Tenant, any
Operating Subtenant or any of their respective Subsidiaries in the ordinary
course of business or

 

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on terms that, taken together with all related transactions, are commercially
reasonable. For the avoidance of doubt, the parties acknowledge and agree that,
(A) except as expressly set forth herein, Tenant has not granted any liens in
favor of Landlord as security for its obligations hereunder and (B) nothing
contained herein shall be deemed or construed (i) to prohibit the issuance of a
lien on the Equity Interests in Tenant or any Operating Subtenant (or direct or
indirect interests in Tenant or any Operating Subtenant) or any direct or
indirect parent of Tenant or any Operating Subtenant owning an interest in the
Gaming Licenses pursuant to a Permitted Credit Facility Pledge (it being agreed
that any foreclosure by a lien holder on such direct or indirect interests in
Tenant or any Operating Subtenant shall be subject to the restriction on Tenant
Change of Control set forth in Article XXII) or (ii) to prohibit Tenant (or any
Operating Subtenant) from pledging its Accounts (other than, for the avoidance
of doubt, the CapEx Reserve, the FF&E Reserve, the Covenant Security Escrow
Account, and any Construction Security or Construction Security Escrow Account)
and other Tenant’s Property and other property of Tenant (or any Operating
Subtenant) to the extent it does not constitute Tenant’s Pledged Property.

(b)    Landlord and Tenant intend that this Lease be an indivisible true lease
that affords the parties hereto the rights and remedies of landlord and tenant
hereunder and does not represent a financing arrangement. This Lease is not an
attempt by Landlord or Tenant to evade the operation of any aspect of the law
applicable to any of the Leased Property. Except as otherwise required by
applicable law or any accounting rules or regulations, Landlord and Tenant
hereby acknowledge and agree that this Lease is intended to constitute a “true
lease” for all other purposes, including federal, state and local tax purposes,
commercial purposes, and bankruptcy purposes and that Landlord shall be entitled
to all the benefits of ownership of the Leased Property, including depreciation
with respect to the Leased Property (but not with respect to any Tenant Capital
Improvements, except as provided in the next sentence) for all federal, state
and local tax purposes. Without prejudice to Sections 10.1(b)(v) or 10.4, Tenant
shall be entitled to all benefits of ownership of any Tenant Capital
Improvements during the Term, including depreciation for all federal, state and
local tax purposes, except to the extent of any Tenant Capital Improvements that
are actually paid for by Landlord (it being understood that Landlord has no
right or obligation to pay for any Tenant Capital Improvements except in
accordance with Section 10.5).

(c)    If, notwithstanding (x) the form and substance of this Lease and (y) the
intent of the parties, and the language contained herein providing that this
Lease shall at all times be construed, interpreted and applied to create an
indivisible lease of all of the Leased Property, any court of competent
jurisdiction orders that this Lease is a financing arrangement, this Lease shall
be considered a secured financing agreement (a “Recharacterization”), then
(subject to the parties’ rights to appeal such Recharacterization order) this
Lease shall be considered a secured financing agreement and Landlord’s rights to
the Leased Property shall be the holder of a perfected first priority deed of
trust, assignment of rents and security agreement naming Tenant as grantor,
Landlord as beneficiary, and Fidelity National Title Agency of Nevada, Inc., a
Nevada corporation, as “Trustee” (a “Recharacterization Deed of Trust”)
encumbering the Leased Property to secure the payment and performance of all the
obligations of Tenant hereunder and, to that end, in the event of a
Recharacterization, but only in event of a Recharacterization and not any time
prior thereto, the following shall apply:

 

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(i)    Tenant grants, assigns, transfers, conveys and confirms unto Trustee, IN
TRUST, WITH POWER OF SALE, for the benefit of Landlord as beneficiary, as
security to secure the payment and performance of all the obligations of Tenant
under the Lease all Tenant’s right, title and interest in and to the Leased
Property. Without limiting the foregoing, there is assigned by Tenant to
Landlord all “Rents” as defined in NRS 107A.140 (2019), of the Leased Property,
and this instrument shall be an “Assignment of Rents,” as defined in NRS 107A.
040 (2019), under the Nevada Uniform Assignment of Rents Act, NRS Chapter 107A
(2019), or successor statute then in effect. Where not inconsistent with this
Lease, the following covenants, Nos. 1; 2 (but solely to the extent that the
court described above has held that the obligations under Article XIII of the
Lease are no longer in effect, in which case the insurance coverages, amounts
and requirements set forth in Article XIII of the Lease shall be the coverages,
amounts and requirements for purposes of this No. 2); 3; 4 (default rate under
the Lease); 5; 6; 7 (attorneys’ fees as required under the Lease); 8 and 9 of
NRS 107.030 (2019) or successor statute then in effect are hereby adopted and
made a part of any Recharacterized Deed of Trust.

(ii)    If, notwithstanding (a) the form and substance of the Lease and (b) the
intent of the parties, and the language contained herein providing that this
Lease shall at all times be construed, interpreted and applied to create an
indivisible lease of all of the Leased Property, a Recharacterization occurs,
Tenant (and each Permitted Leasehold Mortgagee) has (A) authorized Landlord, at
the expense of Tenant, to make any filings or take other actions as Landlord
reasonably determines are necessary or advisable in order to effect fully this
Lease or to more fully perfect or renew the rights of the Landlord, including,
without limitation, irrevocably authorizing Landlord to file in any UCC
jurisdiction any initial financing statements and amendments thereto that
indicate collateral as being the Leased Property and the Tenant’s Pledged
Property, and (B) to subordinate to the Landlord the lien of any Permitted
Leasehold Mortgagee with respect to the Leased Property (it being understood
that nothing herein shall affect the rights of a Permitted Leasehold Mortgagee
under this Lease).

(iii)    Landlord and Tenant acknowledge and agree that, in the event of a
Recharacterization, Landlord’s rights under a Recharacterized Deed of Trust
shall automatically be collaterally assigned to the Fee Mortgagee pursuant to
the terms of the Fee Mortgage with the most senior priority as additional
security for the indebtedness secured thereby.

(d)    At any time and from time to time upon the request of Landlord or Tenant,
and at the expense of the requesting party, Tenant or Landlord, as applicable,
shall promptly execute, acknowledge and deliver such further documents and do
such other acts as the requesting party may reasonably request in order to
effectuate fully this Lease or to more fully perfect or renew the rights of the
requesting party with respect to the Leased Property. Upon the exercise by
Landlord or Tenant of any power, right, privilege or remedy pursuant to this
Lease which requires any consent, approval, recording, qualification or
authorization of any governmental authority, Tenant or Landlord, as applicable,
will execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the exercising party may be required to obtain from such other party for such
consent, approval, recording, qualification or authorization.

 

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11.2    Landlord Encumbrance Obligations. Landlord agrees that Landlord shall
not create or permit to exist at any time any Lessor Lien and Landlord shall, at
its own cost and expense, promptly take such action as may be reasonably
necessary duly to discharge, or to cause to be discharged, all Lessor Liens
attributable to it or any of its Affiliates (and Tenant shall not be responsible
for any monetary or other obligations under or in connection with any Lessor
Lien); provided, however, that Landlord shall not be required to so discharge
any such Lessor Lien(s) (i) while the same is being contested in good faith by
appropriate proceedings diligently prosecuted (so long as neither the Leased
Property, nor any Capital Improvement thereto, nor any part or interest in
either thereof, would be in any imminent danger of being sold, forfeited,
attached or lost pending the outcome of such proceedings and provided that
Tenant would not be in any imminent danger of civil or criminal liability on
account thereof pending the outcome of such proceedings) or (ii) if such
Lessor’s Lien(s) would not be reasonably expected to materially adversely affect
the rights of Tenant under this Lease, impair in any material respect Tenant’s
ability to perform its obligations under this Lease or impose additional
obligations on Tenant under this Lease or result in the termination of this
Lease. Landlord shall indemnify and hold harmless Tenant from and against any
actual loss, cost or expense (including reasonable legal fees and expenses)
which may be suffered or incurred by Tenant, any Operating Subtenant or their
respective Affiliates as the result of Landlord’s failure to discharge and
satisfy any such Lessor Lien to the extent Landlord is required to do so in
accordance with the terms hereof.

ARTICLE XII

PERMITTED CONTESTS

12.1    Permitted Contests. Tenant, upon prior Notice to Landlord, on its own,
in any Operating Subtenant’s or in Landlord’s name, at Tenant’s expense, may
contest, by appropriate legal proceedings conducted in good faith and with due
diligence, the amount, validity or application, in whole or in part, of any
licensure or certification decision (including pursuant to any Gaming
Regulation), Imposition, Legal Requirement, Insurance Requirement, or Lien (but
not Liens granted to Landlord pursuant to this Lease); provided, however, that
(i) in the case of an unpaid Imposition or Lien, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Landlord and from the Leased Property or any Capital Improvement thereto;
(ii) neither the Leased Property or any Capital Improvement thereto, the Rent
therefrom nor any part or interest in either thereof would be in any danger of
being sold, forfeited, attached or lost pending the outcome of such proceedings;
(iii) in the case of a Legal Requirement, neither Landlord nor Tenant would be
in any imminent danger of civil or criminal liability for failure to comply
therewith pending the outcome of such proceedings; (iv) in the case of a Legal
Requirement, Imposition or Lien, Tenant shall give such reasonable security as
may be required by Landlord to insure ultimate payment of the same and to
prevent any sale or forfeiture of the Leased Property or any Capital Improvement
thereto or the Rent by reason of such non-payment or noncompliance; (v) in the
case of an Insurance Requirement, the coverage required by Article XIII shall be
maintained; (vi) Tenant shall keep Landlord reasonably informed as to the status
of the proceedings; (vii) if such contest be finally resolved against Landlord
or Tenant, Tenant shall promptly pay any applicable amount required to be paid,
together with all interest and penalties accrued thereon, and comply with any
applicable Legal Requirement or Insurance Requirement; and (h) in the case of
any Lien, no foreclosure of similar remedies shall have been instituted and no
notice as to the institution or commencement thereof

 

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have been issued except to the extent such institution is stayed no later than
ten (10) Business Days after such notice is issued.    Notwithstanding anything
to the contrary contained herein (but without limiting Landlord’s obligations
under Section 41.14 of this Lease), with respect to any Liens under clause
(g) of Section 11.1, such Lien must be discharged or bonded over within sixty
(60) days of the filing of such Lien. Landlord, at Tenant’s expense, shall
execute and deliver to Tenant such authorizations and other documents as may
reasonably be required in any such contest, and, if reasonably requested by
Tenant or if Landlord so desires, Landlord shall join as a party therein. The
provisions of this Article XII shall not be construed to permit Tenant to
contest the payment of Rent or any other amount (other than Impositions or
Additional Charges which Tenant may from time to time be required to impound
with Landlord) payable by Tenant to Landlord hereunder. Tenant shall indemnify,
defend, protect and save Landlord harmless from and against any liability, cost
or expense of any kind that may be imposed upon Landlord in connection with any
such contest and any loss resulting therefrom, except in any instance where
Landlord opted to join and joined as a party in the proceeding despite Tenant’s
having sent Notice to Landlord of Tenant’s preference that Landlord not join in
such proceeding.

ARTICLE XIII

INSURANCE

13.1    Property Insurance Requirements. During the Term, Tenant or a Tenant
Party shall at all times keep the Leased Property, and all property located in
or on the Leased Property, including Capital Improvements, the Fixtures and
Tenant’s Property, insured with the kinds and amounts of insurance described
below. Each element of insurance described in this Article XIII shall be
maintained with respect to the Leased Property and Tenant’s Property and
operations thereon. Such insurance shall be written by companies permitted to
conduct business in the State. All policies required under this Lease must name
Landlord as an “additional named insured” or “additional insured” as
appropriate. All business interruption policies shall name Landlord as “loss
payee” with respect to Rent only. Property losses shall be payable to Landlord
and/or Tenant as provided in Article XIV. In addition, the policies, as
appropriate, shall name as an “additional named insured” or “additional insured”
as appropriate and “mortgagee/loss payee”, as their interest may appear, each
Permitted Leasehold Mortgagee and as an “additional insured” and/or
“mortgagee/loss payee” as their interest may appear, the holder of any mortgage,
deed of trust or other security agreement (“Facility Mortgagee”) securing any
indebtedness or any other Encumbrance placed on the Leased Property in
accordance with the provisions of Article XXXI (“Facility Mortgage”) by way of a
standard form of mortgagee’s loss payable endorsement. Except as otherwise set
forth herein, any property insurance loss adjustment settlement shall require
the written consent of Landlord, Tenant, and each Facility Mortgagee (to the
extent required under the applicable Facility Mortgage Documents) unless the
amount of the loss net of the applicable deductible is less than Fifty Million
Dollars ($50,000,000) in which event no such consent shall be required. Evidence
of insurance shall be deposited with Landlord and, if requested, with any
Facility Mortgagee(s). The insurance policies required to be carried by Tenant
or a Tenant Party hereunder shall insure against all the following risks with
respect to the Facilities:

(a)    Loss or damage by fire, vandalism and malicious mischief, extended
coverage perils commonly known as “All Risk,” and all physical loss perils
normally included in

 

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such All Risk insurance, including, but not limited to, sprinkler leakage,
collapse, windstorm (including named storm) and terrorism in an amount not less
than the full replacement of the Improvements (but in no event less than a
minimum amount of Four Billion Dollars ($4,000,000,000.00) and including a
building ordinance coverage endorsement, coverage for loss to the undamaged
portion in an amount equal to the full replacement cost for the undamaged
portion and for coverage for demolition costs and coverage for increased costs
of construction in amounts acceptable to Landlord, provided, that Tenant shall
have the right (i) to limit maximum insurance coverage for loss or damage by
earthquake (including earth movement) in an amount not less than the annual
aggregate gross loss estimates for a 475 year event as indicated in a seismic
risk analysis (such analysis to be approved by Landlord and secured by the
Tenant utilizing the most current RMS software, or its equivalent), including
loss amplification, at the expense of the Tenant and, to the extent the Leased
Property is covered under a blanket policy, such seismic risk analysis shall
include all high risk locations covered by the earthquake limit or as may be
requested by Landlord and commercially available; provided, further, with
respect to the terrorism coverage required herein, in the event TRIPRA is no
longer in effect, Tenant shall be required to carry terrorism insurance as
required herein, provided that in the event the premium cost of any terrorism
peril coverages are available only for a premium that is more than 2 times the
current premium paid by Tenant, then Tenant shall be entitled and required to
purchase the maximum amount of insurance coverage it reasonably deems most
efficient and prudent to purchase for such peril and Tenant shall not be
required to spend additional funds to purchase additional coverages insuring
against such risks; and provided, further, that certain property coverages other
than earthquake, flood and windstorm may be sub-limited as long as each
sub-limit (x) is commercially available and prudent as determined by Tenant and
(y) to the extent that the amount of such sub-limit is less than the amount of
such sub-limit in effect as of the Commencement Date, such sub-limit is approved
by Landlord, such approval not to be unreasonably withheld;

(b)    Loss or damage by explosion of steam boilers, pressure vessels or similar
apparatus, now or hereafter installed in any Facility, in such limits with
respect to any one accident as may be reasonably requested by Landlord from time
to time;

(c)    Flood, if any portion of the Improvements is currently or at any time in
the future located in a federally designated “special flood hazard area,” flood
hazard insurance in an amount equal to the maximum amount of such insurance
available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as
each may be amended plus such greater amount as may be requested by Landlord and
commercially available;

(d)    Loss of rental value , on an actual loss sustained basis, covering the
twenty four (24) month period from the date of any Casualty Event, in an amount
not less than 100% of the rent payable hereunder and normal Operating Expenses
(including ninety (90) days ordinary payroll) for a period of twenty four
(24) months with an extended period of indemnity coverage of at least three
hundred sixty five (365) days necessitated by the occurrence of any of the
hazards described in Sections 13.1(a), 13.1(b) or 13.1(c);

 

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(e)    Claims for injury to persons or property damage under a policy of
commercial general liability insurance including but not limited to coverage for
terrorism, premises/operations, blanket contractual liability, liquor liability,
special events or activities to the extent insurable, independent contractors
and personal injury with limits not less than Four Hundred Million Dollars
($400,000,000) each occurrence and Four Hundred Million Dollars ($400,000,000)
in the annual aggregate, provided, that such requirements may be satisfied
through the purchase of a primary general liability policy and excess liability
policies;

(f)    Claims for bodily injury and property damage under a policy of business
automobile liability including garage and garagekeepers liability and containing
provisions and endorsements in accordance with state legal requirements, with
primary limits not less than One Million Dollars ($1,000,000) per accident and
excess limits provided in the excess liability policies referred to above;

(g)    During such time as Tenant or any subtenant is constructing any
improvements at any Facility, Tenant, at its sole cost and expense, shall carry,
or cause to be carried (i) workers’ compensation insurance and employers’
liability insurance covering all persons employed in connection with the
improvements in statutory limits, (ii) a completed operations endorsement to the
commercial general liability insurance policy referred to above, (iii) builder’s
risk insurance, completed value form (or its equivalent), covering all physical
loss, in an amount and subject to policy conditions satisfactory to Landlord,
and (iv) such other insurance, in such amounts, as Landlord deems reasonably
necessary to protect Landlord’s interest in the Leased Property from any act or
omission of Tenant’s or such subtenant’s contractors or subcontractors;

(h)    If any operations of Tenant or any subtenant require the use of any
aircraft or watercraft that is owned, leased or chartered by Tenant or any
subtenant with respect to the Leased Property, Tenant shall maintain or cause to
be maintained aircraft liability insurance, as appropriate, with limits not less
than One Hundred Million Dollars ($100,000,000) combined single limit for bodily
injury and property damage including passengers and crew and watercraft
liability insurance, as appropriate, with limits not less than Ten Million
Dollars ($10,000,000) combined single limit for bodily injury and property
damage including passengers and crew;

(i)    Tenant may provide or cause to be provided self-insured retentions for
portions of the insurance contemplated under this Section 13.1 in commercially
reasonable amounts, it being agreed that the amounts of the self-insured
retentions in effect as of the Commencement Date are commercially reasonable.
Upon (i) the termination of this Lease with respect to the Facilities pursuant
to Section 14.2, (ii) the election of any Facility Mortgagee pursuant to
Section 14.1 to apply any proceeds payable under any property policy of
insurance in accordance with the applicable Facility Mortgage, or (iii) any
proceeds payable under any property policy of insurance being retained by
Landlord pursuant to Section 14.2(f), Tenant shall pay to Landlord the amount of
any self-insured retentions;

(j)    During the Term, Tenant shall maintain or cause to be maintained
environmental impairment liability (“EIL”) pollution liability insurance on the
Leased Property in the form of a pollution legal liability or pollution and
remedial legal liability (or similar product) (“PLL”) insurance policy. Such PLL
insurance shall cover the Facilities and provide coverage for on and off site
cleanup costs for new and historical pollution conditions, and shall include
coverage for first- and third- party bodily injury and property damage claims
related to

 

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pollution conditions. The PLL policy in effect on the date hereof shall run to
expiration and shall be renewed (or replaced with a policy of the same or
superior terms and conditions as the existing policy) in five (5) year policy
period intervals. The PLL policy will have a per claim limit of no less than
Twenty-Five Million Dollars ($25,000,000) and an aggregate policy limit of no
less than Twenty-Five Million Dollars ($25,000,000), with a self-insured
retention or deductible of no greater than Fifty Thousand Dollars ($50,000).
Such policy shall include coverage for claims for microbial matter and
legionella, with the same combined single limits as referenced above, with a
self-insured retention or deductible of no greater than One Million Dollars
($1,000,000), although for the Fee Mortgagee it shall be no greater than One
Hundred Thousand Dollars ($100,000).    The PLL policy shall have the Tenant as
First Named Insured and Landlord, with its successors, assigns and/or affiliates
(as their interests may appear) as Additional Named Insureds (“ANI”) (with the
Fee Mortgagee as ANI as may be required). The PLL policy (i) shall not be
permitted to cover any additional locations during the policy terms, (ii) shall
name the Fee Mortgagee as ANI with an automatic right of assignment to the Fee
Mortgagee in the event of default throughout the policy term, (iii) in the event
the policy is cancelled by the insurers, a copy of such cancellation notice
shall also be mailed to the Fee Mortgagee, (iv) shall not be cancelled or
materially modified by Tenant without the prior written consent of the Fee
Mortgagee, (v) shall, during the Term, include the same coverages, terms,
conditions and endorsements (and shall not be amended in any way without the
prior written consent of the Fee Mortgagee) as the PLL policy approved as of the
date hereof. Any Underground Storage Tanks (USTs) located on the Leased Property
shall be covered on the PLL policy, or be covered as a separate UST policy that
shall be maintained during the Term. Notwithstanding the foregoing or anything
to the contrary set forth herein, the parties agree that Landlord shall take the
lead role in procuring, on Tenant’s behalf, the initial PLL policy to be in
effect as of the date hereof and Tenant shall pay or otherwise reimburse
Landlord for the cost of such initial PLL policy; and

(k)    During the Term, Tenant shall maintain or cause to be maintained cyber
liability insurance, with limits not less than $75,000,000 per claim. Coverage
shall be sufficiently broad to respond to the duties and obligations undertaken
by Tenant in this Lease, and shall include, but not be limited to, claims
involving network security and privacy liability. If the Tenant maintains
broader coverage and/or higher limits than the minimum shown above, the Landlord
requires and shall be entitled to the broader coverage and/or the higher limits
maintained by the contractor. Any available insurance proceeds in excess of the
specified minimum limits of insurance and coverage shall be available to the
Landlord.

13.2    Workers’ Compensation. In addition to the insurance described above,
Tenant shall at all times maintain or cause to be maintained adequate workers’
compensation coverage and any other coverage required by Legal Requirements for
all Persons employed by Tenant or any Operating Subtenant on the Leased Property
in accordance with Legal Requirements.

13.3    Waiver of Subrogation. All insurance policies carried by either party
covering the Leased Property or Tenant’s Property, including, without
limitation, contents, fire and liability insurance, shall expressly waive any
right of subrogation on the part of the insurer against the other party. Each
party, respectively, shall pay any additional costs or charges for obtaining
such waiver.

 

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13.4    Policy Requirements. All of the policies of insurance referred to in
this Article XIII shall be written in form reasonably satisfactory to Landlord
and any Facility Mortgagee and issued by insurance companies with (1) a
financial strength and claims paying ability rating of (x) “A” or better by S&P
and (y) “A2” or better by Moody’s, to the extent Moody’s rates the applicable
insurance company, and (z) “A” or better by Fitch, to the extent Fitch rates the
applicable insurance company, (provided, however for multi-layered policies,
(A) if four (4) or fewer insurance companies issue the Policies, then at least
75% of the insurance coverage represented by the Policies must be provided by
insurance companies with a rating of “A” or better by S&P and “A2” or better by
Moody’s, to the extent Moody’s rates the applicable insurance company, and “A”
or better by Fitch, to the extent Fitch rates the applicable insurance company,
with no remaining carrier below “BBB” by S&P and “Baa2” or better by Moody’s, to
the extent Moody’s rates the applicable insurance company, and “BBB” or better
by Fitch, to the extent Fitch rates the applicable insurance company, or (B) if
five (5) or more insurance companies issue the Policies, then at least sixty
percent (60%) of the insurance coverage represented by the Policies must be
provided by insurance companies with a rating of “A” or better by S&P and “A2”
or better by Moody’s, to the extent Moody’s rates the applicable insurance
company, and “A” or better by Fitch, to the extent Fitch rates the applicable
insurance company, with no remaining carrier below “BBB” by S&P and “Baa2” or
better by Moody’s, to the extent Moody’s rates the applicable insurance company,
and “BBB” or better by Fitch, to the extent Fitch rates the applicable insurance
company, and (2) a rating of A:VIII or better in the current Best’s Insurance
Reports    If Tenant obtains and maintains the general liability insurance
described in Section 13.1(e) above on a “claims made” basis, Tenant shall
provide continuous liability coverage for claims arising during the Term. In the
event such “claims made” basis policy is canceled or not renewed for any reason
whatsoever (or converted to an “occurrence” basis policy), Tenant shall either
obtain (a) “tail” insurance coverage converting the policies to “occurrence”
basis policies providing coverage for a period of at least three (3) years
beyond the expiration of the Term, or (b) an extended reporting period of at
least three (3) years beyond the expiration of the Term. Tenant shall pay all of
the premiums therefor, and deliver certificates thereof to Landlord prior to
their effective date (and with respect to any renewal policy, deliver
certificates thereof to Landlord within ten (10) days of binding insurance), and
in the event of the failure of Tenant either to effect such insurance in the
names herein called for or to pay the premiums therefor, or to deliver such
certificates thereof to Landlord, at the times required, Landlord shall be
entitled, but shall have no obligation, to effect such insurance and pay the
premiums therefor, in which event the cost thereof, together with interest
thereon at the Overdue Rate, shall be repayable to Landlord upon demand
therefor. Tenant shall obtain, to the extent available on commercially
reasonable terms, the agreement of each insurer, by endorsement on the policy or
policies issued by it, or by independent instrument furnished to Landlord, that
it will give to Landlord thirty (30) days’ (or ten (10) days’ in the case of
non-payment of premium) Notice before the policy or policies in question shall
be altered, allowed to expire or cancelled.

13.5    Increase in Limits. If, from time to time after the Commencement Date,
but not more than once in any 12-month period, Landlord determines in the
exercise of its reasonable business judgment that the limits of the personal
injury or property damage-public liability insurance then carried pursuant to
Section 13.1(e) hereof are insufficient, Landlord may give Tenant Notice of
acceptable limits for the insurance to be carried, provided that such limits are
then available and commercially reasonable, and within one hundred eighty
(180) days after the receipt of such Tenant Notice, the insurance shall
thereafter be carried with limits as prescribed by Landlord until further
increase pursuant to the provisions of this Section 13.5.

 

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13.6    Blanket Policy. Any blanket insurance policy shall specifically allocate
to the Leased Property the amount of coverage from time to time required
hereunder or shall otherwise provide the same protection as would a separate
policy insuring only the Leased Property hereof, subject to review and approval
by Landlord based on the schedule of locations and values, and such other
documentation required by Landlord. Further, to the extent the policies are
maintained pursuant to a blanket insurance policy that covers more than one
location within a one thousand foot radius of the Leased Property (the
“Radius”), the limits of such blanket insurance policy must be sufficient to
maintain property and terrorism coverage as set forth in this Section for the
Leased Property and any and all other locations combined within the Radius that
are covered by such blanket insurance policy calculated on a total insured value
basis.

13.7    No Separate Insurance. Tenant shall not, on Tenant’s own initiative or
pursuant to the request or requirement of any third party, (i) take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article XIII to be furnished by, or which may reasonably be
required to be furnished by, Tenant or (ii) increase the amounts of any then
existing insurance by securing an additional policy or additional policies,
unless all parties having an insurable interest in the subject matter of the
insurance, including in all cases Landlord and all Facility Mortgagees, are
included therein as additional insureds or additional named insureds, as
appropriate, and the loss is payable under such insurance in the same manner as
losses are payable under this Lease. Notwithstanding the foregoing, nothing
herein shall prohibit Tenant from insuring against risks not required to be
insured hereby, and as to such insurance, Landlord and any Facility Mortgagee
need not be included therein as additional insureds, nor must the loss
thereunder be payable in the same manner as losses are payable hereunder except
to the extent required to avoid a default under the Facility Mortgage. In
addition, nothing contained herein shall limit Tenant’s ability to procure
policies of insurance with limits in excess of the requirements set forth in
this Article XIII.

13.8    Captive Insurance Company Requirements. With respect to any captive
insurance company providing the terrorism insurance required pursuant to
Section 13.1 above, such captive insurance company must meet the requirements
set forth on Exhibit N attached hereto.

13.9    Insurance Side Letter. The parties hereby acknowledge that they have
executed and delivered that certain letter agreement dated as of the date hereof
which sets forth additional agreements between the parties with respect to
Tenant’s insurance requirements under this Lease.

ARTICLE XIV

CASUALTY

14.1    Property Insurance Proceeds. All proceeds (except business interruption
insurance proceeds not allocated to rent expenses which shall be payable to and
retained by Tenant) payable by reason of any property loss or damage to the
Leased Property, or any portion

 

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thereof, under any property policy of insurance required to be carried hereunder
shall be paid to Fee Mortgagee or to an escrow account held by a third party
depositary reasonably acceptable to Landlord and Tenant (pursuant to an escrow
agreement acceptable to the parties and intended to implement the terms hereof)
and made available to Tenant upon request for the reasonable costs of
preservation, stabilization, emergency restoration, business interruption,
reconstruction and repair, as the case may be, of any damage to or destruction
of the Leased Property, or any portion thereof; provided, however, that the
portion of such proceeds that are attributable to Tenant’s obligation to pay
Rent and Additional Charges shall be applied against Rent and Additional Charges
due by Tenant hereunder as Rent and Additional Charges become due; and provided,
further, that if the total amount of proceeds payable net of the applicable
deductibles is Fifty Million Dollars ($50,000,000) or less, and, if no Event of
Default has occurred and is continuing, the proceeds shall notwithstanding the
foregoing provisions be paid to Tenant and, subject to the limitations set forth
in this Article XIV used for the repair of any damage to the Leased Property;
provided, further, that, in each case, the Leased Property is rebuilt in a
manner at least substantially equivalent to the condition of the Leased Property
that existed immediately prior to the casualty and with materials and
workmanship of like kind and quality and as otherwise reasonably satisfactory to
Landlord. Any excess proceeds of insurance remaining after the completion of the
restoration or reconstruction of the Leased Property to substantially the
condition described in the preceding sentence shall be paid to Tenant. All
salvage resulting from any risk covered by insurance for damage or loss to the
Leased Property shall belong to Landlord. Tenant shall have the right to
prosecute and settle insurance claims, provided that Tenant shall consult with
and involve Landlord in the process of adjusting any insurance claims under this
Article XIV and any final settlement with the insurance company shall be subject
to Landlord’s consent, such consent not to be unreasonably withheld.

14.2    Tenant’s Obligations Following Casualty. (a) If any Facility and/or any
Tenant Capital Improvements to such Facility are damaged, whether or not from a
risk covered by insurance carried by Tenant, except as otherwise provided
herein, (i) Tenant shall restore such Leased Property (including any Tenant
Capital Improvements and all Required CapEx), to substantially the condition
required by Section 14.1, (ii) such damage shall not terminate this Lease and
(iii) subject to Section 14.5, Landlord shall cause the Fee Mortgagee to make
the proceeds of any insurance held in accordance with Section 14.1 available to
Tenant for such restoration in accordance with Section 14.1.

(b)    In the event that any Facility is damaged during the final two years of
the then-current Term (after giving effect to any Renewal Notice that has been
delivered) and Tenant reasonably determines that the cost to restore such damage
will exceed twenty percent (20%) of the fair market value of such Facility
immediately prior to such Casualty Event, either Landlord or Tenant may
terminate this Lease as to such Facility (but not as to the unaffected Facility)
as of the date of such damage (and all obligations of Tenant to pay Rent and
Additional Charges with respect to such Facility shall cease as of the day
before the date of such termination), which may be exercised by written notice
to the other party no later than thirty (30) days following the determination of
the cost reasonably expected to restore. If so terminated, all proceeds of
insurance with respect to such Casualty Event (except business interruption not
allocated to rent expenses which shall be payable to and retained by Tenant)
shall be paid to Landlord (including, for the avoidance of doubt, any proceeds
paid to Tenant pursuant to the second proviso in Section 14.1). Any dispute
between Landlord and Tenant with respect to fair market value or the costs of
restoration will be determined by Experts pursuant to Section 34.1.

 

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(c)    If Tenant is required, or elects to, restore the affected Facility and
the reasonably anticipated cost of the repair or restoration exceeds the amount
of proceeds reasonably expected to be received from the insurance required to be
carried hereunder, Tenant shall provide Landlord with evidence reasonably
acceptable to Landlord that Tenant has available to it any excess amounts needed
to restore such Facility (a “Restoration Deficiency”). Such excess amounts
necessary to restore such Facility shall be paid by Tenant and, if required by
Landlord, Tenant shall deposit, or caused to be deposited, Construction Security
for such excess amounts (in the same manner as described in Section 10.1(c)). If
Tenant elects or is required, to restore the affected Facility, Landlord shall
only be required to make insurance proceeds available to Tenant for such
restoration in accordance with Section 14.1 if Tenant reasonably demonstrates
that such restoration can be completed within four (4) years of the date on
which Tenant can reasonably access the affected Facility for the purpose of
commencing restoration.

(d)    If Tenant has not restored the affected Leased Property and the Primary
Intended Use has not recommenced by the date that is the fourth (4th)
anniversary of the date on which Tenant can reasonably access the affected
Facility for the purpose of commencing restoration, all remaining insurance
proceeds and the Construction Security shall be paid to and retained by Landlord
free and clear of any claim by or through Tenant unless Tenant is continuing to
prosecute the rebuilding or restoration with reasonable diligence.

(e)    In the event that Tenant is neither required nor elects to repair and
restore the affected Leased Property, all property insurance proceeds (except
for, subject to no Event of Default having occurred and being continuing, any
business interruption proceeds in excess of Tenant’s Rent and Additional Charges
obligations hereunder which shall be retained by Tenant), shall be paid to and
retained by Landlord free and clear of any claim by or through Tenant except as
otherwise specifically provided below in this Article XIV.

14.3    No Abatement of Rent. This Lease shall remain in full force and effect
and Tenant’s obligation to pay the Rent, Additional Charges and all other
charges required by this Lease shall remain unabated during the period required
for adjusting insurance, satisfying Legal Requirements, repair and restoration.

14.4    Waiver. Tenant waives any statutory rights of termination which may
arise by reason of any damage or destruction of the Leased Property but such
waiver shall not affect any contractual rights granted to Tenant under this
Article XIV.

14.5    Insurance Proceeds Paid to Fee Mortgagee. Notwithstanding anything
herein to the contrary, in the event that any Fee Mortgagee is entitled to any
insurance proceeds, or any portion thereof, under the terms of any Fee Mortgage,
such proceeds (except business interruption not allocated to rent expenses which
shall be payable to and retained by Tenant) shall be applied, held and/or
disbursed in accordance with the terms of the Fee Mortgage but in all events
subject to Tenant’s right to such insurance proceeds (including Tenant’s right
to receive all insurance proceeds for a Casualty Event less than Fifty Million
Dollars ($50,000,000)

 

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in accordance with Section 14.1) and provided, that, (i) in the event of a
Casualty Event involving proceeds of Fifty Million Dollars ($50,000,000) or more
where Tenant elects to restore the affected Facility in accordance with this
Article XIV and Tenant reasonably demonstrates that such restoration can be
completed within four (4) years of the date on which Tenant can reasonably
access the affected Facility for the purpose of commencing restoration (after
the date of such Casualty Event but without regard to the date on which Tenant
elects to restore the affected Facility), or (ii) in the event of a Casualty
Event involving proceeds of Fifty Million Dollars ($50,000,000) or more where
Tenant is required by this Lease to restore the affected Facility, Landlord will
cause, subject to Section 14.2(e), any Fee Mortgagee that has received, or
thereafter does receive, insurance proceeds to make such proceeds available to
Tenant for the reasonable costs of preservation, stabilization, emergency
restoration, reconstruction and repair for the affected Facility.

14.6    Termination of Lease; Abatement of Rent. In the event this Lease is
terminated as to an affected Facility (such affected Facility, a “Terminated
Facility”) pursuant to (A) Section 8.2 (in respect of Landlord being in jeopardy
of failing to comply with a regulatory requirement material to the continued
operation of a Facility), (B) Section 14.2(b) (in the event that Landlord or
Tenant elects to terminate the Lease with respect to a Facility following a
Casualty Event), (C) Article XV, or (D) any other provision of this Lease which
provides for termination of this Lease with respect to a Facility (a “Leased
Property Rent Adjustment Event”), then (i) the Rent due hereunder from and after
the effective date of any such Leased Property Rent Adjustment Event shall be
reduced by the portion of the Base Rent amount allocated to such Terminated
Facility at the time of termination; (ii) Landlord and Tenant shall enter into a
formal amendment to this Lease whereby such Terminated Facility shall be
excluded from the Leased Property hereunder and Base Rent hereunder shall be
adjusted in accordance with Section 14.6(i); and (iii) Landlord shall retain any
claim which Landlord may have against Tenant for failure to insure such Leased
Property as required by Article XIII.

14.7    Multiple Fee Mortgagees. In any provisions of this Article XIV, Article
XV or any other provision of this Lease providing for any determination,
decision or election by a Fee Mortgagee, the determination, decision or election
of the Fee Mortgagee of the highest priority with respect to the Facility in
question shall be controlling.

ARTICLE XV

CONDEMNATION

15.1    Condemnation.

(a)    Total Taking. If there is a permanent Condemnation of Leased Property
with respect to all or substantially all of a Facility, this Lease shall
terminate with respect to such Facility (but no other portion of the Leased
Property) as of the day before the Date of Taking for such Facility, and
Landlord and Tenant shall enter into a formal amendment to this Lease whereby
such affected Facility shall be excluded from the Leased Property hereunder and
Base Rent hereunder shall be adjusted in accordance with Section 14.6(i).

 

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(b)    Partial Taking.

(i)    If there is a Condemnation of a portion of a Facility, this Lease shall
remain in effect if the affected Facility is not thereby rendered, in the
reasonable determination of Tenant, Unsuitable for Its Primary Intended Use, but
if such Facility is thereby rendered Unsuitable for Its Primary Intended Use,
this Lease shall at Tenant’s option terminate with respect to such Facility as
of the date on which Notice of such determination is delivered to Landlord, and
if Tenant so elects to terminate the provisions of Section 14.6 shall apply.

(ii)    In the event of a Condemnation of a portion of a Facility representing
twenty percent (20%) or more of the fair market value of such Facility during
the final two years of the then-current Term (after giving effect to any Renewal
Notice that has been delivered), either Landlord or Tenant may terminate this
Lease as to such Facility (but not as to any other Facility) as of the day
before the Date of Taking, and if Landlord or Tenant so elect to terminate the
provisions of Section 14.6 shall apply. Any dispute between Landlord and Tenant
with respect to the extent of a Condemnation will be determined by Experts
pursuant to Section 34.1.

(c)    Restoration. If there is a partial Condemnation of a Facility and this
Lease remains in full force and effect with respect to such Facility, Landlord
shall make available to Tenant the portion of the Award applicable to
restoration of the Leased Property, and Tenant shall accomplish all necessary
restoration whether or not the amount provided by the Condemnor for restoration
is sufficient and, if such restoration is not capable of being completed and
such Condemnation results in a material adverse effect on the operations of such
Facility, the Base Rent shall be reduced by such amount as may be agreed upon by
Landlord and Tenant or, if they are unable to reach such an agreement within a
period of ninety (90) days after the occurrence of the Condemnation, then the
Base Rent for such Facility shall be proportionately reduced based on the
relative values of the property taken by condemnation and the portion of the
affected Facility remaining subject to the Lease. In the event that Landlord and
Tenant are unable to agree on such relative values within such ninety (90) day
period, either Landlord or Tenant may request that such relative values be
determined by Experts in accordance with Section 34.1. Tenant shall restore such
Leased Property (as nearly as possible under the circumstances) to a complete
architectural unit of the same general character and condition as such Leased
Property existing immediately prior to such Condemnation. If Tenant has not so
restored the affected Leased Property and the Primary Intended Use has not
recommenced by the date that is the fourth (4th) anniversary of the date on
which Tenant can reasonably access such Facility for the purpose of commencing
restoration, any remaining Award shall be paid to and retained by Landlord free
and clear of any claim by or through Tenant unless Tenant is continuing to
prosecute the rebuilding or restoration with reasonable diligence.

15.2    Award Distribution. The entire Award shall belong to and be paid to
Landlord. Tenant shall, however, be entitled to pursue its own claim with
respect to the Condemnation for Tenant’s lost profits value and moving expenses
and Excluded Assets and, the portion of the Award, if any, allocated to any
Tenant’s Property not required to be transferred at the end of the Term.

15.3    Temporary Taking. The taking of the Leased Property, or any part
thereof, shall constitute a Condemnation only when the use and occupancy by the
taking authority is reasonably expected to exceed 180 consecutive days. During
any shorter period, which shall be a temporary taking, all the provisions of
this Lease shall remain in full force and effect and the Award allocable to the
Term shall be paid to Tenant.

 

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15.4    No Abatement of Rent. This Lease shall remain in full force and effect
and Tenant’s obligation to pay the Rent, Additional Charges and all other
charges required by this Lease shall remain unabated during the period required
for claiming an Award, satisfying Legal Requirements and restoration.

15.5    Waiver. Tenant waives any statutory rights of termination which may
arise by reason of any Condemnation of the Leased Property but such waiver shall
not affect any contractual rights granted to Tenant under this Article XV.

15.6    Award Paid to Fee Mortgagee. Notwithstanding anything herein to the
contrary, in the event that any Fee Mortgagee is entitled to any Award, or any
portion thereof, under the terms of any Fee Mortgage, such Award shall be
applied, held and/or disbursed in accordance with the commercially reasonable
terms of the Fee Mortgage; provided, that, (i) in the event of a Condemnation
where Tenant elects to restore the affected Facility in accordance with this
Article XV and Tenant reasonably demonstrates that such restoration can be
completed within four (4) years of the date on which Tenant can reasonably
access such Facility for the purpose of commencing restoration (after the date
of such Condemnation but without regard to the date on which Tenant elects to
restore the affected Facility), or (ii) in the event of a Condemnation where
Tenant is required by this Lease to restore the affected Facility, Landlord will
cause, subject to the final sentence of Section 15.1(c), the Fee Mortgagee that
has received, or thereafter does receive, any Award to make such Award available
to Tenant for the reasonable costs of preservation, stabilization, emergency
restoration, reconstruction and repair for the affected Facility.

ARTICLE XVI

DEFAULT; REMEDIES

16.1    Events of Default. (a) Any one or more of the following shall constitute
an “Event of Default”:

(i)    Tenant shall fail to pay any installment of Rent within five (5) Business
Days of when due and such failure is not cured within three (3) Business Days
after Notice from Landlord of Tenant’s failure to pay such amount when due;
provided, that Tenant shall be entitled to only one (1) such notice and
additional three (3) Business Day cure period in any Lease Year;

(ii)    Tenant shall fail to pay any Additional Charge when due and such failure
is not cured within five (5) Business Days after Notice from Landlord of
Tenant’s failure to pay such amount when due;

(iii)    a default shall occur under the Guaranty or Operating Subtenant
Guaranty which is not cured within fifteen (15) days after Notice from Landlord
to Guarantor or Operating Subtenant, as applicable;

 

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(iv)    Tenant, Operating Subtenant or Guarantor shall:

(1)    admit in writing its inability to pay its debts generally as they become
due;

(2)    file a petition in bankruptcy or a petition to take advantage of any
insolvency law or act or otherwise commences any proceeding under such law or
act;

(3)    make an assignment for the benefit of its creditors;

(4)    consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property; or

(5)    file a petition or answer seeking reorganization or arrangement under the
United States bankruptcy laws or any other applicable law or statute of the
United States of America or any state thereof or of any applicable foreign
jurisdiction;

(v)    Tenant, Operating Subtenant or Guarantor shall be adjudicated as bankrupt
or a court of competent jurisdiction shall enter an order or decree appointing,
without the consent of Tenant, Operating Subtenant or Guarantor, a receiver of
Tenant or Guarantor or of the whole or substantially all of Tenant’s, Operating
Subtenant’s or Guarantor’s property, or approving a petition filed against
Tenant, Operating Subtenant or Guarantor seeking reorganization or arrangement
of Tenant, Operating Subtenant or Guarantor under the United States bankruptcy
laws or any other applicable law or statute of the United States of America or
any state thereof or of any applicable foreign jurisdiction, and such judgment,
order or decree shall not be vacated or set aside within sixty (60) days from
the date of the entry thereof;

(vi)    Tenant, Operating Subtenant or Guarantor shall be liquidated or
dissolved (except that Guarantor may be liquidated or dissolved into Tenant or
any other Person so long as its assets are distributed following such
liquidation or dissolution to Tenant or such other Person), or entry of a
judgment, order or decree liquidating or dissolving Tenant or Guarantor and such
judgment, order or decree shall not be vacated or set aside within sixty
(60) days from the date of the entry thereof;

(vii)    the estate or interest of Tenant, Operating Subtenant in the Leased
Property or any part thereof shall be levied upon or attached as a result of a
judgment in any proceeding relating to more than Ten Million Dollars
($10,000,000.00) and the same shall not be vacated, discharged or stayed pending
appeal (or bonded or otherwise similarly secured) within the later of ninety
(90) days after such judgment is entered or thirty (30) days after receipt by
Tenant of notice thereof from Landlord; provided, however, that such notice
shall be in lieu of and not in addition to any notice required under applicable
law;

(viii)    if Tenant, Operating Subtenant or Guarantor shall fail to pay, bond,
escrow or otherwise similarly secure payment of one or more final judgments
aggregating in excess of the amount of Seventy-Five Million and No/100 Dollars
($75,000,000.00), which judgments are not discharged or effectively waived or
stayed for a period of forty-five (45) consecutive days;

 

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(ix)    except as permitted in accordance with Section 7.2(d), Tenant
voluntarily ceases operations at a Facility for its Primary Intended Use; and

(x)    any representation made by Tenant hereunder or by Guarantor under the
Guaranty, or Operating Subtenant under the Operating Subtenant Guaranty proves
to be untrue when made in any material respect and the same materially and
adversely affects Landlord;

(xi)    any applicable license material to a Facility’s operation for its
Primary Intended Use is at any time terminated or revoked or suspended or placed
under a trusteeship for more than thirty (30) days (and causes cessation of
Gaming activity at such Facility) and such termination, revocation or suspension
is not stayed pending appeal and would reasonably be expected to have a material
adverse effect on Tenant, the Facilities, or on the Leased Property, taken as a
whole;

(xii)    if a Licensing Event with respect to the Tenant shall occur and is not
cured within the period prescribed by the applicable Gaming Authority or, if no
such period is prescribed by the applicable Gaming Authority, then within 90
days;

(xiii)    except to a permitted assignee pursuant to Section 22.2 or a permitted
subtenant, or with respect to the granting of a permitted pledge hereunder to a
Permitted Leasehold Mortgagee or a Permitted Credit Facility Lender, the sale or
transfer, without Landlord’s consent, of all or any portion of any Gaming
License or similar certificate or license relating to the Leased Property;

(xiv)    (1) a transfer of Tenant’s interest in this Lease (including pursuant
to a Tenant Change of Control) shall have occurred without the consent of
Landlord to the extent such consent is required under Article XXII or Tenant is
otherwise in default of the provisions set forth in Section 22.1 below and in
either case the same is not cured within 30 days after written notice from
Landlord to Tenant, (2) a transfer of Operating Subtenant’s interest in the
Operating Sublease (including any breach of Section 41.17(b)) shall have
occurred without the consent of Landlord to the extent such consent is required
under Article XXII or Section 41.17 or Tenant is otherwise in default of the
provisions set forth in Section 41.17 below and in either case the same is not
cured within 30 days after written notice from Landlord to Tenant or Operating
Subtenant or (3) a transfer of Grand Operating Subtenant’s direct or indirect
interest in the Signature Entities or Signature Owner’s direct or indirect
interest in the Signature Hotel Units or the rights to all revenues generated
thereby (including from or with respect to any Signature Rental Management
Operations) (including any breach of Section 6.2) shall have occurred without
the consent of Landlord to the extent such consent is required under
Section 6.2, and the same is not cured within 30 days after written notice from
Landlord to Tenant or MGM Grand Hotel;

(xv)    the occurrence of an Event of Default pursuant to Section 9.1(e) which
continues for 30 days after written notice from Landlord to Tenant; and

 

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(xvi)    if Tenant shall fail to observe or perform any other term, covenant or
condition of this Lease in any material respect and such failure is not cured by
Tenant within thirty (30) days after Notice thereof from Landlord, unless such
failure cannot with due diligence be cured within a period of thirty (30) days,
in which case such failure shall not be deemed to be an Event of Default if
Tenant proceeds promptly and with due diligence to cure the failure and
diligently completes the curing thereof within one hundred twenty (120) days
after such notice from Landlord; provided, however, that such notice shall be in
lieu of and not in addition to any notice required under applicable law.    No
Event of Default shall be deemed to exist under this clause (xvi) during any
time the curing thereof is prevented by an Unavoidable Delay, provided, that,
upon the cessation of the Unavoidable Delay, Tenant remedies the default without
further delay.

(b)    Notwithstanding the foregoing, in the event that Landlord believes that
there has been a breach that would constitute an Event of Default under
Section 16.1(a), (iii), subclause (1) of (iv), (x), (xi), (xii), (xiii), (xiv),
(xv) or (xvi) above, Landlord shall notify Tenant of such breach and, if Tenant
disagrees as to the existence of such breach or that such breach would
constitute an Event of Default, Tenant may, provide prompt written notice of
such dispute to Landlord (a “Dispute Notice”). The time period during which
Tenant may cure any default shall be tolled form the date of the Dispute Notice
until the date of final resolution of the dispute by the Experts. Each of
Landlord and Tenant shall be entitled to promptly submit the determination of
whether or not there exists an Event of Default to Experts pursuant to
Section 34.1. If the Expert determines that the matter in question is or would
give rise to an Event of Default, Tenant shall have the remaining portion of the
applicable cure period in which to cure such breach before such breach
constitutes an Event of Default.

16.2    Certain Remedies.

(a)    If an Event of Default shall have occurred and be continuing, Landlord
may (i) terminate this Lease by giving Tenant no less than ten (10) days’ Notice
of such termination and the Term shall terminate and all rights of Tenant under
this Lease shall cease, (ii) seek damages as provided in Section 16.3 hereof,
and/or (iii) exercise any other right or remedy at law or in equity available to
Landlord as a result of any Event of Default. Tenant shall pay as Additional
Charges all costs and expenses incurred by or on behalf of Landlord, including
reasonable attorneys’ fees and expenses, as a result of any Event of Default
hereunder. If an Event of Default shall have occurred and be continuing, whether
or not this Lease has been terminated pursuant to the first sentence of this
Section 16.2, Tenant shall, to the extent permitted by law (including applicable
Gaming Regulations), if required by Landlord to do so, immediately surrender to
Landlord possession of all or any portion of the Leased Property (including any
Tenant Capital Improvements) as to which Landlord has so demanded and quit the
same and Landlord may, to the extent permitted by law (including applicable
Gaming Regulations), enter upon and repossess such Leased Property and any
Capital Improvement thereto by reasonable force, summary proceedings, ejectment
or otherwise, and, to the extent permitted by law (including applicable Gaming
Regulations), may remove Tenant and all other Persons and any of Tenant’s
Property from such Leased Property.

 

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(b)    Notwithstanding anything contained herein to the contrary, Landlord shall
not be entitled to terminate this Lease by reason of an Event of Default (but
Landlord may exercise all other rights and remedies), unless and until Landlord
has, following the occurrence of an Event of Default, delivered a notice (“Event
of Default Notice”) to Tenant stating the Event of Default, and containing the
following caption (in bold 16 point type), and Tenant has failed to cure such
Event(s) of Default within ten (10) days of its receipt of the Event of Default
Notice:

“THIS IS AN EVENT OF DEFAULT NOTICE. FAILURE TO TAKE IMMEDIATE ACTION AND TO
CURE THE EVENT(S) OF DEFAULT AS SPECIFIED BELOW WITHIN TEN (10) DAYS OF RECEIPT
OF THIS NOTICE MAY LEAD TO LANDLORD’S TERMINATION OF THE LEASE AND/OR THE
EXERCISE OF OTHER REMEDIES THEREUNDER.”

16.3    Damages.

(a)    None of (i) the termination of this Lease, (ii) the repossession of the
Leased Property (including any Capital Improvements to any Facility), (iii) the
failure of Landlord to relet the Leased Property or any portion thereof,
(iv) the reletting of all or any portion of the Leased Property, or (v) the
inability of Landlord to collect or receive any rentals due upon any such
reletting, shall relieve Tenant of its liabilities and obligations hereunder,
all of which shall survive any such termination, repossession or reletting.
Landlord and Tenant agree that Landlord shall have no obligation to mitigate
Landlord’s damages under this Lease, and Tenant hereby waives any duty of
Landlord to mitigate damages under any Legal Requirements to the full extent
that such duty may be waived. If any such termination of this Lease occurs
(whether or not Landlord terminates Tenant’s right to possession of the Leased
Property), Tenant shall forthwith pay to Landlord (x) all Rent due and payable
under this Lease to and including the date of such termination (together with
interest thereon at the Overdue Rate from the date the applicable amount was
due) and (y) pay on demand all damages to which Landlord shall be entitled at
law or in equity; provided, however, with respect to unpaid Rent from and after
the date of termination, at Landlord’s option, Tenant shall forthwith pay to
Landlord as and for liquidated and agreed current damages, for the occurrence of
an Event of Default, either:

(A)    the sum of:

(ii)    the worth at the time of award of the unpaid Rent (and Additional
Charges) which had been earned at the time of termination to the extent not
previously paid by Tenant under this Section 16.3;

(iii)    the worth at the time of award of the amount by which the unpaid Rent
which would have been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided;

(iv)    the worth at the time of award of the amount by which the unpaid Rent
for the balance of the Term after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; plus

 

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(v)    any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom.

As used in clauses (i) and (ii) above, the “worth at the time of award” shall be
computed by allowing interest at the Overdue Rate. As used in clause
(iii) above, the “worth at the time of award” shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of New York at the
time of award plus one percent (1%) and reducing such amount by the portion of
the unpaid Rent that Tenant proves could be reasonably avoided.

or

(B)    if Landlord chooses not to terminate Tenant’s right to possession of the
Leased Property (whether or not Landlord terminates the Lease), each installment
of said Rent and other sums payable by Tenant to Landlord under this Lease as
the same becomes due and payable, together with interest at the Overdue Rate
from the date when due until paid, and Landlord may enforce, by action or
otherwise, any other term or covenant of this Lease (and Landlord may at any
time thereafter terminate Tenant’s right to possession of the Leased Property
and seek damages under subparagraph (A) hereof, to the extent not already paid
for by Tenant under this subparagraph (B)).

(b)    If, as of the date of any termination of this Lease pursuant to
Section 16.2, the Leased Property shall not be in the condition in which Tenant
has agreed to surrender the same to Landlord at the expiration or earlier
termination of this Lease pursuant to Section 9.1(d), then Tenant, shall pay, as
damages therefor, the cost (as estimated by an independent contractor reasonably
selected by Landlord) of placing the Leased Property in the condition in which
Tenant is required to surrender the same hereunder.

16.4    Receiver. Upon the occurrence and during the continuance of an Event of
Default, and upon commencement of proceedings to enforce the rights of Landlord
hereunder, but subject to any limitations of applicable law, Landlord shall be
entitled, as a matter of right, to the appointment of a receiver or receivers
acceptable to Landlord of the Leased Property and of the revenues, earnings,
income, products and profits thereof, pending the outcome of such proceedings,
with such powers as the court making such appointment shall confer.

16.5    Waiver. If Landlord initiates judicial proceedings or if this Lease is
terminated by Landlord pursuant to this Article XVI, Tenant waives, to the
extent permitted by applicable law, (i) any right of redemption, re-entry or
repossession; (ii) the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt; and (iii) any duty of Landlord to
mitigate damages to the extent such duty may legally be waived.

16.6    Application of Funds. Any payments received by Landlord under any of the
provisions of this Lease during the existence or continuance of any Event of
Default which are made to Landlord rather than Tenant due to the existence of an
Event of Default shall be applied to Tenant’s obligations in the order which
Landlord may reasonably determine or as may be prescribed by the laws of the
State.

 

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16.7    Landlord’s Right to Cure Tenant’s Default. If Tenant shall fail to make
any payment or to perform any act required to be made or performed hereunder
when due including, without limitation, if Tenant fails to expend (or cause the
Operating Subtenants to expend) any Required CapEx as required hereunder or
fails to complete or cause to be completed any work or restoration or
replacement of any nature as required hereunder, or if Tenant shall take any
action prohibited hereunder, and such failure shall have resulted in an Event of
Default, Landlord and/or its Affiliates, without waiving or releasing any
obligation or default, may, but shall be under no obligation to, make such
payment or perform such act (or reimburse any Fee Mortgagee for making such
payment or performing such act) for the account and at the expense of Tenant
(including, in the event of a breach of any such representation or warranty,
taking actions to cause such representation or warranty to be true), and may, to
the extent permitted by law, after an Event of Default, enter upon the Leased
Property for such purpose and take all such action thereon as, in Landlord’s
reasonable opinion, may be necessary or appropriate therefor provided same is
undertaken in accordance with the applicable law. All sums so paid (or
reimbursed) by Landlord and/or any of its Affiliates and all costs and expenses,
including reasonable attorneys’ fees and expenses, so incurred, together with
interest thereon at the Overdue Rate from the date on which such sums or
expenses are paid or incurred by Landlord and/or any of its Affiliates, shall be
paid by Tenant to Landlord on demand as an Additional Charge.

16.8    Miscellaneous.

(a)    Suit or suits for the recovery of damages, or for any other sums payable
by Tenant to Landlord pursuant to this Lease, may be brought by Landlord from
time to time at Landlord’s election, and nothing herein contained shall be
deemed to require Landlord to await the date whereon this Lease and the Term
would have expired by limitation had there been no Event of Default, reentry or
termination.

(b)    No failure by either party to insist upon the strict performance of any
agreement, term, covenant or condition of this Lease or to exercise any right or
remedy consequent upon a breach thereof, and no acceptance by Landlord of full
or partial Rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of such agreement, term, covenant or condition. No
agreement, term, covenant or condition of this Lease to be performed or complied
with by either party, and no breach thereof, shall be or be deemed to be waived,
altered or modified except by a written instrument executed by the parties. No
waiver of any breach shall affect or alter this Lease, but each and every
agreement, term, covenant and condition of this Lease shall continue in full
force and effect with respect to any other then existing or subsequent breach
thereof. If an Event of Default is continuing. Landlord shall be entitled to
seek to enjoin such breach or threatened breach and shall have the right to
invoke any rights and remedies allowed at law or in equity or by statute or
otherwise as though reentry, summary proceedings or other remedies were not
provided for in this Lease.

(c)    Except to the extent otherwise expressly provided in this Lease, each
right and remedy of a party provided for in this Lease shall be cumulative and
shall be in addition to every other right or remedy provided for in this Lease.

(d)    Nothing contained in this Article XVI or otherwise shall vitiate or limit
Tenant’s obligation to pay Landlord’s attorneys’ fees as and to the extent
provided in Article XXXVII hereof, or any indemnification obligations under any
express indemnity made by Tenant of Landlord or of any Landlord Indemnified
Parties as contained in this Lease.

 

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ARTICLE XVII

TENANT’S FINANCING

17.1    Permitted Leasehold Mortgagees.

(a)    On one or more occasions without Landlord’s prior consent Tenant may
mortgage or otherwise encumber Tenant’s estate in and to the Leased Property
(the “Leasehold Estate”) to one or more Permitted Leasehold Mortgagees under one
or more Permitted Leasehold Mortgages and pledge its right, title and interest
under this Lease as security for such Permitted Leasehold Mortgages or any Debt
Agreement secured thereby; provided, that no Person shall be considered a
Permitted Leasehold Mortgagee unless (1) such Person delivers to Landlord a
written agreement providing (i) that (unless this Lease has been terminated as
to a particular Facility) such Permitted Leasehold Mortgagee and any lenders for
whom it acts as representative, agent or trustee, will not use or dispose of any
Gaming License for use at a location other than at the Facility to which such
Gaming License relates, (ii) an express acknowledgement that, in the event of
the exercise by the Permitted Leasehold Mortgagee of its rights under the
Permitted Leasehold Mortgage, the Permitted Leasehold Mortgagee shall be
required to (except for a transfer that meets the requirements of
Section 22.2(a)(i)) secure the approval of Landlord for the replacement of
Tenant with respect to the affected portion of the Leased Property and contain
the Permitted Leasehold Mortgagee’s acknowledgment that such approval may be
granted or withheld by Landlord in accordance with the provisions of
Article XXII of this Lease, and (iii) an express acknowledgment, on behalf of
itself, its successors and assigns and all beneficiaries of the Permitted
Leasehold Mortgage of the priorities and waivers described in Section 17.1(n),
(2) the underlying Permitted Leasehold Mortgage includes an express
acknowledgement that (A) any exercise of remedies thereunder that would affect
the Leasehold Estate shall be subject and subordinate to the terms of the Lease,
and (B) that any foreclosure or realization by any Permitted Leasehold Mortgagee
pursuant to a Permitted Leasehold Mortgage or upon Tenant’s interest under this
Lease or that would result in a transfer of all or any portion of Tenant’s
interest in the Leased Property or this Lease shall in any case be subject to
the applicable provisions, terms and conditions of Article XXII hereof, and
(3) such Person executes a joinder to any existing intercreditor agreement
between any Permitted Leasehold Mortgagee and any Facility Mortgagee
(“Intercreditor Agreement”). Any Facility Mortgagee and its successors and
assigns, by accepting any Facility Mortgage, shall be deemed without executing
any further document or instrument, to have also agreed to recognize the rights
of any Permitted Leasehold Mortgagee as provided in this Article XVII and to
have agreed not to disturb such rights in any way except through the exercise of
the rights expressly granted to Landlord in this Lease or available at law or in
equity to Landlord by reason of the default by Tenant under this Lease.
Notwithstanding anything to the contrary, any Permitted Leasehold Mortgage or
Permitted Credit Facility Pledge shall be required to cover both Facilities, and
Tenant shall not have the right to encumber its (or any Operating Subtenant’s)
interest in the MB Leased Property or the Grand Leased Property separately from
the other.

 

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(b)    Notice to Landlord.

(i)    (1) If Tenant shall, on one or more occasions, mortgage Tenant’s
Leasehold Estate pursuant to a Permitted Leasehold Mortgage and if the holder of
such Permitted Leasehold Mortgage shall provide Landlord with Notice of such
Permitted Leasehold Mortgage together with a true copy of such Permitted
Leasehold Mortgage and the name and address of the Permitted Leasehold
Mortgagee, Landlord and Tenant agree that, following receipt of such Notice by
Landlord, the provisions of this Section 17.1 shall apply in respect of each
such Permitted Leasehold Mortgage and the Permitted Leasehold Mortgagee with
respect thereto.

(2)    In the event of any assignment of a Permitted Leasehold Mortgage or in
the event of a change of address of a Permitted Leasehold Mortgagee or of an
assignee of such Permitted Leasehold Mortgage, Notice of the new name and
address shall be provided to Landlord.

(ii)    Landlord shall promptly upon receipt of a communication purporting to
constitute the notice provided for by subsection (b)(i) above acknowledge by an
executed and notarized instrument receipt of such communication as constituting
the notice provided for by subsection (b)(i) above and confirming the status of
the Permitted Leasehold Mortgagee as such or, in the alternative, notify Tenant
and the Permitted Leasehold Mortgagee of the rejection of such communication as
not conforming with the provisions of this Section 17.1 and specify the specific
basis of such rejection.

(iii)    After Landlord has received the notice provided for by
subsection (b)(i) above, Tenant, upon reasonable request to do so by Landlord,
shall with reasonable promptness provide Landlord with copies of the material
definitive documentation for the loans, notes or other debt obligations secured
by such Permitted Leasehold Mortgage. If requested to do so by Landlord, Tenant
shall thereafter also provide, with reasonable promptness, Landlord from time to
time with a copy of each material amendment, modification or supplement to such
documentation. From time to time upon reasonable request by Landlord, Tenant
shall also notify Landlord, with reasonable promptness, of the date and place of
recording and other pertinent recording data with respect to such instruments as
have been recorded.

(c)    Default Notice. Landlord, upon providing Tenant any notice of (i) default
under this Lease or (ii) a termination of this Lease, shall at the same time
provide a copy of such notice to every Permitted Leasehold Mortgagee for which
notice has been properly provided to Landlord pursuant to Section 17.1(b)
hereof. No such notice by Landlord to Tenant shall be deemed to have been duly
given unless and until a copy thereof has been sent, in the manner prescribed in
Section 17.1(m) of this Lease, to every Permitted Leasehold Mortgagee for which
notice has been properly provided to Landlord pursuant to Section 17.1(b)
hereof. From and after such notice has been sent to a Permitted Leasehold
Mortgagee, such Permitted Leasehold Mortgagee shall have the same period, after
the giving of such notice upon its remedying any default or acts or omissions
which are the subject matter of such notice or causing the same to be remedied,
as is given Tenant after the giving of such notice to Tenant, plus in each
instance, the additional periods of time specified in subsections (d) and (e) of
this Section 17.1 to remedy, commence remedying or cause to be remedied the
defaults or acts or omissions which are the subject matter of such notice
specified in any such notice. Landlord shall accept such performance by or at
the instigation of such Permitted Leasehold Mortgagee as

 

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if the same had been done by Tenant. Tenant authorizes each Permitted Leasehold
Mortgagee (to the extent such action is authorized under the applicable Debt
Agreement) to take any such action at such Permitted Leasehold Mortgagee’s
option and does hereby authorize entry upon the premises by the Permitted
Leasehold Mortgagee for such purpose.

(d)    Notice to Permitted Leasehold Mortgagee. Anything contained in this Lease
to the contrary notwithstanding, if any default shall occur which entitles
Landlord to terminate this Lease, Landlord shall have no right to terminate this
Lease on account of such default unless, following the expiration of the period
of time given Tenant to cure such default or the act or omission which gave rise
to such default, Landlord shall notify every Permitted Leasehold Mortgagee for
which notice has been properly provided to Landlord pursuant to Section 17.1(b)
hereof of Landlord’s intent to so terminate at least thirty (30) days in advance
of the proposed effective date of such termination if such default is capable of
being cured by the payment of money, and at least ninety (90) days in advance of
the proposed effective date of such termination if such default is not capable
of being cured by the payment of money (“Termination Notice”). The provisions of
subsection (e) below of this Section 17.1 shall apply if, during such thirty
(30) or ninety (90) day (as the case may be) Termination Notice period, any
Permitted Leasehold Mortgagee shall:

(i)    notify Landlord of such Permitted Leasehold Mortgagee’s desire to nullify
such Termination Notice; and

(ii)    pay or cause to be paid all Rent, Additional Charges, and other payments
(i) then due and in arrears as specified in the Termination Notice to such
Permitted Leasehold Mortgagee and (ii) which may become due during such thirty
(30) or ninety (90) day (as the case may be) period (as the same may become due)
(in each case, regardless of whether such amount is allowed under any insolvency
or bankruptcy law); and

(iii)    comply or in good faith, with reasonable diligence and continuity,
commence to comply with all nonmonetary requirements of this Lease then in
default and reasonably susceptible of being complied with by such Permitted
Leasehold Mortgagee, provided, however, that such Permitted Leasehold Mortgagee
shall not be required during such ninety (90) day period to cure or commence to
cure any default consisting of Tenant’s failure to satisfy and discharge any
lien, charge or encumbrance against Tenant’s interest in this Lease or the
Leased Property, or any of Tenant’s other assets junior in priority to the lien
of the mortgage or other security documents held by such Permitted Leasehold
Mortgagee or any matter which Permitted Leasehold Mortgagee is prevented from
performing because of any injunction or stay applicable during any bankruptcy or
other judicial proceeding; and

(iv)    during such thirty (30) or ninety (90) day (as the case may be) period,
the Permitted Leasehold Mortgagee shall respond, with reasonable diligence, to
requests for information from Landlord as to the Permitted Leasehold Mortgagee’s
(and related lenders’) intent to pay such Rent and other charges and comply with
this Lease.

 

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(e)    Procedure on Default.

(i)    If Landlord shall elect to terminate this Lease by reason of any Event of
Default of Tenant that has occurred and is continuing, and a Permitted Leasehold
Mortgagee shall have proceeded in the manner provided for by subsection (d) of
this Section 17.1, the specified date for the termination of this Lease as fixed
by Landlord in its Termination Notice shall be extended for a period not to
exceed three (3) months; provided, that such Permitted Leasehold Mortgagee
shall, during such extension period:

(1)    pay or cause to be paid the Rent, Additional Charges and other monetary
obligations of Tenant under this Lease as the same become due (in each case,
regardless of whether such amount is allowed under any insolvency or bankruptcy
law), and continue its good faith efforts to perform or cause to be performed
all of Tenant’s other obligations under this Lease, excepting (A) obligations of
Tenant to satisfy or otherwise discharge any lien, charge or encumbrance against
Tenant’s interest in this Lease or the Leased Property or any of Tenant’s other
assets junior in priority to the lien of the mortgage or other security
documents held by such Permitted Leasehold Mortgagee and (B) past nonmonetary
obligations then in default and not reasonably susceptible of being cured by
such Permitted Leasehold Mortgagee; and

(2)    if not enjoined or stayed pursuant to a bankruptcy or insolvency
proceeding or other judicial order, diligently continue to pursue acquiring or
selling Tenant’s interest in this Lease and the Leased Property by foreclosure
of the Permitted Leasehold Mortgage or other appropriate means and diligently
prosecute the same to completion.

(ii)    If at the end of such three (3) month period such Permitted Leasehold
Mortgagee is complying with subsection (e)(i) above, this Lease shall not then
terminate, and the time for completion by such Permitted Leasehold Mortgagee of
its proceedings shall continue (provided that for the time of such continuance,
such Permitted Leasehold Mortgagee is in compliance with subsection (e)(i)
above) (x) so long as such Permitted Leasehold Mortgagee is enjoined or stayed
pursuant to a bankruptcy or insolvency proceeding or other judicial order and if
so enjoined or stayed, thereafter for so long as such Permitted Leasehold
Mortgagee proceeds to complete steps to acquire or sell Tenant’s interest in
this Lease by foreclosure of the Permitted Leasehold Mortgage or by other
appropriate means with reasonable diligence and continuity but not to exceed
twelve (12) months after the Permitted Leasehold Mortgagee is no longer so
enjoined or stayed from prosecuting the same and in no event longer than
twenty-four (24) months from the date of Landlord’s initial notification to
Permitted Leasehold Mortgagee pursuant to Section 17.1(d) hereof, and (y) if
such Permitted Leasehold Mortgagee is not so enjoined or stayed, thereafter for
so long as such Permitted Leasehold Mortgagee proceeds to complete steps to
acquire or sell Tenant’s interests in this Lease by foreclosure of the Permitted
Leasehold Mortgage or by other appropriate means with reasonable diligence and
continuity but not to exceed twelve (12) months from the date of Landlord’s
initial notification to Permitted Leasehold Mortgagee pursuant to
Section 17.1(d) hereof. Nothing in this subsection (e) of this Section 17.1,
however, shall be construed to extend this Lease beyond the original term hereof
as extended by any options to extend the Term of this Lease properly exercised
by Tenant or a Permitted Leasehold Mortgagee in accordance with Section 1.4, nor
to require a Permitted Leasehold Mortgagee to continue such foreclosure
proceeding after the default has been cured. If the default shall be cured
pursuant to the terms and within the time periods allowed in subsections (d) and
(e) of this Section 17.1 and the Permitted Leasehold Mortgagee shall discontinue
such foreclosure proceedings, this Lease shall continue in full force and effect
as if Tenant had not defaulted under this Lease.

 

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(iii)    If a Permitted Leasehold Mortgagee is complying with subsection (e)(i)
of this Section 17.1, upon the acquisition of Tenant’s Leasehold Estate herein
by a Foreclosure Transferee, this Lease shall continue in full force and effect
as if Tenant had not defaulted under this Lease, provided, that such Foreclosure
Transferee cures all outstanding defaults that can be cured through the payment
of money and all other defaults that are reasonably susceptible of being cured.

(iv)    For the purposes of this Section 17.1, the making of a Permitted
Leasehold Mortgage shall not be deemed to constitute an assignment or transfer
of this Lease nor of the Leasehold Estate hereby created, nor shall any
Permitted Leasehold Mortgagee, as such, be deemed to be an assignee or
transferee of this Lease or of the Leasehold Estate hereby created so as to
require such Permitted Leasehold Mortgagee, as such, to assume the performance
of any of the terms, covenants or conditions on the part of Tenant to be
performed hereunder; but the purchaser at any sale of this Lease (including a
Permitted Leasehold Mortgagee if it is the purchaser at foreclosure) and of the
Leasehold Estate hereby created in any proceedings for the foreclosure of any
Permitted Leasehold Mortgage, or the assignee or transferee of this Lease and of
the Leasehold Estate hereby created under any instrument of assignment or
transfer in lieu of the foreclosure of any Permitted Leasehold Mortgage, shall
be subject to Article XXII hereof (including the requirement that such purchaser
assume the performance of the terms, covenants or conditions on the part of
Tenant to be performed hereunder and meet the qualifications of Section 22.2 or
be reasonably consented to by Landlord in accordance with Section 22.1 hereof).

(v)    Any Permitted Leasehold Mortgagee or other acquirer of the Leasehold
Estate of Tenant pursuant to foreclosure, assignment in lieu of foreclosure or
other proceedings in accordance with the requirements of Section 22.2(a)(i) of
this Lease may, upon acquiring Tenant’s Leasehold Estate, sell and assign the
Leasehold Estate solely in accordance with the requirements of Article XXII of
this Lease and enter into Permitted Leasehold Mortgages in the same manner as
the original Tenant, subject to the terms hereof.

(vi)    Notwithstanding any other provisions of this Lease, any sale of this
Lease and of the Leasehold Estate hereby created in any proceedings for the
foreclosure of any Permitted Leasehold Mortgage, or the assignment or transfer
of this Lease and of the Leasehold Estate hereby created in lieu of the
foreclosure of any Permitted Leasehold Mortgage, shall be deemed to be a
permitted sale, transfer or assignment of this Lease and of the Leasehold Estate
hereby created solely to the extent the successor tenant under this Lease is a
Foreclosure Transferee and the transfer otherwise complies with the requirements
of Section 22.2(a)(i) of this Lease or the transferee is consented to by
Landlord (in its sole discretion) in accordance with Section 22.1 hereof.

(f)    New Lease. In the event of the termination of this Lease other than due
to a default as to which the Permitted Leasehold Mortgagee had the opportunity
to, but did not, cure the default as set forth in Sections 17.1(d) and 17.1(e)
above, Landlord shall provide each Permitted Leasehold Mortgagee with Notice
that this Lease has been terminated (“Notice of

 

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Termination”), together with a statement of all sums which would at that time be
due under this Lease but for such termination, and of all other defaults, if
any, then known to Landlord. Landlord agrees to enter into a new lease (“New
Lease”) of the Leased Property with such Permitted Leasehold Mortgagee or its
Permitted Leasehold Mortgagee Designee (in each case only if such entity is a
Foreclosure Transferee) for the remainder of the Term (including any Renewal
Terms) of this Lease, effective as of the date of termination, at the rent and
additional rent, and upon the terms, covenants and conditions (including all
options to renew but excluding requirements which have already been fulfilled)
of this Lease, provided:

(i)    Such Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee
Designee shall make a binding, written, irrevocable commitment to Landlord for
such New Lease within thirty (30) days after the date such Permitted Leasehold
Mortgagee receives Landlord’s Notice of Termination of this Lease given pursuant
to this Section 17.1(f);

(ii)    Such Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee
Designee shall pay or cause to be paid to Landlord, at the time of the execution
and delivery of such New Lease, any and all sums which would at the time of
execution and delivery thereof be due pursuant to this Lease but for such
termination and, in addition thereto, all reasonable expenses, including
reasonable attorney’s fees, which Landlord shall have incurred by reason of such
termination and the execution and delivery of the New Lease and which have not
otherwise been received by Landlord from Tenant or other party in interest under
Tenant; and

(iii)    Such Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee
Designee shall agree to remedy any of Tenant’s defaults of which said Permitted
Leasehold Mortgagee was notified by Landlord’s Notice of Termination (or in any
subsequent notice) and which can be cured through the payment of money or are
reasonably susceptible of being cured by such Permitted Leasehold Mortgagee or
its Permitted Leasehold Mortgagee Designee.

(g)    New Lease Priorities. It is the intention of the parties that such New
Lease shall continue to maintain the same priority as this Lease with regard to
any Facility Mortgage or any other lien, charge or encumbrance created by the
acts of Landlord on the Leased Property or any part thereof or this Lease (but
Landlord shall not be deemed to make any representation or warranty to that
effect). If more than one Permitted Leasehold Mortgagee shall request a New
Lease pursuant to subsection (f)(i) of this Section 17.1, Landlord shall enter
into such New Lease with the Permitted Leasehold Mortgagee whose mortgage is
senior in lien, or with its Permitted Leasehold Mortgagee Designee acting for
the benefit of such Permitted Leasehold Mortgagee prior in lien foreclosing on
Tenant’s interest in this Lease. Landlord, without liability to Tenant or any
Permitted Leasehold Mortgagee with an adverse claim, may rely upon a title
insurance policy issued by a reputable title insurance company as the basis for
determining the appropriate Permitted Leasehold Mortgagee who is entitled to
such New Lease.

(h)    Permitted Leasehold Mortgagee Need Not Cure Specified Defaults. Nothing
herein contained shall require any Permitted Leasehold Mortgagee as a condition
to its exercise of its rights hereunder to cure any default of Tenant not
reasonably

 

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susceptible of being cured by such Permitted Leasehold Mortgagee or its
Permitted Leasehold Mortgagee Designee (including but not limited to the
defaults referred to in Subsections 16.1(a)(iii), (iv), (v), (vi), (vii), (if
the levy or attachment is in favor of such Permitted Leasehold Mortgagee
(provided, such levy is extinguished upon foreclosure or similar proceeding or
in a transfer in lieu of any such foreclosure) or is junior to the lien of such
Permitted Leasehold Mortgagee and would be extinguished by the foreclosure of
the Permitted Leasehold Mortgage that is held by such Permitted Leasehold
Mortgagee), (viii), (x), (xii), and (xiv) and any other sections of this Lease
which may impose conditions of default not susceptible to being cured by a
Permitted Leasehold Mortgagee or a subsequent owner of the Leasehold Estate
through foreclosure hereof), in order to comply with the provisions of Sections
17.1(d) and 17.1(e), or as a condition of entering into the New Lease provided
for by Section 17.1(f).

(i)    Contest of Event of Default. Notwithstanding anything to the contrary
contained in this Lease, any Permitted Leasehold Mortgagee (and if more than
one, the Permitted Leasehold Mortgagee whose lien is most senior) may, in good
faith, contest through appropriate proceedings whether an alleged non-monetary
default in fact constitutes an Event of Default, and the cure period available
under the terms hereof to such Permitted Leasehold Mortgagee shall be extended
so long as such Permitted Leasehold Mortgagee shall be diligently pursuing such
contest, provided, that: (i) such Permitted Leasehold Mortgagee shall have
commenced such contest prior to the expiration of the applicable notice and cure
period herein for such alleged non-monetary Event of Default; (ii) Tenant shall
not be, or shall not have, separately contested such alleged non-monetary Event
of Default; (iii) pending the outcome of such contest, such Permitted Leasehold
Mortgagee shall make payment of all Rent due and payable hereunder, as and when
due and payable, and shall make payment and shall otherwise cure all
non-monetary Events of Default which are not being contested by such Permitted
Leasehold Mortgagee within applicable cure periods provided herein for such
non-monetary Events of Default; and (iv) such Permitted Leasehold Mortgagee
shall make payment to Landlord of all reasonable attorneys’ fees and costs
incurred by Landlord in connection with such contest in the event that such
Permitted Leasehold Mortgagee is not successful in such contest.

(j)    Casualty Loss. A standard mortgagee clause naming each Permitted
Leasehold Mortgagee for which notice has been properly provided to Landlord
pursuant to Section 17.1(b) hereof may be added to any and all insurance
policies required to be carried by Tenant hereunder on condition that the
insurance proceeds are to be applied in the manner specified in this Lease and
the Permitted Leasehold Mortgage shall so provide; except that the Permitted
Leasehold Mortgage may provide a manner for the disposition of such proceeds, if
any, otherwise payable directly to Tenant (but not such proceeds, if any,
payable jointly to Landlord and Tenant or to Landlord, to the Fee Mortgagee or
to a third-party escrowee) pursuant to the provisions of this Lease.

(k)    Arbitration; Legal Proceedings. Landlord shall give prompt notice to each
Permitted Leasehold Mortgagee (for which notice has been properly provided to
Landlord pursuant to Section 17.1(b) hereof) of any arbitration or legal
proceedings between Landlord and Tenant involving obligations under this Lease.

 

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(l)    No Merger. So long as any Permitted Leasehold Mortgage is in existence,
unless all Permitted Leasehold Mortgagees for which notice has been properly
provided to Landlord pursuant to Section 17.1(b) hereof shall otherwise
expressly consent in writing, the fee title to the Leased Property and the
Leasehold Estate of Tenant therein created by this Lease shall not merge but
shall remain separate and distinct, notwithstanding the acquisition of said fee
title and said Leasehold Estate by Landlord or by Tenant or by a third party, by
purchase or otherwise.

(m)    Notices. Notices from Landlord to the Permitted Leasehold Mortgagee for
which notice has been properly provided to Landlord pursuant to Section 17.1(b)
hereof shall be provided in the method provided in Section 35.1 hereof to the
address furnished Landlord pursuant to subsection (b) of this Section 17.1, and
those from the Permitted Leasehold Mortgagee to Landlord shall be mailed to the
address designated pursuant to the provisions of Section 35.1 hereof. Such
notices, demands and requests shall be given in the manner described in this
Section 17.1 and in Section 35.1 and shall in all respects be governed by the
provisions of those sections.

(n)    Limitation of Liability; Rights as to Collateral. Notwithstanding any
other provision hereof to the contrary, (i) Landlord agrees that any Permitted
Leasehold Mortgagee’s liability to Landlord in its capacity as Permitted
Leasehold Mortgagee hereunder howsoever arising shall be limited to and
enforceable only against such Permitted Leasehold Mortgagee’s interest in the
Leasehold Estate and the other collateral granted to such Permitted Leasehold
Mortgagee to secure the obligations under its Debt Agreement, and (ii) each
Permitted Leasehold Mortgagee agrees that (1) Landlord’s liability to such
Permitted Leasehold Mortgagee hereunder, howsoever arising, shall be limited to
and enforceable only against Landlord’s interest in the Leased Property and the
other collateral granted to Landlord under this Lease, and (2) (A) the Permitted
Leasehold Mortgagee does not have a Lien on, and the applicable Permitted
Leasehold Mortgage does not encumber, the CapEx Reserve, FF&E Reserve, the
Covenant Security Escrow Account or the Construction Security (the “Permitted
Leasehold Mortgage Excluded Collateral”) and (2) (B) the Permitted Leasehold
Mortgage include an express exclusion of the Permitted Leasehold Mortgage
Excluded Collateral from the assets on which Liens are granted thereunder.

(o)    Transfer Procedure. If an Event of Default shall have occurred and be
continuing, the Permitted Leasehold Mortgagee for which notice has been properly
provided to Landlord pursuant to Section 17.1(b) hereof with the most senior
lien on the Leasehold Estate shall release any security interests it may have
with respect to Tenant’s Property that is to be transferred to Landlord under
Article XXXVI (and this Section 17.1(o) shall expressly authorize Tenant (or
Landlord on Tenant’s behalf) to file any UCC-3 termination statements with
respect to any such assets to be transferred to Landlord) but such Permitted
Leasehold Mortgagee shall have the right to make any determinations and
agreements on behalf of Tenant under Article XXXVI (including, without
limitation, requesting that the process described in Article XXXVI be commenced,
the determination and agreement of the Tenant’s Property FMV and negotiation
with Landlord with respect thereto), in each case, in accordance with and
subject to the terms and provisions of Article XXXVI; provided, however, in no
event shall the foregoing diminish the obligations of Tenant or rights of
Landlord under Section XXXVI.

 

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(p)    Third Party Beneficiary. Each Permitted Leasehold Mortgagee (for so long
as such Permitted Leasehold Mortgagee holds a Permitted Leasehold Mortgage) is
an intended third-party beneficiary of this Article XVII entitled to enforce the
same as if a party to this Lease.

17.2    Landlord’s Right to Cure Tenant’s Default. If Tenant shall fail to make
any payment or to perform any act required to be made or performed hereunder
when due or within any cure period provided for herein, Landlord, without
waiving or releasing any obligation or default, may, but shall be under no
obligation to, make such payment or perform such act for the account and at the
expense of Tenant, and may, to the extent permitted by law, enter upon the
Leased Property for such purpose and take all such action thereon as, in
Landlord’s opinion, may be necessary or appropriate therefor. No such entry
shall be deemed an eviction of Tenant. All sums so paid by Landlord and all
costs and expenses, including reasonable attorneys’ fees and expenses, so
incurred, together with interest thereon at the Overdue Rate from the date on
which such sums or expenses are paid or incurred by Landlord, shall be paid by
Tenant to Landlord on demand as an Additional Charge.

17.3    Tenant’s Debt Agreements. Tenant agrees that the principal or
controlling agreement relating to any Material Indebtedness or series of related
Debt Agreements related to Material Indebtedness in each case entered into after
the date hereof will include a provision requiring the lender or lenders
thereunder (or the Representative of such lenders) to provide a copy to Landlord
of any notices issued by such lenders or the Representative of such lenders to
Tenant of a Specified Debt Agreement Default.

17.4    Landlord Cooperation. If, in connection with granting any Permitted
Leasehold Mortgage or entering into any Debt Agreement, Tenant shall reasonably
request reasonable cooperation from Landlord, Landlord shall provide the same at
no cost or expense to Landlord, it being understood and agreed that Tenant shall
be required to reimburse Landlord for all such reasonable and documented out of
pocket costs and expenses so incurred by Landlord, including, but not limited
to, its reasonable and documented out of pocket attorneys’ fees.

ARTICLE XVIII

SALE OF LEASED PROPERTY

18.1    Sale of the Leased Property. So long as no Event of Default has
occurred, Landlord shall not sell or otherwise transfer all or any portion of
the Leased Property (including by entering into a merger or similar transaction
or by any Landlord Change of Control) during the Term to a Tenant Competitor
without the prior written consent of Tenant, which consent may be given or
withheld in Tenant’s sole discretion; provided, however, that, in the event this
Lease is not renewed in accordance with Section 1.4 prior to the date that is
thirty six (36) months prior to the then current expiration date of the Term (or
as of the date that is thirty six (36) months prior to the final expiration date
of this Lease after all renewal options have been exercised), then at any time
following the date that is thirty six (36) months prior to the then current
expiration date of the Term (the “Competitor Restriction Open Date”), Landlord
shall have the ability to sell or otherwise transfer all or any portion of the
Leased Property (including by entering into a merger or similar transaction or
by any Landlord Change of Control) to a Tenant Competitor

 

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without the prior written consent of Tenant. In no event shall Landlord cause or
allow any Tenant Competitor to own a controlling interest in Landlord (whether
directly or indirectly) during the period Landlord is restricted from selling or
otherwise transferring to a Tenant Competitor as provided herein, except for
interests in Landlord’s Parents, MGP REIT, BREIT or a publicly traded Person.
Except as provided above and except as provided in the last sentence of this
Section 18.1, Landlord shall not be limited or restricted in any manner
whatsoever from selling all or any portion of the Leased Property (including by
entering into a merger or similar transaction or by any Landlord Change of
Control). In connection with any sale or other transfer by Landlord of all or
any portion of the Leased Property, Landlord shall be subject in each instance
to all of the rights of Tenant under this Lease, and Landlord and Landlord’s
successor or purchaser must comply with the provisions of Section 8.2 to the
extent applicable to Landlord and, to the extent necessary, any purchaser or
successor Landlord and/or other Related Person of purchaser or successor
Landlord (or other Landlord Change of Control) shall comply with all applicable
Gaming Regulations with respect to such sale or transfer to ensure that there is
not reasonably likely to be any material impact on the validity of any of the
Gaming Licenses or the ability of Tenant (or any Operating Subtenant) to
continue to use the Gaming Facilities for Gaming activities in substantially the
same manner as immediately prior to Landlord’s sale or other transfer.

ARTICLE XIX

HOLDING OVER

19.1    Holding Over. If Tenant shall for any reason remain in possession of the
Leased Property relating to a Facility after the expiration or earlier
termination of the Term without the consent, or other than at the request, of
Landlord, such possession shall be as a month-to-month tenant during which time
Tenant shall pay as Base Rent each month twice the monthly Base Rent applicable
to the prior Lease Year for such Facility, together with all Additional Charges
and all other sums payable by Tenant pursuant to this Lease. During such period
of month-to-month tenancy, Tenant shall be obligated to perform and observe all
of the terms, covenants and conditions of this Lease, but shall have no rights
hereunder other than the right, to the extent given by law to month-to-month
tenancies, to continue its occupancy and use of the Leased Property of, and/or
any Tenant Capital Improvements to, such Facility. Nothing contained herein
shall constitute the consent, express or implied, of Landlord to the holding
over of Tenant after the expiration or earlier termination of this Lease.

ARTICLE XX

RISK OF LOSS

20.1    Risk of Loss. The risk of loss or of decrease in the enjoyment and
beneficial use of the Leased Property as a consequence of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise, or in consequence of foreclosures, attachments, levies or executions
(other than by Landlord and Persons claiming from, through or under Landlord) is
assumed by Tenant, and except as otherwise provided herein no such event shall
entitle Tenant to any abatement of Rent.

 

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ARTICLE XXI

INDEMNIFICATION

21.1    General Indemnification. In addition to the other indemnities contained
herein, and notwithstanding the existence of any insurance carried by or for the
benefit of Landlord or Tenant, and without regard to the policy limits of any
such insurance, Tenant shall protect, indemnify, save harmless and defend
Landlord and its principals, partners, officers, members, directors,
shareholders, employees, managers, agents and servants and their respective
successors and assigns, (collectively, the “Landlord Indemnified Parties”; each
individually, a “Landlord Indemnified Party”) from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses,
including reasonable attorneys’, consultants’ and experts’ fees and expenses,
imposed upon or incurred by or asserted against Landlord by reason of: (i) any
accident, injury to or death of Persons or loss of or damage to property
occurring on or about the Leased Property or adjoining sidewalks under the
control of Tenant or any subtenant; (ii) any use, misuse, non-use, condition,
maintenance or repair by Tenant or any subtenant of the Leased Property;
(iii) any failure on the part of Tenant to perform or comply with any of the
terms of this Lease; (iv) the non-performance of any of the terms and provisions
of any Property Document and all existing and future subleases or management
agreements of the Leased Property to be performed by any party thereunder;
(v) any claim for malpractice, negligence or misconduct committed by any Person
on or working from the Leased Property; (vi) the violation by Tenant or any
subtenant of any Legal Requirement or Insurance Requirement; (vii) the
non-performance of any contractual obligation, express or implied, assumed or
undertaken by Tenant with respect to the Facilities (or any part thereof) or any
business or other activity carried on in relation to the Facilities (or any part
thereof) by Tenant, including contractual obligations arising from any
collective bargaining agreement; (viii) any lien or claim that may be asserted
against the Facilities (or any part thereof) arising from the acts or omissions
of Tenant, including without limitation Liens (A) being contested by Tenant
pursuant to Article XII or (B) arising out of any failure by Tenant to perform
its obligations hereunder or under any instrument or agreement affecting the
Facilities (or any part thereof); (ix) all amounts actually payable by a
Landlord Indemnified Party to any Fee Mortgagee Securitization Indemnitee under
any Fee Mortgage Document as in effect as of the date hereof in the nature of
indemnification as a result of any material misrepresentations made by Tenant as
to a Specified Tenant Securitization Matter; and (x) arising under any
collective bargaining agreements affecting the Leased Property or the employees
of Tenant or its ERISA Affiliates, including all amounts of withdrawal
liability, in each case, whether incurred prior to, at, or following the
Commencement Date. Any amounts which become payable by Tenant to Landlord under
this Article XXI shall be paid within ten (10) Business Days after receipt of
Notice from Landlord requesting payment of the same, which notice may not be
given until liability therefor has been determined by a final non appealable
judgment or settlement or other agreement of the parties, (except with respect
to amounts payable by Tenant under the foregoing clause (ix), or withdrawal
liability amounts under clause (x) for which notice can be given when such
amounts become payable under the applicable Fee Mortgage Document or when such
amounts are demanded by a multiemployer pension plan) and if not timely paid
within such ten (10) Business Day period, shall bear interest at the Overdue
Rate from the date of such determination to the date of payment. Tenant, at its
sole cost and expense, shall contest, resist and defend any such claim, action
or proceeding asserted or instituted against Landlord. For purposes of this
Article XXI, any acts or omissions of Tenant or

 

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any subtenant, or by their respective employees, agents, assignees, contractors,
subcontractors or others acting for or on behalf of Tenant or any subtenant
(whether or not they are negligent, intentional, willful or unlawful), shall be
strictly attributable to Tenant.

ARTICLE XXII

SUBLETTING AND ASSIGNMENT

22.1    Subletting and Assignment. Tenant shall not, except as otherwise
permitted pursuant to this Lease, without Landlord’s prior written consent,
voluntarily or by operation of law assign (which term includes any transfer,
sale, encumbering, pledge or other transfer or hypothecation and undergoing any
Tenant Change of Control) this Lease or Tenant’s Leasehold Estate with respect
to any Facility or sublet all or any portion of any Facility. Tenant
acknowledges that Landlord is relying upon the expertise of Tenant in the
operation of the Facilities and that Landlord entered into this Lease with the
expectation that Tenant would remain in and operate the Facilities during the
entire Term. Any Tenant Change of Control or transfer of any direct or indirect
ownership interests in Tenant shall not constitute an assignment of Tenant’s
interest in this Lease within the meaning of this Article XXII and shall not be
prohibited, and the provisions requiring consent of Landlord contained herein
shall not apply thereto, solely to the extent that (x) Tenant remains and is
thereafter wholly owned and Controlled, directly or indirectly, by Tenant’s
Parent, and (y) the representations and warranties in Section 39.1 remain true
and correct giving effect to such transfer.

22.2    Permitted Assignments. (a) Notwithstanding the foregoing, Tenant may,
without Landlord’s prior written consent:

(i)    (x) assign this Lease by way of foreclosure of the Leasehold Estate or an
assignment-in-lieu of foreclosure to any Person pursuant to a Permitted
Leasehold Mortgage (any such foreclosure or assignment, a “Foreclosure
Assignment”) or (y) undergo a Tenant Change of Control whereby a Person directly
or indirectly acquires beneficial ownership and control of one hundred percent
(100%) of the Equity Interests in Tenant (or the direct or indirect interests in
Tenant) as a result of the purchase at a foreclosure of a Permitted Credit
Facility Pledge or an assignment in lieu of such foreclosure pursuant to a
Permitted Credit Facility Pledge (a “Foreclosure COC”) in each case, effected by
a Permitted Leasehold Mortgagee or a Permitted Leasehold Mortgagee Foreclosing
Party or Permitted Credit Facility Lender (as applicable), in each case only if
(1) such Person is a Foreclosure Transferee, (2) such Foreclosure Transferee
agrees in writing to assume the obligations of Tenant under this Lease without
amendment or modification other than as provided below, and (3) a Qualified
Transferee has become a Guarantor and provided a Guaranty;

(ii)    assign this Lease, or Tenant’s Leasehold Estate in this Lease to
Tenant’s Parent, a wholly-owned and controlled Subsidiary of Tenant’s Parent or
a wholly-owned and controlled Subsidiary of Tenant; provided, (1) such assignee
becomes party to and bound by this Lease and agrees in writing to assume the
obligations of Tenant under this Lease without amendment or modification other
than as provided below; (2) Tenant remains fully liable hereunder; (3) the use
of the Leased Property continues to comply with the requirements of this Lease;
(4) Landlord shall have received executed copies of all documents for such
assignment and (5) if requested by Landlord, Tenant’s Parent shall execute a
reaffirmation of the Guaranty; and

 

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(iii)    pledge or mortgage its Leasehold Estate to a Permitted Leasehold
Mortgagee and/or pledge the direct Equity Interests in Tenant (or the direct or
indirect interests in Tenant) to a Permitted Leasehold Mortgagee or a Permitted
Credit Facility Lender.

Upon the effectiveness of any assignment permitted pursuant to clause (i) of
this Section 22.2, such Foreclosure Transferee or Permitted Leasehold Mortgagee
Foreclosing Party (and, if applicable, its Parent Company) Landlord shall
(x) make such amendments and other modifications to this Lease as are reasonably
required in order to effectuate such assignment and (y) not unreasonably
withhold its consent to other technical amendments which are reasonably
necessary in connection with such assignment (which for the avoidance of doubt,
shall in no event increase the obligations of Landlord or the rights of Tenant
or decrease the rights of Landlord or the obligations of Tenant in any respect).
After giving effect to any such assignment, unless the context otherwise
requires, references to Tenant and Tenant’s Parent hereunder shall be deemed to
refer to the Foreclosure Transferee and its Parent Company (which must be a
Qualified Transferee and deliver a Guaranty to Landlord prior to effectuating
such Foreclosure Assignment or Foreclosure COC), as applicable.

22.3    Permitted Sublease Agreements. (a) Notwithstanding the provisions of
Section 22.1, but subject to compliance with the provisions of this
Section 22.3, Tenant or any Operating Subtenant may:

(i)    enter into a Permitted Sublease of any Facility or portion thereof with
Tenant’s Parent, a wholly-owned Subsidiary of Tenant’s Parent, a wholly-owned
Subsidiary of Tenant or any Affiliate of Tenant’s Parent, without Landlord’s
prior written consent;

(ii)    enter into a Permitted Sublease for a term (inclusive of any renewal or
extension options under such Permitted Sublease) that does not extend beyond the
Term (excluding any Renewal Terms that have not been exercised) with any Person
that is not an Affiliate of Tenant or Tenant’s Parent with respect to any
Ancillary Space at a Facility or any portion thereof, without Landlord’s prior
written consent;

(iii)    subject to obtaining Landlord’s prior written consent, such consent not
to be unreasonably withheld, conditioned or delayed, enter into a Permitted
Sublease for a term (inclusive of any renewal or extension options under such
Permitted Sublease) that extends beyond the Term (excluding any Renewal Terms
that have not been exercised) with any Person that is not an Affiliate of Tenant
or Tenant’s Parent with respect to any Ancillary Space at a Facility;

(iv)    without Landlord’s prior written consent, enter into a Permitted
Sublease for a term (inclusive of any renewal or extension options under such
Permitted Sublease) that does not extend beyond the Term (excluding any Renewal
Terms that have not been exercised) with any Person that is not an Affiliate of
Tenant or Tenant’s Parent with respect to any Primary Space at a Facility and
provided that Tenant (and/or any applicable

 

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Operating Subtenant) retains at least 75% of the gross area (and has not sublet
or entered into management agreements for such gross area) (provided that, the
space operated as the “Delano” or the “Four Seasons” shall be treated as
retained by Tenant for any period during which such space is operated as the
“Delano” or the “Four Seasons” and not otherwise subleased to a Person that is
not an Affiliate of Tenant or Tenant’s Parent) in each individual case, of each
of the hotel, casino and convention space of such Facility (other than pursuant
to the preceding clause (i) or pursuant to Section 22.8(a));

(v)    subject to obtaining Landlord’s prior written consent, enter into a
Permitted Sublease for a term (inclusive of any renewal or extension options
under such Permitted Sublease) that extends beyond the Term (excluding any
Renewal Terms that have not been exercised) with any Person that is not an
Affiliate of Tenant or Tenant’s Parent with respect to any Primary Space at a
Facility and provided that Tenant (and/or any applicable Operating Subtenant)
retains at least 75% of the gross area (and has not sublet or entered into
management agreements for such gross area) (provided that the space operated as
the Delano and the Four Seasons shall be treated as retained by Tenant for any
period during which such space is operated as the “Delano” or the “Four Seasons”
and not otherwise subleased to a Person that is not an Affiliate of Tenant or
Tenant’s Parent) in each individual case, of each of the hotel, casino and
convention space of such Facility (other than pursuant to the preceding clause
(i) or pursuant to Section 22.8(a);

(vi)    sublet a portion of a Facility in order to comply with Section 8.2
hereof; and

(vii)    enter into, allow to continue or renew any Operating Sublease, so long
as such Operating Sublease is in compliance with Section 41.17.

(b)    After an Event of Default has occurred and while it is continuing,
Landlord may collect rents from any subtenant and apply the net amount collected
to the Rent, but no such collection shall be deemed (i) a waiver by Landlord of
any of the provisions of this Lease, (ii) the acceptance by Landlord of such
subtenant as a tenant or (iii) a release of Tenant from the future performance
of its obligations hereunder.

(c)    If reasonably requested by Tenant in connection with a Permitted Sublease
which is permitted under this Section 22.3 with respect to Ancillary Space with
a subtenant that is not an Affiliate of Tenant or Tenant’s Parent or in
connection with a Permitted Management Agreement which is permitted under
Section 22.8 with respect to Ancillary Space with a manager that is not an
Affiliate of Tenant or Tenant’s Parent, Landlord and such sublessee or manager,
as applicable, shall enter into an SNDA with respect to any such sublease or
management agreement, as applicable, such SNDA to be substantially in the form
attached hereto as Exhibit F-1, provided Landlord will not unreasonably
withhold, condition or delay its consent to commercially reasonable
modifications that may be requested by the subtenant (and if a Fee Mortgage is
then in effect, Landlord shall use commercially reasonable efforts to seek to
cause the Fee Mortgagee to enter into such subordination, non-disturbance and
attornment agreement) whereby the subtenant or manager, as applicable, agrees to
attorn to Landlord (or a Fee Mortgagee) and Landlord (and the Fee Mortgagee)
agrees to recognize such subtenant rights under its sublease or manager rights
under its management agreement, as applicable. For the

 

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avoidance of doubt, Landlord shall have no obligation to deliver a
subordination, non-disturbance and attornment agreement with respect to any
sublease or management agreement (x) for Primary Space or (y) with a tenant or
manager that is an Affiliate of Tenant or Tenant’s Parent.

(d)    Tenant shall furnish Landlord in connection with the delivery of each
Annual Certificate with a copy of each sublease and management agreement that
Tenant has entered into since delivery of the last Annual Certificate
(irrespective of whether Landlord’s prior approval was required therefor).

(e)    To the extent Landlord has an approval right pursuant to Section 22.3(a)
or Section 22.8, with respect to Ancillary Space (but not Primary Space)
Landlord shall base, if requested by Tenant, its approval (or disapproval) on a
term sheet or letter of intent containing the material terms (including, without
limitation, the identity of the tenant or manager, the term, the demised area,
rent obligations, security deposit, any renewal or extension options, intended
use, any exclusive use rights or improvement allowance and construction
obligations) of a sublease or management agreement, as applicable, between
Tenant and such subtenant or manager, as applicable, and if Landlord approves
such term sheet or letter of intent no further approval of Landlord shall be
required provided that the final sublease or management agreement, as
applicable, between Tenant and such subtenant or manager, as applicable, is not
on terms that are materially inconsistent with the term sheet or letter of
intent approved by Landlord.

22.4    Required Assignment and Subletting Provisions. Any assignment and/or
sublease must provide that:

(i)    in the case of a sublease, it shall be subject and subordinate to all of
the terms and conditions of this Lease;

(ii)    the use of the applicable Facility (or portion thereof) shall not
conflict with any Legal Requirement or any other provision of this Lease and any
restrictions on Tenant’s activities at the relevant Facility shall also
similarly apply to any sublessee’s activities at the relevant Facility;

(iii)    except as otherwise provided herein, no subtenant or assignee shall be
permitted to further sublet all or any part of the applicable Facility or assign
its sublease except to a party that is not an Affiliate of Tenant and insofar as
the same would be permitted if it were a sublease by Tenant under this Lease;

(iv)    in the case of a sublease, in the event of cancellation or termination
of this Lease for any reason whatsoever or of the surrender of this Lease
(whether voluntary, involuntary or by operation of law) prior to the expiration
date of such sublease, including extensions and renewals granted thereunder,
then, at Landlord’s option and subject to subtenant’s right of non-disturbance
pursuant to Section 22.3(c) above, the subtenant shall make full and complete
attornment to Landlord for the balance of the term of the sublease, which the
subtenant shall execute and deliver within twenty (20) days after request by
Landlord and the subtenant shall waive the provisions of any law now or
hereafter in effect which may give the subtenant any right of election to
terminate the sublease or to surrender possession in the event any proceeding is
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(v)    in the event the subtenant receives a Notice from Landlord stating that
this Lease has been cancelled, surrendered or terminated, then, the subtenant
shall thereafter be obligated to pay all rentals accruing under said sublease
directly to Landlord (or as Landlord shall so direct); all rentals received from
the subtenant by Landlord shall be credited against the amounts owing by Tenant
under this Lease.

For the avoidance of doubt, nothing in this Article XXII shall limit the rights
of subtenants to non-disturbance as specifically provided in Section 22.3(c) of
this Lease.

22.5    Costs. Tenant shall reimburse Landlord for Landlord’s reasonable costs
and expenses incurred in conjunction with the processing and documentation of
any assignment or subletting (including any request for a subordination,
non-disturbance and attornment agreement), including reasonable attorneys’,
architects’, engineers’ or other consultants’ fees whether or not such sublease
or assignment agreement is actually consummated.

22.6    No Release of Tenant’s Obligations. No assignment (other than a
permitted transfer pursuant to this Article XXII, in connection with a sale or
assignment of the entire Leasehold Estate), subletting or management agreement
shall relieve Tenant of its obligation to pay the Rent and to perform all of the
other obligations to be performed by Tenant hereunder or reduce any such
obligations. All obligations and other terms of this Lease applicable to Tenant
and Tenant’s activities and properties shall also apply to each assignee of this
Lease. The liability of Tenant and any immediate and remote successor in
interest of Tenant (by assignment or otherwise), and the due performance of the
obligations of this Lease on Tenant’s part to be performed or observed, shall
not in any way be discharged, released or impaired by any (i) stipulation which
extends the time within which an obligation under this Lease is to be performed,
(ii) waiver of the performance of an obligation required under this Lease that
is not entered into for the benefit of Tenant or such successor, or
(iii) failure to enforce any of the obligations set forth in this Lease,
provided, that Tenant shall not be responsible for any additional obligations or
liability arising as the result of any modification or amendment of this Lease
by Landlord and any permitted assignee of Tenant that is not an Affiliate of
Tenant.

22.7    Intentionally Omitted.

22.8    Management Agreements. Tenant or any Operating Subtenant shall be
permitted to:

(a)    enter in a Permitted Management Agreement with respect to any Facility or
portion thereof with Tenant’s Parent, a wholly-owned Subsidiary of Tenant’s
Parent, a wholly-owned Subsidiary of Tenant or any Affiliate of Tenant’s Parent,
without Landlord’s prior written consent;

(b)    enter into a Permitted Management Agreement for a term (inclusive of any
renewal or extension options under such Permitted Management Agreement) that
does not extend beyond the Term (excluding any Renewal Terms that have not been
exercised) with any Person that is not an Affiliate of Tenant or Tenant’s Parent
with respect to any Ancillary Space at a Facility, without Landlord’s prior
written consent;

 

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(c)    subject to obtaining Landlord’s prior written consent, such consent not
to be unreasonably withheld conditioned or delayed, enter into a Permitted
Management Agreement for a term (inclusive of any renewal or extension options
under such Permitted Management Agreement) that extends beyond the Term
(excluding any Renewal Terms that have not been exercised) with any Person that
is not an Affiliate of Tenant or Tenant’s Parent with respect to any Ancillary
Space at a Facility;

(d)    without Landlord’s prior written consent, enter into a Permitted
Management Agreement for a term (inclusive of any renewal or extension options
under such Permitted Management Agreement) that does not extend beyond the Term
(excluding any Renewal Terms that have not been exercised) with any Person that
is not an Affiliate of Tenant or Tenant’s Parent with respect to Primary Space
at a Facility and provided that Tenant (and/or any applicable Operating
Subtenant) has retained at least 75% of the gross area (and has not sublet or
entered into management agreements with respect to such gross area) (provided
that, the space operated as the “Delano” or the “Four Seasons” shall be treated
as retained by Tenant for any period during which such space is operated as the
“Delano” or the “Four Seasons” and not otherwise subleased to a Person that is
not an Affiliate of Tenant or Tenant’s Parent) (other than pursuant to the
preceding clause (a) and Section 22.3(a)(i)), in each individual case, of each
of the hotel, casino and convention space of such Facility;

(e)    subject to obtaining Landlord’s prior written consent, enter into a
Permitted Management Agreement for a term (inclusive of any renewal or extension
options under such Permitted Management Agreement) that extends beyond the Term
(excluding any Renewal Terms that have not been exercised) with any Person that
is not an Affiliate of Tenant or Tenant’s Parent with respect to Primary Space
at a Facility and provided that Tenant (and/or any applicable Operating
Subtenant) has retained at least 75% of the gross area (and has not sublet or
entered into management agreements with respect to such gross area) (provided
that, the space operated as the “Delano” or the “Four Seasons” shall be treated
as retained by Tenant for any period during which such space is operated as the
“Delano” or the “Four Seasons” and not otherwise subleased to a Person that is
not an Affiliate of Tenant or Tenant’s Parent) (other than pursuant to the
preceding clause (a) and Section 22.3(a)(i)), in each individual case, of each
of the hotel, casino and convention space of such Facility; and

(f)    enter into a Permitted Management Agreement in order to comply with
Section 8.2 hereof.

Notwithstanding anything to the contrary contained herein, Tenant (or any
Operating Subtenant) shall have the right to amend, extend or renew the Four
Seasons Agreement and the Delano Agreement without Landlord’s consent, to the
extent that Landlord’s consent would otherwise be required, as long as such
amendment, extension, or renewal (x) would not (after taking into account any
further extension rights under such agreement) extend beyond the then current
term of the Lease (without regard to Renewal Options) and (y) does not provide
for less favorable economic terms as the existing Delano Agreement or Four
Seasons Agreement, as applicable, and is otherwise on commercially reasonable
terms.

 

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22.9    Bookings. Tenant (or any Operating Subtenant) may enter into any
Bookings that do not cover periods after the expiration of the term of this
Lease without the consent of Landlord in accordance with the Operating Standard
in all material respects, and Bookings shall not be considered an assignment,
sublease or management agreement. Tenant (or any Operating Subtenant) may enter
into any Bookings that cover periods after the expiration of the term of this
Lease without the consent of Landlord, provided, that, (i) such transaction is
in each case made for bona fide business purposes in the normal course of the
Primary Intended Use; (ii) such transaction shall not result in a violation of
any Legal Requirements (including Gaming Regulations) relating to the operation
of any Facility, including any Gaming Facilities, (iii) such Bookings are on
commercially reasonable terms or made for a commercially reasonably purpose at
the time entered into; and (iv) such transaction is not designed with the intent
to frustrate Landlord’s ability to enter into a new lease of the Leased Property
or any portion thereof with a third person following the Expiration Date;
provided, further, that, notwithstanding anything otherwise set forth herein,
any such Bookings in effect as of the Commencement Date are expressly permitted
without such consent. Landlord hereby agrees that in the event of a termination
or expiration of this Lease, Landlord hereby recognizes and shall keep in effect
such Booking on the terms agreed to by Tenant (or any Operating Subtenant) with
such Person and shall not disturb such Person’s rights to occupy the applicable
Facility in accordance with the terms of such Booking.

22.10    Termination of Affiliate Agreements.    Notwithstanding anything to the
contrary contained herein and subject to the terms of any SNDA provided by
Landlord directly to any party actually known by Landlord to be an Affiliate of
Tenant at the time such SNDA was delivered by Landlord (an “Affiliate SNDA”), at
the expiration or earlier termination of the Lease, other than the Guaranty, the
IP Licenses, the Transition Services Agreement, the Property Documents (to the
extent entered into in accordance with this Lease), all Affiliate Agreements may
be terminated by Landlord at Tenant’s sole cost and expense. For the avoidance
of doubt (i) if at the time of the expiration or earlier termination of this
Lease any Operating Sublease, Permitted Sublease and any Permitted Management
Agreement together with any sub-agreements, assignments, licenses, and
non-disturbance agreements (other than any Affiliate SNDA) with respect to the
foregoing are directly or indirectly held by an Affiliate of Tenant’s Parent,
Landlord shall have the right to terminate such agreements at Tenant’s sole
expense and (ii) Landlord hereby acknowledges and agrees that Grand Garden
Tenant, LLC is an Affiliate of Tenant.

ARTICLE XXIII

REPORTING; CONFIDENTIALITY

23.1    Estoppel Certificates and Financial Statements.

(a)    Estoppel Certificate. Each of Landlord and Tenant shall, at any time and
from time to time, but no more frequently than twice per Lease Year, upon
receipt of not less than ten (10) Business Days’ prior written request from the
other party hereto, furnish an estoppel certificate executed by an appropriate
officer with knowledge of the matters set forth therein (an “Estoppel
Certificate”) certifying (i) that this Lease is unmodified and in full force and
effect, or that this Lease is in full force and effect as modified and setting
forth the

 

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modifications; (ii) the Rent and Additional Charges payable hereunder and the
dates to which the Rent and Additional Charges payable have been paid;
(iii) that the address for notices to be sent to the party furnishing such
Estoppel Certificate is as set forth in this Lease (or, if such address for
notices has changed, the correct address for notices to such party); (iv)
whether or not, to its actual knowledge, such party or the other party hereto is
in default in the performance of any covenant, agreement or condition contained
in this Lease (together with, back-up calculation and information reasonably
necessary to support the determination and calculation of the financial
calculations required under this Lease, including, without limitation, the
calculation of the Escalation amount and Tenant’s compliance with Section 23.3)
and, if so, specifying each such default of which such party may have knowledge;
(v) that Tenant is in possession of the Leased Property; and (vi) responses to
such other questions or statements of fact as such other party, any ground or
underlying landlord, any purchaser or any current or prospective Fee Mortgagee
or Permitted Leasehold Mortgagee or Permitted Credit Facility Lender shall
reasonably request. Landlord’s or Tenant’s failure to deliver such statement
within such time shall constitute an acknowledgement by such failing party that,
to such party’s knowledge, (x) this Lease is unmodified and in full force and
effect except as may be represented to the contrary by the other party; (y) the
other party is not in default in the performance of any covenant, agreement or
condition contained in this Lease; and (z) the other matters set forth in such
request, if any, are true and correct. Any such certificate furnished pursuant
to this Article XXIII may be relied upon by the receiving party and any current
or prospective Fee Mortgagee, Permitted Leasehold Mortgagee, Permitted Credit
Facility Lender, ground or underlying landlord or purchaser of the Leased
Property. Each Guarantor or Tenant, as the case may be, shall deliver a written
notice within ten (10) Business Days of obtaining knowledge of the occurrence of
a default hereunder. Such notice shall include a detailed description of the
default and the actions such Guarantor or Tenant has taken or shall take, if
any, to remedy such default.

(b)    Statements. Tenant shall furnish the following statements to Landlord
(which Tenant acknowledges and agrees may be provided by Landlord to any
Landlord’s Parent, MGP REIT and BREIT):

(i)    On the earlier of five (5) Business Days following (x) each date
specified in the Exchange Act and the SEC’s related rules and regulations
(including any additional time permitted under Rule 12b-25 or any successor
provision thereof) that the Tenant’s Parent is (or would be, as a large
accelerated filer, if not required to file SEC Reports at that time) required to
file SEC Reports (each a “SEC Filing Deadline”) and (y) the date the Tenant’s
Parent files its SEC Reports with the SEC: (A) Tenant’s Parent’s Financial
Statements required to be included in such SEC Report (or which would be, if not
required to file SEC Reports at that time) or the SEC Report containing such
Financial Statements; (B) a certificate, executed by a Responsible Officer of
Tenant certifying that no default has occurred under this Lease or, if such a
default has occurred, specifying the nature and status of such default; and
(C) (1) with respect to annual Financial Statements, a report with respect to
Tenant’s Parent’s Financial Statements from Tenant’s Parent’s independent
registered public accounting firm, which report shall not be subject to any
qualification or exception expressing substantial doubt about the ability of the
Tenant’s Parent and its Subsidiaries to continue as a “going concern” or any
exception as to the scope of such audit (excluding any qualification as to going
concern relating to any debt maturities in the twelve month period following the
date such report is delivered or any projected financial performance or covenant
default in any Indebtedness or this

 

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Lease in such twelve month period) and that such Financial Statements have been
prepared in accordance with GAAP and Tenant’s Parent’s accountants have examined
such Financial Statements in accordance with the standards of the PCAOB (or
generally accepted auditing standards, if not required to file SEC Reports at
such time) and (2) with respect to quarterly Financial Statements, a
certificate, executed by a Responsible Officer of the Tenant’s Parent,
certifying that such Financial Statements fairly present, in all material
respects, the financial position and results of operations of Tenant’s Parent
and its Subsidiaries on a consolidated basis in accordance with GAAP as at such
date and for such period (subject to normal year-end audit adjustments, the
absence of footnotes and other informational disclosures customarily omitted
from interim financial statements). Financial statements required to be
delivered pursuant to this Section 23.1(b)(i) will be deemed delivered to the
extent such documents are included in materials filed with the SEC and shall be
deemed to have been delivered on the date such documents are publicly available
on the SEC’s website;

(ii)    Within sixty (60) days after the end of each of the Tenant’s Fiscal
Years (commencing with the Fiscal Year ending December 31, 2020), (a) a budget
and projection by fiscal quarter for the Fiscal Year in which the budget is
delivered, including projected Net Revenue, Net Income, EBITDA, EBITDAR, Net
Revenue by division, and Operating Expenses by division with respect to each
Operating Subtenant (or Tenant with respect to any portion of a Facility that is
not subject to an Operating Sublease), (b) a budget and projection by fiscal
year for the second and third subsequent Fiscal Years, including projected Net
Revenue, EBITDA, EBITDAR with respect to each Operating Subtenant (or Tenant
with respect to any portion of a Facility that is not subject to an Operating
Sublease), (c) a capital budget for each Operating Subtenant for the following
Fiscal Year. EBITDA shall be calculated in accordance with Exhibit L.

(iii)    Within twenty (20) days after the expiration of any calendar quarter,
Tenant shall deliver to Landlord a Financial Covenant compliance report in
substantially in the form attached hereto as Exhibit J, which shall include a
calculation of the Financial Covenant and Listing Covenant under Section 23.3 as
of the relevant date as applicable, based upon the preliminary statements for
such Test Period (the “Preliminary Financial Covenant Compliance Report”).

(iv)    Within sixty (60) days after the expiration of any calendar quarter,
Tenant shall deliver to Landlord a Financial Covenant compliance report in
substantially in the form attached hereto as Exhibit J, which report shall
include an Officer’s Certificate certifying (1) that the Financial Covenant and
Listing Covenant are in compliance under Section 23.3 together with reasonable
detail evidencing such compliance, and (2) that such items are true, correct,
accurate, and complete and fairly present the financial condition and results of
the operations of the Operating Subtenants (or Tenant with respect to any
portion of a Facility that is not subject to an Operating Sublease) (subject to
normal year-end adjustments) as of the relevant date as applicable (the “Final
Financial Covenant Compliance Report”).

(v)    Within sixty (60) days after the expiration of any calendar quarter,
Tenant shall deliver to Landlord a quarterly operating report in substantially
the form attached hereto as Exhibit M, accompanied by an Officer’s Certificate
stating that such items in such quarterly operating report are true, correct,
accurate, and complete and fairly present the

 

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financial condition and results of the operations of the Operating Subtenants
(or Tenant with respect to any portion of a Facility that is not subject to an
Operating Sublease) (subject to normal year-end adjustments) as of the relevant
date as applicable, which reports shall include: (a) an occupancy report
including the average daily rate and Net Revenue per available room and
(b) quarterly, year to date and trailing twelve months operating statements
noting Net Revenue, Net Income, EBITDA, EBITDAR, Net Revenue by division,
Operating Expenses by division.

(vi)    Commencing with the year ended December 31, 2020, Tenant will furnish to
Landlord annually within one hundred twenty (120) days following the end of such
Fiscal Year, a complete copy of the Tenant’s and Operating Subtenants’ combined
audited annual financial report with statements in accordance with GAAP covering
the Facilities, which shall be accompanied by a report from an Approved
Accounting Firm, which report shall indicate that such financial statements are
prepared in accordance with GAAP as of such date and shall not be subject to any
qualification or exception expressing substantial doubt about the ability of
Tenant and Operating Subtenants, collectively, to continue as a “going concern”
or any exception as to the scope of such audit (excluding any qualification as
to going concern relating to any debt maturities in the twelve month period
following the date such report is delivered or any projected financial
performance or covenant default in any Indebtedness or this Lease in such twelve
month period). Promptly following receipt by Landlord of each audited annual
financial report, together with reasonable evidence of the third-party costs and
expenses incurred by Tenant or its Affiliates in connection with such report,
Landlord shall be required to reimburse Tenant or its Affiliates for one-half of
all such third-party costs and expenses incurred by Tenant or its Affiliates.

(vii)    Tenant will furnish to Landlord annually within ninety (90) days
following the end of such Fiscal Year, the Annual Certificate.

(viii)    (a) Such additional financial information and projections as may be
reasonably requested by Landlord in connection with syndications, private
placements or public offerings by or on behalf of Landlord of debt securities or
loans or equity or hybrid securities and (b) such additional information and
unaudited quarterly financial information concerning the Leased Property and
Tenant as Landlord or its Affiliates may require for their filings with the SEC
under both the Securities Act and the Exchange Act, including, but not limited
to SEC Reports and registration statements to be filed by Landlord or its
Affiliates during the Term of this Lease, the Internal Revenue Service and any
other federal, state or local regulatory agency with jurisdiction over Landlord
or its Subsidiaries or Affiliates; provided, however, that if the SEC requires
Landlord or its Affiliates to include Tenant’s Parent’s Financial Statements in
its SEC Reports, Tenant shall use its commercially reasonable efforts to furnish
substantially complete drafts of Tenant’s Parent’s annual Financial Statements
to Landlord no later than fifty-five (55) calendar days after the end of such
year and Tenant Parent’s quarterly Financial Statements to Landlord no later
than thirty-five (35) calendar days after the end of such quarter.

(ix)    Prompt Notice to Landlord of any action, proposal or investigation by
any agency or entity, or complaint to such agency or entity, (any of which is
called a “Proceeding”), known to Tenant, the result of which Proceeding would
reasonably be expected to revoke or suspend or terminate or modify in a way
materially adverse to Tenant, or

 

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fail to renew or fully continue in effect, any license or certificate or
operating authority pursuant to which Tenant carries on any material part of the
Primary Intended Use of all or any portion of the Leased Property.

(x)    Tenant further agrees to provide the financial and operational reports to
be delivered to Landlord under this Lease in such electronic format(s) as may
reasonably be required by Landlord from time to time in order to facilitate
Landlord’s internal financial and reporting database. Tenant also agrees that
Landlord shall have audit rights with respect to such information to the extent
required to confirm Tenant’s compliance with the terms of this Lease (including,
without limitation, calculation of EBITDAR and expenditures with respect to
Required CapEx). Tenant shall not change the accounting practices or policies
described in this Lease for the purpose of calculating EBITDAR and expenditures
with respect to Required CapEx, which the parties agree is based on Tenant’s
Existing Accounting Guidelines. Furthermore, Tenant will not enter into any “off
balance sheet arrangement” outside the normal course of operations as determined
in accordance with GAAP as in effect on the date of this Lease.

(c)    Notwithstanding the foregoing provisions of this Section 23.1, Tenant
shall not be obligated (1) to provide information that is subject to (i) a bona
fide confidentiality agreement, (ii) the quality assurance immunity,
(iii) attorney-client privilege or the attorney work product doctrine or (iv) in
the case of Section 23.1(b)(x) only, creates an unreasonably excessive expense
or burden on Tenant or any of its Subsidiaries to produce or otherwise disclose
or (2) to provide information or assistance that could reasonably be expected to
give Landlord or its Affiliates a “competitive” advantage in more than a de
minimis respect with respect to markets in which Landlord or any of Landlord’s
Affiliates and Tenant, Tenant’s Parent or any of Tenant’s Affiliates might be
competing at any time (“Restricted Information”), it being understood that
Restricted Information shall not include (1) budget and other reporting
information which Landlord is obligated to deliver pursuant to a Fee Mortgage,
(2) financial information concerning the Leased Property and Tenant as Landlord
or its Affiliates may require for ongoing filings with the SEC under both the
Securities Act and the Exchange Act, including, but not limited to SEC Reports
and registration statements to be filed by Landlord or its Affiliates during the
Term of this Lease, the Internal Revenue Service and any other federal, state or
local regulatory agency with jurisdiction over Landlord or its Subsidiaries or
Affiliates or (3) revenue and expense information relevant to Landlord’s
calculation and verification of (x) EBITDA and Net Revenue hereunder or
(y) Tenant’s compliance with Section 23.3 hereof (provided, that Landlord shall
in such instance first execute a nondisclosure agreement in a form reasonably
satisfactory to Tenant with respect to such information). Landlord shall retain
audit rights with respect to Restricted Information to the extent required to
confirm Tenant’s compliance with the terms of this Lease (and Landlord’s or its
Affiliates compliance with SEC, Internal Revenue Service and other legal and
regulatory requirements) and provided, that appropriate measures are in place to
ensure that only Landlord’s or its Affiliates’ auditors and attorneys (and not
Landlord or any of Landlord’s other Affiliates) are provided access to such
information. In addition, Landlord shall not disclose any Restricted Information
to any Person or any employee, officer or director of any Person (other than
Landlord, Landlord’s Parents or a Subsidiary of Landlord, in each case, on a
“need to know” basis) that directly or indirectly owns or operates any Gaming
business or is a Tenant Competitor; provided, however, that in no event shall
Landlord knowingly disclose any

 

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Restricted Information or any other information that is Confidential Information
(except as permitted by Section 23.2(b)) provided pursuant to this Lease to any
Person involved in the ownership (directly or indirectly), management or
operation of any Tenant Competitor. Notwithstanding anything to the contrary
contained herein, Tenant acknowledges that Blackstone Real Estate Partners VII
indirectly owns the Cosmopolitan of Las Vegas and such ownership shall not
result in Tenant being entitled to withhold delivery to Landlord of the
information required to be delivered to Landlord pursuant to the foregoing
provisions of Section 23.1 or to otherwise prohibit any employees of The
Blackstone Group from receiving such information provided that Landlord takes
reasonable measures and precautions to ensure that no Restricted Information is
made available to those persons employed by portfolio companies of The
Blackstone Group involved with the day-to-day management or operation of any
Tenant Competitor which is Controlled by Landlord’s Affiliates.

(d)    Notwithstanding anything to the contrary contained herein, for purposes
of all calculations under this Lease, Tenant and Tenant’s Parent shall not
materially change Tenant’s or Tenant’s Parent’s corporate and shared services
expense allocation practices or policies in existence on the date of this Lease
outlined in Schedule 7, which practices and policies provide that Tenant will
continue to receive allocations in a Non-Discriminatory manner for corporate and
shared services consistent with the allocation of costs to Tenant’s Parent’s
other operating resorts; provided, however, that Tenant and Tenant’s Parent may
change the allocation practices and policies to add newly provided services and
change allocation methodologies so long as such changes would not materially
alter the allocation amounts. Further, notwithstanding anything to the contrary
contained herein, all provisions in this Lease with respect to the financial
calculations under this Lease shall only apply to the computation of the items
specified in this Lease and shall in no way restrict the way such items are
calculated or otherwise treated by Tenant in Tenant’s financial reporting to
other Persons, in Tenant’s public filings or for any other purpose.

(e)    In connection with the incurrence of any Fee Mortgage and any Fee
Mortgagee Securitization or entry into other Debt Agreements or Debt Facilities
relating to the Leased Property, Tenant shall, upon the written request of
Landlord:

(A)    at the sole cost and expense of Landlord, reasonably cooperate with
Landlord in providing information with respect to the Property, Tenant or its
Affiliates, to the extent reasonably requested by such Fee Mortgagee in order to
satisfy the market standards to which such Fee Mortgagee customarily adheres or
which may be reasonably required by prospective arrangers, underwriters,
investors, lenders and/or rating agencies;

(B)    use commercially reasonable efforts to review, re-review and, to the
extent accurate, approve (and to the extent inaccurate, identify the same with
particularity) portions of any Disclosure Document (or any other similar
material required to be reviewed by Landlord under a Fee Mortgage) identified by
Landlord to be reviewed by Tenant, which portions shall be limited to any
portions relating solely to Tenant Information; provided, however, that, except
as expressly provided in Section 21.1, in no event will Tenant have any
liability with respect to any of the matters described in this Section 23.1(e);

 

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(C)    make appropriate officers of Tenant available for a reasonable number of
due diligence meetings and for participation in a reasonable number of meetings,
presentations, road shows and sessions with rating agencies and prospective Fee
Mortgagees all at times to be mutually agreed by Tenant, Landlord and such
prospective Fee Mortgagees, and provide timely and reasonable access during
normal business hours to diligence materials and the Leased Property to allow
sources of financing and their representatives to complete all customary due
diligence;

(D)    providing reasonable assistance with respect to the review and granting
of mortgages and security interests as collateral for any debt financing; and

(E)    reasonably cooperate with the marketing efforts of Landlord and any Fee
Mortgagee or prospective Fee Mortgagee of any Fee Mortgage or any proposed Fee
Mortgage.

23.2    Confidentiality; Public Offering Information.

(a)    The parties recognize and acknowledge that they may receive certain
Confidential Information of the other party. Each party agrees that neither such
party nor any of its Representatives acting on its behalf shall, during or
within five (5) years after the termination or expiration of this Lease,
directly or indirectly use any Confidential Information of the other party or
disclose Confidential Information of the other party to any Person for any
reason or purpose whatsoever, except as reasonably required in order to comply
with the obligations and otherwise as permitted under the provisions of this
Lease. Notwithstanding the foregoing, (1) in the event that a party or any of
its Representatives is requested or becomes legally compelled (pursuant to any
legal, governmental, administrative or regulatory order, authority, process,
examination or request) to disclose any Confidential Information of the other
party, it will, to the extent reasonably practicable and not prohibited by law,
provide the party to whom such Confidential Information belongs prompt Notice of
the existence, terms or circumstances of such event so that the party to whom
such Confidential Information belongs may seek a protective order or other
appropriate remedy or waive compliance with the provisions of this
Section 23.2(a), (2) each party may disclose Confidential Information to its
Affiliates (so long as such Affiliates are not Tenant Competitors) and to its
and its Affiliates’ respective partners, directors, officers, employees, agents,
trustees, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential), (3) each
party may disclose Confidential Information to any other party hereto, (4) in
connection with the exercise of any remedies hereunder or any action or
proceeding relating to this Lease or the enforcement of rights hereunder or
(5) on a confidential basis to any rating agency in connection with rating any
party hereto or their respective subsidiaries. In the event that such protective
order or other remedy is not obtained or the party to whom such Confidential
Information belongs waives compliance with this Section 23.2(a), the party
compelled to disclose such Confidential Information will furnish only that
portion of the Confidential Information or take only such action as, based upon
the advice of your legal counsel, is legally required and will use commercially
reasonable efforts to obtain reliable assurance that confidential treatment will
be accorded any Confidential Information so furnished. The party compelled to
disclose the Confidential Information shall cooperate with any action reasonably

 

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requested by the party to whom such Confidential Information belongs to obtain a
protective order or other reliable assurance that confidential treatment will be
accorded to the Confidential Information.

(b)    Notwithstanding anything to the contrary in this Article XXIII, Tenant
specifically agrees that Landlord may disclose (A) information permitted to be
disclosed under the Master Transaction Agreement, (B) information about the
Facilities themselves (not concerning the operation of the Facilities), (C) this
Lease and its terms, (D) the EBITDAR to Rent Ratio of the Tenant Parties and
(E) financial information and other information concerning the operation of the
Facilities (1) which is publicly available, (2) that Landlord, Landlord’s
Parents or their respective Affiliates are, in Landlord’s , Landlord’s Parents’
or their respective Affiliates’ reasonable judgment, required to disclose (x) to
any Fee Mortgagee (and any agents and lenders party to material debt instruments
entered into by Landlord), a Landlord’s Parent (or its Affiliates) (which may
include the deliveries in Section 23.1(b)(i)-(viii)) or (y) in ongoing filings
with the SEC under either the Securities Act and the Exchange Act, or (3) the
disclosure of which is approved by Tenant in writing, which approval may not be
unreasonably withheld, in each case, in offering memoranda or prospectuses or
confidential information memoranda, or similar publications or marketing
materials, rating agency presentations, investor presentations or Disclosure
Documents in connection with syndications, private placements or public
offerings of securities or loans by or on behalf of the Landlord or its
Affiliates, and SEC Reports and any other reporting requirements under
applicable federal and state laws, including those of any successor to or
Affiliate of Landlord, provided, that, with respect to matters permitted to be
disclosed solely under clause (E)(3), the recipients thereof are advised that
they shall be obligated to use commercially reasonable efforts to maintain the
confidentiality thereof pursuant to Section 23.2(a) or pursuant to
confidentiality provisions substantially similar thereto and (or in accordance
with the standard securitization or syndication process or customary market
standards for dissemination of such type of information, including “click
through” or other affirmative actions or deemed acknowledgements or
representations on the part of the recipient to receive such information) to
comply with all federal, state and other securities laws applicable with respect
to such information. Unless otherwise agreed by Tenant, Landlord shall not
materially revise or change the wording of information previously publicly
disclosed by Tenant and furnished to Landlord pursuant to Section 23.1 or this
Section 23.2 and Landlord’s Form 10-Q or Form 10-K (or supplemental information
filed or furnished in connection therewith) shall not disclose the operational
results of the Facilities prior to Tenant’s Parent’s, Tenant’s or their
respective Affiliate’s public disclosure thereof so long as Tenant’s Parent,
Tenant or such Affiliate reports such information in a timely manner consistent
with historical practices and SEC disclosure requirements. Tenant agrees to
provide such other reasonable information and, if necessary, reasonable
participation in road shows and other presentations at Landlord’s sole cost and
expense, with respect to Tenant and its Leased Property to facilitate a public
or private debt or equity offering or syndication by or on behalf of Landlord or
any direct or indirect parent entity of Landlord or to satisfy Landlord’s or any
direct or indirect parent entity of Landlord’s SEC disclosure requirements. In
this regard, Landlord shall provide to Tenant a copy of any information prepared
by Landlord that includes Confidential Information regarding Tenant to be
published, and Tenant shall have a reasonable period of time (not to exceed
three (3) Business Days) after receipt of such information to notify Landlord of
any corrections. Notwithstanding anything to the contrary in this Section 23.2,
neither the Tenant, any Operating Subtenant nor any of their respective
Subsidiaries shall be required to (A) take any action that unreasonably

 

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interferes with the ongoing operations of the Tenant (or any Operating
Subtenant), (B) take any action contingent upon any debt or equity offering or
syndication or enter into or execute any agreement or document unless the
effectiveness thereof shall be conditioned upon, or become operative after, the
occurrence of such debt or equity offering or syndication, (C) take any action
that would result in any officer, director or other representative of the Tenant
or any of its Subsidiaries incurring any personal liability with respect to any
matters relating to such debt or equity offering or syndication, (D) deliver or
cause the delivery of any legal opinions or any certificate as to solvency or
any other certificate necessary for such debt or equity offering or syndication
that is effective prior thereto, (E) deliver or cause the delivery of any pro
forma financial information of Tenant or any financial information of Tenant
that differs materially in form or substance from that prepared by the Tenant
with respect to such period or (F) take any action that would conflict with,
violate or result in a material breach of or material default under this Lease,
any organizational documents of the Tenant or any of its Subsidiaries or any
applicable law binding on the Tenant or any of its Subsidiaries.

(c)    Except as provided in clause (a) or (b) above or Section 23.4, nothing
herein shall permit the disclosure of Confidential Information regarding Tenant,
Tenant’s Parent or their Affiliates to any Tenant Competitor.

23.3    Financial Covenants. If (commencing with the first full fiscal quarter
ended after the Commencement Date) either (a) (x) the EBITDAR to Rent Ratio
determined on the last day of the most recent Test Period is less than 1.6:1 and
(y) Tenant’s Parent’s Market Capitalization determined on the last day of the
most recent Test Period is less than $6,000,000,000; or (b) Tenant’s Parent is
no longer publicly traded and listed on the New York Stock Exchange, AMEX or
NASDAQ (or any reasonably comparable successor exchange in nature to such
exchanges as of the date hereof) and the EBITDAR to Rent Ratio determined on the
last day of the most recent Test Period is less than 2:1 (the required EBITDAR
to Rent Ratio in clause (a) being referred to as the “Applicable Coverage
Ratio,” the test in clause (a) being referred to as the “Financial Covenant” and
the test in clause (b) being referred to as the “Listing Covenant”), then, in
addition to Tenant’s obligation to pay Rent as provided herein, Tenant shall use
commercially reasonable efforts to, within fifteen (15) days, but in any event
shall, within thirty (30) days after the delivery of the Preliminary Financial
Covenant Compliance Report (or the date such report is due or the commencement
date of a Covenant Failure Period), either or a combination of (at its
option) (1) cause an amount equal to the Rent that would be payable for the
period of one (1) calendar year commencing immediately subsequent to the date of
such determination (taking into account the Escalations) to be deposited into a
Covenant Security Escrow Account in accordance with Covenant Security Escrow
Instructions, or (2) provide one or more Letters of Credit in an aggregate
amount equal to the Rent that would be payable for the period of one
(1) calendar year commencing immediately subsequent to the date of such
determination (taking into account the Escalations). At all times until the
Covenant Security Coverage Cure has occurred, the amount of the Covenant
Security Escrow Account (or the amount of the Letters of Credit) shall equal the
Rent that would be payable for the next one (1) calendar years on any such date
(taking into account the Escalations), and Tenant shall increase the funds in
the Covenant Security Escrow Account (or the amount of the Letters of Credit) in
order to satisfy any deficiency within five (5) Business Days’ notice from
Landlord. In the event that Tenant has delivered a Renewal Notice and a Covenant
Security Coverage Cure has not occurred, then within five (5) Business Days of
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Fair Market Rent being conclusively determined in accordance with this Lease,
Tenant shall be required to increase the funds in the Covenant Security Escrow
Account (or the amount of the Letters of Credit) in order to reflect the
increase in the Base Rent (and any Escalations for the next one year period).
The amounts held in a Covenant Security Escrow Account shall remain in such
account except to the extent that they are required to be released to Landlord
or Tenant in accordance with the Covenant Security Escrow Instructions. Upon the
occurrence of a Covenant Security Coverage Cure or the expiration or earlier
termination of this Lease (other than a termination as a result of an Event of
Default by Tenant), if Tenant has deposited funds or Letters of Credit pursuant
to clauses (1) or (2) of the first sentence in this Section 23.3, such funds or
Letters of Credit (in each case, to the extent remaining) shall be returned to
Tenant as soon as reasonably practical. For purposes of calculating the
Financial Covenant and the Listing Covenant during the First Lease Year, such
calculations will be computed on a pro forma basis as if this Lease had been in
effect during the entirety of such period. Landlord shall be entitled to
collaterally assign its rights with respect to the Covenant Security Escrow
Account to Fee Mortgagee. Notwithstanding anything to the contrary contained
herein, the failure to timely deliver a Preliminary Financial Covenant
Compliance Report or Final Financial Covenant Compliance Report shall commence a
Covenant Failure Period.

23.4    Landlord Obligations. Landlord acknowledges and agrees that certain of
the information contained in the Financial Statements or any other information
provided by Tenant may be non-public financial or operational Confidential
Information with respect to Tenant or its Affiliates, including with respect to
Tenant’s or any Operating Subtenant’s operation of the Leased Property. Landlord
further agrees to maintain the confidentiality of such non-public Confidential
Information; provided, however, that notwithstanding the foregoing and
notwithstanding anything to the contrary in Section 23.2(a) hereof or otherwise
herein, Landlord shall have the right to share such information in compliance
with Section 23.2(b) and with MGP REIT, MGP OP, BREIT, BREIT OP and their
respective officers, employees, directors, Fee Mortgagee, agents and lenders
party to material debt instruments entered into by MGP REIT, MGP OP, BREIT,
BREIT OP or Landlord or any direct or indirect parent entity of Landlord, actual
or prospective arrangers, underwriters, investors, lenders, servicers or
trustees with respect to Indebtedness or Equity Interests that may be issued by
MGP REIT, MGP OP, BREIT or Landlord, rating agencies, accountants, attorneys and
other consultants of Landlord, MGP REIT, MGP OP, BREIT, or BREIT OP (all of the
foregoing, collectively, the “Landlord Representatives”), provided, that such
Landlord Representative is advised (x) of the confidential nature of such
Confidential Information, to the extent such information is not publicly
available, to use commercially reasonable efforts to maintain the
confidentiality thereof pursuant to Section 23.2(a) or pursuant to
confidentiality provisions substantially similar thereto (or in accordance with
the standard securitization or syndication process or customary market standards
for dissemination of such type of information, including “click through” or
other affirmative actions and/or deemed acknowledgements or representations on
the part of the recipient to receive such information) and to comply with all
federal, state and other securities laws applicable with respect to such
information, (y) that such information is not permitted to be disclosed to any
Tenant Competitor, provided that this clause (y) shall not be applicable to any
Fee Mortgage or Fee Mortgage Securitization, and (z) neither Landlord nor any
Landlord Representative shall be permitted to engage in any transactions with
respect to the stock or other equity or debt securities or syndicated loans of
Tenant or Tenant’s Parent based on any such Confidential Information provided to
or by or on behalf of Landlord (provided, that this

 

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provision shall not govern the provision of information by Tenant or Tenant’s
Parent). In addition to the foregoing, Landlord agrees that, upon request of
Tenant, Landlord shall from time to time provide such information as may be
reasonably requested by Tenant with respect to Landlord’s capital structure
and/or any financing secured by this Lease or the Leased Property in connection
with Tenant’s review of the treatment of this Lease under GAAP. In connection
therewith, Tenant agrees to maintain the confidentiality of any such
Confidential Information; provided, however, Tenant shall have the right to
share such information with Tenant’s Parent and Tenant and Tenant’s Parent’s
respective officers, employees, directors, Permitted Leasehold Mortgagees,
Permitted Credit Facility Lenders, agents and lenders party to material debt
instruments entered into by Tenant or Tenant’s Parent, actual or prospective
arrangers, underwriters, investors or lenders with respect to Indebtedness or
Equity Interests that may be issued by Tenant or Tenant’s Parent, rating
agencies, accountants, attorneys and other consultants (the “Tenant
Representatives”) so long as such Tenant Representative is advised of the
confidential nature of such information and agrees, to the extent such
information is not publicly available, (i) to maintain the confidentiality
thereof pursuant to Section 23.2(a) or pursuant to confidentiality provisions
substantially similar thereto (or in accordance with the standard syndication
process or customary market standards for dissemination of such type of
information, including “click through” or other affirmative actions on the part
of the recipient to receive such information) and to comply with all federal,
state and other securities laws applicable with respect to such information and
(ii) not to engage in any transactions with respect to the stock or other equity
or debt securities or syndicated loans of MGP REIT, MGM OP, BREIT, BREIT OP or
Landlord or their respective Affiliates based on any such Confidential
Information provided to, by or on behalf of Tenant or Tenant’s Parent (provided,
that this provision shall not govern the provision of information by Landlord).

ARTICLE XXIV

LANDLORD’S RIGHT TO INSPECT

24.1    Landlord’s Right to Inspect. Subject to any restrictions imposed by any
Gaming Regulations or Gaming Authorities, upon reasonable advance notice to
Tenant, Tenant shall permit Landlord and its authorized representatives
(including any Fee Mortgagee and its representatives) to inspect the Leased
Property during usual business hours. Landlord shall take care to minimize
disturbance of the operations on the Leased Property, except in the case of
emergency. Landlord shall indemnify and hold Tenant and any Operating Subtenant
harmless from and against any claims, losses, costs or expenses arising as a
result of Landlord’s or its representative’s entry onto the Leased Property.

ARTICLE XXV

NO WAIVER

25.1    No Waiver. No delay, omission or failure by Landlord or Tenant to insist
upon the strict performance of any term hereof or to exercise any right, power
or remedy hereunder and no acceptance of full or partial payment of Rent during
the continuance of any default or Event of Default shall impair any such right
or constitute a waiver of any such breach or of any such term. No waiver of any
breach shall affect or alter this Lease, which shall continue in full force and
effect with respect to any other then existing or subsequent breach.

 

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ARTICLE XXVI

REMEDIES CUMULATIVE

26.1    Remedies Cumulative. Unless otherwise provided herein and to the extent
permitted by law, each legal, equitable or contractual right, power and remedy
of Landlord now or hereafter provided either in this Lease or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power and remedy and the exercise or beginning of the exercise by
Landlord of any one or more of such rights, powers and remedies shall not
preclude the simultaneous or subsequent exercise by Landlord of any or all of
such other rights, powers and remedies.

ARTICLE XXVII

ACCEPTANCE OF SURRENDER

27.1    Acceptance of Surrender. No surrender to Landlord of this Lease or of
the Leased Property or any part thereof, or of any interest therein, shall be
valid or effective unless agreed to and accepted in writing by Landlord, and no
act by Landlord or any representative or agent of Landlord, other than such a
written acceptance by Landlord, shall constitute an acceptance of any such
surrender.

ARTICLE XXVIII

NO MERGER

28.1    No Merger. There shall be no merger of this Lease or of the Leasehold
Estate created hereby by reason of the fact that the same Person may acquire,
own or hold, directly or indirectly, (i) this Lease or the Leasehold Estate
created hereby or any interest in this Lease or such Leasehold Estate and
(ii) the fee estate in the Leased Property.

ARTICLE XXIX

CONVEYANCE BY LANDLORD

29.1    Conveyance by Landlord. If Landlord or any successor owner of the Leased
Property shall convey the Leased Property in accordance with Section 18.1 and
the other terms of this Lease other than as security for a debt, and the grantee
or transferee expressly assumes all obligations of Landlord arising after the
date of the conveyance, Landlord or such successor owner, as the case may be,
shall thereupon be released from all future liabilities and obligations of
Landlord under this Lease arising or accruing from and after the date of such
conveyance or other transfer and all such future liabilities and obligations
shall thereupon be binding upon the new owner.

 

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ARTICLE XXX

QUIET ENJOYMENT

30.1    Quiet Enjoyment. So long as Tenant shall pay the Rent as the same
becomes due and shall fully comply with all of the terms of this Lease and fully
perform its obligations hereunder, Tenant shall peaceably and quietly have, hold
and enjoy the Leased Property for the Term, free of any claim or other action by
Landlord or anyone claiming by, through or under Landlord, but subject to all
liens and encumbrances of record as of the Commencement Date or specifically
provided for or permitted in this Lease or consented to by Tenant in writing. No
failure by Landlord to comply with the foregoing covenant shall give Tenant any
right to cancel or terminate this Lease or abate, reduce or make a deduction
from or offset against the Rent or any other sum payable under this Lease, or to
fail to perform any other obligation of Tenant hereunder. Notwithstanding the
foregoing, Tenant shall have the right, by separate and independent action to
pursue any claim it may have against Landlord as a result of a breach by
Landlord of the covenant of quiet enjoyment contained in this Article XXX.

ARTICLE XXXI

LANDLORD’S FINANCING

31.1    Landlord’s Financing. Without the consent of Tenant, Landlord may from
time to time, directly or indirectly, create or otherwise cause to exist one or
more Facility Mortgage upon the Leased Property or any portion thereof or
interest therein. This Lease is and at all times shall be subject and
subordinate to any such Facility Mortgage which may now or hereafter affect the
Leased Property or any portion thereof or interest therein and to all renewals,
modifications, consolidations, replacements, restatements and extensions thereof
or any parts or portions thereof; provided, however, that the subjection and
subordination of this Lease and Tenant’s leasehold interest hereunder to a
Facility Mortgage or any Foreclosure Purchaser (as defined below) shall be
conditioned upon the execution by the holder of each Facility Mortgage and
delivery to Tenant of an SNDA substantially in the form attached hereto as
Exhibit F-2; provided, that upon the request of Landlord, such SNDA shall be
executed by Tenant as well as Landlord and be in substantially the form attached
hereto as Exhibit F-2. Each such SNDA shall bind such holder of such Facility
Mortgage and its successors and assigns as well as any person who acquires any
portion of the Leased Property by assignment or in a foreclosure or similar
proceeding or in a transfer in lieu of any such foreclosure or a successor owner
of the Leased Property as well as their respective successors and assigns (each,
a “Foreclosure Purchaser”), and which shall provide that the holder of such
Facility Mortgage, and any Foreclosure Purchaser shall not disturb Tenant’s
leasehold interest or possession of the Leased Property in accordance with the
terms hereof, or any of Tenant’s rights, privileges and options, and shall give
effect to this Lease, including the provisions of Article XVII which benefit any
Permitted Leasehold Mortgagee (as if such Facility Mortgagee or Foreclosure
Purchaser were the landlord under this Lease (it being understood that if an
Event of Default has occurred and is continuing, at such time such parties shall
be subject to the terms and provisions hereof concerning the exercise of rights
and remedies upon such Event of Default, including the provisions of
Articles XVI and XXXVI)). In connection with the foregoing and at the request of
Landlord, Tenant shall promptly execute an SNDA, in form and substance
substantially in the

 

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form of Exhibit F-2 or otherwise reasonably satisfactory to Tenant, and the
Facility Mortgagee or prospective Facility Mortgagee, as the case may be, which
will incorporate the terms set forth in the preceding sentence. Except for the
documents described in the preceding sentences, this provision shall be
self-operative and no further instrument of subordination shall be required to
give it full force and effect. If, in connection with obtaining any Facility
Mortgage for the Leased Property or any portion thereof or interest therein, a
Facility Mortgagee or prospective Facility Mortgagee shall request
(A) reasonable cooperation from Tenant, Tenant shall provide the same at no cost
or expense to Tenant, it being understood and agreed that Landlord shall be
required to reimburse Tenant for all such costs and expenses so incurred by
Tenant, including, but not limited to, its reasonable attorneys’ fees, or
(B) reasonable amendments or modifications to this Lease as a condition thereto,
Tenant hereby agrees to execute and deliver the same so long as any such
amendments or modifications do not (i) increase Tenant’s monetary obligations
under this Lease, (ii) adversely increase Tenant’s non-monetary obligations
under this Lease in any material respect or decrease Landlord’s obligations in
any material respect, (iii) diminish Tenant’s rights under this Lease in any
material respect, (iv) adversely impact the value of the Leased Property by more
than a de minimis extent or otherwise have more than a de minimis effect on the
Leased Property, Tenant or Landlord, (v) result in this Lease not constituting a
“true lease” or (vi) result in a default under any Permitted Leasehold Mortgage.
The foregoing is not intended to vitiate or supersede the provisions, terms and
conditions of Section 31.1 hereof.

31.2    Attornment. If Landlord’s interest in the Leased Property or any portion
thereof or interest therein is sold, conveyed or terminated upon the exercise of
any remedy provided for in any Facility Mortgage Documents (or in lieu of such
exercise), or otherwise by operation of law: (a) at the request and option of
the new owner or superior lessor, as the case may be, Tenant shall attorn to and
recognize the new owner or superior lessor as Tenant’s “landlord” under this
Lease or enter into a new lease substantially in the form of this Lease with the
new owner or superior lessor, and Tenant shall take such actions to confirm the
foregoing within ten (10) Business Days after request; and (b) the new owner or
superior lessor shall not be (i) liable for any act or omission of Landlord
under this Lease occurring prior to such sale, conveyance or termination;
(ii) subject to any offset, abatement or reduction of rent because of any
default of Landlord under this Lease occurring prior to such sale, conveyance or
termination; (iii) bound by any previous material modification or amendment to
this Lease or any previous prepayment of more than one month’s rent, unless such
material modification, amendment or prepayment shall have been approved in
writing by the applicable Facility Mortgagee (to the extent such approval was
required at the time of such amendment or modification or prepayment under the
terms of the applicable Facility Mortgage Documents) or, in the case of such
prepayment, such prepayment of rent has actually been delivered to such new
owner or superior lessor or in either case, such modification, amendment or
prepayment occurred before Landlord provided Tenant with notice of the Facility
Mortgage and the identity and address of the Facility Mortgagee; or (iv) liable
for any security deposit or other collateral deposited or delivered to Landlord
pursuant to this Lease unless such security deposit or other collateral has
actually been delivered to such new owner or superior lessor.

31.3    Compliance with Fee Mortgage Documents.

(a)    If requested by Landlord and the Fee Mortgagee, Tenant shall make Rent
payments into “lockbox accounts” maintained for the benefit of Fee Mortgagee.

 

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(b)    Tenant shall perform or cause to be performed by Operating Subtenant the
repairs at the Facilities relating to material life safety issues which have
been identified by the Fee Mortgagee based upon the property condition reports
commissioned in connection with the Fee Mortgage, as described on Schedule 6
attached hereto (the “Initial Fee Mortgagee Required Repairs”). Tenant shall
complete or cause to be completed by Operating Subtenant the Initial Fee
Mortgagee Required Repairs on or before the date that is eighteen (18) months
after the date hereof. Any funds spent by Tenant and/or any Operating Subtenant
on the Initial Fee Mortgagee Required Repairs shall, to the extent such amounts
satisfy the requirements of Qualifying CapEx, be applied toward the minimum
Required CapEx set forth in Section 9.1(e).

ARTICLE XXXII

HAZARDOUS SUBSTANCES

32.1    Hazardous Substances. Tenant shall not allow any Hazardous Substance to
be located in, on, under or about the Leased Property or incorporated in any
Facility; provided, however, that Hazardous Substances may be brought, kept,
used or disposed of in, on or about the Leased Property in quantities and for
purposes similar to those brought, kept, used or disposed of in, on or about
similar facilities used for purposes similar to the Primary Intended Use or in
connection with the construction of facilities similar to the Facilities or to
the extent in existence at the Facilities and which are brought, kept, used and
disposed of in strict compliance with Legal Requirements. Tenant shall not allow
the Leased Property to be used as a waste disposal site or for the
manufacturing, handling, storage, distribution or disposal of any Hazardous
Substance other than in the ordinary course of the business conducted at the
Leased Property and in compliance with applicable Legal Requirements.

32.2    Notices. Tenant shall provide to Landlord, within five (5) Business Days
after Tenant’s receipt thereof, a copy of any notice, or notification with
respect to, (i) any violation of a Legal Requirement relating to Hazardous
Substances located in, on, or under the Leased Property or any adjacent
property; (ii) any enforcement or other governmental or regulatory action
instituted, completed or threatened with respect to the Leased Property;
(iii) any claim made or threatened by any Person against Tenant or the Leased
Property relating to damage, contribution, cost recovery, compensation, loss, or
injury resulting from or claimed to result from any Hazardous Substance; and
(iv) any reports made to any federal, state or local environmental agency
arising out of or in connection with the release of any Hazardous Substance in,
on, under or removed from the Leased Property, including any complaints,
notices, warnings or assertions of violations in connection therewith.

32.3    Remediation. If Tenant becomes aware of a violation of any Legal
Requirement relating to any Hazardous Substance in, on, under or about the
Leased Property or any adjacent property, or if Tenant, Landlord or the Leased
Property becomes subject to any order of any federal, state or local agency to
repair, close, detoxify, decontaminate or otherwise remediate Hazardous
Substance in, on, under or about the Leased Property, Tenant shall immediately
notify Landlord of such event and, at its sole cost and expense, cure such
violation or effect such repair, closure, detoxification, decontamination or
other remediation. If Tenant fails to implement and diligently pursue any such
cure, repair, closure, detoxification, decontamination or other remediation,
Landlord shall have the right, but not the obligation, to carry out such action
and to recover from Tenant all of Landlord’s costs and expenses incurred in
connection therewith.

 

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32.4    Indemnity. Tenant shall indemnify, defend, protect, save, hold harmless,
and reimburse Landlord for, from and against any and all costs, losses
(including, losses of use or economic benefit or diminution in value),
liabilities, damages, assessments, lawsuits, deficiencies, demands, claims and
expenses (collectively, “Environmental Costs”) (whether or not arising out of
third-party claims and regardless of whether liability without fault is imposed,
or sought to be imposed, on Landlord) incurred in connection with, arising out
of or resulting from, directly or indirectly, the following, but only to the
extent such occurs before or during (but not after) the Term and is not caused
solely by the actions of Landlord: (i) the production, use, generation, storage,
treatment, transporting, disposal, discharge, release or other handling or
disposition of any Hazardous Substances from, in, on or about the Leased
Property (collectively, “Handling”), including the effects of such Handling of
any Hazardous Substances on any Person or property within or outside the
boundaries of the Leased Property, (ii) the presence of any Hazardous Substances
in, on, under or about the Leased Property and (iii) the violation of any
Environmental Law. “Environmental Costs” include interest, costs of response,
removal, remedial action, containment, cleanup, investigation, design,
engineering and construction, damages (including actual and consequential
damages) for personal injuries and for injury to, destruction of or loss of
property or natural resources, relocation or replacement costs, penalties,
fines, charges or expenses, attorney’s fees, expert fees, consultation fees, and
court costs, and all amounts paid in investigating, defending or settling any of
the foregoing.

Without limiting the scope or generality of the foregoing, Tenant expressly
agrees that, in the event of a breach by Tenant in its obligations under this
Section 32.4 that is not cured within any applicable cure period, Tenant shall
reimburse Landlord for any and all reasonable costs and expenses incurred by
Landlord in connection with, arising out of, resulting from or incident to,
directly or indirectly, before (with respect to any period of time in which
Tenant or its Affiliate was in possession and control of the applicable Leased
Property) or during (but not after) the Term or such portion thereof during
which the Leased Property is leased to Tenant of the following:

(a)    in investigating any and all matters relating to the Handling of any
Hazardous Substances, in, on, from, under or about the Leased Property;

(b)    in bringing the Leased Property into compliance with all Legal
Requirements; and

(c)    in removing, treating, storing, transporting, cleaning-up and/or
disposing of any Hazardous Substances used, stored, generated, released or
disposed of in, on, from, under or about the Leased Property or off-site other
than in the ordinary course of the business conducted at the Leased Property and
in compliance with applicable Legal Requirements.

If any claim is made by Landlord for reimbursement for Environmental Costs
incurred by it hereunder, Tenant agrees to pay such claim promptly, and in any
event to pay such claim within sixty (60) calendar days after receipt by Tenant
of Notice thereof and any amount not so paid within such sixty (60) calendar day
period shall bear interest at the Overdue Rate from the date due to the date
paid in full.

 

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32.5    Environmental Inspections. In the event Landlord has a reasonable basis
to believe that Tenant is in breach of its obligations under this Article XXXII,
Landlord shall have the right, from time to time, during normal business hours
and upon not less than five (5) days’ Notice to Tenant, except in the case of an
emergency in which event no notice shall be required, to conduct an inspection
of the Leased Property to determine the existence or presence of Hazardous
Substances on or about the Leased Property. Landlord shall have the right to
enter and inspect the Leased Property, conduct any testing, sampling and
analyses it deems necessary and shall have the right to inspect materials
brought into the Leased Property. Landlord may, in its discretion, retain such
experts to conduct the inspection, perform the tests referred to herein, and to
prepare a written report in connection therewith. All reasonable costs and
expenses incurred by Landlord under this Section 32.5 shall be paid on demand as
Additional Charges by Tenant to Landlord. Failure to conduct an environmental
inspection or to detect unfavorable conditions if such inspection is conducted
shall in no fashion be intended as a release of any liability for environmental
conditions subsequently determined to be associated with or to have occurred
during Tenant’s tenancy. Tenant shall remain liable for any environmental
condition related to or having occurred during its tenancy regardless of when
such conditions are discovered and regardless of whether or not Landlord
conducts an environmental inspection at the termination of this Lease other than
a condition caused solely by the actions of the Landlord. The obligations set
forth in this Article XXXII shall survive the expiration or earlier termination
of this Lease.

ARTICLE XXXIII

MEMORANDUM OF LEASE

33.1    Memorandum of Lease. Landlord and Tenant shall enter into a short form
memorandum of this Lease, in the form attached hereto as Exhibit G. Tenant shall
pay all costs and expenses of recording any such memorandum and shall fully
cooperate with Landlord in removing from record such memorandum upon the
expiration or earlier termination of the Term. To the extent of any conflict
between the Memorandum of Lease and this Lease, the provisions of this Lease
shall prevail and control.

ARTICLE XXXIV

APPOINTING EXPERTS

34.1    Expert Dispute Resolution Process.

(a)    In the event that the opinion of “Experts” is required under this Lease,
Landlord and Tenant shall negotiate in good faith for no longer than ten
(10) Business Days to appoint a single Expert. If Landlord and Tenant have not
been able to reach agreement on such Person after such ten (10) Business Days of
good faith negotiations, then Landlord and Tenant shall each within ten
(10) Business Days after either party notifying the other of the need to appoint
Experts and the subject matter of the dispute, appoint an Expert and Landlord’s
and

 

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Tenant’s Experts shall, within ten (10) Business Days of their appointment,
jointly appoint a third Expert (such three Experts, or such single Expert agreed
upon by Landlord and Tenant, as applicable, shall be referred to herein as the
“Experts”). The three Experts so appointed, if applicable, shall make all
decisions by majority vote of such Experts. If the two Experts so appointed are
unable to appoint a third Expert within such ten (10) Business Day period, then
either Landlord or Tenant may ask any court of competent jurisdiction to appoint
the third Expert. If either Landlord or Tenant fails to timely appoint an
Expert, the Expert appointed by the other party shall be the sole Expert in
determining the relevant matter. Each Expert appointed hereunder shall have at
least ten (10) years of experience valuing commercial real estate and/or in
leasing or with respect to the matters to be determined, as applicable with
respect to any of the matters to be determined by the Experts.

(b)    Once the Expert or Experts are selected, either by agreement of the
parties or by selection of separate Experts followed by the appointment of a
third Expert, the Experts will determine the matter in question, by proceeding
as follows:

(i)    In the case of Experts required for the purposes of Section 3.5, Landlord
and Tenant shall submit to the Experts their respective determinations of Fair
Market Rent of each Appraiser. The Experts will be instructed to (x) make a
determination as to the Fair Market Rent (the “Expert Fair Market Rent”)
applying the Fair Market Rent Assumptions, and (y) determine the conclusive Fair
Market Rent by calculating (1) in the case of three Experts, the arithmetic mean
of the Expert Fair Market Rent calculation of the two Experts whose calculation
of Expert Fair Market Rent is closest to each other and (2) in the case of one
Expert, the arithmetic mean of the Expert Fair Market Rent calculation and the
Fair Market Rent of the Appraiser closest to such Expert. The Experts shall
notify the parties within thirty (30) days of the submission of the matter to
the Experts in writing of their decision as the conclusive determination of Fair
Market Rent.

(ii)    In the case of Experts required for the purpose of Section 9.1(e),
Landlord and Tenant shall submit to the Experts their respective determinations
of the Qualifying CapEx and the amount of any deficiency. The Experts may only
determine whether or not a deficiency exists and the amount of such deficiency.
The Experts shall notify the parties in writing within fifteen (15) Business
Days of the submission of the matter to the Experts of their determination as to
whether or not a deficiency exists and the amount of such deficiency as the
conclusive determination such matter.

(iii)    In the case of Experts required for the purpose of Section 14.2(b),
Landlord and Tenant shall submit to the Experts their respective determinations
for fair market value and/or the costs of restoration (as applicable) of the
relevant Facility. The Experts may only select either the fair market value
and/or the costs of restoration (as applicable) set forth by Landlord or by
Tenant and may not select any other amount or make any other determination (and
the Experts shall be so instructed). The Experts shall notify the parties in
writing within thirty (30) days of the submission of the matter to the Experts
of their selection of either Tenant’s or Landlord’s determination of fair market
value as the conclusive determination of the fair market value and/or the costs
of restoration (as applicable).

 

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(iv)    In the case of Experts required for the purpose of Section 15.1(b)(ii),
Landlord and Tenant shall submit to the Experts their respective determinations
of the percentage of the relevant Facility taken by Condemnation and/or the fair
market value of such Facility. The Experts may only select either the percentage
of the relevant Facility and/or the fair market value set forth by Landlord or
Tenant and may not select any other amount or make any other determination (and
the Experts shall be so instructed). The Experts shall notify the parties in
writing within thirty (30) days of the submission of the matter to the Experts
of their selection of either Tenant’s or Landlord’s determination of the
percentage of such Facility, the fair market value and/or the costs of
restoration (as applicable) as the conclusive determination of such percentage,
fair market value and/or costs of restoration (as applicable).

(v)    In the case of Experts required for the purpose of Section 15.1(c),
Landlord and Tenant shall submit to the Experts their respective determinations
of the relative values of the property taken by Condemnation and the portion of
the affected Facility remaining subject to the Lease. The Experts may only
select either such relative values set forth by Landlord or Tenant and may not
select any other amount or make any other determination (and the Experts shall
be so instructed). The Experts shall notify the parties in writing within thirty
(30) days of the submission of the matter to the Experts of their selection of
either Tenant’s or Landlord’s determination of such relative values as the
conclusive determination of such relative values.

(vi)    In the case of Experts required for the purpose of Section 16.1(b),
Landlord and Tenant shall submit to the Experts their respective written
descriptions of the events giving rise to Landlord’s belief that an Event of
Default exists. The Experts may only determine whether or not the Event of
Default alleged by Landlord has occurred and may not make any other
determination (and the Experts shall be so instructed). The Experts shall notify
the parties in writing within fifteen (15) Business Days of the submission of
the matter to the Experts of their determination as to whether or not such an
Event of Default has occurred as the conclusive determination such matter.

(vii)    In the case of Experts required for the purpose of Section 36.1,
Landlord and Tenant shall submit to the Experts their respective determinations
of the Tenant’s Property FMV. The Experts may only select either the Tenant’s
Property FMV set forth by Landlord or Tenant and may not select any other amount
or make any other determination (and the Experts shall be so instructed). The
Experts shall notify the parties in writing within thirty (30) days of the
submission of the matter to the Experts of their determination of the Tenant’s
Property FMV as the conclusive determination of such matter.

(c)    In each case, except in the case of Experts determining the Fair Market
Rent which shall be determined pursuant to Section 34.1(b)(i) above or whether
or not a Qualifying CapEx deficiency exists and the amount of such Qualifying
CapEx deficiency which shall be determined pursuant to Section 34.1(b)(ii)
above, the Experts (comprised of a majority of the Experts) will make the
relevant determination by a “baseball arbitration” proceeding with the Experts
limited to awarding only one or the other of the two positions submitted (and
not any position in between or other compromise or ruling not consistent with
one of the two positions submitted), which shall then be final and binding on
the parties and not subject to appeal or court review. Either party may seek an
order of a court of competent jurisdiction to enforce such

 

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determination. The Experts, in their sole discretion, shall consider any and all
materials that they deem relevant, except that there shall be no live hearings
and the parties shall not be permitted to take discovery. The Experts may submit
written questions or information requests to the parties, and the parties may
respond with written materials within a time frame set by the Experts to allow
the Experts to make the relevant determination in the time allowed pursuant to
this Section 34.1.

(d)    All communications between a party and the Experts shall also be copied
to the other party. The parties shall cooperate in good faith to facilitate the
valuation or other determination by the Experts.

(e)    Each of Landlord and Tenant shall pay the cost of the Expert appointed by
it. The costs of the third Expert engaged with respect to any issue under
Section 34.1 of this Lease shall be borne by the party against whom the Experts
rule on such issue. If Landlord pays such Expert and is the prevailing party,
such costs shall be Additional Charges hereunder and if Tenant pays such Expert
and is the prevailing party, such costs shall be a credit against the next Rent
payment hereunder.

ARTICLE XXXV

NOTICES

35.1    Notices. Except as permitted in Section 35.2 below, any notice, request
or other communication to be given by any party hereunder shall be in writing
and shall be sent by registered or certified mail, postage prepaid and return
receipt requested, by hand delivery or nationally recognized express courier
service to the following address:

 

To Tenant:   

MGM Lessee II, LLC

c/o MGM Resorts International

6385 South Rainbow Boulevard

Suite 500

Las Vegas, NV 89118

Attention: Corporate Legal

With a copy to:
(that shall not constitute notice)    Email: legalnotices@mgmresorts.com With a
copy to:
(that shall not constitute notice)   

Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
Attention: Michael Aiello

 W. Michael Bond
Email: michael.aiello@weil.com

    michael.bond@weil.com

 

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To Landlord:   

MGP Growth Properties LLC
1980 Festival Plaza Drive, Suite 750

Las Vegas, Nevada 89135

Attention: James C. Stewart

Email: JStewart@mgpreit.com

With a copy to
(which shall not constitute notice):   

BCORE Windmill Parent LLC

c/o Blackstone Real Estate Advisors L.P.
345 Park Avenue
New York, New York 10154
Attention: Head, U.S. Asset Management
Email: realestatenotices@blackstone.com

 

and

 

c/o Blackstone Real Estate Advisors L.P.
345 Park Avenue
New York, New York 10154
Attention: General Counsel
Email: realestatenotices@blackstone.com

 

and

 

Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Gregory Ressa
Email: gressa@stblaw.com

 

and

 

Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Erik Quarfordt
Email: equarfordt@stblaw.com

 

and

 

Hogan Lovells

Columbia Square

555 Thirteenth Street, NW

Washington, D.C. 20004

Attention: Matt N. Thomson

Email: matt.thomson@hoganlovells.com

 

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or to such other address as either party may hereafter designate. Notice shall
be deemed to have been given on the date of delivery if such delivery is made on
a Business Day, or if not, on the first Business Day after delivery. If delivery
is refused, Notice shall be deemed to have been given on the date delivery was
first attempted. A confirmatory copy of any such notice shall also be sent by
email.

35.2    Deemed Approval Period with respect to certain Items Requiring Consent.
Any request for consent to or approval of any plan, document, transaction,
action, election, notification or similar matter set forth in this Lease that
requires the consent or approval of Landlord, excluding Articles XIV, XV and XVI
(each, an “Item Subject to Deemed Consent”) shall be subject to the terms set
forth in this Section 35.2. Tenant shall submit its request for such approval
through a written notice in accordance with this Agreement. That notice shall
include a reasonably detailed description of the applicable Item Subject to
Deemed Consent, a copy of all material documents reflecting the terms and
conditions of the applicable Item Subject to Deemed Consent, including the
documentation required to be delivered under this Lease in connection with such
request, and such additional information or documentation relating to the Item
Subject to Deemed Consent as may be reasonably available to Tenant and that is
reasonably necessary to evaluation of the applicable Item Subject to Deemed
Consent. Such request shall include in bold lettering the following statement:
“FIRST NOTICE – THIS IS A REQUEST FOR LANDLORD’S CONSENT AND LANDLORD’S RESPONSE
IS REQUESTED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO
THE TERMS OF THE LEASE BETWEEN THE UNDERSIGNED TENANT AND LANDLORD.” If Landlord
does not respond to that request within ten (10) Business Days following its
receipt thereof (which response may be by e-mail and may consist of, among other
things, a request for additional information reasonably available to Tenant or a
qualified approval of the Item Subject to Deemed Consent subject to the
satisfaction of specified reasonable conditions), Tenant may send an additional
written request to Landlord with respect to the Item Subject to Deemed Consent
which shall include in bold lettering the following statement: SECOND NOTICE –
THIS IS A SECOND REQUEST FOR LANDLORD’S CONSENT AND LANDLORD’S RESPONSE IS
REQUESTED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO
THE TERMS OF THE LEASE BETWEEN THE UNDERSIGNED TENANT AND LANDLORD. If Landlord
does not respond to that second request within ten (10) Business Days following
its receipt thereof (which response may be by e-mail and may consist of, among
other things, a request for additional information reasonably available to
Tenant or a qualified approval of the Item Subject to Deemed Consent subject to
the satisfaction of specified reasonable conditions), Tenant may send an
additional written request to Landlord with respect to the Item Subject to
Deemed Consent which shall include in bold lettering the following statement
“THIS IS A THIRD AND FINAL REQUEST FOR LANDLORD’S CONSENT AND FAILURE TO RESPOND
TO THIS REQUEST WITHIN FIVE (5) BUSINESS DAYS WILL RESULT IN THE DEEMED APPROVAL
OF THE REQUEST.” If Landlord does not respond to that third request within five
(5) Business Days following its receipt thereof (which response may be by
e-mail), then Landlord shall be deemed to have approved the applicable Item
Subject to Deemed Consent as of the end of such five (5) Business Day period.
Notwithstanding the foregoing, in the event Landlord’s consent is required
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to Section 22.3(a) or Section 22.7 with respect to Ancillary Space for a portion
thereof that is less than 50,000 square feet, Tenant shall only be required to
provide two (2) notices the first being in the format of the first notice
described above (including that Landlord’s response is required in ten
(10) Business Days) and the second being in the format of the third notice
described above, except that such notice would reference it being a second and
final request (and Landlord’s response is required in five (5) Business Days).

35.3    Unavoidable Delays. Tenant shall notify Landlord promptly upon the
occurrence of an event which constitutes an Unavoidable Delay, and shall keep
Landlord apprised of the status of such Unavoidable Delay and the expiration
thereof. Upon any Unavoidable Delay which Tenant can anticipate or otherwise
mitigate the effect of on a commercially reasonable basis, Tenant shall
undertake commercially reasonable actions to mitigate, or which are intended to
mitigate, the effect of any such Unavoidable Delay.

ARTICLE XXXVI

TRANSITION UPON EXPIRATION OR TERMINATION

36.1    Transfer of Tenant’s Property at the Facilities. Upon Landlord’s written
notice (an “End of Term Asset Transfer Notice”) to Tenant delivered at least six
(6) months prior to the expiration of the Term or, if applicable, within ten
(10) days following the earlier termination of the Lease with respect to any
Facility, Landlord may require, in its sole discretion, that the Tenant transfer
and assign or cause to be transferred and assigned (subject to compliance with
any applicable Gaming Regulations) to the applicable Landlord all of the
Tenant’s (or any Operating Subtenant’s) right, title and interest in and to all
or any portion of the tangible personal property constituting the applicable
Tenant’s Property (including any Gaming Equipment and FF&E), but excluding, for
the avoidance of doubt, Tenant’s or any Operating Subtenant’s business
operations, the rights of Tenant, Tenant’s Parent and their respective
Affiliates in any Hotel Trademarks and other Intellectual Property, Gaming
Licenses, Excluded Assets, customer lists and other proprietary information used
by Tenant or any Operating Subtenant in connection with its overall business
operations, as specified by Landlord in the End of Term Asset Transfer Notice
(the “Designated Tenant’s Property”) for consideration to be received by Tenant
(or its Subsidiaries or Affiliates) from Landlord in an amount equal to the
going concern fair market value of such Tenant’s Property assuming the continued
use thereof in connection with the operation of the Leased Property (the
“Tenant’s Property FMV”); provided, that, if an End of Term Asset Transfer
Notice is being delivered in connection with the termination of this Lease as a
result of the occurrence of an Event of Default, then the Designated Tenant’s
Property shall be transferred and assigned to Landlord for no additional
consideration. Within ten (10) Business Days after Landlord’s delivery of an End
of Term Asset Transfer Notice, Landlord shall notify Tenant in writing of
Landlord’s good faith determination of the Tenant’s Property FMV. If Tenant
disagrees with Landlord’s determination of the Tenant’s Property FMV, Tenant
shall, within ten (10) Business Days of receipt of Landlord’s determination,
notify Landlord in writing of Tenant’s determination of Tenant’s Property FMV.
Landlord and Tenant shall negotiate in good faith to agree upon the Tenant’s
Property FMV for an additional thirty (30) day period and if Landlord and Tenant
are unable to agree during such 30 day period, the Tenant’s Property FMV will be
determined by Experts in accordance with Section 34.1. Following the
determination of the Tenant’s Property FMV, Landlord shall, on the later of ten
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Days following such determination and the expiration of the Term (or termination
of the Lease with respect to any Facility), pay to Tenant or Tenant’s designee
an amount equal to the Tenant’s Property FMV and Tenant shall sell, transfer and
assign or cause to be sold, transferred and assigned (subject to compliance with
any applicable Gaming Regulations) all of Tenant’s (or any Operating
Subtenant’s) right, title and interest in such Designated Tenant’s Property to
Landlord or Landlord’s designee free and clear of any liens or encumbrances but
on an “as-is” basis with no representations or warranties whatsoever. For the
avoidance of doubt, it shall be a condition precedent to Tenant’s obligation to
transfer or cause to be transferred any of the Designated Tenant’s Property
pursuant to this Article XXXVI that the transferee shall comply with all
applicable Legal Requirements, including any Gaming Regulations with respect to
such property. Notwithstanding anything contained in this Lease to the contrary,
(x) all Excluded Assets shall in all events remain the sole property of Tenant
(or any Operating Subtenant or Affiliate thereof) and there shall be no
restrictions or limitations on Tenant’s (or any Operating Subtenant’s or its
Affiliate’s) use or rights with respect to the Excluded Assets and (y) all
fixtures constituting FF&E which are Tenant’s Property (other than, for the
avoidance of doubt, any fixtures constituting Excluded Assets) shall in all
events remain at the Leased Property at the expiration or earlier termination of
the Lease and shall remain the property of Landlord without any obligation to
pay Tenant any amount (and shall not be included in the calculation of Tenant’s
Property FMV).

36.2    Transition Services. The parties have entered into the Transition
Services Agreement with respect to the provision of certain transition services
to Landlord and/or Landlord’s designee (which may include a successor tenant)
after the expiration or earlier termination of the Lease.

36.3    Replacement of Certain Excluded Assets. Upon expiration or earlier
termination of the Lease, all art, artwork, paintings, sculptures or other
artistic installments or displays to the extent removed from any Facility by
Tenant as Excluded Assets shall be replaced by Tenant at its sole cost and
expense with Customary Hotel Art of similar size.

ARTICLE XXXVII

ATTORNEY’S FEES

37.1    Attorneys’ Fees. If Landlord or Tenant brings an action or other
proceeding against the other to enforce or interpret any of the terms, covenants
or conditions hereof or any instrument executed pursuant to this Lease, or by
reason of any breach or default hereunder or thereunder, the party prevailing in
any such action or proceeding and any appeal thereupon shall be paid all of its
costs and reasonable outside attorneys’ fees incurred therein. In addition to
the foregoing and other provisions of this Lease that specifically require
Tenant to reimburse, pay or indemnify against Landlord’s attorneys’ fees, Tenant
shall pay, as Additional Charges, all of Landlord’s reasonable outside
attorneys’ fees incurred in connection with the enforcement of this Lease
(except to the extent provided above), including reasonable attorneys’ fees
incurred in connection with the review, negotiation or documentation of any
subletting, assignment, or management arrangement or any consent requested in
connection therewith, and the collection of past due Rent.

 

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ARTICLE XXXVIII

BROKERS

38.1    Brokers. Tenant warrants that it has not had any contact or dealings
with any Person or real estate broker which would give rise to the payment of
any fee or brokerage commission in connection with this Lease, and Tenant shall
indemnify, protect, hold harmless and defend Landlord from and against any
liability with respect to any fee or brokerage commission arising out of any act
or omission of Tenant. Landlord warrants that it has not had any contact or
dealings with any Person or real estate broker which would give rise to the
payment of any fee or brokerage commission in connection with this Lease, and
Landlord shall indemnify, protect, hold harmless and defend Tenant from and
against any liability with respect to any fee or brokerage commission arising
out of any act or omission of Landlord.

ARTICLE XXXIX

OFAC

39.1    Anti-Terrorism Representations.

(a)    Landlord and Tenant each hereby represent and warrant that neither they,
nor, to their knowledge, Landlord’s Parents (in the case of Landlord) or
Tenant’s Parent (in the case of Tenant), as applicable, is (i) in material
violation of any sanctions program that is established by Executive Order of the
President or published by OFAC; (ii) in material violation of the Trading with
the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers
Act, 50 U.S.C. §§ 1701-06, the U.S.A. Patriot Act, Public Law 107-56, Executive
Order 13224 (September 23, 2001) or any Executive Order of the President issued
pursuant to such statutes or any other applicable Legal Requirements relating to
anti-corruption, anti-bribery, terrorism, or money-laundering; or (iii) named on
the following list that is published by OFAC: “List of Specially Designated
Nationals and Blocked Persons” (collectively, “Prohibited Persons”).

(b)    Neither Landlord nor Tenant will, during the Term of this Lease,
knowingly engage in any transactions or dealings, or knowingly be otherwise
associated with, any Prohibited Persons in connection with the ownership, or use
or occupancy of, the Leased Property, as applicable. A breach of the
representations (being untrue at any time during the Term) or covenants
contained in this Section 39.1 by Landlord or Tenant as a result of which the
other party suffers actual damages shall constitute a material breach of this
Lease and shall entitle the other party to any and all remedies available
hereunder, or at law or in equity.

ARTICLE XL

REIT REQUIREMENTS

40.1    REIT Protection. (a) The parties hereto intend that Rent and other
amounts paid by Tenant hereunder will qualify as “rents from real property”
within the meaning of Section 856(d) of the Code, or any similar or successor
provision thereto and this Lease shall be interpreted consistent with this
intent.

 

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(b)    Anything contained in this Lease to the contrary notwithstanding, the
parties acknowledge and agree that Landlord, in its sole discretion, may assign
this Lease or any interest herein to another Person (including without
limitation, a “taxable REIT subsidiary” (within the meaning of Section 856(l) of
the Code)) in order to maintain MGP REIT’s or any Blackstone REIT’s status as a
“real estate investment trust” (within the meaning of Section 856(a) of the
Code); provided, however, Landlord shall be required to (i) comply with any
applicable legal requirements related to such transfer and (ii) give Tenant
notice of any such assignment; and provided, further, that any such assignment
shall be subject to all of the rights of Tenant hereunder.

(c)    Tenant acknowledges that MGP REIT and any Blackstone REIT each intends to
qualify as a real estate investment trust under the Code. Tenant agrees that it
will not knowingly or intentionally take or omit to take any action, or permit
any status or condition to exist at the Leased Property, which Tenant actually
knows (acting in good faith) would or could result in the Rent payable under
this Lease not qualifying as “rents from real property” within the meaning of
Section 856(d) of the Code.

(d)    Anything contained in this Lease to the contrary notwithstanding, upon
request of Landlord, Tenant shall cooperate with Landlord in good faith and at
no cost or expense to Tenant, and provide such documentation and/or information
as may be in Tenant’s possession or under Tenant’s control and otherwise readily
available to Tenant as shall be reasonably requested by Landlord in connection
with verification of MGP REIT’s and Blackstone REIT’s “real estate investment
trust” (within the meaning of Section 856(a) of the Code) compliance
requirements. Anything contained in this Lease to the contrary notwithstanding,
Tenant shall take such reasonable action as may be requested by Landlord from
time to time in order to ensure compliance with the Internal Revenue Service
requirement that Rent allocable for purposes of Section 856 of the Code to
personal property, if any, at the beginning and end of a calendar year does not
exceed fifteen percent (15%) of the total Rent due hereunder as long as such
compliance does not (i) increase Tenant’s monetary obligations under this Lease
or (ii) materially and adversely increase Tenant’s nonmonetary obligations under
this Lease or (iii) materially diminish Tenant’s rights under this Lease.

ARTICLE XLI

MISCELLANEOUS

41.1    Survival. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities and indemnities of Tenant
or Landlord arising prior to the expiration or earlier termination of the Term
shall survive such expiration or termination.

41.2    Severability. If any term or provision of this Lease or any application
thereof shall be held invalid or unenforceable, the remainder of this Lease and
any other application of such term or provision shall not be affected thereby.

 

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41.3    Non-Recourse. Tenant specifically agrees to look solely to the Leased
Property for recovery of any judgment from Landlord (and Landlord’s liability
hereunder shall be limited solely to its interest in the Leased Property, and no
recourse under or in respect of this Lease shall be had against any other assets
of Landlord whatsoever). It is specifically agreed that no constituent partner
in Landlord or officer or employee of Landlord shall ever be personally liable
for any such judgment or for the payment of any monetary obligation to Tenant.
The provision contained in the foregoing sentence is not intended to, and shall
not, limit any right that Tenant might otherwise have to obtain injunctive
relief against Landlord, or any action not involving the personal liability of
Landlord. Furthermore, except as otherwise expressly provided herein, in no
event shall Landlord ever be liable to Tenant for any indirect or consequential
damages suffered by Tenant from whatever cause. Neither Landlord nor Tenant
shall be liable to the other, nor shall either make any claim against the other,
for punitive damages.

41.4    Successors and Assigns. This Lease shall be binding upon Landlord and
its successors and assigns and, subject to the provisions of Article XXII, upon
Tenant and its successors and assigns.

41.5    Governing Law. THIS LEASE WAS NEGOTIATED IN THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY. ACCORDINGLY, IN ALL RESPECTS THIS LEASE
(AND ANY AGREEMENT FORMED PURSUANT TO THE TERMS HEREOF AND ANY ACTION OR DISPUTE
RELATED TO THE NATURE OF THIS LEASE AS A “TRUE LEASE”) SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OR CONFLICTS OF LAW) AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA, EXCEPT THAT ALL PROVISIONS HEREOF RELATING TO
THE CREATION OF THE LEASEHOLD ESTATE, THE RECHARACTERIZED DEED OF TRUST AND THE
CREATION, PERFECTION AND ENFORCEMENT OF THE LIEN HEREIN GRANTED UPON A
RECHARACTERIZATION, AND ALL REMEDIES SET FORTH IN ARTICLE XVI RELATING TO
RECOVERY OF POSSESSION OF THE LEASED PROPERTY (SUCH AS AN ACTION FOR UNLAWFUL
DETAINER, IN REM ACTION OR OTHER SIMILAR ACTION), SHALL BE CONSTRUED AND
ENFORCED ACCORDING TO, AND GOVERNED BY, THE LAWS OF THE STATE. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, ANY AGREEMENT, ACTION OR DISPUTE
RELATED TO THE NATURE OF THIS LEASE AS A “TRUE LEASE” SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OR CONFLICTS OF LAW).

41.6    Waiver of Trial by Jury. EACH OF LANDLORD AND TENANT ACKNOWLEDGES THAT
IT HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO
TRIAL BY JURY UNDER THE CONSTITUTION OF THE UNITED STATES AND THE STATE. EACH OF
LANDLORD AND TENANT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS LEASE (OR ANY
AGREEMENT FORMED PURSUANT TO THE TERMS HEREOF) OR (ii) IN ANY

 

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MANNER CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF LANDLORD AND
TENANT WITH RESPECT TO THIS LEASE (OR ANY AGREEMENT FORMED PURSUANT TO THE TERMS
HEREOF) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREINAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; EACH OF LANDLORD AND TENANT HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY A COURT
TRIAL WITHOUT A JURY, AND THAT EITHER PARTY MAY FILE A COPY OF THIS SECTION WITH
ANY COURT AS CONCLUSIVE EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.

41.7    Entire Agreement. This Lease and the Exhibits and Schedules hereto
constitute the entire and final agreement of the parties with respect to the
subject matter hereof, and may not be changed or modified except by an agreement
in writing signed by the parties and, with respect to the provisions set forth
in Section 40.1, no such change or modification shall be effective without the
explicit reference to such section by number and paragraph. Landlord and Tenant
hereby agree that all prior or contemporaneous oral understandings, agreements
or negotiations relative to the leasing of the Leased Property are merged into
and revoked by this Lease. Notwithstanding anything to the contrary herein, the
parties hereto acknowledge and agree that this Lease is integral to, and forms
part of the single integrated transaction effected through, this Lease, the
Transition Services Agreement and any and all other instruments or agreements
entered into substantially contemporaneously herewith by any of the parties
hereto or any of their Subsidiaries and/or Affiliates in connection with this
Lease.

41.8    Headings; Consent. All titles and headings to sections, subsections,
paragraphs or other divisions of this Lease are only for the convenience of the
parties and shall not be construed to have any effect or meaning with respect to
the other contents of such sections, subsections, paragraphs or other divisions,
such other content being controlling as to the agreement among the parties
hereto. When the consent of any party hereunder may not be unreasonably
withheld, such consent also may not be unreasonably conditioned or delayed.

41.9    Counterparts. This Lease may be executed in any number of counterparts
and by facsimile or electronic signatures, each of which shall be a valid and
binding original, but all of which together shall constitute one and the same
instrument.

41.10    Interpretation. Both Landlord and Tenant have been represented by
counsel and this Lease and every provision hereof has been freely and fairly
negotiated. Consequently, all provisions of this Lease shall be interpreted
according to their fair meaning and shall not be strictly construed against any
party.

41.11    Time of Essence. TIME IS OF THE ESSENCE OF THIS LEASE AND EACH
PROVISION HEREOF IN WHICH TIME OF PERFORMANCE IS ESTABLISHED. In addition, with
respect to any provision herein that requires an action by Landlord (e.g.,
Section 12.1, which requires Landlord to execute and deliver to Tenant certain
authorizations and documents), unless a time is otherwise specified, such action
shall be taken promptly by Landlord.

 

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41.12    Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.

41.13    Gaming Regulations. (a) Notwithstanding anything to the contrary in
this Lease, this Lease and any agreement formed pursuant to the terms hereof are
subject to the Gaming Regulations and the laws involving the sale, distribution
and possession of alcoholic beverages (the “Liquor Laws”). Without limiting the
foregoing, Landlord, and its respective Related Persons, successors and assigns
acknowledges that (i) it is subject to being called forward by the Gaming
Authority or governmental authority enforcing the Liquor Laws (the “Liquor
Authority”), in each of their discretion, for licensing or a finding of
suitability or to file or provide other information, and (ii) all rights,
remedies and powers under this Lease and any agreement formed pursuant to the
terms hereof, including with respect to the entry into and ownership and
operation of the Gaming Facility, and Landlord’s right to possession or control
of Gaming Equipment, alcoholic beverages or a Gaming License or liquor license,
may be exercised only to the extent that the exercise thereof does not violate
any applicable provisions of the Gaming Regulations and Liquor Laws and only to
the extent that required approvals (including prior approvals) are obtained from
the requisite Gaming Authority and/or Liquor Authority.

(b)    Notwithstanding anything to the contrary in this Lease or any agreement
formed pursuant to the terms hereof, each of Tenant, Landlord, and each of
Tenant’s or Landlord’s successors and assigns agrees to cooperate with each
Gaming Authority and each Liquor Authority in connection with the administration
of their regulatory jurisdiction over the parties hereto and/or the Facilities,
including, without limitation, the provision of such documents or other
information as may be requested by any such Gaming Authorities and/or Liquor
Authorities relating to Tenant, Landlord, Tenant’s or Landlord’s successors and
assigns or to this Lease or any agreement formed pursuant to the terms hereof.

41.14    Certain Provisions of Nevada Law. Landlord shall, pursuant to
Section 108.2405(1)(b) of the Nevada Revised Statutes (“NRS”), record a written
notice of waiver of Landlord’s rights set forth in NRS 108.234 in the form
attached hereto as Exhibit H with the office of the recorder of Clark County,
Nevada on the date hereof. Pursuant to NRS 108.2405(2), Landlord shall serve
such notice by certified mail, return receipt requested, upon the prime
contractor of such work of improvement and all other lien claimants who may give
the owner a notice of right to lien pursuant to NRS 108.245, within ten
(10) days after Landlord’s receipt of a notice of right to lien or ten (10) days
after the date on which the notice of waiver is recorded.

41.15    Savings Clause. If for any reason this Lease is determined by a court
of competent jurisdiction to be invalid as to any space that would otherwise be
a part of the Leased Property and that is subject to a pre-existing lease as of
the date hereof (between Tenant’s predecessor in interest prior to the date
hereof, as landlord, and a third party as tenant), then Landlord shall be deemed
to be the landlord under such pre-existing lease, and the Parties agree that
Tenant shall be deemed to be the collection agent for Landlord for purposes of
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rent and other amounts payable by the tenant under such pre-existing lease and
shall remit the applicable collected amounts to Landlord. In such event, the
Rent payable hereunder shall be deemed to be reduced by any amounts so collected
by Tenant and remitted to Landlord with respect to any such pre-existing lease.

41.16    Agency Relationship with respect to Water Rights. Landlord hereby
appoints Tenant as its exclusive agent until the expiration or earlier
termination of this Lease in, to and with respect to the Water Rights, Water
Permits and Water Infrastructure (collectively, “Water Assets”). It is the
intention of Landlord to maintain a binding arrangement until the expiration or
earlier termination of the Lease whereby Tenant is authorized as the exclusive
agent of Landlord, (a) to use and exercise (or cause to be used and exercised)
the Water Assets for reasonable and beneficial use at the Facilities, (b) to
protect the Water Assets from forfeiture or cancellation by placing them (or
causing them to be placed) to beneficial use as necessary or by making
appropriate filings with the Nevada State Engineer to extend any usage
deadlines, (c) to change temporarily the manner of use, place of use or point of
diversion of the Water Assets, or any portion of them in a Non-Discriminatory
manner and which does not impair the ability of the Facilities to have
sufficient benefit of the Water Assets necessary for the continued operation of
all features and associated uses of Water Assets existing as of the Commencement
Date through the Term (including any Renewal Terms) and the remaining useful
life of such features thereafter, (d) to enter into licenses or leases or other
similar temporary arrangements with Tenant’s Affiliates with respect to the
Water Assets, or any portion of them, in each case, not (1) extending past the
expiration or earlier termination of the Lease or (2) impairing the ability of
the Facilities to have sufficient benefit of the Water Assets necessary for the
continued operation of all features and uses of Water Assets existing as of the
Commencement Date through the Term (including any Renewal Terms) and the
remaining useful life of such features thereafter, (e) to make customary
applications, filings, notices and reports with the Nevada State Engineer with
respect to the foregoing, all at Tenant’s expense, (f) at the good faith and
reasonable discretion of Tenant, to represent Landlord (at Tenant’s sole cost
and expense) in any court adjudication, administrative proceeding, groundwater
management plan, or other determination or management of the Water Assets,
(g) pay, or cause to be paid, any and all fees and assessments charged to or
levied against the Water Assets by the Nevada State Engineer or any other
governmental entity, including but not limited to, fees charged to support the
Las Vegas Valley Groundwater Program, and, (h) upon written approval of
Landlord, to exercise any other rights on behalf of Landlord with respect to the
Water Assets, or any portion of them. This agency shall be effective and
irrevocable until the expiration or earlier termination of the Lease and the
same is intended to be and shall be deemed an agency coupled with an interest.
Promptly following the Commencement Date, Landlord shall complete, execute and
deliver to the Nevada State Engineer all reasonable and customary documents that
Tenant may reasonably require (i) to notify the Nevada State Engineer that
Tenant is leasing the Water Assets and Tenant is Landlord’s exclusive agent with
respect to the Water Assets during the Term, and (ii) to ensure that the Nevada
State Engineer sends Tenant notice of all actions, meetings, hearings, and
copies of all documents pertaining to the Water Assets.    Tenant shall maintain
a record with respect to its actions taken as agent and shall provide Landlord
with (x) notice of any events which could reasonably expected to give rise to
the forfeiture or cancellation of any of the Water Assets, (y) upon Landlord’s
reasonable request, details regarding any leases or licenses or similar
arrangements made by Tenant with respect to any Water Assets and (z) upon
expiration or earlier termination of the Lease, all information and
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reasonably necessary for Landlord to maintain the continued benefit and
ownership of the Water Assets. In the event that Landlord determines in its
reasonable and good faith discretion that Tenant is not performing its functions
with respect to the Water Assets or taking actions with respect to the Water
Assets in a manner that could reasonably be expected to result in the
forfeiture, cancellation or depletion of any Water Assets, Landlord shall have
the right to take such actions as Landlord deems reasonably necessary to
preserve such Water Assets in the event that Tenant does not cure such
deficiencies within thirty (30) days’ prior written notice thereof.

41.17    Operating Subleases.

(a)    Any Operating Sublease shall be expressly subordinate to this Lease and
any Operating Subtenant shall (x) enter into an attornment agreement
substantially in the form entered into by each of the Operating Subtenants on
the date hereof (as each may be modified, supplemented and/or modified from time
to time, “Operating Subtenant Attornment Agreement”), (y) enter into a joinder
to this Lease in substantially the form entered into by the each of the
Operating Subtenants on the date hereof, and (z) enter into the Operating
Subtenant Guaranty, jointly and severally with the other Operating Subtenants.

(b)    No Operating Subtenant shall be permitted to assign its Operating
Sublease other than to an Affiliate of Tenant’s Parent, and any such Operating
Subtenant shall at all times remain a Subsidiary of Tenant’s Parent.

(c)    The Operating Sublease is subject to the terms and conditions of this
Lease and any act, omission, event or condition with respect to any Operating
Subtenant or any Operating Subleased Property which would require Landlord’s
approval or consent or result in a breach by Tenant under Sections 6.2, 6.4,
7.2, 8.2, 8.3, 9.1(a), 9.1(d), 9.2, 10.1, 10.2, 11.1, 12.1, 36.1 or Article XXII
of this Lease if such act, omission, event or condition occurred with respect to
Tenant or the Leased Property shall require Landlord’s approval or consent and
be deemed to be a breach by Tenant under this Lease.

SIGNATURES ON FOLLOWING PAGE

 

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IN WITNESS WHEREOF, this Lease has been executed by Landlord and Tenant as of
the date first written above.

 

MB LANDLORD: MANDALAY PROPCO, LLC By:  

/s/ Andy Chien

Name:   Andy Chien Title:   Chief Financial Officer and   Treasurer GRAND
LANDLORD: MGM GRAND PROPCO, LLC By:  

/s/ Andy Chien

Name:   Andy Chien Title:   Chief Financial Officer and   Treasurer TENANT: MGM
LESSEE II, LLC By:  

/s/ Andrew Hagopian III

Name:   Andrew Hagopian III Title:   Assistant Secretary

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JOINDER

The undersigned, each a Nevada limited liability company, hereby join in the
foregoing Master Lease by and among Mandalay PropCo, LLC, a Delaware limited
liability company, and MGM Grand PropCo, LLC, collectively, as Landlord, and MGM
Lessee II, LLC, a Delaware limited liability company, as Tenant (the “Lease”),
for the sole purpose of (x) agreeing to be bound by the provisions of
Section 6.2 and 6.4 of the Lease as applied to the undersigned, mutatis mutandis
from and after the date of execution of the Lease until the expiration or
earlier termination of the Operating Sublease to which the undersigned is a
party and (y) granting the security interests contemplated by Section 6.4(c) and
Section 9.1(g) of the Lease.

 

MGM GRAND HOTEL, LLC            By:  

/s/ Laura Norton

  Name:   Laura Norton   Title:   Authorized Signatory MANDALAY BAY, LLC   By:  

/s/ Laura Norton

  Name:   Laura Norton   Title:   Authorized Signatory MANDALAY PLACE, LLC   By:
 

/s/ Laura Norton

  Name:   Laura Norton   Title:   Authorized Signatory

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EXHIBIT E

FORM OF GUARANTY

This GUARANTY OF LEASE DOCUMENTS (this “Guaranty”), is made and entered into as
of the              day of February, 2020 by and among MGM RESORTS
INTERNATIONAL, a Delaware corporation (“Guarantor”), Mandalay PropCo, LLC, a
Delaware limited liability company (“MB Landlord”) and MGM Grand PropCo, LLC, a
Delaware limited liability company (“Grand Landlord” and, together with the MB
Landlord, collectively, “Landlord”).

RECITALS

A.    Landlord and certain subsidiaries of Guarantor, including MGM Lessee II,
LLC, a Delaware limited liability company (“Tenant”), have entered into that
certain Master Lease dated of even date herewith (as the same may be amended,
restated, supplemented, waived or otherwise modified from time to time, the
“Lease”), (ii) that certain Transition Services Agreement dated of even date
herewith (as the same may be amended, restated, supplemented, waived or
otherwise modified from time to time, the “TSA”), (iii) that certain Operating
Sublease dated of even date herewith by and between Tenant and MGM Grand Hotel,
LLC (the “MGM Grand Operating Sublease”), (iv) that certain Operating Sublease
dated of even date herewith by and between Tenant and Mandalay Bay, LLC (the
“Mandalay Bay Operating Sublease”), and (v) dated of even date herewith by and
between Tenant and Mandalay Place, LLC (the “Mandalay Place Operating Sublease”,
and together with the Lease, TSA, MGM Grand Operating Sublease and Mandalay Bay
Operating Sublease, the “Lease Documents”). All capitalized terms used and not
otherwise defined herein shall have the same meanings given such terms in the
Lease.

B.    Guarantor is an affiliate of Tenant, will derive substantial benefits from
the Lease Documents and acknowledges and agrees that this Guaranty is given in
accordance with the requirements of the Lease and that Landlord would not have
been willing to enter into the Lease Documents unless Guarantor was willing to
execute and deliver this Guaranty.

AGREEMENTS

NOW, THEREFORE, in consideration of Landlord entering into the Lease Documents
with Tenant, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

1.    Guaranty. In consideration of the benefit derived or to be derived by it
therefrom, as to the Lease Documents, from and after the Commencement Date
thereof, Guarantor hereby unconditionally and irrevocably guarantees, as a
primary obligor and not merely as a surety, (i) the payment when due of all Rent
and all other sums payable by Tenant under the Lease, and (ii) the faithful and
prompt performance when due of each and every one of the terms, conditions and
covenants of any nature to be kept and performed by the applicable non-Landlord
counterparty or counterparties under and as set forth in each Lease Document,
including, without limitation, all indemnification obligations, insurance
obligations, all

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obligations to operate, rebuild, restore or replace any facilities or
improvements now or hereafter located on the Leased Property covered by the
Lease, all obligations to perform the Required CapEx, all obligations to fund
amounts or security under the Lease (including without limitation, funding any
required amounts (or delivering a Letter of Credit, to the extent applicable) to
the CapEx Reserve, the FF&E Reserve, the Covenant Security Escrow Account, the
Construction Security Escrow Account and any impound account), all obligations
to operate the Leased Property under the “Mandalay Bay” or “MGM Grand” brands,
and all obligations under Article XXXVI under the Lease (together with
Guarantor’s obligations under Section 13 hereof, collectively, the
“Obligations”). In the event of the failure of Tenant to pay any such Rent or
other sums, or to render any other performance required of the applicable
non-Landlord counterparty under the Lease Documents, when due or within any
applicable cure period, Guarantor shall forthwith perform or cause to be
performed all provisions of the applicable Lease Document to be performed by the
applicable non-Landlord counterparty thereunder, and pay all reasonable costs of
collection or enforcement and other damages that may result from the
non-performance thereof to the full extent provided under the applicable Lease
Document. As to the Obligations, Guarantor’s liability under this Guaranty is
without limit except as provided in Section 12 hereof. Guarantor agrees that its
guarantee provided herein constitutes an absolute, direct, immediate, continuing
and unconditional guaranty of guarantee of payment and performance when due and
not of collection.

2.    Survival of Obligations. The obligations of Guarantor under this Guaranty
shall survive and continue in full force and effect notwithstanding:

(a)    any amendment, modification, or extension of any of the Lease Documents;

(b)    any compromise, release, consent, extension, indulgence or other action
or inaction in respect of any terms of any Lease Document or any other
guarantor;

(c)    any substitution or release, in whole or in part, of any security for
this Guaranty which Landlord may hold at any time;

(d)    any exercise or non-exercise by Landlord of any right, power or remedy
under or in respect of any Lease Document or any security held by Landlord with
respect thereto, or any waiver of any such right, power or remedy;

(e)    any bankruptcy, insolvency, reorganization, arrangement, adjustment,
composition, liquidation, or the like of Tenant or any other guarantor;

(f)    (i) any limitation of Tenant’s liability under any Lease Document,
(ii) any limitation of Tenant’s liability under any Lease Document which may now
or hereafter be imposed by any statute, regulation or rule of law, or (iii) any
illegality, irregularity, invalidity or unenforceability, in whole or in part,
of any Lease Document or any term thereof;

(g)    any sale, lease, or transfer of all or any part of any interest in the
Facilities or any or all of the assets of Tenant to any Person other than to
Landlord;

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(h)    any act or omission by Landlord with respect to any security instrument
or any failure to file, record or otherwise perfect the same;

(i)    any extensions of time for performance under any Lease Document;

(j)    the release of Tenant from performance or observation of any of the
agreements, covenants, terms or conditions contained in any Lease Document by
operation of law or otherwise;

(k)    the fact that Tenant may or may not be personally liable, in whole or in
part, under the terms of the Lease Documents to pay any money judgment;

(l)    the failure to give Guarantor any notice of acceptance, default or
otherwise;

(m)    any other guaranty now or hereafter executed by Guarantor or anyone else
in connection with any of the Lease Documents;

(n)    any rights, powers or privileges Landlord may now or hereafter have
against any other Person; or

(o)    any other circumstances, whether or not Guarantor had notice or knowledge
thereof.

3.    Primary Liability. The liability of Guarantor with respect to the Lease
Documents shall be primary, direct and immediate, and Landlord may proceed
against Guarantor: (a) prior to or in lieu of proceeding against Tenant, its
assets, any security deposit, or any other guarantor; and (b) prior to or in
lieu of pursuing any other rights or remedies available to Landlord. All rights
and remedies afforded to Landlord by reason of this Guaranty or by law are
separate, independent and cumulative, and the exercise of any rights or remedies
shall not in any way limit, restrict or prejudice the exercise of any other
rights or remedies.

In the event of any default under any Lease Document, a separate action or
actions may be brought and prosecuted against Guarantor whether or not Tenant is
joined therein or a separate action or actions are brought against Tenant.
Landlord may maintain successive actions for other defaults. Landlord’s rights
hereunder shall not be exhausted by its exercise of any of its rights or
remedies or by any such action or by any number of successive actions until and
unless all Obligations the payment and performance of which are hereby
guaranteed have been paid and fully performed.

4.    Obligations Not Affected. In such manner, upon such terms and at such
times as Landlord in its sole discretion deems necessary or expedient, and
without notice to Guarantor, Landlord may: (a) amend, alter, compromise,
accelerate, extend or change the time or manner for the payment or the
performance of any Obligation hereby guaranteed; (b) extend, amend or terminate
the Lease Documents; or (c) release Tenant by consent to any assignment (or
otherwise) as to all or any portion of the Obligations hereby guaranteed, in
each case pursuant to the terms of the Lease Documents. Any exercise or
non-exercise by Landlord of any right

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hereby given Landlord, dealing by Landlord with Guarantor or any other
guarantor, Tenant or any other Person, or change, impairment, release or
suspension of any right or remedy of Landlord against any Person including
Tenant and any other guarantor will not affect any of the Obligations of
Guarantor hereunder or give Guarantor any recourse or offset against Landlord.

5.    Waiver. With respect to the Lease Documents, Guarantor hereby waives and
relinquishes all rights and remedies accorded by applicable law to sureties
and/or guarantors or any other accommodation parties, under any statutory
provisions, common law or any other provision of law, custom or practice, and
agrees not to assert or take advantage of any such rights or remedies including,
but not limited to:

(a)    any right to require Landlord to proceed against Tenant or any other
Person or to proceed against or exhaust any security held by Landlord at any
time or to pursue any other remedy in Landlord’s power before proceeding against
Guarantor or to require that Landlord cause a marshaling of Tenant’s assets or
any assets given as collateral for this Guaranty, or to proceed against Tenant
and/or any collateral, including collateral, if any, given to secure such
Guarantor’s obligation under this Guaranty, held by Landlord at any time or in
any particular order;

(b)    any defense that may arise by reason of the incapacity or lack of
authority of any other Person or Persons;

(c)    notice of the existence, creation or incurring of any new or additional
indebtedness or obligation or of any action or non-action on the part of Tenant,
Landlord, any creditor of Tenant or Guarantor or on the part of any other Person
whomsoever under this or any other instrument in connection with any obligation
or evidence of indebtedness held by Landlord or in connection with any
obligation hereby guaranteed;

(d)    any defense based upon an election of remedies by Landlord which destroys
or otherwise impairs the subrogation rights of Guarantor or the right of
Guarantor to proceed against Tenant for reimbursement, or both;

(e)    any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal;

(f)    any duty on the part of Landlord to disclose to Guarantor any facts
Landlord may now or hereafter know about Tenant, regardless of whether Landlord
has reason to believe that any such facts materially increase the risk beyond
that which Guarantor intends to assume or has reason to believe that such facts
are unknown to Guarantor or has a reasonable opportunity to communicate such
facts to Guarantor, it being understood and agreed that Guarantor is fully
responsible for being and keeping informed of the financial condition of Tenant
and of all circumstances bearing on the risk of non-payment or non-performance
of any Obligations hereby guaranteed;

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(g)    any defense arising because of Landlord’s election, in any proceeding
instituted under the federal Bankruptcy Code, of the application of
Section 1111(b)(2) of the federal Bankruptcy Code;

(h)    any defense based on any borrowing or grant of a security interest under
Section 364 of the federal Bankruptcy Code;

(i)     any defense relating to the exercise by Landlord of its rights under
Section 365(n) of the federal Bankruptcy Code; and

(j)    any defense relating to the application of 502(b)(6) of the federal
Bankruptcy Code; and

(k)    all rights and remedies accorded by applicable law to guarantors,
including without limitation, any extension of time conferred by any law now or
hereafter in effect and any requirement or notice of acceptance of this Guaranty
or any other notice to which the undersigned may now or hereafter be entitled to
the extent such waiver of notice is permitted by applicable law.

6.    Information. Guarantor assumes all responsibility for being and keeping
itself informed of the financial condition and assets of Tenant and of all other
circumstances bearing upon the risk of nonpayment of the Obligations and the
nature, scope and extent of the risks that Guarantor assumes and incurs
hereunder and agrees that Landlord will not have any duty to advise Guarantor of
information regarding such circumstances or risks.

7.    No Subrogation. Until all Obligations of Tenant under the Lease Documents
have been satisfied and discharged in full, Guarantor shall have no right of
subrogation and waives any right to enforce any remedy which Guarantor now has
or may hereafter have against Tenant (including any such remedy of Landlord) and
any benefit of, and any right to participate in, any security now or hereafter
held by Landlord with respect to the Lease Documents.

8.    Agreement to Comply with terms of the Lease Documents . Guarantor hereby
agrees (a) to comply with all terms of the Lease Documents applicable to it,
(b) that it shall take no action, and that it shall not omit to take any action,
which action or omission, as applicable, would cause a breach of the terms of
any Lease Document and (c) that it shall not commence an involuntary proceeding
or file an involuntary petition in any court of competent jurisdiction seeking
(i) relief in respect of Tenant or any of Tenant’s Significant Subsidiaries, or
of a substantial part of the property or assets of Tenant or any of Tenant’s
Significant Subsidiaries, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Tenant or any of Tenant’s Significant Subsidiaries or for a substantial part of
the property or assets of Tenant or any of Tenant’s Significant Subsidiaries. As
used herein, the term “Significant Subsidiary” shall mean, with respect to any
Person, any Subsidiary of that Person that would be a “significant subsidiary”
as defined in Article I, Rule 1 02 of Regulation S-X, promulgated pursuant to
the Securities Act as such Regulation is in effect on the date hereof.

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9.    Agreement to Pay; Contribution; Subordination. Without limitation of any
other right of Landlord at law or in equity, upon the failure of Tenant to pay
any Obligation when and as the same shall become due, Guarantor hereby promises
to and will forthwith pay, or cause to be paid, to Landlord in cash the amount
of such unpaid Obligation. Upon payment by Guarantor of any sums to Landlord as
provided above, all rights of Guarantor against Tenant arising as a result
thereof by way of subrogation, contribution, reimbursement, indemnity or
otherwise shall be subject to the limitations set forth in this Section 9. If
for any reason whatsoever Tenant now or hereafter becomes indebted to Guarantor
or any Affiliate of Guarantor, such indebtedness and all interest thereon shall
at all times be subordinate to Tenant’s obligation to Landlord to pay as and
when due in accordance with the terms of any Lease Document the guaranteed
Obligations, it being understood that Guarantor and each Affiliate of Guarantor
shall be permitted to receive payments from Tenant on account of such
obligations except during the continuance of an Event of Default under any Lease
Document relating to failure to pay amounts due under such Lease Document.
During any time in which an Event of Default relating to failure to pay amounts
due under a Lease Document has occurred and is continuing under such Lease
Document (and provided that Guarantor has received written notice thereof),
Guarantor agrees to make no claim for such indebtedness that does not recite
that such claim is expressly subordinate to Landlord’s rights and remedies under
the Lease Documents.

10.    Application of Payments. With respect to the Lease Documents, and with or
without notice to Guarantor, Landlord, in Landlord’s sole discretion and at any
time and from time to time and in such manner and upon such terms as Landlord
deems appropriate, may (a) apply any or all payments or recoveries following the
occurrence and during the continuance of an Event of Default from Tenant or from
any other guarantor under any other instrument or realized from any security, in
such manner and order of priority as Landlord may determine, to any indebtedness
or other obligation of Tenant with respect to the Lease Documents and whether or
not such indebtedness or other obligation is guaranteed hereby or is otherwise
secured, and (b) refund to Tenant any payment received by Landlord under any
Lease Document.

11.    Guaranty Default. Upon the failure of Guarantor to pay the amounts
required to be paid hereunder when due following the occurrence and during the
continuance of an Event of Default under any Lease Document, Landlord shall have
the right to bring such actions at law or in equity, including appropriate
injunctive relief, as it deems appropriate to compel compliance, payment or
deposit, and among other remedies to recover its reasonable attorneys’ fees in
any proceeding, including any appeal therefrom and any post judgment
proceedings.

12.    Maximum Liability. Guarantor and, by its acceptance of the guarantees
provided herein, Landlord, hereby confirms that it is the intention of all such
Persons that the guarantees provided herein and the obligations of Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of the
United States Bankruptcy Code or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law, the Uniform Fraudulent Conveyance Act,
the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law
to the extent applicable to the guarantees provided herein and the obligations
of Guarantor hereunder. To effectuate the foregoing intention, Landlord hereby
irrevocably agrees that the obligations of Guarantor under this Guaranty shall
be limited to the maximum amount as will result in such obligations not
constituting a fraudulent transfer or conveyance.

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13.    Financial Covenant Obligations. In the event of a bankruptcy of Tenant,
Guarantor will perform, or will cause the performance of, the Tenant’s
obligations set forth under Section 23.3 of the Lease even if such obligations
are subject to a stay by the bankruptcy court.

14. Material Guarantor Acknowledgements. Without limitation of any of the other
provisions, terms, and conditions hereof, Guarantor expressly acknowledges and
agrees that:

(a)     in connection with the implementation of a Foreclosure Assignment or
Foreclosure COC, this Guaranty shall remain in full force and effect and
Guarantor shall be obligated in all respects under the Guaranty without any
termination, reduction, impairment or reduction whatsoever, irrespective of
whether any of the following shall have occurred (whether or not notice thereof
is given to Guarantor) (in each and any such case, irrespective of whether
Guarantor shall execute an affirmation or reaffirmation of its obligations under
the Lease Guaranty, or otherwise affirm or reaffirm its obligations hereunder in
connection therewith): (i) any foreclosure or such other termination of Tenant’s
interest in the Lease or of any or all of the equity in Tenant, (ii) any other
exercise of remedies by the applicable Permitted Leasehold Mortgagee, (iii) any
changes in the nature of the relationship between Tenant, on the one hand, and
Guarantor, on the other hand, including by reason of the replacement of Tenant
with a Foreclosure Transferee and the delivery of a guaranty by a Qualified
Transferee (as defined in the Lease)) that is unrelated to Guarantor, or
(iv) any changes or modifications with respect to the Lease of any nature in
connection with such Foreclosure Assignment or Foreclosure COC pursuant to and
contemplated by paragraph of Section 22.2 of the Lease;

(b)    if a New Lease is successfully entered into in accordance with
Section 17.1(f) of the Lease, then, in any such event, this Guaranty shall
remain in full force and effect and Guarantor shall be obligated in all respects
under this Guaranty without any termination, reduction, impairment or reduction
whatsoever, irrespective of whether any of the following shall have occurred
(whether or not notice thereof is given to Guarantor) (in each and any such
case, irrespective of whether Guarantor shall execute an affirmation or
reaffirmation of its obligations under the Guaranty, or otherwise affirm or
reaffirm its obligations hereunder in connection therewith): (i) any foreclosure
or such other termination of Tenant’s interest in the Lease or of any or all of
the equity in Tenant or any other exercise of remedies by the applicable
Permitted Leasehold Mortgagee, (ii) any termination of the Lease, (iii) any
changes in the nature of the relationship between Tenant, on the one hand, and
Guarantor, on the other hand, including by reason of the replacement of Tenant
with a Foreclosure Transferee and the delivery of a guaranty by a Qualified
Transferee (as defined in the Lease)) that is unrelated to Guarantor, or
(iv) the entry into the New Lease on the terms and conditions contemplated under
Section 17.1(f) of the Lease.

(c)    Guarantor expressly acknowledges and agrees that Guarantor shall, at the
request of Landlord, affirm or reaffirm in writing all of its obligations under
this Guaranty in respect of the Lease Documents or any New Lease, as applicable,
upon the occurrence of any of the following: (i) at the request of Landlord in
connection with any prospective Fee Mortgage or conveyance of the Leased
Property by Landlord, (ii) any Foreclosure Assignment or Foreclosure COC in
accordance with Section 22.2(i) of the Lease; (iii) the assumption by any Person

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(including a Person that is unrelated to Guarantor) of Tenant’s rights and
obligations under the Lease in connection with any such Foreclosure Assignment;
or (iv) the execution of any New Lease by any Person (including a Person that is
unrelated to Guarantor) in accordance with Section 17.1(f) of the Lease.
Guarantor expressly acknowledges and agrees that Guarantor’s failure to so
reaffirm in a writing reasonably acceptable to Landlord all of its obligations
under this Agreement within ten (10) days of a request from Landlord shall be an
immediate default by Guarantor. In addition, and without limitation of anything
otherwise contained in this Agreement, Guarantor acknowledges it hereby appoints
Landlord as its attorney-in-fact with full power in Guarantor’s name and behalf
to execute and deliver at any time an affirmation or reaffirmation of this
Agreement, including as to the Guaranty.

(d)    in connection with Guarantor no longer being Tenant’s Parent, this
Guaranty shall remain in full force and effect and Guarantor shall be obligated
in all respects under the Guaranty without any termination, reduction,
impairment or reduction whatsoever, irrespective of whether Guarantor shall
execute an affirmation or reaffirmation of its obligations under the Guaranty,
or otherwise affirm or reaffirm its obligations hereunder in connection
therewith.

(e)    GUARANTOR HEREBY IRREVOCABLY WAIVES ANY CONTENTION THAT ITS OBLIGATIONS
UNDER THIS GUARANTY ARE UNENFORCEABLE, AND HEREBY ACKNOWLEDGES THAT IT IS
ESTOPPED TO ASSERT TO THE CONTRARY.

15.    Notices. Any notice, request or other communication (“Notice”) to be
given by any party hereunder shall be in writing and shall be sent by registered
or certified mail, postage prepaid and return receipt requested, by hand
delivery or express courier service, by facsimile transmission or by an
overnight express service to the following address:

To Guarantor:

MGM Resorts International

6385 South Rainbow Boulevard

Suite 500

Las Vegas, NV 89118

Attention: Corporate Legal

With a copy to

(that shall not constitute notice):

Email: legalnotices@mgmresorts.com

With a copy to

(that shall not constitute notice):

Weil, Gotshal & Manges, LLP

767 Fifth Avenue

New York, NY 10153

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Attention: Michael Aiello

                 W. Michael Bond

Email: michael.aiello@weil.com

            michael.bond@weil.com

To Landlord:

MGP Growth Properties LLC

1980 Festival Plaza Drive, Suite 750

Las Vegas, Nevada 89135

Attention: James C. Stewart

Email: JStewart@mgpreit.com

With a copy to

(that shall not constitute notice):

c/o BREIT Operating Partnership L.P.

345 Park Avenue

New York, New York 10154

Attention: Head, U.S. Asset Management

Email: realestatenotices@blackstone.com

and

c/o BREIT Operating Partnership L.P.

345 Park Avenue

New York, New York 10154

Attention: General Counsel

Email: realestatenotices@blackstone.com

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Gregory Ressa

Email: gressa@stblaw.com

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Erik Quarfordt

Email: equarfordt@stblaw.com

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and

Hogan Lovells

Columbia Square

555 Thirteenth Street, NW

Washington, D.C. 20004

Attention: Matt N. Thomson

Email: matt.thomson@hoganlovells.com

or to such other address as either party may hereafter designate. Notice shall
be deemed to have been given on the date of delivery if such delivery is made on
a Business Day, or if not, on the first Business Day after delivery. If delivery
is refused, Notice shall be deemed to have been given on the date delivery was
first attempted. Notice sent by facsimile transmission shall be deemed given
upon confirmation that such Notice was received at the number specified above or
in a Notice to the sender.

16.    Miscellaneous.

(a)    No term, condition or provision of this Guaranty may be waived except by
an express written instrument to that effect signed by Landlord. No waiver of
any term, condition or provision of this Guaranty will be deemed a waiver of any
other term, condition or provision, irrespective of similarity, or constitute a
continuing waiver of the same term, condition or provision, unless otherwise
expressly provided. No term, condition or provision of this Guaranty may be
amended or modified with respect to Guarantor except by an express written
instrument to that effect signed by Landlord and Guarantor.

(b)    If any one or more of the terms, conditions or provisions contained in
this Guaranty is found in a final award or judgment rendered by any court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining terms, conditions and
provisions of this Guaranty shall not in any way be affected or impaired
thereby, and this Guaranty shall be interpreted and construed as if the invalid,
illegal, or unenforceable term, condition or provision had never been contained
in this Guaranty.

(c)    THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, EXCEPT THAT THE LAWS OF THE STATE OF NEVADA SHALL
GOVERN THIS AGREEMENT TO THE EXTENT NECESSARY (I) TO OBTAIN THE BENEFIT OF THE
RIGHTS AND REMEDIES SET FORTH HEREIN WITH RESPECT TO ANY OF THE LEASED PROPERTY
AND (II) FOR PROCEDURAL REQUIREMENTS WHICH MUST BE GOVERNED BY THE LAWS OF THE
STATE. GUARANTOR CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE STATE AND
FEDERAL COURTS OF NEW YORK AND AGREES THAT ALL DISPUTES CONCERNING THIS GUARANTY
SHALL BE HEARD IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK.
GUARANTOR FURTHER CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE STATE AND
FEDERAL COURTS OF EACH STATE WITH RESPECT TO ANY ACTION COMMENCED BY LANDLORD
SEEKING TO RETAKE POSSESSION OF ANY OR ALL OF THE LEASED PROPERTY IN WHICH
GUARANTOR IS REQUIRED TO BE NAMED AS A

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NECESSARY PARTY. GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE EFFECTED UPON
IT UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF THE STATE OF NEW YORK AND
IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN THE STATE AND FEDERAL COURTS
LOCATED IN THE STATE OF NEW YORK OR, TO THE EXTENT APPLICABLE IN ACCORDANCE WITH
THE TERMS HEREOF, LOCATED IN CLARK COUNTY IN THE STATE OF NEVADA.

(d)    GUARANTOR, BY ITS EXECUTION OF THIS GUARANTY, AND LANDLORD, BY ITS
EXECUTION AND ACCEPTANCE OF THIS GUARANTY, EACH HEREBY WAIVE TRIAL BY JURY AND
THE RIGHT THERETO IN ANY ACTION OR PROCEEDING OF ANY KIND ARISING ON, UNDER, OUT
OF, BY REASON OF OR RELATING IN ANY WAY TO THIS GUARANTY OR THE INTERPRETATION,
BREACH OR ENFORCEMENT THEREOF.

(e)    In the event of any suit, action, arbitration or other proceeding to
interpret this Guaranty, or to determine or enforce any right or obligation
created hereby, the prevailing party in the action shall recover such party’s
reasonable costs and expenses incurred in connection therewith, including, but
not limited to, reasonable attorneys’ fees and costs of appeal, post judgment
enforcement proceedings (if any) and bankruptcy proceedings (if any). Any court,
arbitrator or panel of arbitrators shall, in entering any judgment or making any
award in any such suit, action, arbitration or other proceeding, in addition to
any and all other relief awarded to such prevailing party, include in such
judgment or award such party’s reasonable costs and expenses as provided in this
Section 16(e).

(f)    Guarantor (i) represents that it has been represented and advised by
counsel in connection with the execution of this Guaranty; (ii) acknowledges
receipt of a copy of the Lease Documents; and (iii) further represents that
Guarantor has been advised by counsel with respect thereto. This Guaranty shall
be construed and interpreted in accordance with the plain meaning of its
language, and not for or against Guarantor or Landlord, and as a whole, giving
effect to all of the terms, conditions and provisions hereof.

(g)    Except as provided in any other written agreement now or at any time
hereafter in force between Landlord and Guarantor, this Guaranty shall
constitute the entire agreement of Guarantor with Landlord with respect to the
subject matter hereof, and no representation, understanding, promise or
condition concerning the subject matter hereof will be binding upon Landlord or
Guarantor unless expressed herein.

(h)    All stipulations, obligations, liabilities and undertakings under this
Guaranty shall be binding upon Guarantor and its successors and assigns and
shall inure to the benefit of Landlord and to the benefit of Landlord’s
successors and assigns.

(i)    Whenever the singular shall be used hereunder, it shall be deemed to
include the plural (and vice-versa) and reference to one gender shall be
construed to include all other genders, including neuter, whenever the context
of this Guaranty so requires. Section captions or headings used in the Guaranty
are for convenience and reference only, and shall not affect the construction
thereof.

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(j)    This Guaranty may be executed in any number of counterparts, each of
which shall be a valid and binding original, but all of which together shall
constitute one and the same instrument.

17.    No Third Party Beneficiaries. Landlord and its successors and assigns are
the beneficiaries of this Guaranty. No other Person shall be a third-party
beneficiary hereof. Without limiting the foregoing, no other creditor or equity
holder of Landlord, any parent company or its Subsidiaries shall have any rights
or be entitled to any benefits hereunder. For the avoidance of doubt, Guarantor
hereby consents to the collateral assignment of this Guaranty to any Fee
Mortgagee and agrees that any Person who succeeds to Landlord’s interest under
any of the Lease Documents in accordance with the terms thereof (or enters into
a new lease with Tenant in accordance with Section 31.2 of the Lease) shall
constitute a permitted successor and/or assignee and intended beneficiary hereof
(and shall become, be recognized by Guarantor as, and have all of the rights of
“Landlord” hereunder).

[Signature Page to Follow]

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EXECUTED as of the date first set forth above.

 

GUARANTOR:

 

MGM RESORTS INTERNATIONAL, a Delaware

corporation

By:    Name:    Title:   

MB LANDLORD:

 

MANDALAY PROPCO, LLC, a Delaware limited

liability company

By:    Name:    Title:   

GRAND LANDLORD:

 

MGM GRAND PROPCO, LLC, a Delaware limited

liability company

   By:    Name:    Title:   

 

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