Exhibit
4.4


 


MEZZANINE LOAN AND SECURITY AGREEMENT (SECOND
MEZZANINE)


 


 


 


Dated as of November 7, 2007


 


Among


 


 


FCP MEZZCO BORROWER II, LLC


as Mezzanine Borrower


 


 


and


 


 


GERMAN AMERICAN CAPITAL CORPORATION


 


and


 


JPMORGAN CHASE BANK, N.A.,


 


on behalf of the holders of the Mezzanine Notes,


 


as Mezzanine Lender


 


 

















 


TABLE OF CONTENTS


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  I.

  	
  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

  	
  1

  
	
   

  	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
  1.2

  	
  Principles of Construction

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  GENERAL TERMS

  	
  31

  
	
   

  	
  2.1

  	
  Loan; Disbursement to Mezzanine Borrower

  	
  31

  
	
   

  	
   

  	
  2.1.1

  	
  The Loan

  	
  31

  
	
   

  	
   

  	
  2.1.2

  	
  Disbursement to Mezzanine Borrower

  	
  31

  
	
   

  	
   

  	
  2.1.3

  	
  The Mezzanine Notes, Pledge and Mezzanine Loan
  Documents

  	
  31

  
	
   

  	
   

  	
  2.1.4

  	
  Use of Proceeds

  	
  31

  
	
   

  	
  2.2

  	
  Interest; Loan Payments; Late Payment Charge

  	
  32

  
	
   

  	
   

  	
  2.2.1

  	
  Payment of Principal and Interest

  	
  32

  
	
   

  	
   

  	
  2.2.2

  	
  Method and Place of Payment

  	
  32

  
	
   

  	
   

  	
  2.2.3

  	
  Late Payment Charge

  	
  33

  
	
   

  	
   

  	
  2.2.4

  	
  Usury Savings

  	
  33

  
	
   

  	
  2.3

  	
  Prepayments

  	
  33

  
	
   

  	
   

  	
  2.3.1

  	
  Mandatory Prepayments

  	
  33

  
	
   

  	
   

  	
  2.3.2

  	
  Prepayments After Event of Default; Application of
  Amounts Paid

  	
  34

  
	
   

  	
   

  	
  2.3.3

  	
  Release of Collateral upon Repayment of Loan in Full

  	
  34

  
	
   

  	
   

  	
  2.3.4

  	
  Release of Individual Properties

  	
  34

  
	
   

  	
   

  	
  2.3.5

  	
  Substitution of Properties.

  	
  37

  
	
   

  	
   

  	
  2.3.6

  	
  Provisions Relating to Individual Properties That Go
  Dark

  	
  43

  
	
   

  	
   

  	
  2.3.7

  	
  Excess Account Collateral

  	
  44

  
	
   

  	
   

  	
  2.3.8

  	
  Reserve Requirements

  	
  44

  
	
   

  	
   

  	
  2.3.9

  	
  Release of Unimproved Parcels

  	
  44

  
	
   

  	
  2.4

  	
  Regulatory Change; Taxes

  	
  45

  
	
   

  	
   

  	
  2.4.1

  	
  Increased Costs

  	
  45

  
	
   

  	
   

  	
  2.4.2

  	
  Special Taxes

  	
  46

  
	
   

  	
   

  	
  2.4.3

  	
  Other Taxes

  	
  47

  
	
   

  	
   

  	
  2.4.4

  	
  Indemnity

  	
  47

  
	
   

  	
   

  	
  2.4.5

  	
  Change of Office

  	
  47

  
	
   

  	
   

  	
  2.4.6

  	
  Survival

  	
  47

  
	
   

  	
  2.5

  	
  Conditions Precedent to Closing

  	
  47

  
	
   

  	
   

  	
  2.5.1

  	
  Representations and Warranties; Compliance with
  Conditions

  	
  47

  
	
   

  	
   

  	
  2.5.2

  	
  Delivery of Mezzanine Loan Documents; Title
  Policies; Reports; Leases

  	
  48

  
	
   

  	
   

  	
  2.5.3

  	
  Delivery of Organizational Documents

  	
  49

  
	
   

  	
   

  	
  2.5.4

  	
  Counsel Opinions

  	
  50

  
	
   

  	
   

  	
  2.5.5

  	
  Consummation of the Merger

  	
  50

  
	
   

  	
   

  	
  2.5.6

  	
  Payments

  	
  51

  
	
   

  	
   

  	
  2.5.7

  	
  Transaction Costs

  	
  51

  
	
   

  	
   

  	
  2.5.8

  	
  Material Adverse Effect

  	
  51

  



 

















 


	
   

  	
   

  	
  2.5.9

  	
  Control

  	
  51

  
	
   

  	
   

  	
  2.5.10

  	
  Insolvency

  	
  51

  
	
   

  	
   

  	
  2.5.11

  	
  Master Lease and Individual Property Subleases

  	
  51

  
	
   

  	
   

  	
  2.5.12

  	
  Equity Contribution

  	
  51

  
	
   

  	
   

  	
  2.5.13

  	
  Existing Indebtedness

  	
  52

  
	
   

  	
   

  	
  2.5.14

  	
  Ground Lease and Fee Mortgagee Estoppels

  	
  52

  
	
   

  	
   

  	
  2.5.15

  	
  Equity and Real Property Transfer Documents

  	
  52

  
	
   

  	
   

  	
  2.5.16

  	
  No Competing Financing

  	
  53

  
	
   

  	
   

  	
  2.5.17

  	
  Approvals

  	
  53

  
	
   

  	
   

  	
  2.5.18

  	
  Searches

  	
  53

  
	
   

  	
  2.6

  	
  Additional Mezzanine Borrower Deliveries and
  Performance

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  CASH MANAGEMENT

  	
  53

  
	
   

  	
  3.1

  	
  Cash Management

  	
  53

  
	
   

  	
   

  	
  3.1.1

  	
  Establishment of Accounts

  	
  53

  
	
   

  	
   

  	
  3.1.2

  	
  Pledge of Account Collateral (Second Mezzanine)

  	
  54

  
	
   

  	
   

  	
  3.1.3

  	
  Maintenance of Collateral Accounts

  	
  55

  
	
   

  	
   

  	
  3.1.4

  	
  Eligible Accounts

  	
  55

  
	
   

  	
   

  	
  3.1.5

  	
  Deposits into Sub-Accounts

  	
  55

  
	
   

  	
   

  	
  3.1.6

  	
  Monthly Funding

  	
  55

  
	
   

  	
   

  	
  3.1.7

  	
  Cash Management Bank (Second Mezzanine)

  	
  57

  
	
   

  	
   

  	
  3.1.8

  	
  Mezzanine Borrower’s Account Representations,
  Warranties and Covenants

  	
  58

  
	
   

  	
   

  	
  3.1.9

  	
  Account Collateral (Second Mezzanine) and Remedies

  	
  58

  
	
   

  	
   

  	
  3.1.10

  	
  Transfers and Other Liens

  	
  59

  
	
   

  	
   

  	
  3.1.11

  	
  Reasonable Care

  	
  59

  
	
   

  	
   

  	
  3.1.12

  	
  Mezzanine Lender’s Liability

  	
  60

  
	
   

  	
   

  	
  3.1.13

  	
  Continuing Security Interest

  	
  60

  
	
   

  	
   

  	
  3.1.14

  	
  Distributions

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  61

  
	
   

  	
  4.1

  	
  Mezzanine Borrower Representations

  	
  61

  
	
   

  	
   

  	
  4.1.1

  	
  Organization

  	
  61

  
	
   

  	
   

  	
  4.1.2

  	
  Proceedings

  	
  61

  
	
   

  	
   

  	
  4.1.3

  	
  No Conflicts

  	
  62

  
	
   

  	
   

  	
  4.1.4

  	
  Litigation

  	
  62

  
	
   

  	
   

  	
  4.1.5

  	
  Agreements

  	
  62

  
	
   

  	
   

  	
  4.1.6

  	
  Title to Property and Assets

  	
  63

  
	
   

  	
   

  	
  4.1.7

  	
  No Bankruptcy Filing

  	
  64

  
	
   

  	
   

  	
  4.1.8

  	
  Full and Accurate Disclosure

  	
  64

  
	
   

  	
   

  	
  4.1.9

  	
  Ownership Interests

  	
  64

  
	
   

  	
   

  	
  4.1.10

  	
  No Plan Assets

  	
  64

  
	
   

  	
   

  	
  4.1.11

  	
  Compliance

  	
  65

  
	
   

  	
   

  	
  4.1.12

  	
  Financial Information

  	
  65

  
	
   

  	
   

  	
  4.1.13

  	
  Condemnation

  	
  65

  
	
   

  	
   

  	
  4.1.14

  	
  Federal Reserve Regulations

  	
  65

  
	
   

  	
   

  	
  4.1.15

  	
  Utilities and Public Access

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


ii

















 


	
   

  	
   

  	
  4.1.16

  	
  Not a Foreign Person

  	
  66

  
	
   

  	
   

  	
  4.1.17

  	
  Setoff, Etc

  	
  66

  
	
   

  	
   

  	
  4.1.18

  	
  Representations and Warranties in the Loan Documents
  (Mortgage)

  	
  66

  
	
   

  	
   

  	
  4.1.19

  	
  Representations and Warranties in the Loan Documents
  (Senior Mezzanine)

  	
  66

  
	
   

  	
   

  	
  4.1.20

  	
  Enforceability

  	
  66

  
	
   

  	
   

  	
  4.1.21

  	
  Reserved

  	
  67

  
	
   

  	
   

  	
  4.1.22

  	
  Insurance

  	
  67

  
	
   

  	
   

  	
  4.1.23

  	
  Use of Property

  	
  67

  
	
   

  	
   

  	
  4.1.24

  	
  Certificate of Occupancy; Licenses

  	
  67

  
	
   

  	
   

  	
  4.1.25

  	
  Flood Zone

  	
  67

  
	
   

  	
   

  	
  4.1.26

  	
  Physical Condition

  	
  67

  
	
   

  	
   

  	
  4.1.27

  	
  Boundaries

  	
  67

  
	
   

  	
   

  	
  4.1.28

  	
  Subleases

  	
  68

  
	
   

  	
   

  	
  4.1.29

  	
  Filing and Recording Taxes

  	
  68

  
	
   

  	
   

  	
  4.1.30

  	
  Single Purpose Entity/Separateness

  	
  68

  
	
   

  	
   

  	
  4.1.31

  	
  Reserved

  	
  69

  
	
   

  	
   

  	
  4.1.32

  	
  Illegal Activity

  	
  69

  
	
   

  	
   

  	
  4.1.33

  	
  No Change in Facts or Circumstances; Disclosure

  	
  69

  
	
   

  	
   

  	
  4.1.34

  	
  Reserved

  	
  69

  
	
   

  	
   

  	
  4.1.35

  	
  Tax Filings

  	
  69

  
	
   

  	
   

  	
  4.1.36

  	
  Solvency/Fraudulent Conveyance

  	
  69

  
	
   

  	
   

  	
  4.1.37

  	
  Investment Company Act

  	
  69

  
	
   

  	
   

  	
  4.1.38

  	
  Interest Rate Cap Agreement (Second Mezzanine)

  	
  70

  
	
   

  	
   

  	
  4.1.39

  	
  Labor

  	
  70

  
	
   

  	
   

  	
  4.1.40

  	
  Brokers

  	
  70

  
	
   

  	
   

  	
  4.1.41

  	
  No Other Debt

  	
  70

  
	
   

  	
   

  	
  4.1.42

  	
  Taxpayer Identification Number

  	
  70

  
	
   

  	
   

  	
  4.1.43

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

  	
  70

  
	
   

  	
   

  	
  4.1.44

  	
  Merger Agreement

  	
  71

  
	
   

  	
   

  	
  4.1.45

  	
  Rights of First Refusal or First Offer to Lease or
  Purchase

  	
  71

  
	
   

  	
  4.2

  	
  Survival of Representations

  	
  71

  
	
   

  	
  4.3

  	
  Mezzanine Borrower’s Knowledge

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  MEZZANINE BORROWER COVENANTS

  	
  71

  
	
   

  	
  5.1

  	
  Affirmative Covenants

  	
  71

  
	
   

  	
   

  	
  5.1.1

  	
  Performance by Mezzanine Borrower

  	
  72

  
	
   

  	
   

  	
  5.1.2

  	
  Existence; Compliance with Legal Requirements;
  Insurance

  	
  72

  
	
   

  	
   

  	
  5.1.3

  	
  Litigation

  	
  72

  
	
   

  	
   

  	
  5.1.4

  	
  Single Purpose Entity

  	
  72

  
	
   

  	
   

  	
  5.1.5

  	
  Consents

  	
  74

  
	
   

  	
   

  	
  5.1.6

  	
  Access to Property

  	
  74

  
	
   

  	
   

  	
  5.1.7

  	
  Notice of Default

  	
  74

  
	
   

  	
   

  	
  5.1.8

  	
  Cooperate in Legal Proceedings

  	
  74

  
	
   

  	
   

  	
  5.1.9

  	
  Reserved

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


iii

















 


	
   

  	
   

  	
  5.1.10

  	
  Insurance

  	
  75

  
	
   

  	
   

  	
  5.1.11

  	
  Further Assurances; Separate Notes; Loan Resizing

  	
  75

  
	
   

  	
   

  	
  5.1.12

  	
  Mortgage Taxes

  	
  76

  
	
   

  	
   

  	
  5.1.13

  	
  Operation

  	
  76

  
	
   

  	
   

  	
  5.1.14

  	
  Business and Operations

  	
  76

  
	
   

  	
   

  	
  5.1.15

  	
  Title to the Collateral

  	
  77

  
	
   

  	
   

  	
  5.1.16

  	
  Costs of Enforcement

  	
  77

  
	
   

  	
   

  	
  5.1.17

  	
  Estoppel Statements

  	
  77

  
	
   

  	
   

  	
  5.1.18

  	
  Loan Proceeds

  	
  78

  
	
   

  	
   

  	
  5.1.19

  	
  No Joint Assessment

  	
  78

  
	
   

  	
   

  	
  5.1.20

  	
  No Further Encumbrances

  	
  78

  
	
   

  	
   

  	
  5.1.21

  	
  Loan (Mortgage) Covenants

  	
  78

  
	
   

  	
   

  	
  5.1.22

  	
  Master Lease

  	
  79

  
	
   

  	
   

  	
  5.1.23

  	
  Covenants

  	
  81

  
	
   

  	
  5.2

  	
  Negative Covenants

  	
  82

  
	
   

  	
   

  	
  5.2.1

  	
  Incur Debt

  	
  82

  
	
   

  	
   

  	
  5.2.2

  	
  Encumbrances

  	
  82

  
	
   

  	
   

  	
  5.2.3

  	
  Engage in Different Business

  	
  82

  
	
   

  	
   

  	
  5.2.4

  	
  Make Advances

  	
  83

  
	
   

  	
   

  	
  5.2.5

  	
  Subdivision

  	
  83

  
	
   

  	
   

  	
  5.2.6

  	
  Commingle

  	
  83

  
	
   

  	
   

  	
  5.2.7

  	
  Guarantee Obligations

  	
  83

  
	
   

  	
   

  	
  5.2.8

  	
  Transfer Assets

  	
  83

  
	
   

  	
   

  	
  5.2.9

  	
  Amend Organizational Documents

  	
  83

  
	
   

  	
   

  	
  5.2.10

  	
  Dissolve

  	
  83

  
	
   

  	
   

  	
  5.2.11

  	
  Bankruptcy

  	
  83

  
	
   

  	
   

  	
  5.2.12

  	
  ERISA

  	
  83

  
	
   

  	
   

  	
  5.2.13

  	
  Distributions

  	
  84

  
	
   

  	
   

  	
  5.2.14

  	
  Modify Mezzanine Account Agreement

  	
  84

  
	
   

  	
   

  	
  5.2.15

  	
  Zoning Reclassification

  	
  84

  
	
   

  	
   

  	
  5.2.16

  	
  Change of Principal Place of Business

  	
  84

  
	
   

  	
   

  	
  5.2.17

  	
  Debt Cancellation

  	
  84

  
	
   

  	
   

  	
  5.2.18

  	
  Misapplication of Funds

  	
  84

  
	
   

  	
   

  	
  5.2.19

  	
  Single-Purpose Entity

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

  	
  85

  
	
   

  	
  6.1

  	
  Insurance Coverage Requirements

  	
  85

  
	
   

  	
   

  	
  6.1.1

  	
  Insurance Proceeds

  	
  85

  
	
   

  	
   

  	
  6.1.2

  	
  Restoration of Property

  	
  85

  
	
   

  	
   

  	
  6.1.3

  	
  Compliance

  	
  85

  
	
   

  	
  6.2

  	
  Condemnation

  	
  86

  
	
   

  	
  6.3

  	
  Certificates

  	
  86

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS

  	
  87

  
	
   

  	
  7.1

  	
  Mortgage Borrower to Pay Impositions and Other
  Charges

  	
  87

  
	
   

  	
  7.2

  	
  No Liens

  	
  87

  
	
   

  	
  7.3

  	
  Contest

  	
  88

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


iv

















 


	
  VIII.

  	
  TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS

  	
  89

  
	
   

  	
  8.1

  	
  General Restriction on Transfers

  	
  89

  
	
   

  	
  8.2

  	
  Sale of Building Equipment

  	
  89

  
	
   

  	
  8.3

  	
  Immaterial Transfers and Easements, etc.

  	
  89

  
	
   

  	
  8.4

  	
  Reserved.

  	
  90

  
	
   

  	
  8.5

  	
  Permitted Equity Transfers

  	
  90

  
	
   

  	
  8.6

  	
  Deliveries to Mezzanine Lender

  	
  91

  
	
   

  	
  8.7

  	
  Loan Assumption

  	
  91

  
	
   

  	
  8.8

  	
  Subleases

  	
  92

  
	
   

  	
   

  	
  8.8.1

  	
  Master Lease and Existing Subleases

  	
  92

  
	
   

  	
   

  	
  8.8.2

  	
  Leasing Conditions

  	
  92

  
	
   

  	
   

  	
  8.8.3

  	
  Delivery of New Sublease or Sublease Modification

  	
  93

  
	
   

  	
   

  	
  8.8.4

  	
  Sublease Amendments

  	
  93

  
	
   

  	
   

  	
  8.8.5

  	
  Security Deposits

  	
  93

  
	
   

  	
   

  	
  8.8.6

  	
  No Default Under Subleases

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  INTEREST RATE CAP AGREEMENT (SECOND MEZZANINE)

  	
  94

  
	
   

  	
  9.1

  	
  Interest Rate Cap Agreement (Second Mezzanine)

  	
  94

  
	
   

  	
  9.2

  	
  Pledge and Collateral Assignment

  	
  94

  
	
   

  	
  9.3

  	
  Covenants

  	
  94

  
	
   

  	
  9.4

  	
  Powers of Mezzanine Borrower Prior to an Event of
  Default

  	
  96

  
	
   

  	
  9.5

  	
  Representations and Warranties

  	
  96

  
	
   

  	
  9.6

  	
  Payments

  	
  97

  
	
   

  	
  9.7

  	
  Remedies

  	
  97

  
	
   

  	
  9.8

  	
  Sales of Rate Cap Collateral (Second Mezzanine)

  	
  99

  
	
   

  	
  9.9

  	
  Public Sales Not Possible

  	
  100

  
	
   

  	
  9.10

  	
  Receipt of Sale Proceeds

  	
  100

  
	
   

  	
  9.11

  	
  Replacement Interest Rate Cap Agreement (Second
  Mezzanine)

  	
  100

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  MAINTENANCE OF PROPERTY; ALTERATIONS

  	
  100

  
	
   

  	
  10.1

  	
  Maintenance of Property

  	
  100

  
	
   

  	
  10.2

  	
  Conditions to Alteration

  	
  100

  
	
   

  	
  10.3

  	
  Costs of Alteration

  	
  101

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND
  OTHER INFORMATION

  	
  102

  
	
   

  	
  11.1

  	
  Books and Records

  	
  102

  
	
   

  	
  11.2

  	
  Financial Statements

  	
  102

  
	
   

  	
   

  	
  11.2.1

  	
  Monthly Reports

  	
  102

  
	
   

  	
   

  	
  11.2.2

  	
  Quarterly Reports

  	
  103

  
	
   

  	
   

  	
  11.2.3

  	
  Annual Reports

  	
  104

  
	
   

  	
   

  	
  11.2.4

  	
  Disclosure Restrictions.

  	
  104

  
	
   

  	
   

  	
  11.2.5

  	
  Capital Expenditures Summaries

  	
  104

  
	
   

  	
   

  	
  11.2.6

  	
  Master Lease

  	
  105

  
	
   

  	
   

  	
  11.2.7

  	
  Annual Budget; Operating Agreement Annual Budgets

  	
  105

  
	
   

  	
   

  	
  11.2.8

  	
  Other Information

  	
  105

  
	
   

  	
   

  	
  11.2.9

  	
  Proprietary Information

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


v

















 


	
  XII.

  	
  ENVIRONMENTAL MATTERS

  	
  106

  
	
   

  	
  12.1

  	
  Representations

  	
  106

  
	
   

  	
  12.2

  	
  Covenants

  	
  106

  
	
   

  	
   

  	
  12.2.1

  	
  Compliance with Environmental Laws

  	
  107

  
	
   

  	
   

  	
  12.2.2

  	
  Notices Regarding Environmental Events

  	
  107

  
	
   

  	
   

  	
  12.2.3

  	
  Other Notices

  	
  107

  
	
   

  	
  12.3

  	
  Environmental Reports

  	
  107

  
	
   

  	
  12.4

  	
  Environmental Indemnification

  	
  108

  
	
   

  	
  12.5

  	
  Recourse Nature of Certain Indemnifications

  	
  109

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  THE OPERATING AGREEMENTS

  	
  109

  
	
   

  	
  13.1

  	
  Operating Agreement Representations, Warranties

  	
  109

  
	
   

  	
  13.2

  	
  Cure by Mezzanine Lender

  	
  110

  
	
   

  	
  13.3

  	
  Option to Renew or Extend the Ground Lease

  	
  111

  
	
   

  	
  13.4

  	
  Operating Agreement Covenants

  	
  111

  
	
   

  	
   

  	
  13.4.1

  	
  Waiver of Interest In New Ground Lease

  	
  111

  
	
   

  	
   

  	
  13.4.2

  	
  No Election to Terminate

  	
  111

  
	
   

  	
   

  	
  13.4.3

  	
  Notice Prior to Rejection

  	
  112

  
	
   

  	
   

  	
  13.4.4

  	
  Mezzanine Lender Right to Perform

  	
  112

  
	
   

  	
   

  	
  13.4.5

  	
  Mezzanine Lender Attorney in Fact

  	
  112

  
	
   

  	
   

  	
  13.4.6

  	
  Payment of Sums Due Under Operating Agreements

  	
  113

  
	
   

  	
   

  	
  13.4.7

  	
  Performance of Covenants

  	
  113

  
	
   

  	
   

  	
  13.4.8

  	
  [Reserved

  	
  113

  
	
   

  	
   

  	
  13.4.9

  	
  No Modification or Termination

  	
  113

  
	
   

  	
   

  	
  13.4.10

  	
  Notices of Default

  	
  113

  
	
   

  	
   

  	
  13.4.11

  	
  Delivery of Information

  	
  113

  
	
   

  	
   

  	
  13.4.12

  	
  No Subordination

  	
  114

  
	
   

  	
   

  	
  13.4.13

  	
  Further Assurances

  	
  114

  
	
   

  	
   

  	
  13.4.14

  	
  Estoppel Certificates

  	
  114

  
	
   

  	
   

  	
  13.4.15

  	
  Common Area/Common Elements Insurance

  	
  114

  
	
   

  	
  13.5

  	
  Mezzanine Lender Right to Participate

  	
  114

  
	
   

  	
  13.6

  	
  No Liability

  	
  114

  
	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
  RESERVED

  	
  115

  
	
   

  	
   

  	
   

  
	
  XV.

  	
  ASSIGNMENTS AND PARTICIPATIONS

  	
  115

  
	
   

  	
  15.1

  	
  Assignment and Acceptance

  	
  115

  
	
   

  	
  15.2

  	
  Effect of Assignment and Acceptance

  	
  115

  
	
   

  	
  15.3

  	
  Content

  	
  115

  
	
   

  	
  15.4

  	
  Register

  	
  116

  
	
   

  	
  15.5

  	
  Substitute Mezzanine Notes

  	
  116

  
	
   

  	
  15.6

  	
  Participations

  	
  117

  
	
   

  	
  15.7

  	
  Disclosure of Information

  	
  117

  
	
   

  	
  15.8

  	
  Security Interest in Favor of Federal Reserve Bank

  	
  117

  
	
   

  	
   

  	
   

  	
   

  



 


vi

















 


	
   

  	
   

  	
   

  	
   

  
	
  XVI.

  	
  RESERVED

  	
  118

  
	
   

  	
   

  	
   

  
	
  XVII.

  	
  DEFAULTS

  	
  118

  
	
   

  	
  17.1

  	
  Event of Default

  	
  118

  
	
   

  	
  17.2

  	
  Remedies

  	
  124

  
	
   

  	
  17.3

  	
  Remedies Cumulative; Waivers

  	
  125

  
	
   

  	
  17.4

  	
  Costs of Collection

  	
  125

  
	
   

  	
   

  	
   

  	
   

  
	
  XVIII.

  	
  SPECIAL PROVISIONS

  	
  126

  
	
   

  	
  18.1

  	
  Exculpation

  	
  126

  
	
   

  	
   

  	
  18.1.1

  	
  Exculpated Parties

  	
  126

  
	
   

  	
   

  	
  18.1.2

  	
  Carveouts From Non-Recourse Limitations

  	
  127

  
	
   

  	
  18.2

  	
  Pro Rata Share

  	
  129

  
	
   

  	
   

  	
   

  	
   

  
	
  XIX.

  	
  MISCELLANEOUS

  	
  129

  
	
   

  	
  19.1

  	
  Survival

  	
  129

  
	
   

  	
  19.2

  	
  Mezzanine Lender’s Discretion

  	
  129

  
	
   

  	
  19.3

  	
  Governing Law

  	
  130

  
	
   

  	
  19.4

  	
  Modification; Waiver in Writing

  	
  131

  
	
   

  	
  19.5

  	
  Delay Not a Waiver

  	
  131

  
	
   

  	
  19.6

  	
  Notices

  	
  131

  
	
   

  	
  19.7

  	
  Trial By Jury

  	
  133

  
	
   

  	
  19.8

  	
  Headings

  	
  133

  
	
   

  	
  19.9

  	
  Severability

  	
  133

  
	
   

  	
  19.10

  	
  Preferences

  	
  133

  
	
   

  	
  19.11

  	
  Waiver of Notice

  	
  134

  
	
   

  	
  19.12

  	
  Expenses; Indemnity

  	
  134

  
	
   

  	
  19.13

  	
  Exhibits and Schedules Incorporated

  	
  136

  
	
   

  	
  19.14

  	
  Offsets, Counterclaims and Defenses

  	
  136

  
	
   

  	
  19.15

  	
  Liability of Assignees of Mezzanine Lender

  	
  136

  
	
   

  	
  19.16

  	
  No Joint Venture or Partnership; No Third Party
  Beneficiaries

  	
  137

  
	
   

  	
  19.17

  	
  Publicity

  	
  137

  
	
   

  	
  19.18

  	
  Waiver of Marshalling of Assets

  	
  137

  
	
   

  	
  19.19

  	
  Waiver of Counterclaim and other Actions

  	
  137

  
	
   

  	
  19.20

  	
  Conflict; Construction of Documents; Reliance

  	
  138

  
	
   

  	
  19.21

  	
  Prior Agreements

  	
  138

  
	
   

  	
  19.22

  	
  Counterparts

  	
  138

  
	
   

  	
  19.23

  	
  Direction of Mortgage Borrower with Respect to the
  Property

  	
  138

  



 


vii

















 


EXHIBITS AND SCHEDULES


 


	
  EXHIBIT A

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT B

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT C

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT D

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT E

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT F

  	
   

  	
  FORM OF MASTER LEASE

  
	
  EXHIBIT G

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT H

  	
   

  	
  FORM OF GROUND LESSOR
  ESTOPPEL CERTIFICATE

  
	
  EXHIBIT I

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT J

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT K

  	
   

  	
  MEZZANINE BORROWER ORGANIZATIONAL
  STRUCTURE

  
	
  EXHIBIT L

  	
   

  	
  INTEREST RATE CAP
  AGREEMENT (SECOND MEZZANINE)

  
	
  EXHIBIT M

  	
   

  	
  FORM OF ASSIGNMENT AND
  ACCEPTANCE AGREEMENT

  
	
  EXHIBIT N

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT O

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT P

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT Q

  	
   

  	
  RATE CAP COUNTERPARTY
  ACKNOWLEDGMENT

  
	
  EXHIBIT R

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT S

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT T

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT U

  	
   

  	
  FORM OF MEMBER POWER

  
	
  EXHIBIT V

  	
   

  	
  PERMITTED SETTLEMENT
  AMOUNTS

  
	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
   

  	
  EXISTING SUBLEASES;
  MATERIAL SUBLEASES; DEFAULTS OR PREPAID RENT UNDER SUBLEASES; SUBLEASING
  STANDARDS

  
	
  SCHEDULE II

  	
   

  	
  LITIGATION SCHEDULE

  
	
  SCHEDULE III

  	
   

  	
  DEFERRED MAINTENANCE AND REMEDIATION

  
	
  SCHEDULE IV

  	
   

  	
  UNIMPROVED PARCELS

  
	
  SCHEDULE VI

  	
   

  	
  RIGHTS OF FIRST REFUSAL OR RIGHTS OF FIRST OFFER (OR
  OTHER RIGHTS OR OPTIONS) TO LEASE OR PURCHASE INDIVIDUAL PROPERTIES

  
	
  SCHEDULE VII

  	
   

  	
  EXISTING MATTERS OF RECORD

  
	
  SCHEDULE VIII

  	
   

  	
  RESERVED

  
	
  SCHEDULE IX

  	
   

  	
  INTERIM SUCCESSOR PRINCIPAL CONTROL PERSONS

  



 


viii

















 


MEZZANINE LOAN AND SECURITY
AGREEMENT (SECOND MEZZANINE)


THIS
MEZZANINE LOAN AND SECURITY AGREEMENT dated as of November 7, 2007 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”),
among FCP MEZZCO BORROWER II, LLC, a Delaware limited liability company (“Mezzanine
Borrower”) having an office at 1505 South Pavilion Center Drive, Las Vegas,
Nevada 89135, GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation (“GACC”
and together with its successors and assigns, “Mezzanine Noteholder I”),
having an address at 60 Wall Street, New York, New York 10005, and JPMORGAN
CHASE BANK, N.A., a national banking association, having an address at 270 Park
Avenue, New York, New York 10017 (“JPMC” and together with its successors
and assigns, “Mezzanine Noteholder II”) (Mezzanine Noteholder I and
Mezzanine Noteholder II, individually or collectively as the context indicates,
“Mezzanine Lender”).


RECITALS:


WHEREAS, Mezzanine Borrower desires to obtain the
Loan (as hereinafter defined) from Mezzanine Lender;


WHEREAS, Mezzanine Lender is willing to make the
Loan to Mezzanine Borrower, subject to and in accordance with the terms of this
Agreement and the other Mezzanine Loan Documents (as hereinafter defined).


NOW, THEREFORE, in consideration of the making of
the Loan by Mezzanine Lender and the covenants, agreements, representations and
warranties set forth in this Agreement, the parties hereto hereby covenant,
agree, represent and warrant as follows:


I.                                         DEFINITIONS; PRINCIPLES OF CONSTRUCTION


1.1           Definitions.  For all purposes of this Agreement, except as
otherwise expressly required or unless the context clearly indicates a contrary
intent:


“80% Trigger Approval Period” shall mean any
period (a) commencing on the Payment Date following the conclusion of any two
(2) consecutive Fiscal Quarters for which the LCR is less than 80% of Closing
Date LCR and (b) ending on the day immediately preceding the Payment Date
following the conclusion of any two (2) consecutive Fiscal Quarters for which
the LCR exceeds 80% of Closing Date LCR, provided that no Noticed
Default or Event of Default is then continuing, and, for avoidance of doubt,
subject to resumption of the 80%
Trigger Approval Period upon any subsequent occurrence of the conditions
set forth in clause (a) above.


“90% Cash Sweep
Period” shall mean any period (a) commencing on the Payment Date following
the conclusion of any two (2) consecutive Fiscal Quarters for which the LCR is
less than 90% of Closing Date LCR and (b) ending on the day immediately
preceding the Payment Date following the conclusion of any two (2) consecutive
Fiscal Quarters for which the LCR


 

















 


exceeds
90% of Closing Date LCR, provided that no Noticed Default or Event of
Default is then continuing, and, for avoidance of doubt, subject to resumption
of the 90% Cash Sweep Period upon any subsequent occurrence of the conditions
set forth in clause (a) above.


 


“Account Collateral (Second Mezzanine)” shall
have the meaning set forth in Section 3.1.2.


“Acknowledgment” shall mean the
Acknowledgment, dated on or about the date hereof made by Counterparty, or as
applicable, Approved Counterparty in the form of Exhibit Q.


“Actually
Known by the Mezzanine Lender to the Contrary” shall mean the actual
receipt, prior to the Closing Date, by Todd Sammann and Michael Mesard of an
email, fax, memorandum, letter or other written statement from any of Mezzanine
Borrower, Sponsor, or Mezzanine Lender’s counsel expressly disclosing to
Mezzanine Lender a state of facts contrary to a representation made by
Mezzanine Borrower in Section 4.1.


“Additional Non-Consolidation Opinion” shall
have the meaning set forth in Section 4.1.30(b).


“Affiliate”
shall mean, with respect to any specified Person, any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
control with, or any general partner or managing member in, such specified
Person.  An Affiliate of a Person
includes, without limitation, (i) any officer or director of such Person, (ii)
any record or beneficial owner of more than 20% of any class of ownership
interests of such Person and (iii) any Affiliate of the foregoing.


“Aggregate Appraised Value” shall have the
meaning set forth in the Loan Agreement (Mortgage).


“Agreement” shall have the meaning set forth
in the Preamble hereof.


“Aliante Financing” shall have the meaning
set forth in Section 2.5.13.


“Allocated Loan Amount” shall mean with
respect to each Individual Property, the designated “Mezzanine Allocated Loan
Amount” allocated to the Loan and applicable to such Individual Property as set
forth in the Loan Agreement (Mortgage).


“ALTA” shall mean American Land Title
Association, or any successor thereto.


“Alteration” shall have the meaning set forth
in the Loan Agreement (Mortgage).


“Annual Budget” shall have the meaning set
forth in the Loan Agreement (Mortgage).


“Appraisals” shall mean the FIRREA appraisals
conducted in 2007 by Cushman & Wakefield on or prior to the Closing Date
which establish the master leased fee or ground leasehold value of each
Individual Property.


 


2

















 


“Appraised Value” shall mean, for an
Individual Property, the value of such Individual Property as determined by the
Appraisal for such Individual Property.


“Approved Bank” shall mean a bank or other
financial institution which has a minimum long-term unsecured debt rating of at
least “A” and a minimum short-term unsecured debt rating of at least “A-1” by
each of the Rating Agencies, or if any such bank or other financial institution
is not rated by all the Rating Agencies, then a minimum long-term rating of at
least “A” and a minimum short-term unsecured debt rating of at least “A-1,” or
their respective equivalents, by two of the Rating Agencies, but in any event
one of the two Rating Agencies shall be S&P, it being understood that the A
and A-1 benchmark ratings and other benchmark ratings in this Agreement are
intended to be the ratings, or the equivalent of ratings, issued by S&P.


“Approved Counterparty” shall mean a bank or
other financial institution which has (a) either (i) a long-term unsecured debt
rating of “A+” or higher by S&P or (ii) if the long-term unsecured debt
rating is “A” or lower by S&P, a short-term rating of not less than “A-1”
from S&P; (b) a long-term unsecured debt rating of not less than “Aa3” by
Moody’s; and (c) if the counterparty is rated by Fitch, either a long-term
unsecured debt rating of not less than “A” from Fitch or a short-term unsecured
debt rating of not less than “F-1” from Fitch.


“Architect” shall mean an architect, engineer
or construction consultant selected by Mortgage Borrower (which can be an
employee of Mortgage Borrower or an Affiliate), licensed to practice in the
relevant State, if required by the laws of such State, and has at least five (5) years of
architectural or construction management experience and which is approved by
Mezzanine Lender, which approval shall not be unreasonably withheld,
delayed or conditioned.


“Asset-Specific Proprietary Information”
shall have the meaning set forth in Section 11.2.9(b).


“Assignment and Acceptance” shall mean an
assignment and acceptance entered into by Mezzanine Lender and an assignee, and
accepted by Mezzanine Lender in accordance with Article XV and in
substantially the form of Exhibit M or such other form customarily used
by Mezzanine Lender in connection with the participation or syndication of
mortgage loans at the time of such assignment.


“Assignment of Leases Counterpart” shall have
the meaning set forth in Section 2.3.5(d).


“Assigned Landlord Lien” shall have the
meaning set forth in the Loan Agreement (Mortgage).


“Bankruptcy Code” shall mean Title 11,
U.S.C.A., as amended from time to time and any successor statute thereto.


“Borrower Party” shall mean any of Mezzanine
Borrower, Mortgage Borrower, Senior Mezzanine Borrower, Junior Mezzanine
Borrowers and Guarantors.


“Building Equipment” shall have the meaning
set forth in the Security Instruments, collectively.


 


3

















 


“Business Day” shall mean any day other than
a Saturday, Sunday or any other day on which national banks in New York or in
the state in which Servicer is located are not open for business.  When used with respect to an Interest
Determination Date, Business Day shall mean any day on which dealings in
deposits in U.S. Dollars are transacted in the London interbank market.


“Cash” shall mean the legal tender of the
United States of America.


“Cash and Cash Equivalents” shall mean any
one or a combination of the following: (i) Cash, and (ii) U.S. Government
Obligations.


“Cash Equity Contribution” shall have the
meaning set forth in Section 2.5.12.


“Cash Management Bank (Second Mezzanine)”
shall mean any Approved Bank acting as Cash Management Bank under the Mezzanine
Account Agreement or other financial institution approved by the Mezzanine
Lender.  The Cash Management Bank
(Mortgage) may serve as the Cash Management Bank (Second Mezzanine) so long as
it is a party to the Mezzanine Account Agreement.


“Cash Management Bank (Mortgage)” shall mean
the “Cash Management Bank” as defined in the Loan Agreement (Mortgage).


“Certificate”
shall have the meaning set forth in the Pledge.


“Close
Affiliate” shall mean with respect to any Person (the “First Person”) any
other Person (each, a “Second Person”) which is an Affiliate of the First
Person and in respect of which any of the following are true: (a) the Second
Person owns, directly or indirectly, at least 75% of all of the legal,
beneficial and/or equitable interest in such First Person, (b) the First Person
owns, directly or indirectly, at least 75% of all of the legal, beneficial
and/or equitable interest in such Second Person, or (c) a third Person owns,
directly or indirectly, at least 75% of all of the legal, beneficial and/or
equitable interest in both the First Person and the Second Person.


“Closing Date” shall mean the date of this
Agreement set forth in the first paragraph hereof.


“Closing Date LCR” shall mean a ratio of 1.28:1.


 “Closing
Date LTV” shall mean 79.7%.


“Code” shall mean the Internal Revenue Code
of 1986, as amended, as it may be further amended from time to time, and any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.


“Collateral” shall mean collectively (i) all
of the Pledged Collateral and all proceeds thereof, (ii) all Receipts, (iii)
any stock certificates or other certificates, membership interest certificates
or instruments evidencing any of the foregoing property described in clauses (i)
and (ii) above, (iv) the Rate Cap Collateral, (Second Mezzanine), (v) the
Account Collateral (Second


 


4

















 


Mezzanine) and (vi) all other rights
appurtenant to the property described in clauses (i) through (v) above.


“Collateral Accounts (Second Mezzanine)”
shall have the meaning set forth in Section 3.1.1.


“Collateral Agent” means German American
Capital Corporation in its capacity as collateral agent acting on behalf of
Mezzanine Lender.


“Combined
Allocated Loan Amount” shall mean with respect to each Individual Property,
the aggregate portions of the Loan,
the Mortgage Loan, the Senior Mezzanine Loan, and the Junior Mezzanine Loans allocated to
such Individual Property that is set forth in the Loan Agreement (Mortgage).


“Combined Principal Amount” shall mean the
sum of each “Principal Amount” as defined in each of the Loan Agreement
(Mortgage), the Senior Mezzanine Loan Agreement, this Mezzanine Loan Agreement,
and the Junior Mezzanine Loan Agreements.


“Combined Release Price” shall mean the
product of (a) the Combined Allocated Loan Amount for the Release Property and
(b) the applicable Combined Release Price Percentage, minus, if applicable, the
principal amount of any prepayment of the Loan paid from Proceeds derived from
a casualty, other damage or injury or Taking affecting such Release Property.


“Combined Release Price Percentage” shall
mean, as of any Release Date, the percentage applicable to the range of the
aggregate of the Combined Allocated Loan Amounts of the Individual Properties
subject to a Security Instrument that would be outstanding immediately
following such Release, as set forth in the following table:


	
  Range of
  Outstanding Aggregate Combined Allocated Loan Amounts Following Release

  	
   

  	
  Combined
  Release Price Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  From $2,475,000,000 to and including $2,103,750,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than $2,103,750,000 to and including $1,732,500,000

  	
   

  	
  110

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than $1,732,500,000 to $0.00

  	
   

  	
  120

  	
  %

  



 


“Contemplated Transactions” shall mean, collectively,
(i) the transactions consummated pursuant to the Merger Agreement, including
but not limited to the acquisition of Station Casinos, Inc. by the Guarantors
and the various equity transfers in connection with the related restructuring,
(ii) the merger of FCP MezzCo Parent Merger Sub, LLC into FCP MezzCo Parent,
LLC, (iii) Mortgage Borrower’s acquisition of the Property from subsidiaries of
Master Lessee and the various equity transfers and merger related to such
acquisition, (iv) the leasing or subleasing of the Property from Mortgage
Borrower to Master Lessee pursuant to the Master Lease, (v) the execution and
delivery of the Mortgage Loan Documents, the Senior Mezzanine Loan Documents,
the Mezzanine Loan Documents, and Junior Mezzanine Loan Documents, Mortgage
Borrower’s, Senior Mezzanine Borrower’s, Mezzanine Borrower’s and Junior


 


5

















 


Mezzanine Borrower’s performance thereunder,
the recordation of the Security Instruments, the filing of the UCC financing
statements evidencing the Pledge, and the exercise of any remedies by Mortgage
Lender, Senior Mezzanine Lender, Mezzanine Lender or any Junior Mezzanine
Lender, and (vi) following Mortgage Lender’s or its designee’s succession in
title to any Property, the transfer of any such Property by Mortgage Lender or
such designee.


“Control” shall mean (i) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise (provided that the granting
of major decision veto rights including, without limitation, with respect to
decisions regarding the sale of material assets, the incurrence or refinancing
of debt, the institution of insolvency, bankruptcy or other proceedings with
respect to debtor protection, and the merger, consolidation, liquidation or
dissolution of such Person in favor of a Person shall not be deemed to
constitute “Control”), together with
(ii) the ownership, direct or indirect, of no less than 51% of the voting
securities of such Person, and the terms Controlled, Controlling and Common
Control shall have correlative meanings.


“Counterparty” shall mean, with respect to
the Interest Rate Cap Agreement (Second Mezzanine), JPMorgan Chase Bank, N.A.,
and with respect to any Replacement Interest Rate Cap Agreement (Second
Mezzanine), any substitute Approved Counterparty.


“Counterparty Opinion” shall have the meaning
set forth in Section 9.3(g).


“Debt” shall mean, with respect to any Person
at any time, (a) indebtedness or liability of such Person for borrowed
money whether or not evidenced by bonds, debentures, notes or other
instruments, or for the deferred purchase price of property or services;
(b) obligations of such Person as lessee under leases which should have
been or should be, in accordance with GAAP, recorded as capital leases;
(c) current liabilities of such Person in respect of unfunded vested
benefits under plans covered by Title IV of ERISA; (d) obligations or
liabilities of such Person arising under letters of credit, credit facilities
or other acceptance facilities; (e) obligations of such Person under any
guarantees or other agreement to become secondarily liable for any obligation
of any other Person, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, to supply funds to invest in any Person or otherwise
to assure a creditor against loss; (f) obligations of such Person secured
by any Lien on any property of such Person, whether or not the obligations have
been assumed by such Person; or (g) obligations of such Person under any
interest rate or currency exchange agreement.


“Debt Service (Second Mezzanine)” shall mean,
with respect to any particular period of time, scheduled interest payments
under the Mezzanine Notes.


“Default” shall mean the occurrence of any
event hereunder or under any other Mezzanine Loan Document which, but for the
giving of notice or passage of time, or both, would be an Event of Default.


“Default Rate” shall have the meaning set
forth in the Mezzanine Notes.


 


6

















 


“Disqualified Transferee” shall mean any
proposed transferee that, (i) has been convicted in a criminal proceeding for a
felony or a crime involving moral turpitude or that is an organized crime
figure or is reputed (as determined by Mezzanine Lender in its sole discretion)
to have substantial business or other affiliations with an organized crime
figure, or (ii) has been found by a court of competent jurisdiction or other
Governmental Authority in a comparable proceeding to have violated any federal
or state securities laws or regulations promulgated thereunder.


“Distributions” shall have the meaning set
forth in the Pledge.


“Eligible Account” shall mean (i)
a segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state-chartered depository
institution subject to regulations regarding fiduciary funds on deposit such as
or similar to Title 12 of the Code of Federal Regulations Section 9.10(b)
which, in either case, has corporate trust powers, acting in its fiduciary
capacity or (ii) a segregated account maintained at an Approved Bank. An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.


“Environmental Certificate” shall have the
meaning set forth in Section 12.2.2.


“Environmental Claim” shall mean the meaning
set forth in the Loan Agreement (Mortgage).


“Environmental Event” shall have the meaning
set forth in Section 12.2.2.


“Environmental
Law” shall mean
any federal, state or local statute, regulation or ordinance or any judicial or
administrative decree or decision, whether now existing or hereinafter enacted,
promulgated or issued, with respect to the protection of human health from any
environmental hazards (as relating to exposure to such environmental hazards),
or the environment, or any Hazardous Materials, wetlands, landfills, open
dumps, storage tanks, underground storage tanks, solid waste, waste water,
storm water run-off, waste emissions or wells. 
Without limiting the generality of the foregoing, the term shall encompass
each of the following statutes, and regulations promulgated thereunder, and
amendments and successors to such statutes and regulations, as may be enacted
and promulgated from time to time:  (i)
the Comprehensive Environmental Response, Compensation and Liability Act of
1980 (codified in scattered sections of 26 U.S.C.; 33 U.S.C.; 42 U.S.C. and 42
U.S.C. §9601 et  seq.); (ii) the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. §6901 et  seq.); (iii) the
Hazardous Materials Transportation Act (49 U.S.C. §1801 et  seq.);
(iv) the Toxic Substances Control Act (15 U.S.C. §2061 et  seq.);
(v) the Clean Water Act (33 U.S.C. §1251 et  seq.); (vi) the Clean
Air Act (42 U.S.C. §7401 et  seq.); (vii) the Safe Drinking Water
Act (21 U.S.C. §349; 42 U.S.C. §201 and §300f et  seq.); (viii)
the National Environmental Policy Act of 1969 (42 U.S.C. §4321); (ix) the
Superfund Amendment and Reauthorization Act of 1986 (codified in scattered
sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.); and (x) Title III
of the Superfund Amendment and Reauthorization Act (40 U.S.C. §1101 et  seq.).


“Environmental Reports” shall have the
meaning set forth in Section 12.1.


 


7

















 


“ERISA” shall mean the United States Employee
Retirement Income Security Act of 1974, as amended from time to time, and the
regulations promulgated and the rulings issued thereunder.


“Event of Default” shall have the meaning set
forth in Section 17.1(a).


“Excess Cash Flow” shall have the meaning set
forth in the Loan Agreement (Mortgage).


“Excess Proceeds” shall have the meaning set
forth in Section 2.3.1.


“Excluded Personal Property” shall mean,
collectively, (a) all of the personal property of Master Lessee (including,
without limitation, all inventory and equipment, but excluding any items that
constitute fixtures), and (b) any personal property of Tenants under Subleases.
For purposes of this definition, the terms “inventory,” “equipment” and “fixtures”
shall have the meaning set forth in the Uniform Commercial Code in effect in
the State of New York, except that the term “fixtures” shall specifically
include, but not be limited to, and the terms “inventory” and “equipment” shall
specifically exclude, all HVAC equipment, elevators, escalators and lighting
together with all equipment, parts and supplies used to service, repair,
maintain and equip the foregoing.


“Exculpated Parties” shall have the meaning
set forth in Section 18.1.1.


“Excusable Delay” shall mean a delay due to strikes,
lockouts, inability to procure materials, power failure, acts of God,
governmental restrictions, enemy or terrorist action, civil commotion, fire,
unavoidable casualty or other causes beyond the control of the Borrower Party
responsible for performing an obligation hereunder, provided that lack of funds
shall not be deemed a cause beyond the control of any Borrower Party.


“Executive
Office Capital Lease” shall have the meaning provided in Section 2.5.13.


“Existing Indebtedness” shall have the
meaning provided in Section 2.5.13.


“Existing Matters of Record” shall mean the
Liens set forth on Schedule VII.


“Existing Notes” shall have the meaning
provided in Section 2.5.13.


“Family Trust” shall mean, with respect
to an individual, any trust or entity owned, controlled by or
established for the benefit of, or the estate of, such individual or that individual’s spouse or lineal descendants
(including adopted children and their lineal descendants).


“Fee Letter” shall mean that certain fee
letter dated October 15, 2007 among Sponsor, FP, GACC, JPMC, and Deutsche Bank
AG, New York Branch.


“Fee
Mortgagee Estoppel Certificate” shall mean an executed estoppel letter from
any mortgagee of, or beneficiary of a deed of trust granted by, a Fee Owner
encumbering the fee simple estate related to the applicable Ground Lease
Property, which estoppel letter shall be in the form attached as Exhibit H-1.


 


8

















 


“Fee
Owner” shall mean, collectively, the owner of the fee simple estate
relating to each Ground Lease Property.


“Fertitta Brothers” shall mean Frank J. Fertitta III and Lorenzo J. Fertitta.


“FF&E” shall have the meaning set forth
in the Master Lease.


“First Mezzanine Borrower” shall mean FCP
MezzCo Borrower I, LLC, a Delaware limited liability company.


“First Mezzanine Lender” shall mean Mezzanine
Noteholder I and Mezzanine Noteholder II, and their respective successors
and/or assigns, as the holder of the First Mezzanine Loan.


“First Mezzanine Loan” shall mean that
certain $150,000,000 mezzanine loan, made as of the date hereof, from First Mezzanine
Lender to First Mezzanine Borrower.


“First Mezzanine Loan Documents” shall mean
the documents evidencing and securing the First Mezzanine Loan, as may be
modified, amended, extended, supplemented, restated or replaced from time to
time.


“First Mezzanine Notes” shall mean that
certain First Mezzanine Note A-1 in the principal amount of $93,750,000  dated as of the date hereof, from First
Mezzanine Borrower to First Mezzanine Lender and that certain First Mezzanine
Note A-2 in the principal amount of $56,250,000 dated as of the date hereof,
from First Mezzanine Borrower to First Mezzanine Lender.


 “Fiscal
Quarter” shall mean each quarter within a Fiscal Year.


“Fiscal Year” shall mean the calendar year
during each year of the term of the Loan or the portion of any such 12-month
period falling within the term of the Loan in the event that such a 12-month
period occurs partially before or after, or partially during, the term of the
Loan, or such other 12-month fiscal accounting period as Mezzanine Borrower may
establish from time to time.


“Fitch” shall mean Fitch Ratings Inc.


“FP” shall mean Fertitta Partners LLC, a
Nevada limited liability company.


“Funding Letter Agreement” shall mean that
certain letter agreement, dated as of even date with this Agreement, between
Mortgage Borrower and Mortgage Lender with respect to conditions precedent to
funding the Loan, the Mortgage Loan, the Senior Mezzanine Loan and the Junior
Mezzanine Loans.


“GAAP” shall mean the generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the


 


9

















 


accounting profession), or in such other
statements by such entity as may be in general use by significant segments of
the U.S. accounting profession as of the Closing Date, to the extent such
principles are applicable to the facts and circumstances on the date of
determination.


“Gaming
Authority” shall mean those federal, state and local governmental,
regulatory and administrative authorities, agencies, boards and officials responsible for or involved in the
regulation of gaming or gaming activities in any jurisdiction, including within
the State of Nevada, specifically, the Nevada Gaming Commission, the Nevada
State Gaming Control Board, and applicable local authorities.


“Gaming
Laws” shall mean those laws pursuant to which any Gaming Authority
possesses regulatory, licensing or permit authority over gaming within any
jurisdiction applicable to the Property and, within the State of Nevada,
specifically, the Nevada Gaming Control Act, as codified in the Chapter 463 of
the Nevada Revised Statutes, and
the regulations of the Nevada Gaming Commission and Nevada State Gaming Control
Board promulgated thereunder, as amended from time to time.


“Go Dark” shall mean, with respect to any
Individual Property, if such Individual Property is not open for business to
the public, unless such closure (i) is a result of a Taking of or casualty or
other damage or injury to such Individual Property or some other Excusable
Delay or (ii) is in connection with an Alteration permitted hereunder (and
provided that not more than one Individual Property may be closed in connection
with an Alteration at any one time unless such concurrent closure is expressly
pre-approved by Mezzanine Lender in writing or is unavoidable in order for
Mortgage Borrower, Master Lessee or Tenant, to comply with Legal Requirements)
and, in either such case, the period of closure does not in any event
exceed (A) solely with respect to a closure due to casualty for which business
interruption insurance proceeds are payable to Master Lessee (or Mortgage Borrower or Mortgage Lender)
under the policy of business interruption insurance maintained by Master Lessee
pursuant to the terms of the Master Lease, the period of time for which such
business interruption insurance proceeds are payable, or (B) as to any other
closure, thirty (30) consecutive days, provided that if in connection with a
Material Alteration, Mezzanine Borrower
shall have caused Mortgage Borrower to
disclose to Mezzanine Lender that the Material Alteration will require
the affected Individual Property to be closed to the public for a specified
period exceeding thirty (30) consecutive days and Mezzanine Lender shall have
approved such Material Alteration, the Individual Property may be closed to the
public for such specified period of closure without being deemed to have “Gone
Dark.”


“Governmental Authority” shall mean any
court, board, agency, commission, office or other authority of any nature
whatsoever for any governmental unit (federal, state, county, district,
municipal, city or otherwise) whether now or hereafter in existence.


“Ground Lease Property” shall mean,
collectively, each Individual Property of which Mortgage Borrower is a tenant under a Ground Lease.


“Ground
Leases” shall have the meaning provided in the Security Instruments,
collectively.


 


10

















 


“Ground
Lessor Estoppel Certificate” shall mean an executed estoppel letter from a
Fee Owner in the form attached as Exhibit H.


“Ground
Rent” shall mean the aggregate amount of all rent and other amounts payable
by the Mortgage Borrower
pursuant to the Ground Leases.


“Guarantors” shall mean Holdco, FP and
VoteCo.


“Hazardous
Materials” shall mean each and every element, compound, chemical
mixture, contaminant, pollutant, material, waste or other substance which is
defined, determined or identified as hazardous or toxic under any Environmental
Law.  Without limiting the generality of
the foregoing, the term shall mean and include:


(i)            “hazardous
substances” as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendment and
Reauthorization Act of 1986, or Title III of the Superfund Amendment and
Reauthorization Act, each as amended, and regulations promulgated thereunder;
excluding, however, common maintenance and cleaning products regularly found at
properties with a standard of operation and maintenance comparable to the
Property;


(ii)           “hazardous
waste” and “regulated substances” as defined in the Resource
Conservation and Recovery Act of 1976, as amended, and regulations promulgated
thereunder;


(iii)          “hazardous
materials” as defined in the Hazardous Materials Transportation Act, as
amended, and regulations promulgated thereunder; and


(iv)          “chemical
substance or mixture” as defined in the Toxic Substances Control Act, as
amended, and regulations promulgated thereunder.


“Holdco” shall mean FCP Holding, Inc., a
Nevada corporation.


“Holding Account” shall mean the “Holding
Account” and various sub-accounts to the Holding Account established pursuant
to the Loan Agreement (Mortgage) as in effect on the date hereof.


“Impositions” shall mean all taxes (including
all ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible transaction, privilege
or license or similar taxes), governmental assessments (including all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Agreement), water, sewer or other rents and charges,
excises, levies, fees (including license, permit, inspection, authorization and
similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property and/or any Rents (including all interest
and penalties thereon), which at any time prior to, during or in respect of the
term hereof may be assessed or imposed on or in respect of or be a Lien upon
(a) Mezzanine Borrower, Senior Mezzanine Borrower, or Mortgage Borrower
(including all income, franchise, single business or other taxes


 


11

















 


imposed on Mezzanine Borrower, Senior
Mezzanine Borrower, or Mortgage Borrower for the privilege of doing business in
the jurisdiction in which the Property is located), (b) the Property, or any
other collateral delivered or pledged to Mortgage Lender, Senior Mezzanine
Lender, or Mezzanine Lender in connection with the Mortgage Loan, Senior
Mezzanine Loan, or Loan, or any part thereof, or any Rents or Receipts
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property or the leasing or use of all or any part
thereof.  Nothing contained in this
Agreement shall be construed to require Mezzanine Borrower, Senior Mezzanine
Borrower, or Mortgage Borrower to pay any tax, assessment, levy or charge
imposed on (i) Master Lessee, (ii) any Tenant or (iii) Mortgage Lender, Senior
Mezzanine Lender, or Mezzanine Lender in the nature of a capital levy, estate,
inheritance, succession, income or net revenue tax.


“Improvements” shall have the meaning set
forth in the Security Instruments, collectively.


“Increased Costs” shall have the meaning set
forth in Section 2.4.1.


“Indebtedness” shall mean, at any given time,
the Principal Amount, together with all accrued and unpaid interest thereon and
all other obligations and liabilities due or to become due to Mezzanine Lender
pursuant hereto, under the Mezzanine Notes or in accordance with the other
Mezzanine Loan Documents and all other amounts, sums and expenses paid by or
payable to Mezzanine Lender hereunder or pursuant to the Mezzanine Notes or the
other Mezzanine Loan Documents.


“Indemnified Parties” shall have the meaning
set forth in Section 19.12(b).


“Independent” shall mean, when used with
respect to any Person, a Person who: (i) does not have any direct financial
interest or any material indirect financial interest in any Borrower Party or
in any Affiliate of any Borrower Party, (ii) is not connected with any Borrower
Party or any Affiliate of any Borrower Party as an officer, employee, promoter,
underwriter, trustee, partner, member, manager, creditor, director, supplier,
customer or person performing similar functions and (iii) is not a member of
the immediate family of a Person defined in (i) or (ii) above.


“Independent Accountant” shall mean a firm of
nationally recognized, certified public accountants which is Independent and
which is selected by Mortgage Borrower, Senior Mezzanine Borrower, or Mezzanine
Borrower, as applicable, and reasonably acceptable to Mezzanine Lender.


“Independent Director,” “Independent
Manager,” or “Independent Member” shall mean a Person who is not and
will not be while serving, and has not been in the five (5) years preceding the
date hereof, (i) a member (other than an Independent Member), manager (other
than an Independent Manager), director (other than an Independent Director),
officer, employee, attorney, or counsel of Mezzanine Borrower or its Affiliates
(provided that Mezzanine Borrower may have the same Independent Directors,
Independent Managers or Independent Members as Mortgage Borrower, Senior
Mezzanine Borrower, or any Junior Mezzanine Borrower), (ii) a


 


12

















 


customer, supplier or other Person who
derives more than 1% of its purchases or revenues from its activities with
Mezzanine Borrower or its Affiliates, (iii) a direct or indirect legal or
beneficial owner in any entity referred to in (i) or (ii) above or any of its
Affiliates, (iv) a member of the immediate family of any member, manager,
officer, director, employee, attorney, customer, supplier or other Person
referred to in (i), (ii) or (iii) above, or (v) a person Controlling or under
the common Control of anyone listed in (i) through (iv) above.  A Person that otherwise satisfies the
foregoing shall not be disqualified from serving as an Independent Director or
Independent Manager or Independent Member if such individual is at the time of initial
appointment, or at any time while serving as such, is an Independent Director
or Independent Manager or Independent Member, as applicable, of a Single
Purpose Entity affiliated with Mezzanine Borrower.


“Individual Property” shall have the meaning
set forth in the Loan Agreement (Mortgage).


“Individual Property Sublease” shall mean the
Sublease of an Individual Property from Master Lessee to the subsidiary of
Master Lessee that operates the Individual Property (the “Individual
Property Sublessee”.  There shall be
an Individual Property Sublease for each Individual Property.


“Insurance Requirements” shall have the
meaning set forth in the Loan Agreement (Mortgage).


“Intercreditor Agreement” shall mean an
intercreditor, recognition and standstill agreement among Mezzanine Lender,
Senior Mezzanine Lender, the Junior Mezzanine Lenders, and Mortgage Lender.


“Interest Determination Date” shall have the
meaning set forth in the Mezzanine Notes.


“Interest Period” shall have the meaning set
forth in the Mezzanine Notes.


“Interest Rate Cap Agreement (Second Mezzanine)”
shall mean the Confirmation and Agreement (together with the confirmation and
schedules relating thereto) between the Counterparty and Mezzanine Borrower,
obtained by Mezzanine Borrower and collaterally assigned to Mezzanine Lender
pursuant to this Agreement.  After
delivery of a Replacement Interest Rate Cap Agreement (Second Mezzanine) to
Mezzanine Lender, the term “Interest Rate Cap Agreement (Second Mezzanine)”
shall be deemed to mean such Replacement Interest Rate Cap Agreement (Second
Mezzanine).  The Interest Rate Cap
Agreement (Second Mezzanine) shall be governed by the laws of the State of New
York and shall contain each of the following:


(a)           Notional Amount.  The notional amount of the Interest Rate Cap
Agreement (Second Mezzanine) shall be equal to the Principal Amount, which may
be reduced from time to time in amounts equal to any prepayment of the
principal of the Loan made in accordance with Section 5(b) of the Mezzanine
Notes;


(b)           Remaining Term.  The remaining term of the Interest Rate Cap
Agreement (Second Mezzanine) shall at all times extend through the end of the
Interest Period in which the


 


13

















 


Maturity Date occurs as extended from time to time
pursuant to this Agreement and the Mezzanine Loan Documents;


(c)           Parties. 
The Interest Rate Cap Agreement (Second Mezzanine) shall be issued by
the Counterparty to Mezzanine Borrower and shall be pledged to Mezzanine Lender
by Mezzanine Borrower in accordance with this Agreement;


(d)           Payment Stream.  The Counterparty under the Interest Rate Cap
Agreement (Second Mezzanine) shall be obligated to make a stream of payments,
directly to the Mezzanine Account (whether or not an Event of Default has
occurred) from time to time equal to the product of (i) the notional amount of
such Interest Rate Cap Agreement (Second Mezzanine) multiplied by (ii) the
excess, if any, of LIBOR (including any upward rounding under the definition of
LIBOR) over the Strike Price;


(e)           Acknowledgment.  The Counterparty under the Interest Rate Cap
Agreement (Second Mezzanine) shall execute and deliver the Acknowledgment; and


(f)            Other. 
The Interest Rate Cap Agreement (Second Mezzanine) shall impose no
material obligation on the beneficiary thereof (after payment of the
acquisition cost) and shall be in all material respects reasonably satisfactory
in form and substance to Mezzanine Lender.


“Interest Rate Swap Agreement” shall have the
meaning set forth in the Loan Agreement (Mortgage).


“Junior Mezzanine Borrowers” shall mean,
collectively, Third Mezzanine Borrower and such other mezzanine borrowers party
to the Junior Mezzanine Loans, as the context may require.


“Junior Mezzanine Lender” shall mean,
collectively, Third Mezzanine Lender and such other mezzanine lenders party to
the Junior Mezzanine Loans.


“Junior Mezzanine Loan Agreement” shall mean a Mezzanine Loan and Security Agreement entered into between
a Junior Mezzanine Borrower, as borrower, and a Junior Mezzanine Lender, as
lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.


“Junior Mezzanine Loan Documents” shall mean,
collectively, the Third Mezzanine Loan Documents and such other mezzanine loan
documents created and entered into pursuant to Section 5.1.11(b), as the
context may require.


“Junior Mezzanine Loans” shall mean,
collectively, the Third Mezzanine Loan and such other mezzanine loans junior to
this Loan as may be created pursuant to Section 5.1.11(b).


“Junior Mezzanine Notes” shall mean, collectively,
the Third Mezzanine Notes and such other mezzanine notes created and entered
into pursuant to Section 5.1.11(b), as the context may require.


 


14

















 


“Junior Mezzanine Release Price” shall mean
the product of (a) the “Mezzanine Allocated Loan Amount” for each Junior
Mezzanine Loan with respect to the Release Property as set forth in the Loan
Agreement (Mortgage); and (b) the applicable Combined Release Price Percentage,
minus, if applicable, the principal amount of any prepayment of the Loan paid
from Proceeds derived from a casualty, other damage or injury or Taking
affecting such Release Property.


“Land” shall have the meaning set forth in
the Security Instruments, collectively.


“Land Loan” shall mean indebtedness
incurred pursuant to a senior secured delayed-draw term loan in an aggregate
amount of $250 million that shall be entered into substantially concurrently
with the closing of the transaction contemplated hereunder.


“Late Payment Charge” shall have the meaning
set forth in Section 2.2.3.


“LCR” shall mean a ratio, as determined by
Mortgage Lender for the applicable period, in which:


(a)           the numerator
is Portfolio Four-Wall EBITDAR, applied consistently, as determined by Mortgage
Lender based on Master Lessee’s four most recent quarterly financial statements
with respect to the Property prepared and delivered to Mezzanine Lender in
accordance with Section 11.2.2, for the trailing twelve (12) month
period immediately prior to the applicable calculation date; and


(b)           the denominator
is the aggregate amount of Master Lease Base Rent payable under the Master
Lease for the twelve calendar months immediately prior to the applicable
calculation date, provided that for the twelve-month period following the Closing
Date, LCR shall be calculated based on the Master Lease Base Rent payable under
the Master Lease from the Closing Date through the full calendar month
preceding the calculation date, with such sum annualized to determine the
Master Lease Base Rent for a full twelve month period.


“Leasehold Estate” means the estate in the
Property created by each Ground Lease.


“Legal Requirements” shall have the meaning
set forth in the Loan Agreement (Mortgage).


“Letter of Credit” shall mean an irrevocable,
unconditional, transferable, clean sight draft letter of credit (either an
evergreen letter of credit or one which does not expire until at least sixty
(60) days after the Maturity Date (the LC Expiration Date)), in favor of
Mortgage Lender and entitling Mortgage Lender to draw thereon in New York, New
York, based solely on a statement executed by an officer or authorized
signatory of Mortgage Lender and issued by an Approved Bank.  If at any time (a) the institution issuing
any such Letter of Credit shall cease to be an Approved Bank or (b) the Letter
of Credit is due to expire prior to the LC Expiration Date, Mortgage Lender
shall have the right immediately to draw down the same in full and hold the
proceeds thereof in accordance with the provisions of this Agreement, unless
Mortgage Borrower shall deliver a replacement Letter of Credit from an Approved
Bank within (i) as to (a) above, twenty (20) days after Mortgage Lender
delivers written notice to Mezzanine Borrower


 


15

















 


that the institution issuing the Letter of
Credit has ceased to be an Approved Bank or (ii) as to (b) above, at least
twenty (20) days prior to the expiration date of said Letter of Credit.


“LIBOR” shall have the meaning set forth in
the Mezzanine Notes.


 “LIBOR
Margin” shall have the meaning set forth in the Mezzanine Notes.


“LIBOR Rate” shall have the meaning set forth
in the Mezzanine Notes.


“License” shall have the meaning set forth in
Section 4.1.24.


“License and Reservation Service Agreement”
shall mean the License and Reservation Service Agreement regarding
the branding rights, reservation system and primary customer data base, by and
between Mortgage Borrower and Master Lessee, dated as of the date hereof.


“Lien” shall mean any mortgage, deed of trust,
lien, pledge, hypothecation, assignment, security interest, or any other
encumbrance or charge on or affecting Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, the Collateral, the
Property, any portion thereof or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and the filing of mechanic’s,
materialmen’s and other similar liens and encumbrances.


“Loan” shall mean the loan in the amount of
the Principal Amount made by Mezzanine Lender to Mezzanine Borrower pursuant to
this Agreement.


“Loan Agreement (Mortgage)” shall mean the
Loan and Security Agreement, dated as of the date hereof, between FCP PROPCO,
LLC, a Delaware limited liability company, as borrower, and , GERMAN AMERICAN CAPITAL CORPORATION, a
Maryland corporation and JPMORGAN CHASE BANK, N.A., a national banking association,
collectively as the initial lenders.


“Loan Documents (Mortgage)” or “Mortgage
Loan Documents” shall mean, collectively, the Loan Agreement (Mortgage),
the Mortgage Notes, the Security Instruments, the Assignment of Leases (as
defined in the Loan Agreement (Mortgage)), the Assignment of Licenses (as
defined in the Loan Agreement (Mortgage), the Ground Lessor Estoppel
Certificate, the Master Lease, the Fee Mortgage Estoppel Certificate, SNDA, the
Account Agreement, the Recourse Guaranty and all other documents executed
and/or delivered by Mortgage Borrower, Master Lessee or Guarantor to Mortgage
Lender in connection with the Loan (Mortgage), and in connection with any
Property Substitution, including any opinion certificates or other certifications
or representations delivered by or on behalf of Mortgage Borrower, or any
Affiliate of Borrower, to Mortgage Lender.


“Loan (Mortgage)” or “Mortgage Loan”
shall mean the loan in the amount of $2,050,000,000 made by Mortgage Lender to
Mortgage Borrower pursuant to the Loan Agreement (Mortgage).


 


16

















 


“LTV
Ratio” shall mean the ratio, expressed as a percentage, of the Combined
Principal Amount as of the date of determination, to the Aggregate Appraised Value as of the
date of determination.


“Master Lease” shall mean that certain Master Lease
Agreement for the Property by and between
Mortgage Borrower, as lessor, and Master Lessee, as lessee, dated as of the
date hereof, as more particularly described in Section 5.1.22.


“Master Lessee” shall mean Station
Casinos, Inc., a Nevada corporation and “Master
Lessee Parties” shall mean the Master Lessee and each Individual Property
Sublessee.


 “Material
Adverse Effect” shall mean any event or condition that has a material adverse
effect on (i) the Property taken as a whole, (ii) the use, operation, or value
of any Individual Property, (iii) the business, profits, operations or
financial condition of Mortgage Borrower or Mezzanine Borrower, or (iv) the
ability of Mezzanine Borrower to repay the principal and/or interest of the
Loan as it becomes due or to satisfy any of Mezzanine Borrower’s material
obligations under the Mezzanine Loan Documents (v) the ability of Mortgage
Borrower or Senior Mezzanine Borrower to repay principal and interest of the
Loan (Mortgage) or Senior Mezzanine Loan as it becomes due or satisfy any of
Mortgage Borrower’s obligations under the Loan Documents (Mortgage) or Senior
Mezzanine Borrower’s obligations under the Senior Mezzanine Loan, or (vi) the Collateral
taken as a whole.


“Material Alteration” shall mean any
Alteration which, when aggregated with all related Alterations, involves costs estimated by
Master Lessee (which costs shall be reasonably acceptable to Mezzanine Borrower
and Mezzanine Lender) to be incurred in implementing the Alterations exceeding
$50 million.


“Material Alteration Collateralization Threshold”
shall mean $100 million.


“Material Sublease” shall mean: (i) each
Individual Property Sublease; (ii) any Sublease to a single Tenant covering
10,000 square feet or more of rentable area of any Individual Property; and
(iii) the Material Subleases (including all amendments and supplements thereto)
designated as such on Schedule I attached hereto and made a part hereof.


“Maturity Date” shall have the meaning set
forth in the Mezzanine Notes.


“Maturity Date Payment” shall have the
meaning set forth in the Mezzanine Notes.


“Maximum Legal Rate” shall mean the maximum
non-usurious interest rate, if any, that at any time or from time to time may
be contracted for, taken, reserved, charged or received on the indebtedness
evidenced by the Mezzanine Notes and as provided for herein or the other
Mezzanine Loan Documents, under the laws of such state or states whose laws are
held by any court of competent jurisdiction to govern the interest rate
provisions of the Loan.


“Member
Power” shall mean the member/stock power executed by Mezzanine Borrower and
substantially in the form of Exhibit U.


 


17

















 


“Merger
Agreement” shall mean that certain Agreement and Plan of Merger by and
among Station Casinos, Inc., Fertitta Colony Partners LLC and FCP Acquisition
Sub, dated as of February 23, 2007, as amended.


“Merger Representations and Warranties” shall
mean the representations and warranties made by Master Lessee in the Merger
Agreement that are material to the interests of Mezzanine Lender and that, if
breached (but for the application of clause (z) in the lead-in to Article IV of
the Merger Agreement), would allow Sponsor to terminate its obligations under
the Merger Agreement.


“Mezzanine Account” shall have the meaning
set forth in Section 3.1.1.


“Mezzanine Account Agreement” shall mean the
Account and Control Agreement (Second Mezzanine), dated as of the date hereof,
among Collateral Agent, Mezzanine Borrower and Cash Management Bank.


“Mezzanine Borrower” shall have the meaning
set forth in the first paragraph of this Agreement.


“Mezzanine Debt Service Reserve Account”
shall have the meaning set forth in Section 3.1.1(a).


“Mezzanine Lender” shall have the meaning set
forth in the first paragraph of this Agreement.


“Mezzanine Loan Agreement” shall mean that
certain Mezzanine Loan and Security Agreement (Second Mezzanine), dated as of
the date hereof, between Mezzanine Borrower, as borrower, and Mezzanine Lender,
as lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.


“Mezzanine Loan Default Revocation Notice”
shall mean a notice from Mezzanine Lender that an Event of Default which has
occurred under the Mezzanine Loan Documents is no longer continuing.


“Mezzanine Loan Default Notice” shall mean a
notice from Mezzanine Lender that an Event of Default has occurred and is
continuing under the Mezzanine Loan Documents.


“Mezzanine Loan Documents” shall mean,
collectively, this Agreement, the Mezzanine Notes, the Mezzanine Account
Agreement, the Recourse Guaranty (Mezzanine) and the Pledge and any and all
other agreements, instruments or documents executed by Mezzanine Borrower (or
any of its Affiliates) evidencing, securing or delivered in connection with the
Loan and the transactions contemplated thereby, including, without limitation,
any certificates or representations delivered by or on behalf of Mezzanine
Borrower or any Affiliate of Mezzanine Borrower.


“Mezzanine Noteholder I” is defined in the
first paragraph of this Agreement.


“Mezzanine Noteholder II” is defined in the
first paragraph of this Agreement.


 


18

















 


“Mezzanine Notes” shall mean, collectively,
(a) that certain Mezzanine Note A-1, dated the date hereof, made by Mezzanine
Borrower, as maker, in favor of Mezzanine Lender, as payee, in the principal
amount of $93,750,000 and (b) that certain Mezzanine Note A-2, dated the date
hereof, made by Mezzanine Borrower, as maker, in favor of Mezzanine Lender, as
payee, in the principal amount of $56,250,000, as the same may be amended,
restated, replaced, supplemented, substituted, severed or otherwise modified
from time to time.


“Mezzanine Release Price” shall mean the
product of (a) the Allocated Loan Amount with respect to the Release Property;
and (b) the applicable Combined Release Price Percentage, minus, if applicable,
the principal amount of any prepayment of the Loan paid from Proceeds derived
from a casualty, other damage or injury or Taking affecting such Release
Property.


“Mortgage Borrower” shall have the meaning
ascribed to the term “Borrower” in the Loan Agreement (Mortgage).


“Mortgage Default” shall have the meaning
ascribed to the term “Default” in the Loan Agreement (Mortgage).


“Mortgage Event of Default” shall have the
meaning ascribed to the term “Event of Default” in the Loan Agreement
(Mortgage).


“Mortgage Lender” shall have the meaning
ascribed to the term “Lender” in the Loan Agreement (Mortgage).


“Mortgage Loan” shall mean the loan in the
amount of $2,050,000,000 made by Mortgage Lender to Mortgage Borrower pursuant
to the Loan Agreement (Mortgage).


“Mortgage Notes” shall have the meaning
ascribed to “Notes” in the Loan Agreement (Mortgage).


“Mortgage Release Price” shall mean the
product of (a) the “Allocated Loan Amount” of the Mortgage Loan with respect to
the Release Property as set forth in the Loan Agreement (Mortgage); and (b) the
applicable Combined Release Price Percentage, minus, if applicable, the
principal amount of any prepayment of the Loan paid from Proceeds derived from
a casualty, other damage or injury or Taking affecting such Release Property.


“New Sublease” shall have the meaning set
forth in Section 8.8.2.


“Non-Consolidation Opinion” shall have the
meaning provided in Section 2.5.4(a).


“Non-Contravention Opinion” shall have the
meaning provided in Section 2.5.4(d).


“Non-Disqualification Opinion”  shall mean an opinion of outside tax counsel
reasonably acceptable to the Mortgage Lender or the Rating Agencies to whom
such opinion is addressed that a contemplated action will neither cause any
trust formed as a Real Estate Mortgage Investment Conduit (a “REMIC”)
pursuant to a Securitization to fail to qualify as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code at any time
that any “regular interests” in the REMIC are outstanding nor cause a “prohibited
transaction” tax


 


19

















 


(within the meaning of Section 860F(a)(2) of the Code) or “prohibited
contribution” tax (within the meaning of Section 860G(d) of the Code) to be
imposed on any such REMIC.


“Obligations (First Mezzanine)” shall mean
all indebtedness, obligations and liabilities of First Mezzanine Borrower to
First Mezzanine Lender, under the First Mezzanine Loan Agreement or any of the
other First Mezzanine Loan Documents or in respect of the First Mezzanine Loan
or the First Mezzanine Notes, or other instruments at any time evidencing any
of the foregoing, whether existing on the date of this Agreement or arising or
incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.


“Obligations (Junior Mezzanine)” shall mean
the “Obligations” as defined in the applicable Junior Mezzanine Loan Agreement.


“Obligations (Second Mezzanine)” shall mean
all indebtedness, obligations and liabilities of Mezzanine Borrower to
Mezzanine Lender, under this Agreement or any of the other Mezzanine Loan
Documents or in respect of the Loan or the Mezzanine Notes, or other
instruments at any time evidencing any of the foregoing, whether existing on
the date of this Agreement or arising or incurred hereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise.


“Obligations (Senior Mezzanine)” shall mean
the Obligations (First Mezzanine).


“Obligations (Mortgage)” shall have meaning
set forth in the recitals of the Security Instruments.


“OFAC List” means the list of specially
designated nationals and blocked persons subject to financial sanctions that is
maintained by the U.S. Treasury Department, Office of Foreign Assets Control
and accessible through the internet website www.treas.gov/ofac/t11sdn.pdf.


“Officer’s Certificate” shall mean a
certificate executed by an authorized signatory of Mezzanine Borrower that is
familiar with the financial condition of Mortgage Borrower and Mezzanine
Borrower and the operation of the Property, or, in the case of Officer’s
Certificates required under Section 11, the principal officer of
Mezzanine Borrower (as designated in its organizational documents).


“Operating Agreements” shall mean,
collectively, the Master Lease, the Material Subleases, and the Ground Leases.


“Opinion of Counsel” shall mean an opinion of
counsel of a law firm selected by Mezzanine Borrower and reasonably acceptable
to Mezzanine Lender, which opinion of counsel shall include (without
limitation) opinions re due formation, due authorization, due execution,
enforceability and 10b-5 negative assurances.


“Other Charges” shall mean, collectively,
maintenance charges, impositions other than Impositions, and any other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Property, now or hereafter
levied or


 


20

















 


assessed or imposed against the Property or
any part thereof by any Governmental Authority, other than those required to be
paid by a Tenant pursuant to its respective Sublease.


“Other Taxes” shall have the meaning set
forth in Section 2.4.3.


“Ownership
Interests” shall mean all of the equity interests in First Mezzanine
Borrower.


“Payment Date” shall have the meaning set
forth in the Mezzanine Notes.


“Permitted
Debt” shall mean, (i) in the case of the Mortgage Borrower, the Mortgage
Notes and the other obligations, indebtedness and liabilities specifically
provided for in any Mortgage Loan Document and secured by the Loan Agreement
(Mortgage), the Security Instruments and the other Loan Documents (Mortgage)
and any Interest Rate Protection Agreements (as defined in the Loan Agreement
(Mortgage) including any obligations under the Interest Rate Protection
Agreements); (ii) in the case of Senior Mezzanine Borrower, the applicable Senior
Mezzanine Notes executed by Senior Mezzanine Borrower and the other
obligations, indebtedness and liabilities specifically permitted in the Senior
Mezzanine Loan Documents executed by Senior Mezzanine Borrower, (iii) in the
case of the Mezzanine Borrower, the Mezzanine Notes and the other obligations,
indebtedness and liabilities specifically provided for in any Mezzanine Loan
Document and secured by this Agreement, the Pledge or the other Mezzanine Loan
Documents; and (iv) in the case of each Junior Mezzanine Borrower, the
applicable Junior Mezzanine Notes executed by such Junior Mezzanine Borrower
and the other obligations, indebtedness and liabilities specifically permitted
in the Junior Mezzanine Loan Documents executed by such Junior Mezzanine Borrower.  In no event shall Mezzanine Borrower,
Mortgage Borrower, Senior Mezzanine Borrower, or any Junior Mezzanine Borrower
be permitted under this provision to enter into a note (other than the Mortgage
Notes and the other Loan Documents (Mortgage), the Mezzanine Notes and the
other Mezzanine Loan Documents, the Senior Mezzanine Notes and the other Senior
Mezzanine Loan Documents or the Junior Mezzanine Notes and the other Junior
Mezzanine Loan Documents, as applicable) or other instrument for borrowed money.


“Permitted Encumbrances” shall mean
collectively, (a) the Liens and security interests created or permitted by the
Loan Documents (Mortgage), (b) all Liens, encumbrances and other matters
disclosed in the Title Policies, (c) Liens, if any, for Impositions imposed by
any Governmental Authority not yet due or delinquent (d) Liens arising
after the date hereof which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted in accordance with Article
VII hereof; (e) in the case of Liens arising after the date hereof,
statutory Liens of carriers, warehousemen, mechanics, materialmen and other
similar Liens arising by operation of law, which are incurred in the ordinary
course of business or in connection with any Alteration permitted hereunder for
sums which are not delinquent or are being contested in good faith in
accordance with Article VII hereof; (f) easements, rights-of-way,
restrictions and other similar charges or non-monetary encumbrances against
real property which would not individually or in the aggregate be reasonably
likely to have a Material Adverse Effect; (g) any judgment Lien provided that
the judgment it secures shall have been discharged of record or the execution
thereof stayed pending appeal within 30 days after the entry thereof or within
30 days after the expiration of any stay, as applicable; (h) any matters that
would be disclosed by an accurate survey of an Individual Property other than
the Surveys, provided that


 


21

















 


in the case of Substitute Properties, the survey-related coverage under
the Title Policies is provided with respect to such Substitute Properties;
(i) any of the Existing Matters of Record, provided that (1) the amounts
secured by such Liens have been paid in full, or, in the case of an existing
contested lien is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted in accordance with Article VII
hereof and (2) such Liens are insured over in the Title Policies in a manner
satisfactory to Mezzanine Lender, whether such insurance is made available in
consideration of payment, bonding or indemnity by Mortgage Borrower (but
without limiting Mezzanine Borrower’s obligations under Article VII with
respect to the existing contested lien and provided that any such indemnity or
other consideration shall be in a form reasonably satisfactory to Mezzanine
Lender); (j) the Owner’s Title Policy Loss Payment Direction Letter; (k) any
Sublease permitted under Section 8.8.2 below; and (l) such other Liens as
Mezzanine Lender may approve in writing in Mezzanine Lender’s sole discretion.


“Permitted Encumbrances (Senior Mezzanine)”
means collectively, the Liens and security interests created pursuant to the
Senior Mezzanine Loan Documents.


“Permitted Encumbrances (Second Mezzanine)”
means, collectively, the Liens and security interests created pursuant to this
Agreement, the Pledge, and the other Mezzanine Loan Documents.


“Person” shall mean any individual,
corporation, partnership, joint venture, limited liability company, estate,
trust, unincorporated association, any federal, state, county or municipal
government or any bureau, department or agency thereof and any fiduciary acting
in such capacity on behalf of any of the foregoing.


“Plan” shall have the meaning set forth in Section
4.1.10(a).


“Pledge” shall mean that certain Pledge and
Security Agreement (Second Mezzanine), dated as of the date hereof, from
Mezzanine Borrower to Collateral Agent.


“Pledge (Senior Mezzanine)” shall mean the “Pledge”
as defined in the Senior Mezzanine Loan Agreement.


“Pledged Collateral” shall have the meaning
set forth in the Pledge.


“PML” shall mean probable maximum loss.


“Portfolio Four-Wall EBITDAR” shall mean
earnings from hotel and casino operations at the Property before interest
expense/income, taxes, depreciation and amortization, any rental expense on
real property (other than ground rent), distribution expense, direct and
allocated corporate overhead expense, regional office allocation, royalty
charges from affiliates and restructuring expense plus any non-cash
charges/less any non-cash income, including but not limited to losses on sales
of assets and non cash compensation expense.


“Portfolio
MAE” shall mean a material adverse effect on the Property taken as a whole,
or the operations, business or condition (financial or otherwise) of Mortgage
Borrower, taken as a whole.


 


22

















 


“Prepayment Fee” shall have the meaning set
forth in the Mezzanine Notes.


“Principal Amount” shall mean, collectively,
the aggregate “Principal Amount” under each of the Mezzanine Notes, as
such term is defined in each of the Mezzanine Notes.


“Principal Control Persons” shall mean (a) one or more affiliates of Colony Capital, LLC (or, subject to such
Persons being licensed as and when required in accordance with applicable
Gaming Laws, its five most senior executive officers, including, without
limitation, Thomas J. Barrack, Jr.’s successor as Chief Executive Officer of
Colony Capital, LLC), (b) Frank J. Fertitta III, (c) Lorenzo J. Fertitta, (d)
Thomas J. Barrack, Jr., (e) any other Person expressly agreed to in writing by
Mezzanine Lender, in Mezzanine Lender’s reasonable discretion, to be a Principal
Control Person, and (f) in the event that both Fertitta Brothers are deceased
or incapacitated, one of the Persons identified on Schedule IX
designated by Mezzanine Borrower (subject to compliance with applicable Gaming
Laws and provided that the Person so designated shall not be a Disqualified
Transferee) as a Principal Control Person in lieu of the Fertitta Brothers.


“Principal
Investors” shall mean (a) one or more Affiliates of Colony Capital, LLC,
(b) Frank J. Fertitta III, his Affiliates, personal investment vehicles,
spouse, lineal descendants (including adopted children and their lineal
descendants) and any trust or entity owned, controlled by or established for
the benefit of, or the estate of, any of the foregoing, (c) Lorenzo J.
Fertitta, his Affiliates, personal investment vehicles, spouse, lineal
descendants (including adopted children and their lineal descendants) and any
trust or entity owned, controlled by or established for the benefit of, or the
estate of, any of the foregoing, (d) Blake and Delise Sartini, their
Affiliates, personal investment vehicles, lineal descendants (including adopted
children and their lineal descendants) and any trust or entity owned,
controlled by or established for the benefit of, or the estate of, any of the foregoing,
and (e) Thomas J. Barrack, Jr., his Affiliates, personal investment vehicles,
spouse, lineal descendants (including adopted children and their lineal
descendants) and any trust or entity owned, controlled by or established for
the benefit of, or the estate of, any of the foregoing.  For purposes of this definition, the term “Affiliate”
shall mean, with respect to any specified Person, any other Person directly or
indirectly Controlling or Controlled by or under direct or
indirect Common Control with, or any general partner or managing member in,
such specified Person.


“Pro Rata Share”
shall mean, with respect to each Mezzanine Lender, the ratio of such Mezzanine
Lender’s interest in the amount of the Loan to the aggregate amount of the
Loan.  As of the date hereof, the Pro
Rata Share applicable to Mezzanine
Noteholder I is sixty-two and one-half percent (62.5%) and the Pro Rata Share
applicable to Mezzanine
Noteholder II is thirty-seven and one-half percent (37.5%).


“Proceeds” shall have the meaning set forth
in the Loan Agreement (Mortgage).


“Prohibited Person” means any Person
identified on the OFAC List or any other Person with whom a U.S. Person may not
conduct business or transactions by prohibition of Federal law or Executive
Order of the President of the United States or America.


“Property” shall have the meaning set forth
in the Loan Agreement (Mortgage).


 


23

















 


“Property
Specific Representations” shall mean the representations and warranties of
Mezzanine Borrower set forth in Sections 4.1.4 (with respect to the
Property only), 4.1.6, 4.1.11, 4.1.13, 4.1.15, 4.1.23,
4.1.24, 4.1.25, 4.1.26, 4.1.27, 4.1.29, 4.1.39,
4.1.45, and 12.1 with respect to the Property.


“Proprietary Information” shall have the
meaning set forth in Section 11.2.9(a).


“Proscribed Assignee” shall mean Highland
Capital Partners.


“Protective Advances” shall mean sums
advanced by Mezzanine Lender for the purposes of payment of items reasonably
necessary to protect the Collateral or the Property.


“Purchase
and Sale Agreement” shall mean that certain Amended and Restated Purchase
and Sale Agreement, dated as of October 31, 2007, by and among Charleston
Station LLC, Boulder Station, Inc., Palace Station Hotel & Casino, Inc.,
and Sunset Station, Inc., collectively as sellers, FCP Newco, LLC, and the
other parties thereto, as assigned by FCP NewCo, LLC to Mortgage Borrower on or
approximately on the date hereof.


“PZR” shall mean The Planning Zoning Resource
Corporation.


“Qualified
Transferee” shall mean any entity that, together with its Close Affiliates,
(i) is experienced in owning and/or operating properties similar to the
Property, (ii) (a) has a net worth, as of a date no more than six (6) months
prior to the date of the transfer of at least $500 Million and (b) immediately
prior to such transfer, controls real estate equity assets of at least $2
Billion, and (iii) is not a Disqualified Transferee.


“Rate Cap Collateral (Second Mezzanine)”
shall have the meaning set forth in Section 9.2.


“Rating Agencies” shall mean (a) prior to a
Securitization, each of S&P, Moody’s and Fitch and any other
nationally-recognized statistical rating agency which has been approved by
Mortgage Lender and (b) after a Securitization has occurred, each such Rating
Agency which has rated the Securities in the Securitization.


“Rating Agency Confirmation” shall mean,
collectively, a written affirmation from each of the Rating Agencies that the
credit rating of the Securities given by such Rating Agency immediately prior
to the occurrence of the event with respect to which such Rating Agency
Confirmation is sought will not be qualified, downgraded or withdrawn as a
result of the occurrence of such event, which affirmation may be granted or
withheld in such Rating Agency’s sole and absolute discretion which may be
satisfied by a Rating Agency declining to review the matter in question without
adverse impact on the Securities.  In the
event that, at any given time, no such Securities shall have been issued and
are then outstanding, then the term Rating Agency Confirmation shall be deemed
instead to require the written approval of Mezzanine Lender based on its good faith determination
of whether the Rating Agencies would issue a Rating Agency Confirmation if any
such Securities were outstanding.


“Real Property” shall mean, collectively, the
Land, the Improvements and the Appurtenances (as defined in the Security
Instruments, collectively).


 


24

















 


“Receipts” shall mean with respect to any
Person, the declaration or payment of any cash, cash flow, dividend or
distribution on or in respect of any member’s or partner’s interest, shares of
any class of capital stock or other beneficial interest of such Person; the
purchase, redemption, exchange or other retirement of any member’s or partner’s
interest, shares of any class of capital stock or other beneficial interest of
such Person, directly or indirectly; the return of capital by such Person to
its members, shareholders or partners as such; or any other distribution of any
nature whatsoever on or in respect of any member’s or partner’s interest,
shares of any class of capital stock or other beneficial interest of such
Person.


“Recourse Guaranty (Mezzanine)” shall mean
that certain Guaranty of Recourse Obligations of Mezzanine Borrower, dated as
of the date hereof, by Guarantor in favor of Mezzanine Lender, as the same may
be amended, supplemented, restated or otherwise modified from time to time.


“Register” shall have the meaning set forth
in Section 15.4.


“Regulatory Change” shall mean any change
after the date of this Agreement in federal, state or foreign laws or
regulations or the adoption or the making, after such date, of any
interpretations, directives or requests applying to Mezzanine Lender, or any
Person Controlling Mezzanine Lender or to a class of banks or companies
Controlling banks of or under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or Governmental Authority
or monetary authority charged with the interpretation or administration
thereof.


“Release” shall have the meaning provided in Section
2.3.4.


“Release Date” shall have the meaning
provided in Section 2.3.4(a).


“Release Instruments” shall have the meaning
provided in Section 2.3.4(c).


“Release Property” shall have the meaning
provided in Section 2.3.4.


“Rents” shall have the meaning set forth in
the Loan Agreement (Mortgage).


“Replaced Property” shall have the meaning
provided in Section 2.3.5(a).


“Replacement Interest Rate Cap Agreement (Second
Mezzanine)” shall mean collectively, one or more interest rate
cap agreements from an Approved Counterparty with terms that are the same in
all material respects as the terms of the Interest Rate Cap Agreement (Second
Mezzanine), except that (i) the same shall be effective as of (A) in connection
with a replacement following a downgrade, withdrawal or qualification of
Counterparty, the date required in Section 9.3(c) or (B) in connection
with a replacement related to an extension of the Maturity Date, the date
required in Section 5(a)(ii) of the Mezzanine Notes, and (ii) the notional
amount shall be the Principal Amount then outstanding; provided that to the
extent any such interest rate cap agreement does not meet the foregoing
requirements, a Replacement Interest Rate Cap Agreement (Second Mezzanine)
shall be such interest rate cap agreement approved in writing by Mezzanine
Lender.


 


25

















 


“Requesting Parties” shall have the meaning
set forth in Section 11.2.9(b).


“Revolving/Term
Credit Facility” shall mean that certain Credit Agreement, dated as of even
date herewith, among Station Casinos, Inc., as borrower, Deutsche Bank Trust
Company Americas, as administrative agent, Deutsche Bank Securities Inc. and J.
P. Morgan Securities Inc., as joint lead arrangers and joint bookrunners,
JPMorgan Chase Bank, N.A., as syndication agent, and the other lenders party
thereto, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time,
and any refinancing thereof.


“Revolving/Term Credit Facility Lien” shall
have the meaning provided in Section 8.5(b)(iv).


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


“Securitization” shall have the meaning set
forth in the Loan Agreement (Mortgage).


“Security Instrument” shall have the meaning
set forth in the Loan Agreement (Mortgage).


“Senior Mezzanine Borrower” shall mean First
Mezzanine Borrower.


“Senior Mezzanine Collateral” shall mean the “Collateral”
as defined in the Senior Mezzanine Loan Agreement.


“Senior Mezzanine Default” shall have the
meaning ascribed to the term “Default” in the Senior Mezzanine Loan Agreement.


“Senior Mezzanine Event of Default” shall have
the meaning ascribed to the term “Event of Default” in the Senior Mezzanine
Loan Agreement.


“Senior Mezzanine Lender” shall mean First
Mezzanine Lender.


“Senior Mezzanine Loan Agreement” shall mean
a Mezzanine Loan and Security Agreement entered into between a Senior Mezzanine
Borrower, as borrower, and a Senior Mezzanine Lender, as lender, as the same
may be amended, restated, replaced, supplemented or otherwise modified from
time to time.


“Senior Mezzanine Loan Documents” shall mean
the First Mezzanine Loan Documents.


“Senior Mezzanine Loan” shall mean the First
Mezzanine Loan.


“Senior Mezzanine Notes” shall mean the First
Mezzanine Notes.


“Senior Mezzanine Ownership Interests” shall
mean the “Ownership Interests” as defined in the First Mezzanine Loan Agreement.


“Senior Mezzanine Release Price” shall mean
the product of (a) the “Mezzanine Allocated Loan Amount” for the Senior
Mezzanine Loan with respect to the Release Property as


 


26

















 


set forth in the Loan Agreement (Mortgage);
and (b) the applicable Combined Release Price Percentage, minus, if applicable,
the principal amount of any prepayment of the Loan paid from Proceeds derived
from a casualty, other damage or injury or Taking affecting such Release Property.


“Servicer” shall mean such Person designated
in writing with an address for such Person by Mezzanine Lender, in its sole
discretion, to act as Mezzanine Lender’s agent hereunder with such powers as
are specifically delegated to the Servicer by Mezzanine Lender, whether
pursuant to the terms of this Agreement, the Mezzanine Account Agreement or
otherwise, together with such other powers as are reasonably incidental
thereto.


“Single Purpose Entity” shall mean a Person,
other than an individual, which (i) is formed or organized solely for the
purpose of acquiring, owning, holding, developing, using, operating and
financing, directly, or, in the case of Mezzanine Borrower, Senior Mezzanine
Borrower, or any Junior Mezzanine Borrower, indirectly, an ownership interest
in the Property, (ii) does not engage in any business unrelated to the Property
(or in the case of Mezzanine Borrower, Senior Mezzanine Borrower, or any Junior
Mezzanine Borrower, its subsidiary) and the ownership, development, use,
operation and financing thereof, (iii) has not and will not have any assets
other than those related to its interest in the Property (or in the case of
Mezzanine Borrower, Senior Mezzanine Borrower, or any Junior Mezzanine
Borrower, its subsidiary) or the operation, management and financing thereof or
any indebtedness other than the Permitted Debt (as applicable), (iv) maintains
its own separate books and records and its own accounts, in each case which are
separate and apart from the books and records and accounts of any other Person,
(v) holds itself out as being a Person, separate and apart from any other
Person, (vi) does not and will not commingle its funds or assets with those of
any other Person, (vii) conducts its own business in its own name; (viii)
maintains separate financial statements, (ix) pays its own liabilities out of
its own funds, (x) observes all partnership, corporate or limited liability
company formalities, as applicable, (xi) pays the salaries of its own
employees, if any, and maintains a sufficient number of employees, if any, in
light of its contemplated business operations, (xii) does not guarantee or
otherwise obligate itself with respect to the debts of any other Person or hold
out its credit as being available to satisfy the obligations of any other
Person, (xiii) does not acquire obligations or securities of its partners,
members or shareholders, (xiv) allocates fairly and reasonably shared expenses,
including, without limitation, any overhead for shared office space, if any,
(xv) uses separate stationery, invoices, and checks, (xvi) maintains an
arms-length relationship with its Affiliates, (xvii) does not and will not
pledge its assets for the benefit of any other Person (except as permitted
pursuant to the Mortgage Loan, the Senior Mezzanine Loan, the Loan or any
Junior Mezzanine Loan, as applicable) or make any loans or advances to any
other Person, (xviii) does and will continue to use commercially reasonable
efforts to correct any known misunderstanding regarding its separate identity, (xix)
maintains adequate capital in light of its contemplated business operations,
and (xx) files its own tax returns, if any, as may be required under applicable
law, to the extent (1) not part of a consolidated group filing a consolidated
return or returns or (2) not treated as a division for tax purposes of another
taxpayer, and pays any taxes so required to be paid under applicable law, and
(xx) has not and will not engage in, seek, or consent to the dissolution,
winding up, liquidation, consolidation or merger and except as otherwise
permitted in this Agreement, has not and will not engage in, seek or consent to
any asset sale, transfer of partnership, membership or shareholder interests,
or amendments of its partnership or operating agreement, certificate of


 


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incorporation, articles of organization or
other organizational document.  In
addition, if such Person is a partnership, (1) all general partners of such
Person shall be Single Purpose Entities; and (2) if such Person has more than
one general partner, then the organizational documents shall provide that such
Person shall continue (and not dissolve) for so long as a solvent general
partner exists.  In addition, if such
Person is a corporation, then, at all times: (a) such Person shall have at
least two (2) Independent Directors and (b) the board of directors of such
Person may not take any action requiring the unanimous affirmative vote of 100%
of the members of the board of directors unless all of the directors, including
the Independent Directors, shall have participated in such vote.  In addition, if such Person is a limited
liability company, (a) such Person shall have at least two (2) Independent
Managers, Independent Directors or Independent Members, (b) if such Person is
managed by a board of managers or directors, the board of managers or directors
of such Person may not take any action requiring the unanimous affirmative vote
of 100% of the members of the board of managers or directors unless all of the
managers or directors, including the Independent Managers or Independent
Directors, shall have participated in such vote, (c) if such Person is not
managed by a board of managers or directors, the members of such Person may not
take any action requiring the affirmative vote of 100% of the members of such
Person unless all of the members, including the Independent Members, shall have
participated in such vote, (d) each managing member shall be a Single Purpose
Entity and (e) its articles of organization, certificate of formation and/or
operating agreement, as applicable, shall provide that until all of the
Indebtedness and Obligations (Mortgage), Obligations (Senior Mezzanine),
Obligations (Second Mezzanine), or Obligations (Junior Mezzanine), as applicable,
are paid in full such entity will not dissolve. 
In addition, the organizational documents of such Person shall provide
that such Person (1) without the unanimous consent of all of the partners,
directors or members, as applicable, shall not with respect to itself or to any
other Person in which it has a direct or indirect legal or beneficial interest
(a) seek or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian or other similar official for the benefit of
the creditors of such Person or all or any portion of such Person’s
properties, or (b) petition or otherwise institute insolvency proceedings or
otherwise seek any relief under any laws relating to the relief from debts or
the protection of debtors generally, (2) has and will maintain its books,
records, resolutions and agreements as official records, (3) has held and will
hold its assets in its own name, (4) has not and will not identify its
partners, members or shareholders, or any affiliates of any of them as a
division or part of it, and (5) except as provided in the Mortgage Loan
Documents, Senior Mezzanine Loan Documents, Mezzanine Loan Documents or Junior
Mezzanine Loan Documents, as applicable, has not and will not enter into or be
a party to any transaction with its partners, members, shareholders, or its
Affiliates except in the ordinary course of business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a
comparable arms-length transaction with a third party.


“Special Taxes”
shall mean any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, or any liabilities with respect thereto, including
those arising after the date hereof as result of the adoption of or any change
in law, treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof by a
Governmental Authority but excluding, in the case of Mezzanine Lender, such
taxes (including income taxes, franchise taxes and branch profit taxes) as are
imposed on or measured by Mezzanine Lender’s net income by the United States of
America or any Governmental Authority of the jurisdiction under the laws under
which Mezzanine Lender is organized or maintains a lending office.


 


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“SPE Entity” shall mean the Mortgage
Borrower, the Senior Mezzanine Borrower, the Mezzanine Borrower and any other
Person which is required by this Agreement to be, as long as the Loan is
outstanding, a Single Purpose Entity.


“Sponsor” shall mean Fertitta
Colony Partners LLC, a Nevada limited liability company.


“State” shall mean, with respect to
each Individual Property, the State in which such Individual Property or any
part thereof is located.


“Strike Price” shall
mean 5.77%.


“Sub-Account(s)” shall have the
meaning set forth in Section 3.1.1.


“Sublease” shall mean any lease (other
than the Ground Leases or the Master Lease), sublease or sub-sublease, letting,
license, concession or other agreement (whether written or oral and whether now
or hereafter in effect), pursuant to which any Person is granted by the
Mortgage Borrower or the Master Lessee a possessory interest in, or right to
use or occupy all or any portion of any space in the Property, and every
modification, amendment or other agreement relating to such lease, sublease,
sub-sublease, or other agreement entered into in connection with such lease,
sublease, sub-sublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.


“Sublease Modification” shall have the
meaning set forth in Section 8.8.2.


“Subleasing Standards” shall mean the
standards set forth on Schedule I attached hereto and made a part
hereof.


“Substitute Property” shall have the
meaning provided in Section 2.3.5(a).


“Substitute Property Mortgage Spreader
Agreement” shall have the meaning provided in Section 2.3.5(a).


“Substitution” shall have the meaning
provided in Section 2.3.5(a).


“Substitution Date” shall have the
meaning provided in Section 2.3.5(c).


“Substitution Due Diligence Package” shall have the meaning provided in Section 2.3.5(c).


“Substitution Notice”
shall have the meaning provided in Section 2.3.5(c).


“Survey” shall have the meaning set
forth in the Loan Agreement (Mortgage).


“Taking” shall mean a temporary or
permanent taking by any Governmental Authority as the result or in lieu or in
anticipation of the exercise of the right of condemnation or eminent domain, of
all or any part of the Property, or any interest therein or right accruing
thereto,


 


29

















 


including any right of access
thereto or any change of grade affecting the Property or any part thereof.


“Tenant” shall have the meaning set
forth in the Loan Agreement (Mortgage).


“Third Mezzanine Borrower” shall mean
FCP Mezzco Borrower III, LLC, a Delaware limited liability Company.


“Third Mezzanine Lender” shall mean
Mezzanine Noteholder I and Mezzanine Noteholder II, and their respective
successors and/or assigns, as the holder of the Third Mezzanine Loan.


“Third Mezzanine Loan” shall mean that
certain $125,000,000 mezzanine loan, made as of the date hereof, from Third
Mezzanine Lender to Third Mezzanine Borrower.


“Third Mezzanine Loan Documents” shall
mean the documents evidencing and securing the Third Mezzanine Loan, as may be
modified, amended, extended, supplemented, restated or replaced from time to
time.


“Third Mezzanine Notes” shall mean
that certain Third Mezzanine Note A-1 in the principal amount of $78,125,000
dated as of the date hereof, from Third Mezzanine Borrower to Third Mezzanine
Lender, and that certain Third Mezzanine Note A-2 in the principal amount of
$46,875,000 dated as of the date hereof, from Third Mezzanine Borrower to Third
Mezzanine Lender.


“Title Company” shall have the meaning
set forth in the Loan Agreement (Mortgage).


“Title Policies” shall have the
meaning set forth in the Loan Agreement (Mortgage).


“Transfer” shall mean to, directly or
indirectly, sell, assign, convey, mortgage, transfer, pledge, hypothecate,
encumber, grant a security interest in, exchange or otherwise dispose of any
beneficial interest or grant any option or warrant with respect to, or where
used as a noun, a direct or indirect sale, assignment, conveyance, transfer,
pledge or other disposition of any beneficial interest by any means whatsoever
whether voluntary, involuntary, by operation of law or otherwise.


“True Lease Opinion” shall have the
meaning provided in Section 2.5.4(b).


“True Sale Opinion” shall have the
meaning provided in Section 2.5.4(c).


“UCC” or “Uniform Commercial Code”
shall mean the Uniform Commercial Code as in effect in the State.


“UCC Financing Statement” shall have the meaning provided in Section
2.3.5(d)(xiii)(3).


“Unimproved Parcels” shall mean (a)
those portions of the Property identified on Schedule IV attached hereto
and made a part hereof and (b) any other undeveloped portion of an Individual
Property as to which Mezzanine Lender has reasonably determined that such portion


 


30

















 


is not is not required for the
primary intended use of such Individual Property and that the release of such
portion will not adversely affect either the “as leased” appraised value or the
net operating income of the remaining portion of such Individual Property.


“U.S. Government Obligations” shall
have the meaning set forth in the Loan Agreement (Mortgage).


“VoteCo” shall mean FCP VoteCo, LLC, a
Nevada limited liability company.


1.2           Principles of
Construction.  All references to
sections and schedules are to sections and schedules in or to this Agreement
unless otherwise specified.  All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.  When used herein,
the term “financial statements” shall include the notes and schedules
thereto.  Unless otherwise specified
herein or therein, all terms defined in this Agreement shall have the
definitions given them in this Agreement when used in any other Mezzanine Loan
Document or in any certificate or other document made or delivered pursuant
thereto.  Any capitalized term used
herein but not otherwise defined shall have the meaning ascribed to it in the
Loan Agreement (Mortgage).  All uses of
the word “including” shall mean including, without limitation unless the
context shall indicate otherwise.  Unless
otherwise specified, the words hereof, herein and hereunder and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.  Unless otherwise specified, all meanings
attributed to defined terms herein shall be equally applicable to both the
singular and plural forms of the terms so defined.


II.                                     GENERAL TERMS


2.1           Loan; Disbursement to Mezzanine Borrower.


2.1.1        The
Loan.  Subject to and upon the terms
and conditions set forth herein, each Mezzanine Lender hereby agrees, on a
several (but not joint) basis, to make its Pro Rata Share of the Loan, and
Mezzanine Borrower hereby agrees to accept the Loan, on the Closing Date.


2.1.2        Disbursement
to Mezzanine Borrower.  Mezzanine
Borrower may request and receive only one borrowing hereunder in respect of the
Loan and any amount borrowed and repaid hereunder in respect of the Loan may
not be reborrowed.  Mezzanine Borrower
acknowledges and agrees that the full proceeds of the Loan will have been
disbursed by Mezzanine Lender to Mezzanine Borrower on the Closing Date.


2.1.3        The Mezzanine Notes, Pledge and Mezzanine Loan Documents.  The Loan shall be evidenced by the Mezzanine Notes and secured by this
Agreement, the Pledge and the other Mezzanine
Loan Documents.


2.1.4        Use of Proceeds.  Mezzanine Borrower shall use the proceeds of
the Loan to make a contribution to Mortgage Borrower and cause Mortgage
Borrower to (a) acquire the Property, (b) pay all past-due operating expenses,
if any, in respect of the Property, (c) fund any working capital requirements
of the Property, (d) make deposits into the Sub-Accounts as required under the
Loan Agreement (Mortgage), (e) pay costs and expenses incurred in


 


31

















 


connection with the closing of
the Loan, (f) distribute to its parent entities and (g) retain and/or
distribute the balance, if any.


2.2           Interest; Loan Payments; Late Payment Charge.


2.2.1        Payment of Principal and Interest.


(i)            Except
as set forth in Section 2.2.1(ii), interest shall accrue on the
Principal Amount as set forth in the Mezzanine Notes.


(ii)           Upon the occurrence and during the
continuance of an Event of Default and from and after the Maturity Date if the
entire Principal Amount is not repaid on the Maturity Date, interest on the
outstanding principal balance of the Loan and, to the extent permitted by law,
overdue interest and other amounts due in respect of the Loan shall accrue at
the Default Rate calculated from the date such payment was due without regard
to any grace or cure periods contained herein. 
Interest at the Default Rate shall be computed from the occurrence of
the Event of Default until the actual receipt and collection of the
Indebtedness (or that portion thereof that is then due).  To the extent permitted by applicable law,
interest at the Default Rate shall be added to the Indebtedness, shall itself accrue
interest at the same rate as the Loan and shall be secured by this Agreement
and the Pledge.  This paragraph shall not
be construed as an agreement or privilege to extend the date of the payment of
the Indebtedness, nor as a waiver of any other right or remedy accruing to
Mezzanine Lender by reason of the occurrence of any Event of Default, and
Mezzanine Lender retains its rights under the Mezzanine Notes to accelerate and
to continue to demand payment of the Indebtedness upon the happening of any
Event of Default.


2.2.2        Method and Place of Payment.


(a)           On each Payment Date, Mezzanine Borrower shall pay to
Mezzanine Lender interest accruing pursuant to the Mezzanine Notes for the
entire Interest Period during which said Payment Date shall occur.


(b)           All amounts advanced by Mezzanine Lender pursuant to the
applicable provisions of the Mezzanine Loan Documents, other than the Principal
Amount, together with any interest at the Default Rate or other charges as
provided therein, shall be due and payable hereunder as provided in the
Mezzanine Loan Documents.  In the event
any such advance or charge is not so repaid by Mezzanine Borrower, Mezzanine
Lender may, at its option, first apply any payments received under the
Mezzanine Notes to repay such advances, together with any interest thereon, or
other charges as provided in the Mezzanine Loan Documents, and the balance, if
any, shall be applied in payment of any installment of interest or principal
then due and payable.


(c)           The Maturity Date Payment shall be due and payable in full
on the Maturity Date.


2.2.3        Late Payment Charge.  If any principal, interest or any other sums
due under the Mezzanine Loan Documents (other than the outstanding Principal
Amount due and payable on the Maturity Date) is not paid by Mezzanine Borrower
on or prior to the date on which it is due,


 


32

















 


Mezzanine Borrower shall pay to
Mezzanine Lender upon demand an amount equal to the lesser of three percent
(3%) of such unpaid sum or the Maximum Legal Rate (the “Late Payment Charge”)
in order to defray the expense incurred by Mezzanine Lender in handling and
processing such delinquent payment and to compensate Mezzanine Lender for the
loss of the use of such delinquent payment. 
Any such amount shall be secured by this Agreement, the Pledge and the
other Mezzanine Loan Documents to the extent permitted by applicable law.


2.2.4        Usury Savings.  This Agreement and the Notes are subject to
the express condition that at no time shall Mezzanine Borrower be obligated or
required to pay interest on the principal balance of the Loan at a rate which
could subject Mezzanine Lender to either civil or criminal liability as a
result of being in excess of the Maximum Legal Rate.  If, by the terms of this Agreement or the
other Mezzanine Loan Documents, Mezzanine Borrower is at any time required or
obligated to pay interest on the principal balance due under the Mezzanine Notes at a rate in excess
of the Maximum Legal Rate, then the LIBOR Rate or the Default Rate, as the case
may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and
all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal and not on account of the interest
due under the Mezzanine
Notes.  All sums paid or agreed to be
paid to Mezzanine Lender for the use, forbearance, or detention of the sums due
under the Loan, shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Loan until
payment in full so that the rate or amount of interest on account of the Loan
does not exceed the Maximum Legal Rate of interest from time to time in effect
and applicable to the Loan for so long as the Loan is outstanding.


2.3           Prepayments.  No prepayments of the Indebtedness shall be
permitted except as set forth in this Section 2.3 and Section 4
of the Mezzanine Notes.  If Mezzanine Borrower tenders payment of any
part of the Indebtedness other than in accordance with Sections 2.3.2, 2.3.3 or
2.3.4, (a) such payment may be made only on the next occurring Payment Date
together with all unpaid interest thereon as calculated through the end of the
Interest Period during which such Payment Date occurs (even if such period
extends beyond such Payment Date and calculated as if such payment had not been
made on such Payment Date), and (b) Mezzanine Borrower shall pay, in addition
to the Indebtedness, an amount equal to the Prepayment Fee and all other fees
and sums payable hereunder or under the Mezzanine Loan Documents.


2.3.1        Mandatory Prepayments.


(a)           If
there shall occur a casualty or Taking in respect of the Property and as a
result thereof the Loan (Mortgage) and the Senior Mezzanine Loan are prepaid in
whole or in part, then, to the extent that there shall be excess proceeds or awards available
following the application of the proceeds or awards to reconstruct or repair
the Property or to the payment of all or any portion of the Loan (Mortgage)
pursuant to the terms of the Loan Documents (Mortgage) and the Senior Mezzanine
Loan pursuant to the terms of the Senior Mezzanine Loan Documents, (“Excess
Proceeds”), Mezzanine Borrower shall repay the Mezzanine Notes, or a
portion thereof, in the amount of such available Excess Proceeds (excluding
that portion used to pay any Prepayment Fee) in accordance with Section 4(b) of
the Mezzanine Notes.  All Excess Proceeds
shall be deposited directly into the Mezzanine Account.


 


33

















 


2.3.2        Prepayments After Event of Default;
Application of Amounts Paid. 
If, following an Event of Default, Mezzanine Lender shall accelerate the
Indebtedness and Mezzanine Borrower thereafter tenders payment of all or any
part of the Indebtedness, or if all or any portion of the Indebtedness is recovered
by Mezzanine Lender after such Event of Default, (a) such payment may be made
only on the next occurring Payment Date together with all unpaid interest
thereon as calculated through the end of the Interest Period during which such
Payment Date occurs (even if such period extends beyond such Payment Date and
calculated as if such payment had not been made on such Payment Date), and all
other fees and sums payable hereunder or under the Mezzanine Loan Documents,
including without limitation, interest that has accrued at the Default Rate,
and any Late Payment Charges), (b) such payment shall be deemed a voluntary
prepayment by Mezzanine Borrower, and (c) Mezzanine Borrower shall pay, in
addition to the Indebtedness, an amount equal to the Prepayment Fee.


2.3.3        Release of Collateral upon Repayment of Loan in Full.  Mezzanine Lender shall, upon the written
request of Mezzanine Borrower, upon payment in full of the Principal Amount and
interest on the Loan and all other amounts due and payable under the Mezzanine
Loan Documents in accordance with the terms and provisions of the Mezzanine Notes and this Agreement,
release the Lien of (i) this Agreement upon the Account Collateral (Second Mezzanine )and the Rate Cap Collateral
(Second Mezzanine) and (ii) the Pledge. 
In such event, Mezzanine Borrower shall submit to Mezzanine Lender, not
less than ten (10) Business Days prior to the date of such release or
assignment, a release of lien, for such property for execution by Mezzanine
Lender.  Such release or assignment, as
applicable, shall be in a form appropriate in each jurisdiction in which the
Collateral is located and satisfactory to Mezzanine Lender in its reasonable
discretion.  In addition, Mezzanine
Borrower shall provide all other documentation Mezzanine Lender reasonably
requires to be delivered by Mezzanine Borrower in connection with such release
or assignment, as applicable.


2.3.4        Release of Individual Properties.  In the event Mortgage Borrower requests the
release of any Individual Property or Properties from the Lien under the Loan
Documents (Mortgage) or to otherwise convey such Individual Property or
Properties to another Person, subject to satisfaction of each of the conditions
set forth below, Mezzanine Lender shall consent to such release and conveyance
and authorize (i) Mortgage Borrower to effect the release of such Individual
Property or Individual Properties (a “Release” and each Individual
Property subject to a Release, a “Release Property”) from the Lien of
the applicable Security Instrument and related Loan Documents (Mortgage) (or to
the extent so requested by Mezzanine Borrower, assign the Lien of the
applicable Security Instrument to a new lender without representation, warranty
or recourse) and to concurrently therewith convey the Release Property to a
Person other than Mortgage Borrower, Mezzanine Borrower, Senior Mezzanine
Borrower, or any SPE Entity (each release and conveyance under this Section
2.3.4 or Section 2.3.5, a “Property Release”), (ii) a
reduction in the notional amounts of the Interest Rate Protection Agreement,
the Interest Rate Cap Agreement (Second Mezzanine), and/or the interest rate
cap agreements required pursuant to the Junior Mezzanine Loan Documents, all in
proportion to the reduction of the principal amounts thereof as required under
the Loan Documents (Mortgage), Senior Mezzanine Loan Documents, Mezzanine Loan
Documents, and Junior Mezzanine Loan Documents, as applicable, (iii) the Cash
Management Bank (Mortgage) to return to Mortgage Borrower any Excess Account
Collateral subject to and in accordance with Section 2.3.7 of the Loan
Agreement (Mortgage) except to the extent otherwise provided in such Section,
(iv) Mortgage Borrower to 


 


34

















 


comply with Section
2.3.8 of the Loan Agreement (Mortgage) with regard to adjusting the ongoing
reserve requirements thereunder, and (v) a reduction in the Master Lease Base
Rent in an amount, which shall equal the product of (x) the initial Master
Lease Base Rent multiplied by (y) a fraction, the numerator of which is the
Combined Allocated Loan Amount for the Release Property, and the denominator of
which is the original Combined Principal Amount, and (vi) Mezzanine Borrower to
cause Mortgage Borrower to enter into an amendment to the Master Lease with
Master Lessee (A) to effect such authorized reduction in the Master Lease Base
Rent, (B) to cause such Release Property to be released from the Master Lease,
(C) to terminate the Master Lease with respect to such Release Property as of
the date that such Release Property is released from the Lien of the applicable
Security Instrument and related Loan Documents (Mortgage), (D) to amend the
legal description of the “Leased Property” (as defined in the Master Lease) to
delete the Release Property, and (E) make such other amendments consistent with
the release of the Release Property from the Leased Property.:


(a)           Mezzanine
Borrower delivers a written notice (a “Property Release Notice”) to Mezzanine
Lender of its desire to effect such Property Release no later than thirty (30)
days prior to the date of such desired Property Release, and setting forth the
Business Day (the “Release Date”) on which Mezzanine Borrower desires that
Mortgage Lender release its interest in such Release Property.


(b)           Each
of the Mortgage Lender, Senior Mezzanine Lender, Mezzanine Lender and each
Junior Mezzanine Lender shall have received all prepayment fees required to be
paid to them under the Loan Documents (Mortgage), Senior Mezzanine Loan
Documents, Mezzanine Loan Documents, and Junior Mezzanine Loan Documents, as
applicable, and the Mezzanine Lender shall have received the full Mezzanine
Release Price and evidence that the Mortgage Lender has received the full
Mortgage Release Price, Senior Mezzanine Lender has received the full Senior
Mezzanine Release Price, and each Junior Mezzanine Lender has received its full
applicable Junior Mezzanine Release Price. 
Interest payable under the Mortgage Notes, Senior Mezzanine Notes,
Mezzanine Notes and Junior Mezzanine Notes shall be calculated through the end
of the Interest Period in which such payment is made on the applicable
principal amount (even if such period extends beyond such Payment Date and
calculated as if such payment had not been made on such Payment Date (i.e.
without a deduction for the portion of the Principal Amount included in the
Release Price)).


(c)           Mortgage
Borrower shall submit to Mortgage Lender (with a copy to Mezzanine Lender),
concurrently with the Property Release Notice (except that Mortgage Borrower
may deliver the release of Liens hereinafter described to Mortgage Lender and
Mezzanine Lender after delivery of the Property Release Notice so long as such
delivery is made prior to the tenth (10th ) Business Day preceding the
applicable Release Date), a release of Liens (and related Loan Documents
(Mortgage) for each applicable Release Property (for execution by Mortgage
Lender) in a form appropriate in the State and otherwise satisfactory to
Mortgage Lender in its reasonable discretion and all other documentation
Mezzanine Lender reasonably require to be delivered by Mortgage Borrower or
Mezzanine Borrower in connection with such Property Release (collectively, “Release
Instruments”) for each applicable Release Property together with an Officer’s
Certificate certifying that (i) the Release Instruments are, or will be when
delivered, in compliance with all Legal Requirements, (ii) the release to be
effected will not violate the terms of this Agreement, (iii) the release to be
effected will not impair or otherwise adversely 


 


35

















 


affect the Liens, security interests and other rights of Mortgage
Lender under the Loan Documents (Mortgage) not being released (or as to the
Individual Properties subject to the Mezzanine Loan Documents not being
released) or the Mezzanine Lender’s Lien on the Collateral; and (iv) the
requirement described in paragraph (d) below is satisfied in connection with
such Property Release (together with calculations and supporting documentation
demonstrating the same in reasonable detail).


(d)           With
respect to any Property Release, after giving effect to such Property Release,
the LCR as of the Release Date for all of the Individual Properties then
remaining subject to the Liens of the Security Instruments shall not be less
than the greater of (A) the Closing Date LCR and (B) 65% of the LCR for the
Individual Properties subject to the Liens of the Security Instruments
immediately prior to the Release Date.


(e)           No
Default or Event of Default shall have occurred and then be continuing on the
date on which Mezzanine Borrower delivers the Property Release Notice and on
the Release Date.


(f)            The
Release Property is simultaneously transferred to a party other than Mezzanine
Borrower or any SPE Entity.


(g)           Mezzanine
Borrower causes Mortgage Borrower to execute and deliver such other
instruments, certificates, opinions of counsel and documentation as Mezzanine
Lender and the Rating Agencies shall reasonably request in order to preserve,
confirm or secure the Liens and security granted to Mortgage Lender by the Loan
Documents (Mortgage), including any amendments, modifications or supplements to
any of the Loan Documents (Mortgage) and partial release endorsements to the
existing Title Policies, as applicable.


(h)           Mezzanine
Borrower shall pay (or cause Mortgage Borrower to pay) for any and all
reasonable out-of-pocket costs and expenses incurred in connection with any
proposed Property Release, including (with respect to Mezzanine Borrower)
Mezzanine Lender’s reasonable attorneys’ fees and disbursements and (with
respect to Mortgage Borrower) all title insurance premiums for any endorsements
to any existing Title Policies reasonably required by Mortgage Lender in
connection with such proposed release.


(i)            Prior
to the Release Date, Mezzanine Borrower shall deliver to Mezzanine Lender
evidence reasonably satisfactory to Mezzanine Lender that all amounts owing to
any parties in connection with the transaction relating to the proposed
Property Release have been paid in full, or will simultaneously be paid in full
on the Release Date or adequate reserves therefor are established by Mezzanine
Borrower (or, as applicable Mortgage Borrower) in cash with respect to
contingent or other liabilities that may arise out of such transaction and for
which Mortgage Borrower and Mezzanine Borrower are not adequately indemnified
or insured against as reasonably determined by Mezzanine Lender.


(j)            As
a condition precedent to a Release but not as a direct covenant of the Mezzanine
Borrower, on the Release Date, Mortgage Borrower, Senior Mezzanine Borrower,
and each Junior Mezzanine Borrower shall have paid to Mortgage Lender, Senior
Mezzanine Lender and each Junior Mezzanine Lender, as applicable, the Mortgage
Release Price, the Senior 


 


36

















 


Mezzanine Release Price, and the applicable Junior Mezzanine Release
Price and any other sums required to be paid under Section 2.3.4 of the
Loan Agreement (Mortgage), the Senior Mezzanine Loan Agreement, and each Junior
Mezzanine Loan Agreement.  This Section
2.3.4(j) shall not create a debtor-creditor relationship between Second
Mezzanine Borrower and any Junior Mezzanine Lender.


(k)           In
the event Mezzanine Lender has approved in writing a right of first refusal or
purchase option with respect to the subject Release Property, the transfer of
the Release Property in connection with the Property Release shall comply in
all respects with the terms and conditions of any such rights of first refusal
or purchase options, as such terms and conditions have been approved by
Mezzanine Lender.


2.3.5        Substitution of Properties.  


(a)           Generally.  Mezzanine Borrower may cause Mortgage
Borrower, subject to the conditions in this Section 2.3.5, substitute one
or more properties (each a “Substitute Property”) for an existing
Individual Property (each a “Replaced Property”) (each release and
substitution a “Substitution”); provided, however, such right of
Substitution shall be limited to Individual Properties whose aggregate
Allocated Loan Amounts in respect of the Mortgage Loan as set forth in the Loan
Agreement (Mortgage) represent not greater than twenty percent (20%) of the
Loan Amount (as defined in the Loan Agreement (Mortgage)).  From and after the Substitution of a
Substitute Property in accordance herewith, such Substitute Property shall
thereafter be deemed a Property, and shall have the Allocated Loan Amount and
Combined Allocated Loan Amount applicable to the Replaced Property.  Concurrently with the completion of all steps
necessary to effect a Substitution as provided in this Section 2.3.5,
Mezzanine Lender shall permit Mortgage Lender to release such Replaced Property
from the Lien of the applicable Security Instrument and related Loan Documents
(Mortgage) and convey the Replaced Property to a Person other than Mortgage
Borrower or another SPE Entity.  In the
event of a Substitution, the Mortgage Notes shall remain in full force and
effect, and the Lien of the applicable Security Instrument shall be spread to
encumber the Substitute Property (each a “Substitute Property Mortgage
Spreader Agreement”).


(b)           Certain
Requirements.  All Substitute
Properties shall comply with this Section 2.3.5.  To qualify as a Substitute Property, a
property must, as of the Substitution Date (in addition to the other criteria
set forth in this Section 2.3.5):


(i)            be
subject to the Master Lease;


(ii)           be
a property as to which Mortgage Borrower will hold insurable fee title or a
valid and subsisting leasehold interest free and clear of any Lien or other
encumbrance except for Permitted Encumbrances (excluding those described in
clauses (b), (d), (e) and (i) of the definition of Permitted Encumbrances) and
exceptions not materially impairing the value of such property, and have an
appraised value at least equal to the Appraised Value of the Replaced Property;


(iii)          be
free and clear, as evidenced by the environmental report referred to in
paragraph (c) below, of Hazardous Substances requiring  remediation or other action under any 


 


37

















 


Environmental Law the presence of which violates Environmental Laws
(with the exception of any immaterial remediation, as determined by Mezzanine
Lender in its sole discretion) and be in material compliance with all
Environmental Laws;


(iv)          be
of a similar use and quality to the other Individual Properties (as reasonably
determined by Mezzanine Lender applying the standards of a prudent commercial
mezzanine loan lender);


(v)           be
in good repair and condition, as evidenced by the engineering report referred
to in clause (c) below;


(vi)          if
the Substitute Property is ground leased (such that Mortgage Borrower will hold
a leasehold interest rather than fee title), the ground lease shall be
financeable and otherwise in form and substance reasonably acceptable to
Mezzanine Lender, including, without limitation, rent payment and other
material financial obligations and providing for the recordation of a
memorandum of lease in the applicable real property records; and


(vii)         be
in compliance, in all material respects, with Legal Requirements and Insurance
Requirements, as evidenced by diligence items required to be provided in
paragraph (c) below.


(c)           Diligence
Process. The Mezzanine Borrower shall submit to the Mezzanine Lender
written notice (a “Substitution Notice”) setting forth the Business Day
no earlier than thirty (30) days after the date of such Substitution Notice on
which Mezzanine Borrower desires to effect such Substitution (the “Substitution
Date”), together with the following materials (the “Substitution Due
Diligence Package”) relating to the proposed Substitute Property:
(i) a description of the proposed Substitute Property sufficient to obtain
a Title Policy for such proposed Substitute Property, (ii) three years of
historical cash flow operating statements, if available, (iii) true,
complete and correct copies of any Material Subleases affecting the proposed
Substitute Property, (iv) a map and site plan, including an existing Survey of the
proposed Substitute Property dated not more than six (6) months prior to such
submission, (v) a copy of the proposed amendment to the Master Lease and
Master Lease SNDA and the License and Reservation Service Agreement to include
the proposed Substitute Property, (vi) copies of all permits, licenses and
approvals required with respect to operation of the proposed Substitute
Property, (vii) a Phase I environmental
assessment report, conducted under the ASTM International Standard Practice for Environmental Site Assessments:  Phase I Environmental Site Assessment Process
E1527-05, issued by a recognized environmental consultant,
(viii) copies of all condominium documents and ground leases, if any, (ix)
an engineer’s inspection report, (x) ground lessor, fee mortgagee, condominium
association and tenant (under Material Subleases) estoppel certificates and
tenant (under Material Subleases) Non-Disturbance Agreements, in each case in
the forms attached hereto and including such variations that are either
immaterial or are reasonably acceptable to Mezzanine Lender, as applicable,
together with any consents required with respect to the Contemplated
Transactions, (xi) a commitment from the Title Company with respect to the
issuance of a Title Policy, together with copies of all exceptions referenced
therein and a copy of the recorded memorandum of ground lease if such
Substitute Property will be a Ground Lease Property, (xii) upon the
reasonable request of the Mezzanine Lender, a PML study, (xiii) a FIRREA
appraisal conducted by Cushman & 


 


38

















 


Wakefield (or another Independent appraiser reasonably acceptable to
Mezzanine Lender), (xiv) if such proposed Substitute Property is not then
owned by the Mortgage Borrower or its Affiliate, a duly executed copy of the
purchase and sale agreement for such proposed Substitute Property and copies of
all proposed documentation transferring title to the proposed Substitute
Property to Mortgage Borrower including any interim transfers to its Affiliates,
(xv) a copy of the flood certification, (xvi) either (A) a letter or other
evidence with respect to the proposed Substitute Property from the appropriate
Governmental Authorities concerning compliance with applicable zoning and
building laws, (B) an ALTA 3.1 zoning endorsement for the Title Policy or (C) a
zoning report prepared by PZR indicating that the proposed Substitute Property
is in material compliance with applicable zoning and building laws,
(xvii) a copy of the valid permanent certificate of occupancy (if required
by applicable law), (xviii) calculations of the LTV Ratio and LCR both
before and after the proposed Substitution, (xix) evidence reasonably
satisfactory to Mezzanine Lender and its insurance consultant of insurance policies
covering the proposed Substitute Property satisfying all of the requirements of
Article VI, and (xx) UCC, bankruptcy, state and federal tax lien, litigation
and judgment searches conducted by a search firm reasonably acceptable to the
Mezzanine Lender with respect to the title holder of such proposed Substitute
Property on the date immediately prior to acquisition thereof by Mortgage
Borrower, in each of the locations reasonably specified by the Mezzanine Lender
and not revealing any Liens other than Permitted Encumbrances.  In addition, Mezzanine Borrower shall permit
the Mezzanine Lender at all reasonable times and upon reasonable prior notice
to make an inspection of such proposed Substitute Property.  Mezzanine Lender shall confirm Mezzanine
Borrower’s compliance with this paragraph (c) with respect to each proposed
Substitute Property within thirty (30) days after Mezzanine Lender’s receipt of
the complete applicable Substitution Due Diligence Package and Mezzanine Lender’s
failure to so confirm or deny Mezzanine Borrower’s compliance within such
thirty (30) day period shall be deemed compliance by Mezzanine Borrower with
this paragraph (c), provided that this sentence appears in bold capital letters
in the Substitution Notice accompanying the Substitution Due Diligence Package.


(d)           Additional
Conditions Precedent.  In addition to
the conditions in paragraphs (a), (b) and (c) above, each Substitution shall be
subject to the satisfaction of the following conditions precedent:


(i)            Rating
Agency Confirmation; Rating Agency Requirements.  For any Substitution made after a
Securitization, Mortgage Lender’s receipt (with a copy to Mezzanine Lender) of
a Rating Agency Confirmation and Mortgage Borrower’s satisfaction of such other conditions as may be required by
the Rating Agencies, including any such conditions as may relate to any
applicable Ground Lease;


(ii)           Release
Conditions.  Mezzanine Borrower’s
compliance with the condition set forth in Section 2.3.4(c), (e), (f), (g)
and (k) with respect to the release of the Replaced Property;


(iii)          Financial
and Other Tests.


(1)           LCR.  After giving effect to such Substitution, as
of the Substitution Date the LCR for all of the Individual Properties then
remaining subject to the Liens of the Security Instruments (i.e., including the
Substitute Property and excluding the Replaced 


 


39

















 


Property),
shall not be less than the greater of (A) the Closing Date LCR and (B) the LCR
for the Individual Properties subject to the Liens of the Security Instruments
immediately prior to the Substitution Date;


(2)           LTV Ratio.  After giving effect to such Substitution, as
of the Substitution Date the LTV Ratio for all of the Properties then remaining
subject to the Liens of the Security Instruments (i.e. including the Substitute
Property and excluding the Replaced Property), shall not be more than the
Closing Date LTV.


(3)           EBITDAR.  The earnings from hotel and casino operations at the Property before interest
expense/income, taxes, depreciation and amortization, any rental expense on
real property (other than ground rent), distribution expense, direct and
allocated corporate overhead expense, regional office allocation, royalty
charges from affiliates and restructuring expense plus any non-cash charges/less
any non-cash income, including but not limited to losses on sales of assets and
non cash compensation expense (as evidenced by the financial statements and
information provided to Mezzanine Lender by Mezzanine Borrower
pursuant to clause (c) of this Section 2.3.5), during each of the
three 12-month periods prior to the Substitution Date shall not have materially
declined or during the prior 12-month period, evidence a material downward
trend (as reasonably determined by Mezzanine Lender, applying the
standards of a prudent commercial mezzanine loan lender) over such three (3)
year period.


(4)           Geographic
Diversity.  The proposed Substitution
does not cause (A) more than two Individual Properties to be within a three (3)
mile radius of each other or (B) any two Individual Properties to be within a
three (3) mile radius of each other having aggregate Combined Allocated Loan
Amounts in excess of forty percent (40%) of the Combined Principal Amount.


(iv)          Lender’s
Costs and Expenses.  Mezzanine
Borrower shall pay for any and all reasonable out-of-pocket costs and expenses
of Mezzanine Lender incurred in connection with any proposed Substitution,
including Mezzanine Lender’s reasonable attorneys’ fees and disbursements.  Senior Mezzanine Borrower shall pay for any
and all reasonable out-of-pocket costs and expenses of Senior Mezzanine Lender
incurred in connection with any proposed Substitution, including Senior
Mezzanine Lender’s reasonable attorneys fees and disbursements.  Mortgage Borrower shall pay for any and all
reasonable out-of-pocket costs and expenses of Mortgage Lender incurred in
connection with any proposed Substitution, including all title insurance
premiums for any endorsements to any existing Title Policies reasonably
required by Mortgage Lender in connection with such proposed Substitution,
title premiums, mortgage recording taxes, transfer taxes and recording fees;


(v)           Transaction
Costs.  Mezzanine Borrower shall
deliver to Mezzanine Lender evidence reasonably satisfactory to Mezzanine
Lender that all amounts owing to any parties in connection with the
transactions relating to the proposed Substitution have been paid in full, or
will simultaneously be paid in full on the Substitution Date or adequate
reserves therefor are established by Mezzanine Borrower (or Mortgage Borrower)
in cash with respect to contingent or other liabilities that may arise out of
such transaction and for which Mezzanine Borrower (or Mortgage Borrower) is not
adequately indemnified or insured against as reasonably determined by Mezzanine
Lender;


 


40

















 


(vi)          Opinions
of Counsel.  Delivery to Mezzanine
Lender of the following favorable original Opinions of Counsel or updates
thereto in connection with the Substitute Property similar in form and
substance to the opinions which were delivered on the Closing Date in
connection with the Replaced Property, reasonably satisfactory to Mezzanine
Lender and addressed to the Mezzanine Lender on behalf of the holders of the
Mezzanine Notes: (a) if requested by the Rating Agencies, a True Lease Opinion
and a Non-Consolidation Opinion, (b) a local counsel enforceability opinion as
to matters governed by local law, (c) an enforceability opinion under New York
law, (d) an opinion to the effect that each of Mortgage Borrower, Master Lessee
and Guarantor is duly organized and validly existing under the laws of the
state of its formation and is qualified or licensed to do business in each
jurisdiction where the nature of its business in which it is engaged makes such
qualification or licensing necessary and (e) an opinion to the effect that the
Loan Documents (Mortgage) or amendments thereto have been duly authorized,
executed and delivered by Mortgage Borrower, Master Lessee and Guarantor and
are the valid and binding obligations and agreements of such party, enforceable
in accordance with their terms, in each case with the same exceptions as made
on Closing Date;


(vii)         No
Event of Default.  No Event of
Default shall have occurred and then be continuing on the date on which
Mezzanine Borrower delivers the Substitution Notice and on the Substitution
Date;


(viii)        Accuracy
of Representations and Warranties. 
The representations and warranties set forth in the Mezzanine Loan
Documents shall be true and correct as to the Substitute Property on the
Substitution Date in all material respects (subject to any additional items set
forth on updated exhibits and schedules hereto provided by Mezzanine Borrower
which do not violate the provisions of the Mezzanine Loan Documents and are not
reasonably likely to have a Material Adverse Effect with respect to such
Substitute Property);


(ix)           Officer’s
Certificate.  Delivery to Mezzanine
Lender of an Officer’s Certificate certifying to the truth and accuracy of the
statements in clauses (vii) and (viii);


(x)            Non-Disqualification
Opinion.  Delivery of a
Non-Disqualification Opinion;


(xi)           Organizational
Documents.  If required by the Rating
Agencies, delivery of original updated organizational documents of each of the
Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, Junior
Mezzanine Borrowers, Master Lessee, Guarantors and Sponsor, including, but not
limited to a current certificate of good standing.  If the Substitute Property is located in a
State not previously covered by the Security Instruments, evidence of Mortgage
Borrower’s and Master Lessee’s qualification to do business in the State where
the Substitute Property is located. 
Delivery of appropriate evidence of the authorization of the Mortgage
Borrower, Master Lessee and Guarantors approving the execution, delivery and
performance of the Mortgage Loan Documents or amendments thereto being executed
and delivered in connection with the Substitution, duly adopted by the Mortgage
Borrower, Master Lessee and Guarantors as applicable and accompanied by an
Officer’s Certificate stating that such authorizations have not been altered or
repealed and are in full force and effect, and certifying as to the names of
the Persons authorized to sign on behalf of such parties, together with the
true signatures of each such Person;


 


41

















 


(xii)          Insurance
Certificates.  Delivery of the
insurance certificates with respect to the Substitute Property required under
the Loan Agreement (Mortgage); and


(xiii)         Loan
Documents.  Delivery of originals of
the following Mortgage Loan Documents or amendments thereto:


(1)           a Substitute
Property Mortgage Spreader Agreement, duly executed and acknowledged by
Mortgage Borrower;


(2)           a first priority Assignment of Master Lease,
Subleases, Rents and Security Deposits, from Borrower, as assignor, to Mortgage
Lender, as assignee, assigning to Mortgage
Lender all of Mortgage Borrower’s interest in and to the Master
Lease, the Subleases, Rents and Security Deposits as security for the Mortgage
Loan with respect to the
Substitute Property, or a counterpart original of the Assignment of Leases,
modified as necessary, duly executed and acknowledged by Mortgage Borrower (the
“Assignment of Leases Counterpart”);


(3)           UCC financing
statements (Form UCC-1) (or other forms required in any jurisdiction), covering
all fixtures, Building Equipment and other personal property (other than the
Excluded Personal Property), and all proceeds thereof, naming Mortgage Borrower
as debtor and Mortgage Lender as secured party (collectively, the “UCC
Financing Statements”; together with the Assignment of Leases Counterpart
and the Substitute Property Mortgage Spreader Agreement, the “Security
Documents”);


(4)           the Title Policy or
endorsements to the Title Policies, as applicable, issued by the Title Company
in an amount equal to 125% of the Allocated Loan Amount for the Substitute
Property (or, if the Title Company issues a tie-in endorsement between the
Title Policy for the Substitute Property and the Title Policies for the other
Individual Properties in form and substance reasonably acceptable to Mezzanine
Lender, in an amount equal to 100% of the Allocated Loan Amount for the
Substitute Property), reflecting the addition of each such Substitute Property
and containing such affirmative coverage similar in form and substance to the
affirmative coverage provided in connection with the Replaced Property,
insuring that the Substitute Property Mortgage Spreader Agreement creates a
valid first lien on Borrower’s fee or leasehold title in the Substitute
Property subject to the Permitted Encumbrances, and insuring the perfected
first priority interest of Mortgage Lender pursuant to the Substitute Property
Mortgage Spreader Agreement, together with any title insurance premiums, fees
or charges due in connection therewith, and the Mezzanine Borrower shall cause
Mortgage Borrower to cooperate with the Mortgage Lender and execute such
further instruments and documents and perform such further acts as the
Mezzanine Lender or the Title Company shall reasonably request to carry out the
creation and perfection of the liens and security interests contemplated by the
Security Documents and the release, discharge and removal of any encumbrances
required for the issuance of the Title Policy;


(5)           an amendment to the
Master Lease and to the Master Lease SNDA incorporating the Substitute Property
and eliminating the Replaced Property;


 


42

















 


(6)           updates to any Exhibits
and Schedules to the Mortgage Loan Documents as applicable without disclosing
matters inconsistent with the requirements of this Section 2.3.5; and


(7)           a Confirmation of
Guaranty in customary form duly executed and delivered by Guarantors, adding
the Substitute Property to and affirming their obligations under the Recourse
Guaranty.


(xiv)        Senior
Mezzanine Loan Deliveries.  The
Senior Mezzanine Lender shall have received all deliveries required under Section
2.3.5 of the Senior Mezzanine Loan Agreement, including, but not limited
to, insurance certificates naming Senior Mezzanine Lender with respect to the
Substitute Property, a copy of the owner’s title insurance policy and related
mezzanine endorsement (if available in such State) and copies of the Substitution
Due Diligence Package and all final deliveries to Mortgage Lender under this Section
2.3.5.


(xv)         Junior
Mezzanine Loan Deliveries.  The
Junior Mezzanine Lenders shall have received all deliveries required under Section
2.3.5 of the Junior Mezzanine Loan Agreements, including, but not limited
to, insurance certificates naming Junior Mezzanine Lenders with respect to the
Substitute Property, a copy of the owner’s title insurance policy and related
mezzanine endorsement (if available in such State) and copies of the
Substitution Due Diligence Package and all final deliveries to Mortgage Lender
under this Section 2.3.5.


(xvi)        Additional
Deliveries.  Mezzanine Lender shall
have received such other deliveries reasonably requested by Mezzanine Lender,
provided such requests are customary and are consistent with the deliveries
required with respect to the Individual Properties on the Closing Date.


2.3.6        Provisions
Relating to Individual Properties That Go Dark.


(a)           Mezzanine
Borrower shall not permit Mortgage Borrower to allow, permit or suffer any
Individual Property to Go Dark.  If an
Individual Property shall Go Dark, it shall be an Event of Default hereunder
unless, within 30 days of such Individual Property Going Dark, Mezzanine
Borrower shall cause Mortgage Borrower to:


(i)           
cause such Individual Property to reopen for business to the public; or


(ii)          
cause such Individual Property to be released from the lien of the applicable
Security Instrument in accordance with Section 2.3.4 hereof; or


(iii)          provide
a Substitute Property, to be subject to the lien of the Security Instrument, in
accordance with Section 2.3.5 hereof to the extent permitted under such
Section, to replace such Individual Property.


(b)           If any Individual Property shall Go Dark,
Mezzanine Borrower will cause Mortgage Borrower to promptly send written notice
thereof to Mezzanine Lender.  If an
Individual Property shall Go Dark, the Master Lessee shall nonetheless be
required to make into the Holding Account without reduction the full Master Lease
Rent payment as and when 


 


43

















 


required under the Master Lease and the Master Lease Rent Payment
Direction Letter with respect to all Individual Properties.


2.3.7        Excess Account Collateral.  Upon the occurrence of any Property Release,
provided no 90% Cash Sweep Period
exists and no Event of Default has occurred and is continuing, Mezzanine Lender
shall promptly perform an analysis of the Account Collateral (Second Mezzanine)
in order to reasonably determine the amount of the Account Collateral (Second
Mezzanine) (including, but not limited to, Proceeds) attributable to the
Release Property (the “Excess Account Collateral”), and shall promptly
instruct Cash Management Bank to return to Mezzanine Borrower the Excess
Account Collateral, if any, except to the extent that Mezzanine Lender
reasonably determines that a shortfall exists in any Sub-Account with respect
to the Property other than the Release Property.


2.3.8        Reserve Requirements.  Upon the occurrence of a Property Release,
provided no Event of Default has occurred and is continuing, Mezzanine Borrower
shall cause Mortgage Borrower to promptly prepare a revised estimate of
Impositions and Other Charges, insurance premiums, Ground Rent and Master Lease
Rent with respect to the remaining Properties in accordance with Sections
16.1, 16.2 and 16.3, as applicable of the Loan Agreement
(Mortgage), and shall promptly provide Mezzanine Lender and Cash Management
Bank (Mortgage) with notice of the revised Monthly Tax Reserve Amount, Monthly
Insurance Reserve Amount and Monthly Ground Rent Amount.


2.3.9        Release of Unimproved Parcels.  Subject to satisfaction of each of the
conditions set forth below with respect to any Unimproved Parcel, at the
request of Mezzanine Borrower, Mezzanine Lender shall consent to the release
such Unimproved Parcel from the Lien of the applicable Security Instrument and
related Loan Documents (Mortgage) and concurrent conveyance of such Unimproved
Parcel to a Person other than Mortgage Borrower or another SPE Entity, without
the payment of any Release Price:


(a)           Mezzanine
Borrower delivers a written notice to Mezzanine Lender (i) identifying the
Unimproved Parcel to be released and the date on which Mezzanine Borrower
desires the release to be effective, which date shall not be less than thirty
(30) days from the date of Mezzanine Borrower’s delivery of notice, and (ii)
specifying the intended use of the Unimproved Parcel, which shall not be
inconsistent with the use of the portion of the related Individual Property
that shall remain subject to the Lien of the applicable Security
Instrument.  For the avoidance of doubt,
the erecting, maintaining and operating of residential apartment or condominium
complexes on Unimproved Parcels after their release shall not be deemed to be
inconsistent with the use of the related Individual Property.


(b)           No
Noticed Default or Event of Default shall exist and be continuing on the date
Mezzanine Borrower delivers its notice to Lender or on the date on which the
release of the Unimproved Parcel is to become effective.


(c)           Each
of the Unimproved Parcel and the remainder of the related Individual Property
shall constitute separate tax lots and comply with all applicable Legal
Requirements, including all zoning and subdivision laws.


 


44

















 


(d)           The
release of the Unimproved Parcel shall not impair, other than to a de minimis
extent, any access to or use of the remaining portion of the related Individual
Property.


(e)           Mezzanine
Borrower shall cause Mortgage Borrower to submit to Mortgage Lender (with a
copy to Mezzanine Lender), concurrently with its request for release, Release
Instruments for the Unimproved Parcel together with an Officer’s Certificate
certifying that (i) the Release Instruments are in compliance with all Legal
Requirements, (ii) the release and conveyance to be effected will not violate
the terms of this Agreement, (iii) the release to be effected will not impair
or otherwise adversely affect the Liens, security interests and other rights of
Mortgage Lender under the Loan Documents (Mortgage) not being released (or as
to the Property subject to the Loan Documents (Mortgage) not being released)
nor adversely affect Mezzanine Lender’s Lien on the Collateral and (iv) the
requirement described in the other clauses of this Section 2.3.9 have been
satisfied in connection with the release and conveyance of the Unimproved
Parcel (together with calculations and supporting documentation demonstrating
the same in reasonable detail).


(f)            On
the date of release of the Unimproved Parcel, the Unimproved Parcel is
simultaneously transferred to a party other than Mortgage Borrower or any SPE
Entity.


(g)           Mortgage
Borrower executes and delivers such other instruments, certificates, opinions
of counsel and documentation as Mezzanine Lender and the Rating Agencies shall
reasonably request in order to preserve, confirm or secure the Liens and
security granted to Mortgage Lender by the Loan Documents (Mortgage), including
any amendments, modifications or supplements to any of the Loan Documents
(Mortgage) and partial release endorsements to the existing Title Policies.


(h)           Mezzanine
Borrower shall pay for any and all reasonable out-of-pocket costs and expenses
incurred by Mezzanine Lender, and cause Mortgage Borrower to pay for any and
all reasonable out-of-pocket costs and expenses incurred by Mortgage Lender in
connection with any proposed release and conveyance of an Unimproved Parcel,
including, with respect to Mezzanine Borrower, Mezzanine Lender’s reasonable
attorneys’ fees and disbursements and with respect to Mortgage Borrower, all
title insurance premiums for any endorsements to any existing Title Policies
reasonably required by Mezzanine Lender in connection with such proposed
release.


(i)            Mezzanine
Borrower shall cause a Non-Disqualification Opinion with respect to such
release to be delivered to Mortgage Lender (with a copy to Mezzanine Lender)
and the Rating Agencies.


2.4           Regulatory Change; Taxes.


2.4.1        Increased Costs.  If as a result of any Regulatory Change or
compliance of Mezzanine Lender therewith, the basis of taxation of payments to
Mezzanine Lender or any company Controlling Mezzanine Lender of the principal
of or interest on the Loan is changed or Mezzanine Lender or the company
Controlling Mezzanine Lender shall be subject to (i) any tax, duty, charge or
withholding of any kind with respect to this Agreement (excluding federal
taxation of the overall net income of Mezzanine Lender or the company
Controlling Mezzanine 


 


45

















 


Lender); or (ii) any reserve,
special deposit or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities, of Mezzanine Lender
or any company Controlling Mezzanine Lender is imposed, modified or deemed
applicable; or (iii) any other condition affecting loans to Mezzanine Borrowers
subject to LIBOR-based interest rates is imposed on Mezzanine Lender or any
company Controlling Mezzanine Lender and Mezzanine Lender determines that, by
reason thereof, the cost to Mezzanine Lender or any company Controlling
Mezzanine Lender of making, maintaining or extending the Loan to Mezzanine
Borrower is increased, or any amount receivable by Mezzanine Lender or any
company Controlling Mezzanine Lender hereunder in respect of any portion of the
Loan to Mezzanine Borrower is reduced, in each case by an amount deemed by
Mezzanine Lender in good faith to be material (such increases in cost and
reductions in amounts receivable being herein called “Increased Costs”),
then Mezzanine Lender shall provide notice thereof to Mezzanine Borrower and
Mezzanine Borrower agrees that it will pay to Mezzanine Lender upon Mezzanine
Lender’s written request such additional amount or amounts as will compensate
Mezzanine Lender or any company Controlling Mezzanine Lender for such Increased
Costs to the extent Mezzanine Lender determines that such Increased Costs are
allocable to the Loan.  If Mezzanine
Lender requests compensation under this Section 2.4.1, Mezzanine
Borrower may, by notice to Mezzanine Lender, require that Mezzanine Lender
furnish to Mezzanine Borrower a statement setting forth the basis for
requesting such compensation and the method for determining the amount
thereof.  In the event that Mezzanine
Borrower is required to pay any Increased Costs in accordance with the terms
hereof, Mezzanine Borrower shall have the right to prepay the Principal Amount
(together with all accrued but unpaid interest thereon calculated through the
end of the then current Interest Period) without the imposition of any
Prepayment Fee.  Mezzanine Borrower shall
have up to ninety (90) days following the later to occur of (1) Mezzanine
Lender furnishing a statement setting forth the basis for requesting
compensation for Increased Costs if requested by Mezzanine Borrower and (2)
receipt from Mezzanine Lender of notice of the Increased Costs to make such
prepayment, provided until such prepayment is paid in full (including all
accrued but unpaid interest thereon calculated through the end of the then
current Interest Period), Mezzanine Borrower shall pay to Mezzanine Lender upon
Mezzanine Lender’s written request such additional amount or amounts as will
compensate Mezzanine Lender or any company Controlling Mezzanine Lender for
Increased Costs incurred in the interim to the extent Mezzanine Lender
determines that such Increased Costs are allocable to the Loan.


2.4.2        Special Taxes.  Mezzanine Borrower shall make all payments
hereunder free and clear of and without deduction for Special Taxes.  If Mezzanine Borrower shall be required by
law to deduct any Special Taxes from or in respect of any sum payable hereunder
or under any other Mezzanine Loan Document to Mezzanine Lender, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.4.2) Mezzanine Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Mezzanine
Borrower shall make such deductions, and (iii) Mezzanine Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law. Notwithstanding anything
to the contrary contained in this Section 2.4, Mezzanine Borrower shall
not be liable for any amounts as a result of withholding for Special Taxes or
additional costs incurred as a result of the assignment of all or any portion
of the Loan by Mezzanine Lender.


 


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2.4.3        Other Taxes.  In addition, Mezzanine Borrower agrees to pay
(or cause Mortgage Borrower to pay) any present or future stamp or documentary
taxes or other excise or property taxes, charges, or similar levies which arise
from any payment made hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other
Mezzanine Loan Documents, or the Loan (hereinafter referred to as “Other
Taxes”).


2.4.4        Indemnity.  Mezzanine Borrower shall indemnify Mezzanine
Lender for the full amount of Special Taxes (unless Mezzanine Borrower shall
not be liable therefore as provided in Section 2.4.2) and Other Taxes
(including any Special Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.4.4) paid by Mezzanine
Lender and any liability (including penalties, interest, and reasonable
out-of-pocket expenses) arising therefrom or with respect thereto, whether or
not such Special Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be made within
thirty (30) days after the date Mezzanine Lender makes written demand therefor.


2.4.5        Change of Office.  To the extent that changing the jurisdiction
of Mezzanine Lender’s applicable office would have the effect of minimizing
Special Taxes, Other Taxes or Increased Costs, Mezzanine Lender shall use
reasonable efforts to make such a change, provided that same would not
otherwise be disadvantageous to Mezzanine Lender.


2.4.6        Survival.  Without prejudice to the survival of any
other agreement of Mezzanine Borrower hereunder, the agreements and obligations
of Mezzanine Borrower contained in this Section 2.4 shall survive the
payment in full of principal and interest hereunder, and the termination of
this Agreement.


2.5           Conditions
Precedent to Closing.  The obligation
of Mezzanine Lender to make the Loan hereunder is subject to the fulfillment
by, or on behalf of, Mezzanine Borrower or waiver by Mezzanine Lender of the
following conditions precedent no later than the Closing Date; provided,
however, that unless a condition precedent shall expressly survive the Closing
Date pursuant to a separate agreement, by funding the Loan and filing UCC
financing statements relating to the Pledge, Mezzanine Lender shall be deemed
to have waived any such conditions not theretofore fulfilled or satisfied; and
provided that the funding of the Loan shall be further subject to the terms and
conditions set forth in the Funding Letter Agreement:


2.5.1        Representations and Warranties; Compliance
with Conditions.  The
representations and warranties of Mezzanine Borrower contained in this
Agreement and the other Mezzanine Loan Documents, and the Merger
Representations and Warranties, shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and
as of such date, and no Default, Event of Default, Mortgage Default, Mortgage
Event of Default, Senior Mezzanine Default or Senior Mezzanine Event of Default
shall have occurred and be continuing; and Mezzanine Borrower shall be in
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other Mezzanine Loan Document on its part to be
observed or performed.  Notwithstanding
the foregoing, (i) the breach or failure of a Property Specific Representation
shall not constitute the failure to satisfy the condition precedent set forth
in this Section 2.5.1 unless such breach or failure would result in a “Material
Adverse Effect on the Company” (as such phrase is defined in the Merger
Agreement), (ii) in the event of the breach or failure of a Property Specific
Representation that results in a 


 


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Portfolio MAE, Mezzanine Lender
may require Mezzanine Borrower to effect a Mezzanine Lender-Initiated
Substitution.


2.5.2        Delivery of Mezzanine Loan Documents; Title
Policies; Reports; Leases.


(a)           Mezzanine Loan Documents.  Mezzanine Lender shall have received an
original copy of this Agreement, the Mezzanine Notes, the Pledge, and all of
the other Mezzanine Loan Documents, in each case, duly executed (and to the
extent required, acknowledged) and delivered on behalf of Mezzanine Borrower
and any other parties thereto.


(b)           Certificates; Perfection of Lien.  Mezzanine Lender shall have received
originals of the Certificates together with a Member Power endorsed in
blank.  The Pledge and the
other Mezzanine Loan Documents shall constitute valid, perfected, and enforceable first priority Liens upon the
Collateral, in favor of Mezzanine Lender, subject only to the Permitted
Encumbrances (Second Mezzanine).


(c)           Interest
Rate Cap Agreement (Second Mezzanine). 
Mezzanine Lender shall have received the original Interest Rate Cap
Agreement (Second Mezzanine) which shall be in form and substance satisfactory
to Mezzanine Lender and a counterpart of the Acknowledgment executed and
delivered by the Counterparty;


(d)           Mezzanine
Account Agreement.  Mezzanine Lender
shall have received the original
of the Mezzanine Account Agreement executed by each of Cash Management Bank and
Mezzanine Borrower;


(e)           Intercreditor Agreements.  Mezzanine Lender shall have
received the Intercreditor Agreement 


(f)            UCC Financing Statements.  Mezzanine Lender shall have received evidence
that the UCC financing statements relating to the Pledge and this Agreement
have been delivered to the Mezzanine Lender for filing in the applicable
jurisdictions.


(g)           Title
Insurance.


(i)            Mezzanine
Lender shall have received a copy of the Title Policies or a marked-up and
signed commitment having the force and effect of a title policy, marked “paid”
by an authorized representatives of the Title Company) issued by the Title
Company with respect to the Loan (Mortgage) and dated as of the Closing Date,
with a mezzanine loan endorsement in favor of Mezzanine Lender, it successors
and assigns, dated as of the Closing Date and reinsurance and direct access
agreements in form and substance acceptable to Mezzanine Lender. Mezzanine
Lender shall also have received evidence that all premiums in respect of the
Title Policies have been paid; and


(ii)           Mezzanine
Lender shall have received evidence of Mortgage Borrower’s ownership of the Property in the form
of owner’s title policies insuring Mortgage Borrower’s title to the
Property, which title policies shall be in form and substance, and issued by a
title insurance company (with appropriate reinsurance or coinsurance),
reasonably satisfactory to Mortgage Lender. 
Mezzanine Lender shall also have received a letter from Mortgage
Borrower 


 


48

















 


to the Mezzanine Lender and countersigned by the Title Companies,
directing the Title Company to make certain loss payments under certain of
Mortgage Borrower’s owner’s title insurance policies to Mezzanine Lender as
more particularly set forth therein.


(iii)          Mezzanine
Lender shall have received a “UCC 9” title policy in favor of Mezzanine Lender,
its successors and assigns, dated as of the Closing Date with such mezzanine
endorsements in favor of Lender as Mezzanine Lender reasonably requires, in
form and substance acceptable to Mezzanine Lender.  Mezzanine Lender also shall have received
evidence that all premiums in respect of the “UCC Plus” title policy have been
paid.


(h)           Survey. 
Mezzanine Lender shall have received a current Survey for the Property,
containing the survey certification required by the Loan Agreement (Mortgage);


(i)            Insurance. 
Mezzanine Lender shall have received valid certificates of insurance for
the policies of insurance required by the Loan Agreement (Mortgage) naming
Mezzanine Lender as an additional insured (as applicable) and containing a
cross liability/severability endorsement, satisfactory to Mezzanine Lender in
its sole discretion, and evidence of the payment of all insurance premiums
currently due and payable for the existing policy period;


(j)            Environmental Reports.  Mezzanine Lender shall have received an
Environmental Report in respect of the Property from a firm, and in form and
substance, reasonably satisfactory to Mezzanine Lender;


(k)           Encumbrances. 
Mezzanine Borrower shall have taken or caused to be taken such actions
in such a manner so that Mezzanine Lender has a valid and perfected first Lien
as of the Closing Date on the Collateral.


(l)            Loan Documents (Mortgage).  Mezzanine Lender shall have received true and
correct copies of all Loan Documents (Mortgage), each of which shall be
reasonably satisfactory to Mezzanine Lender.


(m)          Senior Mezzanine Loan Documents.  Mezzanine Lender shall have received true and
correct copies of all Senior Mezzanine Loan Documents, each of which shall be
reasonably satisfactory to Mezzanine Lender.


(n)           Pledgor Acknowledgments.  Mezzanine Lender shall have received an
original of the Acknowledgment in the form of Exhibit D executed by each of
First Mezzanine Borrower and Mezzanine Borrower and dated as of the Closing
Date, and Mezzanine Lender shall have received satisfactory evidence thereof.


2.5.3        Delivery of Organizational Documents.  On or before the Closing Date, Mezzanine
Borrower shall deliver, or cause to be delivered, to Mezzanine Lender copies,
certified by an Officer’s Certificate, of all organizational documentation
related to Mezzanine Borrower, Sponsor, each SPE Entity, each Guarantor, Master
Lessee, Mortgage Borrower, Senior Mezzanine Borrower, and the Junior Mezzanine
Borrowers as have been requested by Mezzanine Lender and/or the formation,
structure, existence, good standing and/or qualification to do business of
Mezzanine Borrower, Sponsor, each SPE Entity, each Guarantor, Master Lessee,
Mortgage Borrower, Senior Mezzanine Borrower, and the Junior Mezzanine
Borrowers 


 


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as Mezzanine Lender may request
in its sole discretion, including, without limitation, good standing
certificates, qualifications to do business in the appropriate jurisdictions,
resolutions authorizing the entering into of the Loan and incumbency
certificates as may be requested by Mezzanine Lender.  Each of the organizational documents of any
SPE Entity shall contain single purpose entity provisions reasonably approved
by Mezzanine Lender prior to the date hereof.


2.5.4        Counsel Opinions.


(a)           Mezzanine
Lender shall have received or Mezzanine Borrower shall have delivered into
escrow (for release to Mezzanine Lender concurrently with the delivery of the
Security Instruments to the Title Company for recording) a non-consolidation
opinion in a form reasonably satisfactory to the Mezzanine Lender (the “Non-Consolidation
Opinion”).


(b)           Mezzanine
Lender shall have received or Mezzanine Borrower shall have delivered into
escrow (for release to Lender concurrently with the delivery of the Pledge to
the Title Company for recording) a true lease opinion with respect to the
Master Lease in form and substance reasonably satisfactory to the Mezzanine
Lender (the “True Lease Opinion”).


(c)           Mezzanine Lender shall have received or Mezzanine Borrower
shall have delivered into escrow (for release to Mezzanine Lender concurrently
with the delivery of the Pledge to the Title Company for recording) a true sale
opinion with respect to the Transfer of the entities owning the Property to
Mortgage Borrower in form and substance reasonably satisfactory to the Lender
(the “True Sale Opinion”).


(d)           Mezzanine Lender shall have received or Mezzanine Borrower
shall have delivered into escrow (for release to Mezzanine Lender concurrently
with the delivery of the Pledge to the Title Company for recording) a
non-contravention opinion with respect to the Transfer of the entities owning
the Property to Mortgage Borrower in form and substance reasonably satisfactory
to the Lender (the “Non-Contravention Opinion”).


(e)           [Reserved]


(f)            Mezzanine Lender shall have received or
Mezzanine Borrower shall have delivered into escrow (for release to Mezzanine
Lender concurrently with the delivery of the Pledge to the Title Company) (i) the Opinion of Counsel in such form and
substance reasonably satisfactory to the Mezzanine Lender; (ii) a copy of the “Opinion
of Counsel” delivered to Senior Mezzanine Lender pursuant to the Senior
Mezzanine Loan Agreement, and (iii) a copy of the “Opinion of Counsel”
delivered to Mortgage Lender pursuant to the Loan Agreement (Mortgage).


(g)           Mezzanine Lender shall have received from Counterparty the
Counterparty Opinion in such form approved by the Mezzanine Lender.


2.5.5        Consummation of the Merger.  Mezzanine Borrower shall have delivered to
Mezzanine Lender a true, correct and complete copy of the Merger
Agreement.  The merger transactions contemplated
by the Merger Agreement shall have been consummated in accordance with the
Merger Agreement, and all conditions precedent to such consummation, as set
forth in the Merger Agreement, shall, as of the consummation of the merger
transactions, 


 


50

















 


have been satisfied (and would
have been satisfied, without taking into consideration the application of the
last paragraph of Section 6.1 of the Merger Agreement) or (subject to the
following clause) waived, provided that no item requiring the consent of the
Parent (as defined in the Merger Agreement), including pursuant to Section 6.1
of the Merger Agreement, that is material to the interest of Mezzanine Lender
shall have been given and no condition material to the interests of the
Mezzanine Lender shall have been waived except, in ease such case, with the
prior written consent of Mezzanine Lender (which Mezzanine Lender shall not
unreasonably withhold or delay).


2.5.6        Payments.  All payments, deposits or escrows, if any,
required to be made or established by Mezzanine Borrower under this Agreement,
the Mezzanine Notes and the
other Mezzanine Loan Documents on or before the Closing Date shall have been
paid.


2.5.7        Transaction Costs.  Mezzanine Borrower shall have paid or
reimbursed Mezzanine Lender for all title insurance premiums, recording and
filing fees, costs of Environmental Reports, seismic reports, zoning reports,
searches, flood certifications, appraisals and other reports, the reasonable
fees and costs of Mezzanine Lender’s counsel and all other reasonable third
party out-of-pocket expenses incurred in connection with the origination of the
Loan; and Mezzanine Borrower shall have paid the fees due to Mezzanine Lender
pursuant to the Fee Letter.


2.5.8        Material Adverse Effect.  Subject to the qualification contained in the
preamble to Article IV of the Merger Agreement, other than clause (z) thereof,
since December 31, 2005, there not having occurred a “Material Adverse Effect
on the Company” (as defined in the Merger Agreement).


2.5.9        Control.  After giving effect to the consummation of
the transactions contemplated by the Merger Agreement, the Principal Investors,
collectively, shall beneficially own and control, with unrestricted voting
power, at least seventy percent (70%) of the voting equity of each Person
constituting a Guarantor pursuant to arrangements consistent with the
arrangements previously disclosed to Mezzanine Lender.


2.5.10      Insolvency.  None of Mezzanine Borrower, Senior Mezzanine
Borrower or Mortgage Borrower or any of their constituent Persons shall be the
subject of any bankruptcy, reorganization, or insolvency proceeding.


2.5.11      Master Lease and Individual Property
Subleases. Mezzanine Lender shall have received a copy of the duly
executed Master Lease and each Individual Property Sublease, each in form consistent with the forms attached hereto (with
respect to the Master Lease) or to the Purchase and Sale Agreement (with
respect to the Individual Property Subleases) and otherwise reasonably
acceptable to Mezzanine Lender and acceptable to the Rating Agencies and
acceptable to the Title Company.


2.5.12      Equity
Contribution.  Holdco and FP
collectively shall have received as equity contributions an aggregate amount
equal to at least 32.5% of the total consideration payable under the Merger
Agreement (a portion of which may be in the
form of rollover equity provided by Frank Fertitta III, Lorenzo Fertitta and
certain others) (plus such additional amount as the 


 


51

















 


Principal Investors and their
co-investors shall elect to contribute in their sole discretion), and (x)
Holdco shall have contributed (or cause to be contributed) as a common equity
contribution proceeds of such equity contribution received to Mortgage Borrower
in an amount not less than $550 million (the “Cash Equity Contribution”)
and (y) Holdco and FP shall have applied, or caused to be applied, all proceeds
of such equity contributions other than the Cash Equity Contribution to finance
the consummation of the Contemplated Transactions.


2.5.13      Existing Indebtedness.  After giving effect to the consummation of
the Contemplated Transactions, (a) Master Lessee and its subsidiaries shall
have no outstanding preferred equity or indebtedness, except for (i)
indebtedness incurred pursuant to (A) the 6 1/2% Senior Subordinated Notes due
2014, the 6 7/8% Senior Subordinated Notes due 2016, the 6% Senior Notes due
2012, the 6 5/8% Senior Subordinated Notes due 2018 and the 7.75% Senior Notes
due 2016 (the “Existing Notes”), in an aggregate principal amount of
approximately $2,300 million, (B) the Revolving/Term Credit Facility, (C) the Mortgage Loan, the Senior
Mezzanine Loan and the Junior Mezzanine Loans, and (D) the Loan; (ii) preferred
equity held by Holdco in its subsidiaries and preferred equity held by one
Borrower Party in another Borrower Party, so long as such preferred equity does
constitute “disqualified stock,” is not otherwise entitled to any mandatory
dividends or redemptions, and contains terms that are otherwise reasonably
satisfactory to Mezzanine Lender
(provided that Mezzanine Lender shall approve such terms so long as they are
not adverse to the interests of Mezzanine Lender); (iii) indebtedness evidenced by a note in the principal amount
of $100 million dated February 16, 2007 issued by GV Ranch Station Capital
Holdings, LLC and indebtedness evidenced by a series of notes in an aggregate
principal amount of $9.2 million issued by a subsidiary of Master Lessee having
a weighted average interest rate of 7.1% and maturity dates ranging from 2009
to 2026; (iv) a capital lease of the office building in which Master Lessee’s
executive offices are located adjacent to the Red Rock Resort (the “Executive
Office Capital Lease”); (v) indebtedness evidenced by that certain
Credit Agreement dated as of October 4, 2007 providing to Aliante Gaming, LLC,
a Nevada limited liability company, construction loans in the aggregate amount
of $410 million and revolving loans in the aggregate amount of $20 million, and
a completion guaranty by Master Lessee in respect thereof (the “Aliante
Financing”) and (vi) such other existing indebtedness and preferred equity,
if any, as shall be agreed by Mezzanine Lender (together with the Existing
Notes, and the indebtedness described in clauses (iii), (iv) and (v), the “Existing
Indebtedness”), and (b) all stock of the Master Lessee shall be owned by
Guarantors free and clear of Liens (other than those securing the
Revolving/Term Credit Facility).


2.5.14      Ground Lease and Fee Mortgagee Estoppels.  Landlord shall have received a Ground Lessor
Estoppel Certificate and, if applicable, a Fee Mortgagee Estoppel Certificate,
for each Ground Lease Property.


2.5.15      Equity and Real Property Transfer Documents.  Mezzanine Borrower shall have delivered to
Mezzanine Lender true, correct and complete copies of all documentation
pursuant to which the transactions contemplated by the Merger Agreement are
consummated, including, but not limited to, all documents evidencing all stages
of the acquisition of Station Casinos, Inc. by the Guarantors and all documents
evidencing (i) all preliminary transfers of equity interests that resulted in
the Mezzanine Borrower structure set forth on Exhibit K, (ii) any
preliminary transfers of the Property into Affiliates of Mortgage Borrower and
(iii) the acquisition of such Affiliates by and the merger of such Affiliates
into Mortgage Borrower.  In addition,
Mezzanine 


 


52

















 


Borrower shall have delivered to Mezzanine
Lender a copy of the ALTA owner’s title insurance policy(ies) issued by the Title Company
with respect to the Property and insuring Mortgage Borrower’s fee and/or
leasehold title thereto, in form and substance reasonably acceptable to Mezzanine
Lender.


2.5.16      No
Competing Financing.  Mezzanine Lender shall be reasonably
satisfied that prior to and during the 135-day period after the Closing Date
(or such shorter period necessary to complete the Securitization) there shall
be no competing offering, placement, or arrangement of any debt
securities or bank financing (including refinancings and renewals of debt) by
or on behalf of any Guarantor or any of its subsidiaries (including Mezzanine
Borrower) other than (a) the Revolving/Term
Credit Facility, (b) the Mezzanine
Loan, (c) the Executive Office Capital Lease, (d) the Aliante
Financing, (e) the Land Loan,
(f) to the extent permitted to be incurred under the Merger Agreement,
refinancings of existing indebtedness of subsidiaries of Master Lessee, and
(g) to the extent permitted to be incurred under the Merger Agreement,
construction and other single asset financings by subsidiaries of Master
Lessee.


2.5.17      Approvals.  All material governmental and third party
approvals necessary in connection with the Contemplated Transactions (including
all necessary regulatory and gaming approvals) and the continuing operations of
Master Lessee, Mezzanine Borrower and their respective subsidiaries (including
shareholder or member approvals, if any) shall have been obtained on terms
reasonably satisfactory to Mezzanine Lender and shall be in full force and
effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on the Contemplated
Transactions.  There shall not exist any
action, suit, investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental authority that would permit
Sponsor under the Merger Agreement not to consummate the merger transaction.


2.5.18      Searches.  Mezzanine Lender shall have received current
judgment, bankruptcy, UCC, litigation and tax lien searches showing no material
monetary encumbrances with respect to the Property or material liabilities of
Mezzanine Borrower or the SPE Entities other than as contemplated by the
Mezzanine Loan Documents; provided that, for the avoidance of doubt, the
disclosure, in any such searches or otherwise, or existence of any pending or
threatened action, suit, litigation or proceeding relating to the Contemplated
Transactions which does not constitute at such time a contractual basis for
termination of the Merger Agreement shall not constitute a basis of the failure
or non-satisfaction of this condition.


2.6           [Reserved]  


III.                                 CASH MANAGEMENT


3.1           Cash Management.


3.1.1        Establishment of Accounts.  Mezzanine Borrower hereby acknowledges that,
simultaneously with the execution of this Agreement, pursuant to the Mezzanine
Account Agreement, Mezzanine Borrower has established with Cash Management Bank
(Second Mezzanine) a holding account (the “Mezzanine Account”), which
has been established as a 


 


53

















 


non-interest bearing deposit account
with interest-bearing sub-accounts.  The
Mezzanine Account and each sub-account of such account and the funds deposited
therein shall serve as additional security for the Loan.  Pursuant to the Mezzanine Account Agreement,
Mezzanine Borrower shall irrevocably instruct and authorize Cash Management
Bank (Second Mezzanine) to disregard any and all orders for withdrawal from the
Collateral Accounts (Second Mezzanine) made by, or at the direction of,
Mezzanine Borrower.  Mezzanine Borrower
agrees that, prior to the payment in full of the Indebtedness, the terms and
conditions of the Mezzanine Account Agreement shall not be amended or modified
in any material respect without the prior written consent of Mezzanine Lender
(which consent Mezzanine Lender may grant or withhold in its sole
discretion).  In recognition of Mezzanine
Lender’s security interest in the funds deposited into the Collateral Accounts
(Second Mezzanine) the Mezzanine Account shall be named as follows: “FCP Mezzco
Borrower II, LLC Holding Account in favor of German American Capital
Corporation, as Collateral Agent” (Account Number 048818640.  Mezzanine Borrower confirms that it has
established with Cash Management Bank (Second Mezzanine) the following
sub-accounts of the Mezzanine Account (each, a “Sub-Account” and,
collectively, the “Sub-Accounts” and together with the Mezzanine
Account, the “Collateral Accounts (Second Mezzanine)”), which (i) may be
ledger or book entry sub-accounts and need not be actual sub-accounts, (ii)
shall each be linked to the Mezzanine Account, (iii) shall each be a “deposit
account” (as
such term is defined in Section 9-102(a)(29) of the UCC) and (iv) shall
each be an Eligible Account to which certain funds shall be allocated and from
which disbursements shall be made pursuant to the terms of this Agreement:


(a)           A sub-account for the retention of Account Collateral
(Second Mezzanine) in respect of Debt Service (Second Mezzanine) on the Loan
with the account number 048818658 (the “Mezzanine Debt Service Reserve Account”).


3.1.2        Pledge of Account Collateral (Second
Mezzanine).  To secure the
full and punctual payment and performance of the Obligations (Second
Mezzanine), Mezzanine Borrower hereby collaterally assigns, grants a security
interest in and pledges to Mezzanine Lender, to the extent not prohibited by
applicable law, a second priority continuing security interest in and to the
following property of Mezzanine Borrower, whether now owned or existing or
hereafter acquired or arising and regardless of where located (all of the same,
collectively, the “Account Collateral (Second Mezzanine)”):


(a)           any and all Excess Cash Flow from time to time available
in the Holding Account and required, by the terms of the Loan Agreement
(Mortgage) as now in effect or amended with the consent of Mezzanine Lender, to
be deposited by the Mortgage Lender or the Cash Management Bank (Mortgage) into
the Mezzanine Account;


(b)           the Collateral Accounts (Second Mezzanine) and all cash,
deposits and/or wire transfers from time to time deposited or held in, credited
to or made to Collateral Accounts (Second Mezzanine);


(c)           all interest and cash from time to time received,
receivable or otherwise payable in respect of, or in exchange for, any or all
of the foregoing or purchased with funds from the Collateral Accounts (Second
Mezzanine); and


 


54

















 


(d)           to the extent not covered by clauses (a) or (b) above, all
proceeds (as defined under the UCC) of any or all of the foregoing.


In addition to the rights and remedies herein
set forth, Mezzanine Lender shall have all of the rights and remedies with
respect to the Account Collateral (Second Mezzanine) available to a secured
party at law or in equity, including, without limitation, the rights of a secured
party under the UCC, as if such rights and remedies were fully set forth
herein.


This Agreement shall constitute a security
agreement for purposes of the Uniform Commercial Code and other applicable law.


3.1.3        Maintenance
of Collateral Accounts.


(a)           Mezzanine Borrower agrees that each of the Collateral
Accounts (Second Mezzanine) is and shall be maintained (i) as a “deposit
account” (as such term is defined in Section 9-102(a)(29) of the UCC), (ii) in
such a manner that Mezzanine Lender shall have control (within the meaning of
Section 9-104(a)(2) of the UCC) over the Mezzanine Account and (iii) such that
no Person other than Mezzanine Lender shall have any right of withdrawal from
the Collateral Accounts (Second Mezzanine) and, except as provided herein, no
Account Collateral  (Second Mezzanine)
shall be released to the Mezzanine Borrower or any Affiliate of Mezzanine
Borrower from the Collateral Accounts (Second Mezzanine).  Without limiting the Mezzanine Borrower’s
obligations under the immediately preceding sentence, Mezzanine Borrower shall
only establish and maintain the Mezzanine Account with a financial institution
that has executed an agreement substantially in the form of the Mezzanine
Account Agreement or in such other form acceptable to Mezzanine Lender in its
sole discretion.


3.1.4        Eligible Accounts.  The Collateral Accounts (Second Mezzanine)
shall be Eligible Accounts.  The
Collateral Accounts (Second Mezzanine) shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other banking or governmental authority, as may now
or hereafter be in effect.  Income and
interest accruing on the Collateral Accounts 
(Second Mezzanine) or any investments held in such accounts shall be
periodically added to the principal amount of such account and shall be held,
disbursed and applied in accordance with the provisions of this Agreement and
the Mezzanine Account Agreement. 
Mezzanine Borrower shall be the beneficial owner of the Collateral
Accounts (Second Mezzanine) for federal income tax purposes and shall report
all income on the Collateral Accounts (Second Mezzanine).


3.1.5        Deposits into Sub-Accounts.  On the date hereof, Mezzanine Borrower has
deposited the following amounts into the Sub-Accounts:


(i)            $0.00 into the Mezzanine Debt Service
Reserve Account;


3.1.6        Monthly Funding.


(a)           Mezzanine
Borrower hereby irrevocably authorizes Mezzanine Lender to transfer (and,
pursuant to the Mezzanine Account Agreement shall irrevocably authorize Cash
Management Bank (Second Mezzanine) to execute any corresponding instructions of
Mezzanine Lender), and Mezzanine Lender shall transfer, from the Mezzanine
Account by 11:00 a.m. New 


 


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York time on the date on which each payment of funds on deposit in the
Second Mezzanine Debt Service Reserve Account under the Loan Agreement
(Mortgage) is made to the Mezzanine Account, or as soon thereafter as
sufficient funds are in the Mezzanine Account to make the applicable transfers,
commencing on the date of the first transfer of funds from the Second Mezzanine
Debt Service Reserve Account under the Loan Agreement (Mortgage) to the
Mezzanine Account, funds in an amount equal to the sum of any Protective Advances
which may have been advanced by (and not previously reimbursed to) the
Mezzanine Lender pursuant to the terms of the Mezzanine Loan Documents to cure
any Default or Event of Default, any Mortgage Default or Mortgage Event of
Default, or to protect the Collateral together with any interest payable on
such amounts pursuant to the Mezzanine Loan Documents, plus (x) the unpaid Debt
Service (Second Mezzanine) for the next occurring Payment Date, plus (y) an
amount equal to such payments for any prior month(s), to the extent not
previously paid, plus (z) an amount equal to the amount, if any, deducted from
the Mezzanine Account in any preceding month to pay any other amounts then due
under the Mezzanine Loan Documents (other than any Debt Service (Second Mezzanine)).  Mezzanine Borrower acknowledges that
Mezzanine Lender shall not be required to make such withdrawal and deposit
until such time as Mezzanine Lender is able to calculate the amount of the Debt
Service (Second Mezzanine) for the next occurring Payment Date.


(b)           If
for any reason there will be insufficient amounts in the Mezzanine Debt Service
Reserve Account on any Payment Date to pay the Debt Service (Second Mezzanine)
due on such Payment Date, Mezzanine Borrower shall immediately deposit into the
Mezzanine Account an amount equal to the shortfall of available funds in the
Mezzanine Debt Service Reserve Account. 
Any failure by Mezzanine Borrower to deposit the full amount required by
the preceding sentence shall constitute an Event of Default hereunder.  If Mezzanine Lender shall reasonably
determine that there will be insufficient amounts in the Mezzanine Account to
pay any Protective Advances as and when the same are due and payable, Mezzanine
Lender shall provide written notice of same to Mezzanine Borrower setting forth
the basis for such determination.  Within
ten (10) Business Days of receipt of said notice, Mezzanine Borrower shall
deposit into the Mezzanine Account an amount equal to the shortfall of available
funds in the Mezzanine Account.  Any
failure by Mezzanine Borrower to deposit the full amount required by the
preceding sentence within said ten (10) Business Day period shall constitute an
Event of Default hereunder.


(c)           Mezzanine
Lender (so long as Mezzanine Lender is not the same entity as Mortgage Lender)
agrees to deliver to Mortgage Lender a monthly notice letter (the Second
Mezzanine Lender Monthly Debt Service Notice as described in the Loan Agreement
(Mortgage)) at least five (5) Business Days prior to each Payment Date setting forth
the Debt Service (Second Mezzanine) payable by Mezzanine Borrower on the first
Payment Date occurring after the date such notice is delivered.


(d)           Mezzanine
Borrower hereby acknowledges that, pursuant to Section 3.1.6 of the Loan
Agreement (Mortgage), to the extent Mortgage Lender has received a Mezzanine
Loan Default Notice and until such time as Mortgage Lender receives a Mezzanine
Loan Default Revocation Notice, the Mortgage Borrower has irrevocably directed
that Excess Cash Flow and any other payments to be made to Mezzanine Borrower,
any Junior Mezzanine Borrower, Mezzanine Lender, or any Junior Mezzanine Lender
are to be deposited directly into the 


 


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Mezzanine Account for application as provided in this Agreement (in
lieu of transferring such funds to such accounts of the Mezzanine Lender, any
Junior Mezzanine Lender or Mortgage Borrower as the Mortgage Borrower may have
so directed if the Mortgage Lender had not received such notice from Mezzanine
Lender).  Mezzanine Lender shall promptly
provide Mortgage Lender with a Mezzanine Loan Default Revocation Notice if an
Event of Default which has occurred under the Mezzanine Loan Documents is no
longer continuing.


3.1.7        Cash Management Bank (Second Mezzanine).


(a)           Mezzanine Lender shall have the right at Mezzanine
Borrower’s sole cost and expense to replace the Cash Management Bank (Second
Mezzanine) with a financial institution reasonably satisfactory to Mezzanine
Borrower in the event that (i) the Cash Management Bank (Second Mezzanine)
fails, in any material respect, to comply with the Mezzanine Account Agreement
or (ii) the Cash Management Bank (Second Mezzanine) is no longer an Approved
Bank.  Upon the occurrence and during the
continuance of an Event of Default, Mezzanine Lender shall have the right at
Mezzanine Borrower’s sole cost and expense to replace Cash Management Bank
(Second Mezzanine) at any time, without notice to Mezzanine Borrower.  Mezzanine Borrower shall cooperate with
Mezzanine Lender in connection with the appointment of any replacement Cash
Management Bank (Second Mezzanine) and the execution by the Cash Management
Bank (Second Mezzanine) and the Mezzanine Borrower of a Mezzanine Account
Agreement and delivery of same to Mezzanine Lender (with a copy to the
Mezzanine Lender).


(b)           So long as no Event of Default shall have occurred and be
continuing, Mezzanine Borrower shall have the right at its sole cost and
expense to replace the Cash Management Bank (Second Mezzanine) with a financial
institution that is an Approved Bank provided that such financial institution
and Mezzanine Borrower shall execute and deliver to Mezzanine Lender (with a
copy to Mezzanine Lender) a Mezzanine Account Agreement substantially similar
to the Mezzanine Account Agreement executed as of the Closing Date, or in such
other form reasonably required by Mezzanine Lender or required by the Rating
Agencies, with such changes therein as shall be reasonably acceptable to
Mezzanine Lender.


 


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3.1.8        Mezzanine Borrower’s
Account Representations, Warranties and Covenants.


(a)           Mezzanine
Borrower represents, warrants and covenants that: (i) as of the date hereof,
Mortgage Borrower has irrevocably directed the Master Lessee pursuant to a
letter substantially in the form of the Master Lease Rent Payment Direction
Letter to make all payments of Master Lease Scheduled Rent directly to the
Holding Account at all times during the term of the Mortgage Loan and Mezzanine
Borrower shall cause Mortgage Borrower to deposit all such sums in such Holding
Account; and (ii) Mezzanine Borrower shall cause Mortgage Borrower to comply
with, and use commercially reasonable efforts to enforce Mortgage Lender’s
compliance with, all of the terms and conditions of Section 3.1 of the Loan
Agreement (Mortgage), including, without limitation: (1) the timely funding of
all Sub-Accounts under the Mortgage Loan, including any Sub-Account
deficiencies in accordance with Section 3.1.6(c) of the Loan Agreement
(Mortgage); (2) the distribution of funds to Mezzanine Lender in accordance
with the “Second Mezzanine Lender Monthly Debt Service Notice” as described in
the Loan Agreement (Mortgage); and (3) the timely payment of Impositions and
Other Charges, insurance premiums, Ground Rent, Debt Service in respect of the
Mortgage Loan, Debt Service (Second Mezzanine), and debt service in respect of
the Junior Mezzanine Loans.


(b)           Mezzanine
Borrower represents, warrants and covenants that (i) pursuant to the Loan
Agreement (Mortgage), provided no Mortgage Event of Default has occurred and is
continuing, Mortgage Lender has agreed to make or direct the Cash Management
Bank (Mortgage) to transfer all funds on deposit in the Second Mezzanine Debt
Service Reserve Account under the Loan Agreement (Mortgage) to the Mezzanine
Account, (iii) Mezzanine Borrower shall pay or cause to be paid all Receipts,
Cash and Cash Equivalents or other items of operating income not covered by the
preceding subsection (a) within one Business Day after receipt thereof by
Mezzanine Borrower or its Affiliates directly into the Mezzanine Account and,
until so deposited, any such amounts held by Mezzanine Borrower or its
Affiliates shall be deemed to be Account Collateral (Second Mezzanine) and
shall be held in trust by it for the benefit, and as the property, of Mezzanine
Lender and shall not be commingled with any other funds or property of
Mezzanine Borrower or its Affiliates, (iv) there are no accounts other than the
Collateral Accounts (Second Mezzanine) maintained by Mezzanine Borrower or any
other Person with respect to the Collateral or the collection of Receipts, and
(v) so long as the Loan shall be outstanding, neither Mezzanine Borrower nor
any other Person shall open any other operating accounts with respect to the
Collateral or the collection of Receipts, except for the Collateral Accounts
(Second Mezzanine).


3.1.9        Account
Collateral (Second Mezzanine) and Remedies.


(a)           Upon
the occurrence and during the continuance of an Event of Default, without
additional notice from Mezzanine Lender to Mezzanine Borrower, (i) Mezzanine
Lender may, in addition to and not in limitation of Mezzanine Lender’s other
rights, make any and all withdrawals from, and transfers between and among, the
Collateral Accounts (Second Mezzanine) as Mezzanine Lender shall determine in
its sole and absolute discretion to pay any Obligations (Second Mezzanine),
operating expenses and/or capital expenditures for the Property in such order and priority as Mezzanine
Lender shall determine in its sole and absolute discretion; and (ii) all payments to the Mezzanine
Lender pursuant to Section 3.1.6 shall immediately cease.


 


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(b)           Upon
the occurrence and during the continuance of an Event of Default, Mezzanine
Borrower hereby irrevocably constitutes and appoints Mezzanine Lender as
Mezzanine Borrower’s true and lawful attorney-in-fact, with full power of
substitution, to execute, acknowledge and deliver any instruments and to
exercise and enforce every right, power, remedy, option and privilege of
Mezzanine Borrower with respect to the Account Collateral (Second Mezzanine),
and do in the name, place and stead of Mezzanine Borrower, all such acts,
things and deeds for and on behalf of and in the name of Mezzanine Borrower,
which Mezzanine Borrower could or might do or which Mezzanine Lender may deem
necessary or desirable to more fully vest in Mezzanine Lender the rights and
remedies provided for herein and to accomplish the purposes of this Agreement.  The foregoing powers of attorney are
irrevocable and coupled with an interest. 
Upon the occurrence and during the continuance of an Event of Default,
Mezzanine Lender may perform or cause performance of any such agreement, and
any reasonable out-of-pocket expenses of Mezzanine Lender incurred in
connection therewith shall be paid by Mezzanine Borrower as provided in Section
5.1.12.


(c)           Mezzanine
Borrower hereby expressly waives, to the fullest extent permitted by law,
presentment, demand, protest or any notice of any kind in connection with this
Agreement or the Account Collateral (Second Mezzanine).  Mezzanine Borrower acknowledges and agrees
that ten (10) days’ prior written notice of the time and place of any public
sale of the Account Collateral (Second Mezzanine) or any other intended
disposition thereof shall be reasonable and sufficient notice to Mezzanine
Borrower within the meaning of the UCC.


3.1.10      Transfers and
Other Liens.  Mezzanine Borrower agrees that it will not
(i) sell or otherwise dispose of any of the Account Collateral (Second
Mezzanine) or (ii) create or permit to exist any Lien upon or with respect to
all or any of the Account Collateral (Second Mezzanine), except for the Lien
granted to Mezzanine Lender under this Agreement.


3.1.11      Reasonable Care. 
Beyond the exercise of reasonable care in the custody thereof, Mezzanine
Lender shall have no duty as to any Account Collateral (Second Mezzanine) in
its possession or control as agent therefor or bailee thereof or any income
thereon or the preservation of rights against any person or otherwise with
respect thereto.  Mezzanine Lender shall
be deemed to have exercised reasonable care in the custody of the Account
Collateral (Second Mezzanine) in its possession if the Account Collateral
(Second Mezzanine) is accorded treatment substantially equal to that which
Mezzanine Lender accords its own property, it being understood that Mezzanine
Lender shall not be liable or responsible for any loss or damage to any of the
Account Collateral (Second Mezzanine), or for any diminution in value thereof,
by reason of the act or omission of Mezzanine Lender, its Affiliates, agents,
employees or bailees, except to the extent that such loss or damage results
from the Mezzanine Lender’s gross negligence or willful misconduct.  In no event shall Mezzanine Lender be liable
either directly or indirectly for losses or delays resulting from any event
which may be the basis of an Excusable Delay, computer malfunctions,
interruption of communication facilities, labor difficulties or other causes
beyond Mezzanine Lender’s reasonable control or for indirect, special or
consequential damages except to the extent of Mezzanine Lender’s gross
negligence or willful misconduct. 
Notwithstanding the foregoing, Mezzanine Borrower acknowledges and
agrees that (i) Mezzanine Lender does not have custody of the Account
Collateral (Second Mezzanine), (ii) Cash Management Bank (Second Mezzanine) has
custody of the Account Collateral (Second Mezzanine), (iii) the initial Cash
Management Bank (Second Mezzanine) was chosen by 


 


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Mezzanine Borrower and (iv) Mezzanine Lender has no obligation or duty
to supervise Cash Management Bank (Second Mezzanine) or to see to the safe
custody of the Account Collateral (Second Mezzanine).


3.1.12      Mezzanine Lender’s
Liability.


(a)           Mezzanine
Lender shall be responsible for the performance only of such duties with
respect to the Account Collateral (Second Mezzanine) as are specifically set
forth in this Section 3.1 or elsewhere in the Mezzanine Loan Documents,
and no other duty shall be implied from any provision hereof.  Mezzanine Lender shall not be under any
obligation or duty to perform any act with respect to the Account Collateral
(Second Mezzanine) which would cause it to incur any expense or liability or to
institute or defend any suit in respect hereof, or to advance any of its own
monies.  Mezzanine Borrower shall
indemnify and hold Mezzanine Lender, its employees and officers harmless from
and against any loss, cost or damage (including, without limitation, reasonable
attorneys’ fees and disbursements) incurred by Mezzanine Lender in connection
with the transactions contemplated hereby with respect to the Account
Collateral (Second Mezzanine) except as such may be caused by the gross
negligence or willful misconduct of Mezzanine Lender, its employees, officers
or agents.


(b)           Mezzanine
Lender shall be protected in acting upon any notice, resolution, request,
consent, order, certificate, report, opinion, bond or other paper, document or
signature believed by it in good faith to be genuine, and, in so acting, it may
be assumed that any person purporting to give any of the foregoing in
connection with the provisions hereof has been duly authorized to do so.  Mezzanine Lender may consult with counsel,
and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by it hereunder and in
good faith in accordance therewith.


3.1.13      Continuing
Security Interest.  This
Agreement shall create a continuing security interest in the Account Collateral
(Second Mezzanine) and shall remain in full force and effect until payment in
full of the Indebtedness.  Upon payment
in full of the Indebtedness, this security interest shall automatically
terminate without further notice from any party and Mezzanine Borrower shall be
entitled to the return, upon its request, of such of the Account Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof and
Mezzanine Lender shall execute such instruments and documents as may be
reasonably requested by Mezzanine Borrower to evidence such termination and the
release of the Account Collateral (Second Mezzanine).


3.1.14      Distributions. 
Notwithstanding anything to the contrary contained herein, there shall
be no restriction or limitation on Mezzanine Borrower’s ability to make
distributions to its members or its or their Affiliates other than as set forth
in Section 5.2.13.


 


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IV.                                 REPRESENTATIONS AND
WARRANTIES


4.1           Mezzanine Borrower Representations.  Except as Actually Known by the Mezzanine
Lender to the Contrary, Mezzanine Borrower represents and warrants as of the
Closing Date that:


4.1.1        Organization.  Each
of Mortgage Borrower, Senior Mezzanine Borrower, and Mezzanine Borrower is a
limited liability company and has been duly organized and is validly existing
and in good standing pursuant to the laws of the State of Delaware with
requisite power and authority to own its properties and to transact the
businesses in which it is now engaged. 
Master Lessee is a corporation and has been duly organized and is
validly existing and in good standing pursuant to the laws of the State of
Nevada with requisite power and authority to own its properties and to transact
the businesses in which it is now engaged. 
Holdco is a corporation and has been duly organized and is validly
existing and in good standing pursuant to the laws of the State of Delaware
with requisite power and authority to own its properties and to transact the
businesses in which it is now engaged.  FP is a limited liability company and has been duly
organized and is validly existing and in good standing pursuant to the laws of
the State of Nevada with requisite power and authority to own its properties
and to transact the businesses in which it is now engaged.  VoteCo is a limited liability company and has
been duly organized and is validly existing and in good standing pursuant to
the laws of the State of Nevada with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged.  Each of Mortgage Borrower, Senior
Mezzanine Borrower, Mezzanine Borrower, Guarantors and Master Lessee has duly
qualified to do business and is in good standing in each jurisdiction where it
is required to be so qualified in connection with its properties, businesses
and operations, or, in the case of qualifications in the various States (a) an
application for such qualification has been duly filed with the applicable
Governmental Authority and all fees required in order to obtain such
qualification have been paid in full, (b) all conditions to obtaining such
qualification have been satisfied under applicable law and the issuance of such
qualification is a ministerial act of the applicable Governmental Authority,
(c) each of Mortgage Borrower, Senior Mezzanine Borrower, and Mezzanine
Borrower has agreed to so qualify in accordance with a post-closing side letter
entered into on the date hereof, and (d) no such failure to qualify would be
reasonably likely to have a Material Adverse Effect.  Each of Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, Master Lessee and Guarantor possesses all
material rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the
businesses in which it is now engaged, and the sole business of Mezzanine
Borrower is the ownership of the Ownership Interests.  The organizational structure of Mortgage
Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, each Guarantor and
Master Lessee is accurately depicted by the schematic diagrams attached hereto
as Exhibit K.  Mezzanine Borrower
shall not change its name, identity, limited liability company form or
jurisdiction of organization unless it shall have given Mezzanine Lender thirty
(30) days prior written notice of any such change and shall have taken all
steps reasonably requested by Mezzanine Lender to grant, perfect, protect
and/or preserve the liens and security interest granted to Mezzanine Lender
under the Mezzanine Loan Documents.


4.1.2        Proceedings.  Each
of Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, Junior
Mezzanine Borrowers, Guarantors and Master Lessee has full 


 


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power to and has taken all necessary action
to authorize the execution, delivery and performance of the Mezzanine Loan
Documents to which it is a party.


4.1.3        No Conflicts.  The
execution, delivery and performance of this Agreement, the other Mezzanine Loan
Documents, the Senior Mezzanine Loan Documents, and the Loan Documents
(Mortgage) by Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower,
Junior Mezzanine Borrowers, Guarantors and Master Lessee, as applicable, will
not conflict with or result in a material breach of any of the terms or
provisions of, or constitute a material default under, or result in the
creation or imposition of any Lien (other than pursuant to the Mezzanine Loan
Documents, the Senior Mezzanine Loan Documents, and Loan Documents (Mortgage))
upon any of the property or assets of any such Person pursuant to the terms of
any indenture, mortgage, deed of trust, loan agreement, partnership agreement
or other agreement or instrument to which any such Person is a party or by
which any of such Person’s property or assets is subject (unless consents from
all applicable parties thereto have been obtained), except for any conflict
that would not individually or in the aggregate reasonably be expected to
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of any statute or any order, rule or regulation of
any Governmental Authority, and any material consent, approval, authorization,
order, registration or qualification of or with any Governmental Authority
required for the execution, delivery and performance by Mortgage Borrower,
Senior Mezzanine Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, Guarantors
and Master Lessee of this Agreement, the other Mezzanine Loan Documents, and
the Loan Documents (Mortgage) except for any violation that would not
individually or in the aggregate reasonably be expected to result in a Material
Adverse Effect, or any other Mezzanine Loan Documents has been obtained and is
in full force and effect.


4.1.4        Litigation. 
Except as set forth on Schedule II attached hereto, there are no
arbitration proceedings, governmental investigations, actions, suits or
proceedings at law or in equity by or before any Governmental Authority now
pending or, to the best of Mezzanine Borrower’s knowledge, threatened against
or affecting Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower,
Junior Mezzanine Borrowers, any Guarantor, Master Lessee or any Individual
Property (other than claims (A) (i) which are being covered by insurance, (ii)
which are being defended by the relevant insurance company and (iii) as to
which Mortgage Borrower has not received a notice from such insurance company
that the claim exceeds the total amount of insurance coverage with respect to
such claim; (B) which are covered by the self insurance limit permitted
pursuant to the Mortgage Loan Documents and are being diligently defended by
Mortgage Borrower, Guarantors, Master Lessee or their respective Affiliates; or
(C) which relate to employment claims for which liability in the event any such
matter is adversely determined could not reasonably be expected to exceed
$1,000,000 or provided that none of such unscheduled claims could reasonably be
expected to individually or in the aggregate to have a Material Adverse Effect
if adversely determined).  The actions,
suits or proceedings identified on Schedule II, if determined against
Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, Junior
Mezzanine Borrowers, any Guarantor, Master Lessee or the Property, would not
have a Material Adverse Effect.


4.1.5        Agreements.  The
Operating Agreements constitute all of the agreements to which Mortgage Borrower
or any of its Affiliates are party or are bound which are material to the
ownership and operation of any Individual Property.  Mezzanine Borrower is not a party to any 


 


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agreement or instrument or subject to any
restriction which is reasonably likely to materially and adversely affect
Mezzanine Borrower or Mezzanine Borrower’s business, properties or assets,
operations or condition, financial or otherwise.  Mezzanine Borrower is not in default in any
material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any material agreement or
instrument to which it is a party or by which Mezzanine Borrower or the
Collateral is bound.  Mezzanine Borrower
has no material financial obligation (contingent or otherwise) under any
indenture, mortgage, deed of trust, loan agreement or other similar agreement
or instrument to which Mezzanine Borrower is a party or by which Mezzanine
Borrower or the Collateral is otherwise bound, other than (a) obligations
constituting the Permitted Debt of Mezzanine Borrower which are incurred in the
ordinary course of the ownership and operation of the Collateral and (b)
obligations under the Mezzanine Loan Documents.


4.1.6        Title to Property
and Assets.


Mortgage Borrower has good, marketable and insurable (i) leasehold
title to the Land and the Improvements relating to the Ground Lease Properties,
and enjoys the quiet and peaceful possession of the Leasehold Estate related
thereto, and (ii) fee simple title to the Land and the Improvements relating to
the Fee Properties, in each case free and clear of all Liens whatsoever except
the Permitted Encumbrances.  Mortgage
Borrower has good and marketable title to the remainder of the Property
(excluding the Excluded Personal Property), free and clear of all Liens
whatsoever except the Permitted Encumbrances. 
The Security Instruments, when properly recorded in the appropriate
records, together with any Uniform Commercial Code financing statements
required to be filed in connection therewith, will create (i) a valid,
perfected first mortgage lien on the Land and the Improvements or the leasehold
estate therein, as applicable, subject only to Permitted Encumbrances and (ii)
perfected security interests in and to, and perfected collateral assignments
of, all personalty other than the Excluded Personal Property (including the
Subleases) or any leases of equipment from third parties, all in accordance
with the terms thereof, in each case subject only to any applicable Permitted
Encumbrances.  For avoidance of doubt,
those portions of the Excluded Personal Property owned by Master Lessee
constituting “FF&E” as defined in the Master Lease, are subject to a Lien
in favor of the Mortgage Borrower, as landlord, under the Master Lease, and
such landlord Lien has been assigned to Mortgage Lender, along with Mortgage
Borrower’s other rights as landlord under the Master Lease, pursuant to the
Security Instruments and the Assignment of Leases (such landlord Lien, as
assigned to Lender, the “Assigned Landlord Lien”).  There are no claims for payment for work,
labor or materials affecting the Property which are or may become a lien prior
to, or of equal priority with, the Liens created by the Loan Documents
(Mortgage) other than the Permitted Encumbrances.  None of the Permitted Encumbrances would
individually or in the aggregate reasonably be expected to result in a Material
Adverse Effect as of the Closing Date and thereafter.  Mezzanine Borrower shall cause Mortgage
Borrower to preserve its right, title and interest in and to the Property for
so long as the Mezzanine Notes remain outstanding and will cause Mortgage
Borrower to warrant and defend same and the validity and priority of the Lien
hereof from and against any and all claims whatsoever other than the Permitted
Encumbrances.


Senior Mezzanine Borrower owns all of the Senior Mezzanine Collateral,
including without limitation, the Senior Mezzanine Ownership Interests, subject
to no rights of others, 


 


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including any liens or other encumbrances
except for Permitted Encumbrances (Senior Mezzanine).


Mezzanine Borrower owns all of the Collateral, including without
limitation, the Ownership Interests, subject to no rights of others, including
any liens or other encumbrances, except for the Permitted Encumbrances (Second
Mezzanine).


4.1.7        No Bankruptcy
Filing.  None of Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, any Guarantor or
Master Lessee is contemplating either the filing of a petition by it under any
state or federal bankruptcy or insolvency laws or the liquidation of all or a
major portion of such entity’s assets or property, and Mezzanine Borrower has
no knowledge of any Person contemplating the filing of any such petition
against it, Mortgage Borrower, Senior Mezzanine Borrower, any Junior Mezzanine
Borrower, any Guarantor or Master Lessee.


4.1.8        Full and Accurate
Disclosure.  To the best of Mezzanine Borrower’s knowledge
no statement of material fact made by Mezzanine Borrower in this Agreement or
in any of the other Mezzanine Loan Documents contains any untrue statement of a
material fact or omits to state any material fact necessary to make such
statements contained herein or therein not materially misleading as of the date
made which in any such case could reasonably be expected to have a Material
Adverse Effect.  There is no fact
presently known to Mezzanine Borrower which has not been disclosed which could
reasonably be expected to have a Material Adverse Effect.


4.1.9        Ownership
Interests.  The Ownership Interests constitute all of the
property currently owned by Mezzanine Borrower.


4.1.10      No Plan Assets.


(a)           Mezzanine
Borrower does not maintain an employee benefit plan as defined by Section 3(3)
of ERISA, which is subject to Title IV of ERISA, and Mezzanine Borrower (i) has
no knowledge of any material liability which has been incurred or is expected
to be incurred by Mezzanine Borrower which is or remains unsatisfied for any
taxes or penalties with respect to any “employee benefit plan,” within the
meaning of Section 3(3) of ERISA, or any “plan,” within the meaning of Section
4975(e)(1) of the Code or any other benefit plan (other than a multiemployer
plan) maintained, contributed to, or required to be contributed to by Mezzanine
Borrower or by any entity that is under common control with Mezzanine Borrower
within the meaning of ERISA Section 4001(a)(14) (a “Plan”) or any plan
that would be a Plan but for the fact that it is a multiemployer plan within
the meaning of ERISA Section 3(37); and (ii) has made and shall continue to
make when due all required contributions to all such Plans, if any.  Each such Plan has been and will be
administered in compliance with its terms and the applicable provisions of
ERISA, the Code, and any other applicable federal or state law other than such actions or
failures to act that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect; and no action shall be taken or
fail to be taken that would result in the disqualification or loss of
tax-exempt status of any such Plan intended to be qualified and/or tax exempt
other than such actions or failures to act that individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect; and


 


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(b)           None
of Mortgage Borrower, Senior Mezzanine Borrower, or the Mezzanine Borrower is
an employee benefit plan, as defined in Section 3(3) of ERISA, subject to Title
I of ERISA, none of the assets of Mortgage Borrower, Senior Mezzanine Borrower,
or Mezzanine Borrower constitutes or will constitute plan assets of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101 and none of
Mortgage Borrower, Senior Mezzanine Borrower, or the Mezzanine Borrower is a
governmental plan within the meaning of Section 3(32) of ERISA and none of
Mortgage Borrower, Senior Mezzanine Borrower, or the Mezzanine Borrower is
subject to state statutes regulating investment of, and fiduciary obligations
with respect to, governmental plans similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code currently in effect, which prohibit or
otherwise restrict the transactions contemplated by this Agreement.


4.1.11      Compliance. 
Subject to Schedule 4.1.11, Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, the Collateral and the Property and the use
thereof comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes (except
for any non-compliance that individually or in the aggregate would not
reasonably be expected to result in a Material Adverse Effect).  To the best of Mezzanine Borrower’s
knowledge, none of Mortgage Borrower, Senior Mezzanine Borrower, or Mezzanine Borrower is in default or in
violation of any order, writ, injunction, decree or demand of any Governmental
Authority.  To the best of Mezzanine
Borrower’s knowledge, there has not been committed by Mortgage Borrower, Senior
Mezzanine Borrower, or Mezzanine Borrower any act or omission affording the
federal government or any other Governmental Authority the right of forfeiture
as against the Property or the Collateral or any part thereof or any monies
paid in performance of Mezzanine Borrower’s obligations under any of the
Mezzanine Loan Documents.


4.1.12      Financial
Information.  The information set forth in the certificate
of Mortgage Borrower regarding financial information dated of even date
herewith (i) is true, complete and correct in all material respects and (ii)
fairly represents the financial condition of the Master Lessee and the Property
as of the Closing Date.  None of Mortgage
Borrower, Senior Mezzanine Borrower, or Mezzanine Borrower has any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Mezzanine
Borrower and could reasonably be expected to have a Material Adverse Effect.


4.1.13      Condemnation. 
Except as set forth on Schedule II, no Taking is pending or, to
the best of Mezzanine Borrower’s knowledge, is contemplated with respect to all
or any portion of the Property.  No
Taking is pending or, to the best of Mezzanine Borrower’s knowledge, is
contemplated for the relocation of roadways providing access to the
Property.  None of the Taking matters
listed on Schedule II is reasonably likely to result in (a) a material
reduction in the vehicular or pedestrian access to any Individual Property, (b)
a material reduction in the parking rights located on or appurtenant to any
Individual Property or (c) a Material Adverse Effect.


4.1.14      Federal Reserve
Regulations.  None of the proceeds of
the Loan will be used for the purpose of purchasing or carrying any “margin
stock”“ as defined in Regulation U, Regulation X or Regulation T or for the
purpose of reducing or retiring any Indebtedness which 


 


65

















 


was originally incurred to purchase or carry “margin”
stock or for any other purpose which might constitute this transaction a “purpose
credit” within the meaning of Regulation U or Regulation X, which in any such
case would cause the Loan, the Mezzanine Borrower or the Mezzanine Lender to be
in violation of Regulation U.  As of the
Closing Date, Mezzanine Borrower does not own any “margin stock.”


4.1.15      Utilities and
Public Access.  Each Individual Property has rights of access
to one or more public ways, either directly or through a recorded easement set
forth in and insured under the Title Policies. 
Each Individual Property is served by water, sewer, sanitary sewer and
storm drain facilities adequate to service the Property for its intended uses
(except to the extent any such failure individually or in the aggregate would
not reasonably be expected to result in a Material Adverse Effect).  All utilities necessary to the existing use
of the Property are located either in the public right-of-way abutting the
Property or in recorded easements serving the Property and such easements are
set forth in and insured by the Title Policies.


4.1.16      Not a Foreign
Person.  None of Mortgage Borrower, Senior Mezzanine
Borrower or Mezzanine Borrower is a foreign person within the meaning of §
1445(f)(3) of the Code.


4.1.17      Setoff, Etc.  The
Collateral and the rights of Mezzanine Lender with respect to the Collateral
are not subject to any setoff, claims, withholdings or other defenses, other
than Mortgage Lender’s right to restrict distributions from Mortgage Borrower
to Senior Mezzanine Borrower under the terms and conditions set forth in the
Loan Agreement (Mortgage) and Senior Mezzanine Lender’s right to restrict
distributions from Senior Mezzanine Borrower to Mezzanine Borrower under the
terms of the Senior Mezzanine Loan Agreement.


4.1.18      Representations and
Warranties in the Loan Documents (Mortgage).  Each of the representations and warranties
contained in the Loan Documents (Mortgage) (which are hereby incorporated by
reference as if fully set forth herein) is true and correct in all material
respects, as of the Closing Date and there is no Mortgage Default or Mortgage
Event of Default thereunder.


4.1.19      Representations and
Warranties in the Senior Mezzanine Loan Documents.  Each of the representations and warranties
contained in the Senior Mezzanine Loan Documents (which are hereby incorporated
by reference as if fully set forth herein) is true and correct in all material
respects, as of the Closing Date and there is no Senior Mezzanine Default or
Senior Mezzanine Event of Default thereunder.


4.1.20      Enforceability.  The
Mezzanine Loan Documents to which each of Mortgage Borrower, Mezzanine
Borrower, Junior Mezzanine Borrowers, Senior Mezzanine Borrower, Guarantors and
Master Lessee is a party have been duly executed and delivered by, or on behalf
of, Mortgage Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, Senior
Mezzanine Borrower, Guarantors and Master Lessee, as applicable, and constitute
legal, valid and binding obligations of such Persons, as applicable,
enforceable against such Persons, as applicable, in accordance with their
respective terms, subject only to applicable bankruptcy, insolvency and similar
laws affecting rights of creditors generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).


 


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4.1.21      Reserved.


4.1.22      Insurance.  Mezzanine Borrower has obtained and has
delivered or caused Mortgage Borrower to obtain and deliver to Mezzanine Lender
certified copies or originals of all insurance policies required under this
Agreement, reflecting the insurance coverages, amounts and other requirements
set forth in this Agreement.  Mezzanine
Borrower has not, and to the best of Mezzanine Borrower’s knowledge no Person
has, done by act or omission anything which would impair the coverage of any
such policy.


4.1.23      Use of Property.  Each
Individual Property is used exclusively for casino and hotel operations and
other appurtenant and related uses.


4.1.24      Certificate of
Occupancy; Licenses.  All material certifications, permits,
licenses and approvals, including without limitation, certificates of
completion and occupancy permits required of Mortgage Borrower for the legal
use, occupancy and operation of each Individual Property for its current use as
a hotel and casino (collectively, the “Licenses”), have been obtained
and are in full force and effect (except to the extent any such failure would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect).  Mezzanine
Borrower shall cause Mortgage Borrower to keep and maintain all Licenses
necessary for the operation of each Individual Property in accordance with its
current use as a hotel and casino.  The
use being made of each Individual Property is in conformity with the
certificate of occupancy issued for such Individual Property (except to the extent
any such failure would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect).


4.1.25      Flood Zone.  None
of the Improvements on the Property are located in an area as identified by the
Federal Emergency Management Agency as an area having special flood hazards
except as identified on the flood certifications delivered to Lender prior to
the date hereof, and Mezzanine Borrower has caused Mortgage Borrower to obtain
the insurance required under Article VI of the Loan Agreement (Mortgage) with
respect to any Improvements located in any such special flood hazards.


4.1.26      Physical
Condition.  To the best of Mezzanine Borrower’s
knowledge, the Property, including, without limitation, all buildings,
Improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair
in all material respects; to the best of Mezzanine Borrower’s knowledge, there
exists no structural or other material defects or damages in or to the
Property, whether latent or otherwise, and Mortgage Borrower has not received
any written notice from any insurance company or bonding company of any defects
or inadequacies in the Property, or any part thereof, which would adversely
affect the insurability of the same or cause the imposition of extraordinary
premiums or charges thereon or of any termination or threatened termination of
any policy of insurance or bond.


4.1.27      Boundaries. 
Except as set forth in and insured pursuant to the Title Policies, to
the best of Mezzanine Borrower’s knowledge and, where applicable, in reliance
on the Surveys 


 


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(a) all of the Improvements lie wholly within
the boundaries and building restriction lines of the Real Property relating to
the applicable Individual Property, (b) no improvements on adjoining properties
encroach upon the Real Property, and (c) no easements or other encumbrances
upon the Real Property encroach upon any of the Improvements, so as to have a
Material Adverse Effect.


4.1.28      Subleases.  The
Property is not subject to any leases other than the Master Lease, the
Individual Property Subleases, and the other Subleases set forth on Schedule I
attached hereto.  No Person has any
possessory interest in the Property or right to occupy the same except under
and pursuant to the provisions of the Master Lease, the Individual Property
Subleases and the other Subleases.  The
current Material Subleases are in full force and effect and to the best of
Mezzanine Borrower’s knowledge, there are no material defaults thereunder by
either party (other than as expressly disclosed on Schedule I).  No Rent under any Material Sublease has been
paid more than one (1) month in advance of its due date, except as disclosed on
Schedule I.  There has been no
prior sale, transfer or assignment, hypothecation or pledge by Mortgage
Borrower or Master Lessee of the Master Lease, the Individual Property
Subleases or any Sublease or of the Rents received therein, which will be
outstanding following the funding of the Loan, other than those being assigned
to Lender concurrently herewith.


4.1.29      Filing and
Recording Taxes.  All transfer taxes, deed stamps, intangible
taxes or other amounts in the nature of transfer taxes required to be paid by
any Person under applicable Legal Requirements currently in effect in connection
with the transfer of the Property to Mortgage Borrower and the granting and
recording of the Security Instruments and the UCC financing statements required
to be filed in connection with the Mortgage Loan have been paid.  All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Mortgage Loan Documents, including, without
limitation, the Security Instruments, have been paid, and, under current Legal
Requirements, the Security Instruments are enforceable against Mortgage
Borrower in accordance with its terms by Mortgage Lender (or any subsequent
holder thereof) subject only to applicable bankruptcy, insolvency and similar
laws affecting rights of creditors generally, and subject as to enforceability,
to general principles of  equity (regardless
of whether enforcement is  sought  in  a
proceeding in equity or at law.


4.1.30      Single Purpose Entity/Separateness.


(a)           Until
the Indebtedness has been paid in full, Mezzanine Borrower hereby represents,
warrants and covenants that Mezzanine Borrower, Senior Mezzanine Borrower,
Mortgage Borrower, each Junior Mezzanine Borrower and each other SPE Entity is,
shall be, and shall continue to be, a Single Purpose Entity.


(b)           All
of the assumptions made in the Non-Consolidation Opinion, including, but not
limited to, any exhibits attached thereto, are true and correct in all material
respects and any assumptions made in any subsequent non-consolidation opinion
delivered in connection with the Mezzanine Loan Documents (an “Additional
Non-Consolidation Opinion”), including, but not limited to, any exhibits
attached thereto, will have been and shall be true and correct in all material
respects.  Mortgage Borrower, Senior
Mezzanine Borrower, Mezzanine Borrower and 


 


68

















 


each SPE Entity have complied and will comply in all
material respects with all of the assumptions made with respect to it in the
Non-Consolidation Opinion in all material respects.  Mortgage Borrower,  Senior Mezzanine Borrower, Mezzanine Borrower
and each SPE Entity will have complied and will comply with all of the
assumptions made with respect to it in any Additional Non-Consolidation
Opinion.  Each entity other than Mortgage
Borrower with respect to which an assumption shall be made in any Additional
Non-Consolidation Opinion will have complied and will comply in all material
respects with all of the assumptions made with respect to it in any Additional
Non-Consolidation Opinion.


(c)           All
of the assumptions made in the True Lease Opinion, including, but not limited
to, any exhibits attached thereto, are true and correct in all material
respects.


(d)           All
of the assumptions made in the True Sale Opinion, including, but not limited
to, any exhibits attached thereto, are true and correct in all material
respects.


4.1.31      Reserved.


4.1.32      Illegal Activity.  No
portion of the Property has been or will be purchased with proceeds of any
illegal activity.


4.1.33      No Change in
Facts or Circumstances; Disclosure.  All material information
submitted by Mezzanine Borrower to Mezzanine Lender in writing in connection
with the Loan or in satisfaction of the terms hereof and all material
statements of fact made by any Mezzanine Borrower in this Agreement or in any
other Mezzanine Loan Document, are to the best of Mezzanine Borrower’s
knowledge, accurate and correct in all material respects except as would not
have a Material Adverse Effect.


4.1.34      Reserved


4.1.35      Tax Filings.  Mezzanine Borrower has filed (or has obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and has paid or made adequate provision for the payment of
all federal, state and local taxes, charges and assessments payable by
Mezzanine Borrower.


4.1.36      Solvency/Fraudulent
Conveyance.  Mezzanine Borrower has not entered into the
transaction contemplated by this Agreement or any Mezzanine Loan Document with
the actual intent to hinder, delay, or defraud any creditor.  Mezzanine Borrower’s assets do not and,
immediately following the making of the Loan will not, constitute unreasonably
small capital to carry out its business as conducted or as proposed to be
conducted.  Mezzanine Borrower does not
intend to, and does not believe that it will, incur Debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Debt and liabilities as they mature (taking into account the timing
and amounts of cash to be received by Mezzanine Borrower and the amounts to be
payable on or in respect of obligations of Mezzanine Borrower).


4.1.37      Investment
Company Act.  Mezzanine Borrower is not (a) an investment
company or a company Controlled by an investment company, within the meaning of
the Investment Company Act of 1940, as amended, or (b) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.


 


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4.1.38      Interest Rate Cap
Agreement (Second Mezzanine).  A complete and correct copy of the Interest
Rate Cap Agreement (Second Mezzanine) is
attached hereto as Exhibit L.  The
Interest Rate Cap Agreement (Second Mezzanine) is in full force and effect and enforceable against Mezzanine Borrower
in accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws generally affecting the enforcement of creditors’ rights and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).


4.1.39      Labor. 
Except as set forth on Schedule II, no organized work stoppage or
labor strike is pending or threatened by employees and other laborers at the
Property.  Except as set forth in Schedule
II or to the extent any such failure would not reasonably be expected to
result in a Material Adverse Effect, none of Mortgage Borrower or Master
Lessee, (i) is involved in or, to the best knowledge of Mezzanine Borrower,
threatened with any labor dispute, grievance or litigation relating to labor
matters involving any employees and other laborers at the Property, including,
without limitation, violation of any federal, state or local labor, safety or
employment laws (domestic or foreign) and/or charges of unfair labor practices
or discrimination complaints, (ii) to the best knowledge of Mezzanine Borrower,
has engaged in any unfair labor practices within the meaning of the National
Labor Relations Act or the Railway Labor Act or (iii) is a party to, or bound
by, any collective bargaining agreement or union contract with respect to
employees and other laborers at the Property and no such agreement or contract
is currently being negotiated by the Mortgage Borrower or Master Lessee.


4.1.40      Brokers. 
Neither Mezzanine Borrower nor Mezzanine Lender has dealt with any
broker or finder with respect to the transactions contemplated by the Mezzanine
Loan Documents, and neither party has done any acts, had any negotiations or
conversations, or made any agreements or promises which will in any way create
or give rise to any obligation or liability for the payment by either party of
any brokerage fee, charge, commission or other compensation to any Person with
respect to the transactions contemplated by the Mezzanine Loan Documents.  Mezzanine Borrower and Mezzanine Lender shall
each indemnify and hold harmless the other from and against any loss, liability,
cost or expense, including any judgments, attorneys’ fees, or costs of appeal,
incurred by the other party and arising out of or relating to any breach or
default by the indemnifying party of its representations, warranties and/or
agreements set forth in this Section 4.1.40.  The provisions of this Section 4.1.40
shall survive the expiration and termination of this Agreement and the payment
of the Indebtedness.


4.1.41      No Other Debt. 
Mezzanine Borrower has not borrowed or received debt financing that has not
been heretofore repaid in full, other than the Permitted Debt of Mezzanine
Borrower.


4.1.42      Taxpayer
Identification Number.  Mezzanine Borrower’s Federal taxpayer
identification number is 26-1259293.


4.1.43      Compliance with
Anti-Terrorism, Embargo and Anti-Money Laundering Laws.  (i)
None of Mezzanine Borrower, any Guarantor or any Person who Controls Mezzanine
Borrower or any Guarantor currently is identified on the OFAC List or otherwise
qualifies as a Prohibited Person, and (ii) none of Mezzanine Borrower or any
Guarantor is in violation of any Legal Requirements relating to anti-money
laundering or anti-terrorism, including, without 


 


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limitation, Legal Requirements related to
transacting business with Prohibited Persons or the requirements of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the related
regulations issued thereunder, including temporary regulations, all as amended
from time to time.  To the best of
Mezzanine Borrower’s knowledge, no Tenant at the Premises currently is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, and
no Tenant at the Premises is owned or Controlled by a Prohibited Person.


4.1.44      Merger Agreement. 
Mezzanine Borrower has caused Mortgage Borrower to deliver to Mezzanine
Lender true complete and correct copies of the Merger Agreement and all
deliveries made by any party thereto or any of their respective Affiliates as
Mezzanine Lender shall have requested, to the extent that such deliveries are
within the possession or control of Mezzanine Borrower or Mortgage Borrower or
any of the Guarantors.


4.1.45      Rights of First
Refusal or First Offer to Lease or Purchase.  No Person, whether pursuant to
an Operating Agreement or otherwise has a right of first refusal, right of
first offer or other right or option pursuant to such Operating Agreement or
otherwise to lease or purchase or to restrict or impose requirements upon the
lease or purchase of all or any part of any Individual Property, except as set
forth on Schedule VI.  None of the
matters set forth on Schedule VI has been or will be triggered by any of
the Contemplated Transactions and Mortgage Borrower and its Affiliates are not
in default of any of the provisions referenced in Schedule VI.  None of the matters set forth on Schedule
VI has or will have a Material Adverse Effect.  .


4.2           Survival
of Representations. 
Mezzanine Borrower agrees that all of the representations and warranties
of Mezzanine Borrower set forth in Section 4.1 and elsewhere in this
Agreement and in the other Mezzanine Loan Documents shall be deemed given and
made as of the date hereof and survive for so long as any amount remains owing
to Mezzanine Lender under this Agreement or any of the other Mezzanine Loan
Documents by Mezzanine Borrower or Guarantor unless a longer survival period is
expressly stated in a Mezzanine Loan Document with respect to a specific
representation or warranty, in which case, for such longer period.  All representations, warranties, covenants
and agreements made in this Agreement or in the other Mezzanine Loan Documents
by Mezzanine Borrower shall be deemed to have been relied upon by Mezzanine
Lender notwithstanding any investigation heretofore or hereafter made by
Mezzanine Lender or on its behalf.


4.3           Mezzanine Borrower’s Knowledge.  Whenever a representation or warranty is made
“to Mezzanine Borrower’s knowledge,” “to Mezzanine Borrower’s best knowledge,” “to
Master Lessee’s knowledge,” “to Master Lessee’s best knowledge,” or a term of
similar import, such term shall mean the current actual knowledge of each of
Thomas Friel and Matthew Heinhold, in each case
after reasonable diligence, and of Mezzanine Borrower’s or Master Lessee’s, as
applicable, respective executive officers (other than Thomas Friel) and
directors who have actual knowledge of the relevant subject matter.


V.                                     MEZZANINE BORROWER
COVENANTS


5.1           Affirmative Covenants.  From the Closing Date and until payment and
performance in full of all obligations of Mezzanine Borrower under the
Mezzanine Loan 


 


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Documents, Mezzanine Borrower (as to itself, Senior Mezzanine Borrower,
Mortgage Borrower and the Property) hereby covenants and agrees with Mezzanine
Lender that:


5.1.1        Performance by
Mezzanine Borrower.  Mezzanine Borrower shall in a timely manner
observe, perform and fulfill in all material respects each and every covenant,
term and provision of each Mezzanine Loan Document executed and delivered by,
or applicable to, Mezzanine Borrower, and shall not enter into or otherwise
suffer or permit any amendment, waiver, supplement, termination or other
modification of any Mezzanine Loan Document executed and delivered by, or
applicable to, Mezzanine Borrower, as applicable, without the prior written
consent of Mezzanine Lender.


5.1.2        Existence;
Compliance with Legal Requirements; Insurance.  Subject to Section 7.3 and
Mortgage Borrower’s right of contest pursuant to Section 7.3 of the Loan
Agreement (Mortgage), Mezzanine Borrower shall at all times comply and cause
the Mortgage Borrower and the Property to be in compliance in all material
respects with all Legal Requirements applicable to the Mezzanine Borrower,
Senior Mezzanine Borrower, Mortgage Borrower, any SPE Entity and the Property
and the uses permitted upon the Property. 
Mezzanine Borrower shall cause Mortgage Borrower to do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its existence, rights, licenses, permits and franchises necessary to comply
with all material Legal Requirements applicable to it and the Property.  There shall never be committed by Mezzanine
Borrower, and Mezzanine Borrower shall not permit Senior Mezzanine Borrower or
Mortgage Borrower or knowingly permit any other Person in occupancy of or
involved with the operation or use of the Property to commit, any act or
omission affording the federal government or any state or local government the
right of forfeiture as against the Property or any part thereof or any monies
paid in performance of Mezzanine Borrower’s obligations under any of the
Mezzanine Loan Documents.  Mezzanine
Borrower hereby covenants and agrees not to commit, knowingly permit or suffer
to exist any act or omission affording such right of forfeiture.  Mezzanine Borrower shall and shall cause
Mortgage Borrower to at all times maintain, preserve and protect all franchises
and trade names where the failure to so preserve and protect would be
reasonably likely to have a Material Adverse Effect, and preserve all the
remainder of its property used in and necessary for the conduct of its business
and shall and shall cause Mortgage Borrower to keep the Property in good working
order and repair (reasonable wear and tear excepted, and subject to Excusable
Delays, casualty and Taking, as to the latter two of which Section 6.2
shall apply), and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto
as more fully set forth in the Security Instruments.  Mezzanine Borrower shall and shall cause
Mortgage Borrower to keep the Property insured at all times to such extent and
against such risks, and maintain liability and such other insurance, as is more
fully set forth in this Agreement and the Loan Agreement (Mortgage).


5.1.3        Litigation. 
Mezzanine Borrower shall give prompt written notice to Mezzanine Lender
of any litigation or governmental proceedings pending or threatened in writing
against Mezzanine Borrower, Senior Mezzanine Borrower, Mortgage Borrower, the
Collateral or the Property which, if determined adversely to Mezzanine
Borrower, Mortgage Borrower, the Collateral or the Property would reasonably be
expected to have a Material Adverse Effect.


 


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5.1.4        Single Purpose
Entity.


(a)           Each
of Mezzanine Borrower and each SPE Entity has been since the date of its
formation and shall remain a Single Purpose Entity.


(b)           Each
of Mezzanine Borrower and each SPE Entity shall continue to maintain its own
deposit account or accounts, separate from those of any Affiliate, with
commercial banking institutions.  None of
the funds of Mezzanine Borrower or any SPE Entity will be diverted to any other
Person for anything other than business uses of Mezzanine Borrower or any SPE
Entity, as applicable, nor will such funds be commingled with the funds of any
other Affiliate.


(c)           To
the extent that Mezzanine Borrower or any SPE Entity shares the same officers
or other employees as any of Mezzanine Borrower, any SPE Entity or their
Affiliates, the salaries of and the expenses related to providing benefits to
such officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary and
benefit costs associated with all such common officers and employees.


(d)           To
the extent that Mezzanine Borrower or any SPE Entity jointly contracts with any
of Mezzanine Borrower, any SPE Entity or either of their Affiliates, as
applicable, to do business with vendors or service providers or to share
overhead expenses, the costs incurred in so doing shall be allocated fairly
among such entities, and each such entity shall bear its fair share of such
costs.  To the extent that either
Mezzanine Borrower or any SPE Entity contracts or does business with vendors or
service providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing shall be fairly
allocated to or among such entities for whose benefit the goods and services
are provided, and each such entity shall bear its fair share of such
costs.  All material transactions between
(or among) Mezzanine Borrower or each SPE Entity and any of their respective
Affiliates shall be conducted on substantially the same terms (or on more
favorable terms for Mezzanine Borrower or any SPE Entity, as applicable) as
would be conducted with third parties.


(e)           To
the extent that Mezzanine Borrower, any SPE Entity or any of their Affiliates
have offices in the same location, there shall be a fair and appropriate
allocation of overhead costs among them, and each such entity shall bear its
fair share of such expenses.


(f)            Mezzanine
Borrower and each SPE Entity shall conduct its affairs strictly in accordance
with its organizational documents, and observe all necessary, appropriate and
customary corporate, limited liability company or partnership formalities, as
applicable, including, but not limited to, obtaining any and all members’
consents necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, without
limitation, payroll and intercompany transaction accounts.


(g)           In
addition, Mezzanine Borrower and each SPE Entity shall each: (i) maintain books
and records separate from those of any other Person; (ii) maintain its assets
in such a manner that it is not more costly or difficult to segregate, identify
or ascertain such assets; (iii) hold regular meetings of its board of
directors, shareholders, partners or members, as the case may be; (iv) hold
itself out to creditors and the public as a legal entity separate and distinct
from any other entity; (v) prepare separate tax returns (unless part of a
consolidated group) and financial statements (unless part of a consolidated
group), or if part of consolidated group it will be shown as a separate member
of such group or such consolidated tax returns or financial 


 


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statements will contain a note indicating that it
and its Affiliate are separate legal entities and maintain records, books of
account and accounts separate and apart from any other Person; (vi) transact
all business with its Affiliates on an arm’s-length basis and pursuant to
enforceable agreements; (vii) conduct business in its name and use separate
stationery, invoices and checks; (viii) not commingle its assets or funds with
those of any other Person; and (ix) not assume, guarantee or pay the debts or
obligations of any other Person.


5.1.5        Consents.  If
Mezzanine Borrower or any SPE Entity is a corporation, the board of directors
of such Person may not take any action requiring the unanimous affirmative vote
of 100% of the members of the board of directors unless all of the directors,
including the Independent Directors, shall have participated in such vote.  If Mezzanine Borrower or any SPE Entity is a
limited liability company, (a) if such Person is managed by a board of managers
or directors, the board of managers or directors of such Person may not take
any action requiring the unanimous affirmative vote of 100% of the members of
the board of managers or directors unless all of the managers or directors,
including the Independent Managers or Independent Directors, shall have
participated in such vote, (b) if such Person is not managed by a board of
managers or directors, the members of such Person may not take any action
requiring the affirmative vote of 100% of the members of such Person unless all
of the members, including the Independent Members, shall have participated in
such vote.  An affirmative vote of 100%
of the directors, managers or members, as applicable, of Mezzanine Borrower and
any SPE Entity shall be required to (i) file a bankruptcy or insolvency
petition or otherwise institute insolvency proceedings or to authorize
Mezzanine Borrower or any SPE Entity to do so or (ii) file an involuntary
bankruptcy petition against any Affiliate, Manager, or any Affiliate of
Manager.  Furthermore, Mezzanine Borrower’s
and each SPE Entity’s formation documents shall expressly state that for so
long as the Loan is outstanding, neither Mezzanine Borrower nor any SPE Entity
shall be permitted to (i) dissolve, liquidate, consolidate, merge or sell all
or substantially all of Mezzanine Borrower’s or any SPE Entity’s assets other
than in connection with the repayment of the Loan or (ii) engage in any other
business activity and such restrictions shall not be modified or violated for
so long as the Loan is outstanding.


5.1.6        Access to
Property.  Subject to applicable Gaming Laws, Mezzanine
Borrower shall cause Mortgage Borrower to permit agents, representatives and
employees of Mezzanine Lender and the Rating Agencies to inspect the Property
or any part thereof during normal business hours on Business Days upon
reasonable advance notice.


5.1.7        Notice of Default. 
Mezzanine Borrower shall promptly advise Mezzanine Lender (a) of any
event or condition of which Mezzanine Borrower has knowledge that has a
Material Adverse Effect and (b) of the occurrence of any Default or Event of
Default of which Mezzanine Borrower has knowledge.


5.1.8        Cooperate in
Legal Proceedings.  Mezzanine Borrower shall and shall cause
Mortgage Borrower to, cooperate fully with Mezzanine Lender with respect to any
proceedings before any court, board or other Governmental Authority which would
reasonably be expected to affect in any material adverse way the rights of
Mezzanine Lender hereunder or under any of the other Mezzanine Loan Documents
and, in connection therewith, permit Mezzanine Lender, at its election, to
participate in any such proceedings which may have a Material Adverse Effect.


 


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5.1.9        Reserved.


5.1.10      Insurance.


(a)           Mezzanine
Borrower shall cause Mortgage Borrower to cooperate with Mortgage Lender in
obtaining for Mortgage Lender the benefits of any Proceeds lawfully or
equitably payable in connection with the Property and distributing any excess
Proceeds to Mezzanine Lender as otherwise provided in this Agreement.


(b)           Mezzanine
Borrower shall comply and shall cause Mortgage Borrower to comply with all
applicable Insurance Requirements and shall not permit Mortgage Borrower to
bring or keep or permit to be brought or kept any article upon any of the
Property or cause or permit any condition to exist thereon which would be
prohibited by any Insurance Requirement, or would invalidate insurance coverage
required hereunder or under the Loan Agreement (Mortgage) to be maintained by
Mortgage Borrower on or with respect to any part of the Property pursuant to
this Agreement or the Loan Agreement (Mortgage).


5.1.11      Further
Assurances; Separate Notes; Loan Resizing.


(a)           Mezzanine
Borrower shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Mezzanine Lender all documents, and take all
actions, reasonably required by Mezzanine Lender from time to time to confirm
the rights created or now or hereafter intended to be created under this
Agreement and the other Mezzanine Loan Documents and any security interest
created or purported to be created thereunder, to protect and further the
validity, priority and enforceability of this Agreement and the other Mezzanine
Loan Documents, to subject to the Mezzanine Loan Documents any property of
Mezzanine Borrower intended by the terms of any one or more of the Mezzanine
Loan Documents to be encumbered by the Mezzanine Loan Documents, or otherwise
carry out the purposes of the Mezzanine Loan Documents and the transactions
contemplated thereunder.  Mezzanine
Borrower agrees that it shall, upon request and at Mezzanine Lender’s cost
(including, without limitation, any costs related to the modification or
replacement of the Interest Rate Cap Agreement (Second Mezzanine) (but not
including any breakage costs associated with or arising under the Interest Rate
Cap Agreement (Second Mezzanine)), reasonably cooperate with Mezzanine Lender
in connection with any request by Mezzanine Lender to sever one or more of the
Mezzanine Notes into two (2) or more separate substitute notes in an aggregate
principal amount equal to the Principal Amount and to reapportion the Loan
among such separate substitute notes, including, without limitation, by executing
and delivering to Mezzanine Lender new substitute notes to replace the
applicable Mezzanine Note or Mezzanine Notes, amendments to or replacements of
existing Mezzanine Loan Documents to reflect such severance and/or Opinions of
Counsel with respect to such substitute notes, amendments and/or replacements,
provided that Mezzanine Borrower shall bear no costs or expenses in connection
therewith (other than internal administrative costs and expenses of Mezzanine
Borrower).  Any such substitute notes may
have varying principal amounts and economic terms, provided, however, that (i)
the maturity date of any such substitute note shall be the same as the
scheduled Maturity Date of the Mezzanine Notes immediately prior to the
issuance of such substitute notes, (ii) the initial weighted average LIBOR
Margin for the term of the substitute notes shall not exceed the LIBOR Margin
under the Mezzanine Note being substituted immediately prior to the issuance of
such substitute notes; and 


 


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(iii) the economics of the Loan shall not change in
a manner which is adverse to Mezzanine Borrower.  Upon the occurrence and during the
continuance of an Event of Default, Mezzanine Lender may apply payment of all sums
due under such substitute notes in such order and priority as Mezzanine Lender
shall elect in its sole and absolute discretion.  For avoidance of doubt, Mezzanine Borrower
agrees and acknowledges that such application may result in the weighted
average LIBOR Margin for the term of the applicable notes exceeding the initial
weighted average LIBOR Margin under the Mezzanine Note, and such result shall
not in any way restrict Lender’s right, in its discretion, to make such
application.


(b)           Mezzanine
Borrower further agrees to cooperate with Mortgage Lender, Senior Mezzanine
Lender, and Mezzanine Lender in the resizing of the Mortgage Loan, the Senior
Mezzanine Loan, the Loan, and any Junior Mezzanine Loan, all as provided in and
in accordance with Section 5.1.11(b) of the Loan Agreement (Mortgage).


(c)           Any amounts recovered from Collateral, or any part thereof, after
an Event of Default may be applied by Lender toward the payment of any interest
and/or principal of the Loan and/or any other amounts due under the Loan Documents
in such order, priority, or proportions as Lender in its sole discretion shall
determine.


5.1.12      Mortgage Taxes. 
Mezzanine Borrower shall cause Mortgage Borrower to pay all taxes,
charges, filing, registration and recording fees, excises and levies payable
with respect to the Mortgage Notes or the Liens created or secured by the
Mortgage Loan Documents, other than income, franchise and doing business taxes
imposed on Lender.


5.1.13      Operation.


                                Mezzanine
Borrower shall cause Mortgage Borrower to, and cause Master Lessee to, (i)
promptly perform and/or observe in all material respects all of the covenants
and agreements required to be performed and observed by it under the Master
Lease and do all things necessary to preserve and to keep unimpaired its material
rights thereunder; (ii) promptly notify Mezzanine Lender of any Master Lease
Default of which it is aware; and (iii) promptly deliver to Lender a copy of
each financial statement, capital expenditures plan, property improvement plan
and any other notice, report and estimate received by it under the Master
Lease; and Mezzanine Borrower shall cause Mortgage Borrower to enforce in a
commercially reasonable manner the performance and observance of all of the
covenants and agreements required to be performed and/or observed by the Master
Lessee under the Master Lease.  Whenever
in this Agreement or in any other Loan Document Mezzanine Borrower is obligated
to cause Mortgage Borrower to cause the Master Lessee to take or refrain from
taking a certain action, and whenever this Agreement or any Mezzanine Loan
Document shall set forth an obligation of Master Lessee, then such provisions
shall be construed to mean that Mezzanine Borrower shall cause Mortgage
Borrower to exercise its best efforts to cause Master Lessee to take or refrain
from taking such action, or performing such action, including exercising such
legal rights and remedies as shall be available to Mortgage Borrower under the
Master Lease and applicable law.


5.1.14      Business and
Operations.  Mezzanine Borrower shall and shall cause
Senior Mortgage Borrower and Mortgage Borrower to continue to engage in the
businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, 


 


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management and operation of the Property, the
Senior Mezzanine Collateral and the Collateral. 
Mezzanine Borrower shall and shall cause Senior Mezzanine Borrower and
Mortgage Borrower to qualify to do business and shall remain in good standing
under the laws of all applicable jurisdictions as and to the extent required
for the ownership, maintenance, management and operation of the Property, the
Senior Mezzanine Collateral and the Collateral.


5.1.15      Title to the
Collateral.  Mezzanine Borrower shall warrant and defend
(a) its title to the Collateral and every part thereof, subject only to
Permitted Encumbrances (Second Mezzanine) and (b) the validity and priority of
the Liens of this Agreement and the Pledge on the Collateral,, in each case
against the claims of all Persons whomsoever. 
Mezzanine Borrower shall reimburse Mezzanine Lender for any losses,
costs, damages or expenses (including reasonable attorneys’ fees and court
costs) incurred by Mezzanine Lender if an interest in the Collateral, other
than Permitted Encumbrance (Second Mezzanine), is claimed by another Person.


5.1.16      Costs of
Enforcement.  In the event (a) that this Agreement or the
Pledge is foreclosed upon in whole or in part or that by reason of Mezzanine
Borrower’s default hereunder this Agreement or the Pledge is put into the hands
of an attorney for collection, suit, action or foreclosure, (b) of the
foreclosure of any security agreement prior to or subsequent to this Agreement
in which proceeding Mezzanine Lender is made a party, or (c) of the bankruptcy,
insolvency, rehabilitation or other similar proceeding in respect of Mezzanine
Borrower or any of its constituent Persons or an assignment by Mezzanine
Borrower or any of its constituent Persons for the benefit of its creditors,
Mezzanine Borrower, its successors or assigns, shall be chargeable with and
agrees to pay all reasonable out-of-pocket costs of collection and defense,
including reasonable attorneys’ fees and costs, incurred by Mezzanine Lender or
Mezzanine Borrower in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, together with all required
service or use taxes.


5.1.17      Estoppel
Statements.  Mezzanine Borrower shall, from time to time
but no more often than once in any calendar quarter so long as no Event of
Default shall exist, upon thirty (30) days’ prior written request from
Mezzanine Lender and shall cause Senior Mezzanine Borrower and Mortgage
Borrower to  execute, acknowledge and
deliver to the Mezzanine Lender, an Officer’s Certificate, stating that this
Agreement and the other Mezzanine Loan Documents (or as applicable, the Senior
Mezzanine Loan Documents or the Loan Documents (Mortgage)) are unmodified and
in full force and effect (or, if there have been modifications, that this
Agreement and the other Mezzanine Loan Documents or as applicable the Senior
Mezzanine Loan Documents or the Loan Documents (Mortgage) are in full force and
effect as modified and setting forth such modifications), stating the amount of
accrued and unpaid interest and the outstanding principal amount of the
Mezzanine Notes (or as applicable Senior Mezzanine Notes or Mortgage Notes) and
containing such other information with respect to the Mezzanine Borrower, Senior
Mezzanine Borrower, Mortgage Borrower, the Property, the Mortgage Loan, the
Senior Mezzanine Loan, and the Loan as Mezzanine Lender shall reasonably
request.  Mezzanine Lender shall, from
time to time, but no more often than once in any calendar quarter, upon thirty
(30) days’ prior written request from Mezzanine Borrower, execute, acknowledge
and deliver to Mezzanine Borrower, a certificate signed by an officer of
Mezzanine Lender, stating that this Agreement and the other Mezzanine Loan
Documents are unmodified and in full force and effect (or, if there have been
modifications, that this Agreement and the other 


 


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Mezzanine Loan Documents are in full force
and effect as modified and setting forth such modifications).  The estoppel certificate from Mezzanine
Borrower shall also state either that, to the best of Mezzanine Borrower
knowledge, no Default exists hereunder or, if any Default shall exist
hereunder, specify such Default and the steps being taken to cure such Default
and the estoppel certificate from Mezzanine Lender shall state whether
Mezzanine Lender has delivered notice of a Default or an Event of Default.


5.1.18      Loan Proceeds. 
Mezzanine Borrower shall use the proceeds of the Loan received by it on
the Closing Date only for the purposes set forth in Section 2.1.4.


5.1.19      No Joint
Assessment.  Mezzanine Borrower shall not and shall not
permit Mortgage Borrower to suffer, permit or initiate the joint assessment of
the Property, (a) with any other real property constituting a tax lot separate
from the Property and (b) which constitutes real property with any portion of
the Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to such real property
portion of the Property.


5.1.20      No Further
Encumbrances.  Subject to Section 7.3 of the Loan
Agreement (Mortgage) and Section 7.3 hereof, Mezzanine Borrower shall do,
or cause to be done, all things necessary to keep and protect the Property, the
Senior Mezzanine Collateral, and the Collateral and all portions thereof
unencumbered from any Liens, easements or agreements granting rights in the
Collateral, the Senior Mezzanine Collateral or the Property or restricting the
use or development of the Property, except for (a) with respect to the
Property, Permitted Encumbrances, (b) with respect to the Senior Mezzanine
Collateral, Permitted Encumbrances (Senior Mezzanine), and (c) with respect to
the Collateral, Permitted Encumbrances (Second Mezzanine).


5.1.21      Loan (Mortgage) Covenants.  Mezzanine Borrower shall cause Mortgage
Borrower, to fully keep, perform and comply with (or cause to be kept,
performed and complied with) each of the covenants, terms and provisions set
forth in the Loan Agreement (Mortgage) and the Security Instruments, which are
hereby incorporated by reference as if fully set forth herein, notwithstanding
any waiver or future amendment of such covenants, terms and provisions by
Mortgage Lender.  Mezzanine Borrower
acknowledges that the obligation to comply with such covenants, terms and
provisions is separate from, and may be enforced independently from, the obligations
of the Mortgage Borrower under the Loan Documents (Mortgage).


(a)           Without Mezzanine
Lender’s prior written consent, Mezzanine Borrower shall not, and shall cause
Mortgage Borrower not to, (i) amend or modify (by agreement on the part of the
Mortgage Borrower or Mezzanine Borrower) or (ii) affirmatively permit the
modification or amendment of (by operation of law or otherwise) the Loan
Documents (Mortgage) in effect as of the Closing Date.


(b)           In the event the
Loan (Mortgage) shall at any time be repaid, and the Liens securing the Loan
(Mortgage) at any time be released in full, then unless and until the Mezzanine
Note shall have been repaid in full and all obligations of Mezzanine Borrower
to Mezzanine Lender hereunder and under the other Mezzanine Loan Documents
shall have been satisfied, then Mezzanine Borrower shall nevertheless comply or
cause the Mortgage Borrower to comply 


 


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with
each of the terms and provisions of the Loan Documents (Mortgage) (other than
payment of principal, interest and premium and the obligation to maintain the
Interest Rate Swap Agreement (if any)) and the Loan Documents (Mortgage) shall
nevertheless be deemed to remain in full force and effect as between Mezzanine
Borrower and Mezzanine Lender with Mezzanine Lender being deemed in such
context to possess exclusively all of the rights and remedies of the Mortgage
Lender thereunder including without limitation, all rights of consent and
approval, rights to receive and control the disposition of casualty insurance
proceeds and condemnation awards, and the right to collect rents and make
waterfall distributions (but expressly excluding any rights and remedies
relating to payment of the indebtedness under the Loan Documents (Mortgage) and
evidenced by the Mortgage Notes) and Mezzanine Borrower shall nevertheless
comply or cause the Mortgage Borrower to comply with each of the terms and
provisions of the Loan Documents (Mortgage) (and any amendment or modification
consented to in writing by Mezzanine Lender) (other than the payment of
principal, interest and premium and the obligation to maintain the Interest
Rate Swap Agreement if any)).  Mezzanine
Borrower shall, and shall cause Mortgage Borrower to, execute any and all documents
reasonably requested by Mezzanine Lender for the implementation or furtherance
of the foregoing provided that the same shall be at Mezzanine Lender’s sole
cost and expense.  Mezzanine Borrower
shall deliver to Mezzanine Lender copies of any and all modifications to the
Loan Documents (Mortgage) within five (5) Business Days after execution
thereof.


(c)           Mezzanine Borrower
covenants and agrees to cause Mortgage Borrower to deliver any and all
financial information delivered or required to be delivered to Mortgage Lender
pursuant to the terms of the Loan Documents (Mortgage) to be delivered
simultaneously to Mezzanine Lender.


5.1.22      Master Lease.


(a)           Each Individual
Property shall at all times be leased directly and exclusively by the Mortgage
Borrower to the Master Lessee under the Master Lease (and not to any other
Person under the Master Lease or any replacement Master Lease).  Master Lessee shall be permitted to enter
into Subleases subject to and in accordance with Section 8.8.2.


(b)           The Master Lease
shall have an initial term of fifteen (15) years with renewal rights.


(c)           The Master Lease
shall require Master Lessee to make payments of Master Lease Rent.  Pursuant to the Master Lease and the Master
Lease Rent Payment Direction Letter all Master Lease Scheduled Rent shall at
all times during the term of the Loan be made directly to the Holding Account,
and none of the foregoing payments of Master Lease Rent shall be deemed made
until such payment has been deposited into the Holding Account.


(d)           The Master Lease
shall require the Master Lessee to prepare the expenses and revenue in
accordance with Article XI and to submit copies to Mezzanine Lender for
its reference, not for its approval.


(e)           Neither Mortgage
Borrower nor Master Lessee shall terminate the Master Lease or consent to the
termination of the Master Lease without the prior written consent of Mezzanine 


 


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Lender.  Except as provided in the Master Lease with
respect to casualties or condemnations, the Master Lease shall not provide for the
release of an Individual Property.  The
Master Lease may be amended to provide, inter alia, for a release of an
Individual Property and the reduction of Master Lease Rent as provided in Section
2.3.4(v) and (vi).


(f)            Except for the
Assignment of Leases and the Permitted Encumbrances, neither the Mortgage
Borrower nor the Master Lessee shall Transfer or sublease, or allow to be
Transferred, its interest in the Master Lease or any interest therein without
the prior written consent of the Mezzanine Lender.  The Mezzanine Borrower shall not permit
Mortgage Borrower to permit (except as expressly permitted under the Master
Lease) and shall not consent to (except as expressly required under the Master
Lease) any assignment by the Master Lessee of its interest in the Master Lease
or its rights and interests thereunder except to Master Lessee’s successor by
merger or acquisition of all or substantially all of Master Lessee’s
assets.  Notwithstanding the foregoing,
Master Lessee shall pledge to Mortgage Borrower its interest in the “FF&E”
as defined in the Master Lease, subject to the Assigned Landlord Lien.


(g)           Neither the Mortgage
Borrower nor the Master Lessee shall, without the prior written consent of
Mezzanine Lender which consent, solely with respect to clauses (ii) and (iii)
of this Section 5.1.22(g), will not be unreasonably withheld, (i) renew
(other than pursuant to renewal rights expressly set forth in the Master
Lease), extend, release any Individual Property from (except in connection with
a Property Release, Substitution or release of an Unimproved Parcel, in
compliance with Sections 2.3.4, 2.3.5 and 2.3.9 hereof)
terminate, reduce rents (except as expressly authorized pursuant to Section
2.3.4) or other sums payable under, accept a surrender of, or shorten the
term of, the Master Lease, (ii) appoint any appraiser, (iii) make any
determination of Fair Market Rental or Fair Market Value (as such terms are
defined in the Master Lease), (iv) waive any provisions of the Master Lease,
provided that subject to clause (i) Mortgage Borrower and Master Lessee shall
have the right to waive provisions of the Master Lease so long as the same
would not have the effect of (1) waiving or reducing the monetary obligations
of Master Lessee under the Master Lease or (2) either permitting Master Lessee
to take an action that Mortgage Borrower or Master Lessee is prohibited from
taking under this Agreement or any other Loan Document, or preventing Mortgage
Borrower and/or Master Lessee from complying with an obligation on the part of
Mortgage Borrower or Master Lessee under this Agreement or any other Loan
Document, (v) amend or modify in any respect in a manner adverse to Mezzanine
Lender or that would decrease Master Lessee’s obligations or increase Mortgage
Borrower’s obligations thereunder, any provision of the Master Lease contained
in Article I (leased property, term, etc.), Article III (rent), Article IV
(termination and abatement), Article V (Ownership of Leased Property), Section
6.1(b) (Taxes and Other Charges; Contest for
Taxes and Other Charges, Legal Requirements and Liens), Article VIII
(Alterations; Leasing), Article X (Casualty and Condemnation), Article XI
(Accounts and Reserves), Article XII (defaults and remedies), Article XV
(Subordination) and related definitions in Article II (definitions) or (vi)
materially amend or modify any provision of the Master Lease not listed in
clause (v) in a manner adverse to Mezzanine Lender or that would decrease
Master Lessee’s obligations or increase Mortgage Borrower’s obligations
thereunder, provided that nothing in this Section
5.1.22(d) shall prohibit or restrict Master Lessee from exercising its
rights under Section 1.2 of the Master Lease subject to the requirements of Sections
2.3.4 and 2.3.9 hereof.


 


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(h)           The
Master Lease shall be subject and subordinate to the Loan pursuant to the
Master Lease SNDA.


(i)            Mortgage
Lender shall have the right to declare a Master Lease Tenant Default under the
Master Lease and to exercise the rights and remedies of the Mortgage Borrower,
as landlord under the Master Lease (including without limitation, exercising it
rights and remedies with respect to the Assigned Landlord Lien), pursuant to
the assignment of such rights in the Assignment of Leases.


(j)            The form of the Master Lease is attached hereto as
Exhibit F.  Mezzanine Lender hereby
approves of the form of the Master Lease.  Notwithstanding the foregoing, or anything
else in Mezzanine Loan Documents to the contrary, except as expressly set forth
in this Agreement if any conflict,
contradiction or inconsistency exists between the Master Lease and this
Agreement, the terms and provisions of this Agreement shall, as among the
parties hereto, control and govern.


5.1.23      Senior
Mezzanine Loan Covenants. 
Mezzanine Borrower shall cause Senior Mezzanine Borrower to fully keep,
perform and comply with (or cause to be kept, performed and complied with) each
of the covenants, terms and provisions set forth in the Senior Mezzanine Loan
Agreement and the Pledge (Senior Mezzanine), which are hereby incorporated by
reference as if fully set forth herein, notwithstanding any waiver or future
amendment of such covenants, terms and provisions by Senior Mezzanine
Lender.  Mezzanine Borrower acknowledges
that the obligation to comply with such covenants, terms and provisions is
separate from, and may be enforced independently from, the obligations of the
Senior Mezzanine Borrower under the Senior Mezzanine Loan Documents.


(a)           Without
Mezzanine Lender’s prior written consent, Mezzanine Borrower shall not, and
shall cause Senior Mezzanine Borrower not to, (i) amend or modify (by agreement
on the part of the Senior Mezzanine Borrower or Mezzanine Borrower) or (ii)
affirmatively permit the modification or amendment of (by operation of law or
otherwise) the Senior Mezzanine Loan Documents in effect as of the Closing
Date.


(b)           In
the event the Senior Mezzanine Loan shall at any time be repaid, and the Liens
securing the Senior Mezzanine Loan at any time be released in full, then unless
and until the Mezzanine Note shall have been repaid in full and all obligations
of Mezzanine Borrower to Mezzanine Lender hereunder and under the other
Mezzanine Loan Documents shall have been satisfied, then Mezzanine Borrower
shall nevertheless comply or cause the Senior Mezzanine Borrower to comply with
each of the terms and provisions of the Senior Mezzanine Loan Documents (other
than payment of Principal, interest and premium and the obligation to maintain
the Interest Rate Cap Agreement (if any)) and the Senior Mezzanine Loan
Documents shall nevertheless be deemed to remain in full force and effect as
between Mezzanine Borrower and Mezzanine Lender with Mezzanine Lender being
deemed in such context to possess exclusively all of the rights and remedies of
the Senior Mezzanine Lender thereunder including without limitation, all rights
of consent and approval, rights to receive and control the disposition of
casualty insurance proceeds and condemnation awards, and the right to collect
rents and make waterfall distributions (but expressly excluding any rights and
remedies relating to payment of the indebtedness under the Senior Mezzanine
Loan Documents and evidenced by the Senior


 


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Mezzanine Notes) and Mezzanine Borrower shall nevertheless comply or
cause the Senior Mezzanine Borrower to comply with each of the terms and
provisions of the Senior Mezzanine Loan Documents (or any amendment or
modification consented to in writing by Mezzanine Lender)(other than the payment
of principal, interest and premium and the obligation to maintain the Interest
Rate Cap Agreement if any)).  Mezzanine
Borrower shall, and shall cause Senior Mezzanine Borrower to, execute any and
all documents reasonably requested by Mezzanine Lender for the implementation
or furtherance of the foregoing provided that the same shall be at Mezzanine
Lender’s sole cost and expense. 
Mezzanine Borrower shall deliver to Mezzanine Lender copies of any and
all modifications to the Senior Mezzanine Loan Documents within five (5)
Business Days after execution thereof.


(c)           Mezzanine
Borrower covenants and agrees to cause Senior Mezzanine Borrower to deliver any
and all financial information delivered or required to be delivered to Senior
Mezzanine Lender pursuant to the terms of the Senior Mezzanine Loan Documents
to be delivered simultaneously to Mezzanine Lender.


5.2           Negative
Covenants.


From the Closing Date until payment and
performance in full of all obligations of Mezzanine Borrower under the
Mezzanine Loan Documents or the earlier release of the Lien of this Agreement
or the Pledge in accordance with the terms of this Agreement and the other
Mezzanine Loan Documents, Mezzanine Borrower covenants and agrees with
Mezzanine Lender that it will not do, or cause, permit, or suffer Mortgage
Borrower to do, directly or indirectly, any of the following:


5.2.1        Incur Debt.  Incur, create or assume any Debt other than
Permitted Debt of Mezzanine Borrower, Mortgage Borrower, and Senior Mezzanine
Borrower, (as applicable) or Transfer or lease all or any part of the Property,
Senior Mezzanine Collateral, or Collateral or any interest therein, except as
permitted in the Mezzanine Loan Documents (for the avoidance of doubt,
Mezzanine Borrower shall not have any obligations under or with respect to the
Junior Mezzanine Loans);


5.2.2        Encumbrances.  Other than in connection with the Mezzanine
Loan, Senior Mezzanine Loan, and the Junior Mezzanine Loans, incur, create or
assume or permit the incurrence, creation or assumption of any Debt secured by
an interest in Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, Junior Mezzanine Borrowers or any SPE Entity;


5.2.3        Engage in Different Business.  With respect to (i) Mezzanine Borrower,
engage, directly or indirectly, in any business other than that of entering
into this Agreement and the other Mezzanine Loan Documents to which Mezzanine
Borrower is a party and the use, ownership, management, and financing of the
Ownership Interests and activities related thereto; (ii) with respect to Senior
Mezzanine Borrower, engage, directly or 


 


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indirectly, in any business
other than that of entering into the Senior Mezzanine Loan Agreement and the
other Senior Mezzanine Loan Documents to which Senior Mezzanine Borrower is a
party and the use, ownership, management and financing of the Senior Mezzanine
Ownership Interests and activities related thereto; and (iii) with respect to
Mortgage Borrower, engage, directly or indirectly, in any business other than
that of entering into the Loan Agreement (Mortgage) and the other Loan
Documents (Mortgage) to which Mortgage Borrower is a party and the use,
ownership, management, leasing, renovation, financing, development, operation
and maintenance of the Property and activities related thereto.


5.2.4        Make Advances.  Make advances or make loans to any Person, or
hold any investments, except as expressly permitted pursuant to the terms of
this Agreement or any other Mezzanine Loan Document;


5.2.5        Subdivision.  Permit Mortgage Borrower to subdivide any
Individual Property other than with respect to Unimproved Parcels in accordance
with the terms of this Agreement or otherwise with the prior consent of
Mezzanine Lender which consent shall not be unreasonably withheld, conditioned
or delayed.


5.2.6        Commingle.  Commingle its assets with the assets of any
of its Affiliates;


5.2.7        Guarantee Obligations.  Guarantee any obligations of any Person;


5.2.8        Transfer Assets.  Transfer any asset other than in the ordinary
course of business or Transfer any interest in the Property, the Senior
Mezzanine Collateral or Collateral except in each case (including in connection
with a Release or Substitution) as may be permitted hereby or in the other
Mezzanine Loan Documents;


5.2.9        Amend Organizational Documents.  Amend or modify any of its organizational
documents without Mezzanine Lender’s consent, other than in connection with any
Transfer permitted pursuant to Article VIII or to reflect any change in
capital accounts, contributions, distributions, allocations or other provisions
that do not and could not reasonably be expected to have a Material Adverse
Effect and provided that Mezzanine Borrower remains and each SPE Entity remains
a Single Purpose Entity;


5.2.10      Dissolve.  Dissolve, wind-up, terminate, liquidate,
merge with or consolidate into another Person, except as expressly permitted
pursuant to this Agreement;


5.2.11      Bankruptcy.  (i) File a bankruptcy or insolvency petition
or otherwise institute insolvency proceedings, (ii) dissolve, liquidate,
consolidate, merge or sell all or substantially all of its assets other than in
connection with the repayment of the Loan, or (iii) file or solicit the filing
of an involuntary bankruptcy petition against Mortgage Borrower, Senior
Mezzanine Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, a Master
Lessee Party, any Guarantor or any SPE Entity of any such Person, without
obtaining the prior consent of all of the directors, members or managers, as
applicable, of such Person;


5.2.12      ERISA.  Engage in any activity that would subject
Mortgage Borrower, Senior Mezzanine Borrower, or Mezzanine Borrower to material
liability under ERISA or qualify it as an “employee benefit plan”
(within the meaning of Section 3(3) of ERISA) to which ERISA applies and
Mezzanine Borrower’s assets do not and will not constitute plan assets within
the meaning of 29 C.F.R. Section 2510.3-101;


 


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5.2.13      Distributions.  From and after the occurrence and during the
continuance of an Event of Default or an event of default (a “Junior
Mezzanine Event of Default”) under any of the Junior Mezzanine Loan
Documents, make any distributions to or for the benefit of any of its partners
or members or its or their Affiliates; provided that so long as an Event of
Default shall not have occurred and be outstanding, distributions from
Mezzanine Borrower solely for the purpose of enabling a Junior Mezzanine
Borrower to cure a Junior Mezzanine Event of Default, and which distributions
are in fact sufficient to completely cure such Junior Mezzanine Event of
Default and are used for their intended purpose, shall be permitted.


5.2.14      Modify Mezzanine Account Agreement.  Without the prior consent of Mezzanine
Lender, which shall not be unreasonably withheld, delayed or conditioned,
execute any modification to the Mezzanine Account Agreement;


5.2.15      Zoning Reclassification.  Without the prior written consent of
Mezzanine Lender (which in the case of clause (a) shall not be unreasonably
withheld), directly or through the Mortgage Borrower, (a) initiate or consent
to any zoning reclassification of any portion of the Property, (b) seek any
variance under any existing zoning ordinance that could result in the use of
the Property becoming a non-conforming use under any zoning ordinance or any
other applicable land use law, rule or regulation, or (c) allow any portion of
the Property to be used in any manner that could result in the use of the
Property becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation;


5.2.16      Change of Principal Place of Business.  Change Mezzanine Borrower’s principal place
of business and chief executive office set forth on the first page of this Agreement
without first giving Mezzanine Lender thirty (30) days’ prior written notice
(but in any event, within the period required pursuant to the UCC) and there
shall have been taken such action, reasonably satisfactory to Mezzanine Lender,
as may be necessary to maintain fully the effect, perfection and priority of
the security interest of Mezzanine Lender hereunder in the Account Collateral
(Second Mezzanine) and the Rate Cap Collateral (Second Mezzanine) at all times;


5.2.17      Debt Cancellation.  Cancel or otherwise forgive or release any
material claim or debt owed to it, directly or indirectly, by any Person,
except for adequate consideration or in the ordinary course of its business and
except for termination of a Sublease as permitted by Section 8.8 of the Loan
Agreement (Mortgage);


5.2.18      Misapplication of Funds.  Permit Mortgage Borrower to distribute any
revenue from the Property or any Proceeds in violation of the provisions of the
Loan Agreement (Mortgage), permit Senior Mezzanine Borrower to distribute any
Receipts from the Senior Mezzanine Ownership Interests in violation of the
provisions of the Senior Mezzanine Loan Agreement, distribute any Receipts from
the Ownership Interests in violation of the provisions of this Agreement, fail
to remit amounts to the Mezzanine Account, as applicable, as required by Section
3.1, permit Mortgage Borrower to misappropriate any security deposit or
portion thereof or apply the proceeds of the Loan in violation of Section
2.1.4; or


5.2.19      Single-Purpose Entity.  Fail to be a Single Purpose Entity or take or
suffer any action or inaction the result of which would be to cause it or any
SPE Entity to cease to be a Single Purpose Entity.


 


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VI.                                 INSURANCE; CASUALTY; CONDEMNATION;
RESTORATION


6.1           Insurance Coverage Requirements.  Mezzanine Borrower will cause Mortgage
Borrower, at its expense, to procure and maintain the insurance policies
required by the Loan Documents (Mortgage). 
Each commercial general liability or umbrella liability policy with
respect to the Property shall, to the extent permitted in the Loan Documents
(Mortgage), name Mezzanine Lender as an additional insured and shall, to the
extent permitted in the Loan Documents (Mortgage), contain a cross liability/severability
endorsement in form and substance acceptable to Mezzanine Lender.


6.1.1        Insurance Proceeds.  In the event of any loss or damage to the
Property, Mezzanine Borrower shall give prompt written notice to the insurance
carrier and Mezzanine Lender.  Mezzanine
Lender acknowledges that Mortgage Borrower’s rights to any insurance proceeds
are subject to the terms of the Loan Agreement (Mortgage).  Mezzanine Borrower may not and shall not
permit Mortgage Borrower to settle, adjust or compromise any claim under such
insurance policies without the prior written consent of Mezzanine Lender which
shall not be unreasonably withheld, delayed or denied; provided, further, that
Mortgage Borrower may make proof of loss and adjust and compromise any claim
under casualty insurance policies which is of an amount less than the amount
set forth on Exhibit V for the applicable Individual Property so long as no
Event of Default has occurred and is continuing.  Any proceeds of such claim which are not used
to reconstruct or repair the Property or applied to Mortgage Borrower’s costs
in connection therewith, or applied to the balance of the loan evidenced by the
Loan Documents (Mortgage), shall be deposited into the accounts established
pursuant to the Loan Agreement (Mortgage) to the extent required thereby, or if
such deposit is not required thereunder, then such proceeds shall be paid to
Mezzanine Lender and applied to the payment of the Obligations (Second
Mezzanine) whether or not then due.


6.1.2        Restoration of Property.  In the event that Mortgage Borrower is
permitted pursuant to the terms of the Loan Agreement (Mortgage) to
reconstruct, restore or repair the Property following a casualty to any portion
of the Property, Mezzanine Borrower shall cause Mortgage Borrower to promptly
and diligently repair and restore the Property in the manner and within the
time periods required by the Loan Agreement (Mortgage), the Operating
Agreements and any other agreements affecting the Property.  In the event that Mortgage Borrower is
permitted pursuant to terms of the Loan Agreement (Mortgage) to elect to not
reconstruct, restore or repair the Property following a casualty to any portion
of the Property, Mezzanine Borrower shall not permit Mortgage Borrower to elect
not to reconstruct, restore or repair the Property without the prior written
consent of Mezzanine Lender, provided that the prior written consent of
Mezzanine Lender shall not be required during the period when the Mortgage
Borrower shall be complying with the last sentence of Section 6.2.4(a) of the
Loan Agreement (Mortgage) or where the full Mezzanine Release Price with
respect to such Property has been paid to Mezzanine Lender and the conditions
to the release of such Property as set forth in Section  2.3.4 have been satisfied.


6.1.3        Compliance.  Mezzanine Borrower shall and shall cause
Mortgage Borrower to comply with all Insurance Requirements and shall not bring
or keep or permit to be brought or kept any article upon any of the Properties
or cause or permit any condition to exist thereon which would be prohibited by
any Insurance Requirement, or would invalidate insurance 


 


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coverage required
to be maintained by Mortgage Borrower on or with respect to any part of the
Property pursuant to Section 6.1 of the Loan Agreement (Mortgage).


6.1.4        Condemnation.  In the event that all or any portion of the
Property shall be damaged or taken through condemnation (which term shall
include any damage or taking by any governmental authority, quasi governmental
authority, any party having the power of condemnation, or any transfer by
private sale in lieu thereof), or any such condemnation shall be threatened,
Mezzanine Borrower shall give prompt written notice to Mezzanine Lender.  Mezzanine Lender acknowledges that Mortgage
Borrower’s rights to any condemnation award is subject to the terms of the Loan
Agreement (Mortgage).  Notwithstanding
the foregoing, Mezzanine Borrower may not and shall not permit Mortgage
Borrower to settle or compromise any claim, action or proceeding relating to
such damage or condemnation without the prior written consent of Mezzanine
Lender, which shall not be unreasonably withheld, delayed or denied; provided,
further, that Mortgage Borrower may settle, adjust and compromise any such
claim, action or proceeding which is of an amount less than the amount set
forth on Exhibit V for the applicable Individual Property so long as no Default
or Event of Default has occurred and is continuing.  Any Excess Proceeds shall be paid to
Mezzanine Lender and applied to the payment of the Obligations (Second
Mezzanine) whether or not then due pursuant to Section 2.3.1(b).  In the event that Mortgage Borrower is
permitted pursuant to the terms of the Loan Agreement (Mortgage) to
reconstruct, restore or repair the Property following a condemnation of any
portion of the Property, Mezzanine Borrower shall cause Mortgage Borrower to
promptly and diligently repair and restore the Property in the manner and
within the time periods required by the Loan Agreement (Mortgage), the
Operating Agreements and any other agreements affecting the Property.  In the event that Mortgage Borrower is
permitted pursuant to the terms of the Loan Agreement (Mortgage) to elect not
to reconstruct, restore or repair the Property following a condemnation of any
portion of the Property, Mezzanine Borrower shall not permit Mortgage Borrower
to elect not to reconstruct, restore or repair the Property without the prior
written consent of Mezzanine Lender.


6.1.5        Certificates.  Mezzanine Borrower shall deliver (or cause
Mortgage Borrower to deliver) to Mezzanine Lender annually, concurrently with
the renewal of the insurance policies required hereunder, a certificate from
Mezzanine Borrower’s and Mortgage Borrower’s insurance agent stating that the
insurance policies required to be delivered to Mezzanine Lender pursuant to
Section 6.1 and Section 2.5.2(g) are maintained with insurers who comply
with the terms of Section 6.1.11 of the Loan Agreement (Mortgage), setting
forth a schedule describing all premiums required to be paid by Mezzanine
Borrower or Mortgage Borrower, as applicable, to maintain the policies of
insurance required under Section 6.1 and Section 2.5.2(g), and stating
that either Mezzanine Borrower or Mortgage Borrower, as applicable, has paid
such premiums.  Certificates of insurance
with respect to all replacement policies shall be delivered to Mezzanine Lender
not less than ten (10) Business Days prior to the expiration date of any of the
insurance policies required to be maintained hereunder which certificates shall
bear notations evidencing payment of applicable premiums.  Mezzanine Borrower shall deliver to Mezzanine
Lender originals (or certified copies) of such replacement insurance policies
on or before the earlier to occur of (i) thirty (30) days after the effective
date thereof (including the insurance certificates delivered pursuant to
Section 2.5.2(g)) and (ii) five (5) Business Days after Mezzanine Borrower’s
receipt thereof.  If Mezzanine Borrower
fails to (i) maintain and deliver to Mezzanine Lender the certificates of
insurance and certified copies or originals required by this 


 


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Agreement upon
five (5) Business Days’ prior notice to Mezzanine Borrower, Mezzanine Lender
may procure such insurance, and all costs thereof (and interest thereon at the
Default Rate) shall be added to the Indebtedness.  Mezzanine Lender shall not, by the fact of
approving, disapproving, accepting, preventing, obtaining or failing to obtain
any insurance, incur any liability for or with respect to the amount of
insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and Mezzanine
Borrower hereby expressly assumes full responsibility therefor and all
liability, if any, with respect such matters.


VII.                             IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER
ITEMS


7.1           Mortgage Borrower
and Senior Mezzanine Borrower to Pay Impositions and Other Charges.  Mezzanine Borrower shall cause Mortgage
Borrower to pay (or cause to be paid) all Impositions now or hereafter levied
or assessed or imposed against the Property or any part thereof prior to the
imposition of any interest, charges or expenses for the non-payment thereof and
to pay all Other Charges on or before the date they are due.  Mezzanine Borrower shall cause Senior
Mezzanine Borrower to pay (or cause to be paid) all Impositions now or
hereafter levied or assessed or imposed against the Senior Mezzanine Collateral
or any part thereof prior to the imposition of any interest, changes or
expenses for the non-payment thereof. 
Mezzanine Borrower shall pay all Impositions now or hereafter levied or
assessed or imposed against the Collateral or any part thereof prior to the
imposition of any interest, charges or expenses for the non-payment
thereof.  Mezzanine Borrower shall
deliver or cause to be delivered to Mezzanine Lender annually, no later than
thirty (30) calendar days after the first day of each fiscal year of Mezzanine
Borrower, and shall update as new information is received, a schedule
describing all Impositions, payable or estimated to be payable during such
fiscal year attributable to or affecting the Property, the Collateral, the
Senior Mezzanine Collateral, Mezzanine Borrower, Senior Mezzanine Borrower, or
Mortgage Borrower.  Subject to Mortgage
Borrower’s right of contest set forth in Section 7.3 of the Loan
Agreement (Mortgage), as set forth in the next two sentences and provided that there
are sufficient funds available in the Tax Reserve Account under the Loan
Agreement (Mortgage), Mortgage Lender, on behalf of Mortgage Borrower, shall
pay all Impositions and Other Charges which are attributable to or affect the
Property or Mortgage Borrower, prior to the date such Impositions or Other
Charges shall become delinquent or late charges may be imposed thereon,
directly to the applicable taxing authority with respect thereto.  Mortgage Lender shall, or Mortgage Lender
shall direct the Cash Management Bank to, pay to the taxing authority such
amounts to the extent funds in the Tax Reserve Account are sufficient to pay
such Impositions.  Nothing contained in
this Agreement, the Senior Mezzanine Loan Agreement, the Loan Agreement
(Mortgage) or any Security Instrument shall be construed to require Mezzanine
Borrower, the Senior Mezzanine Borrower or Mortgage Borrower to pay any tax,
assessment, levy or charge imposed on Mortgage Lender, the Senior Mezzanine
Borrower or Mezzanine Lender in the nature of a franchise, capital levy,
estate, inheritance, succession, income or net revenue tax.


7.2           No Liens.  Subject to Section 7.3 and Mortgage Borrower’s
right of contest set forth in Section 7.3 of the Loan Agreement
(Mortgage) and to Permitted Encumbrances, Mezzanine Borrower shall cause
Mortgage Borrower to at all times keep, or cause to be kept, the Property free
from all Liens (other than Permitted Encumbrances) and shall pay when due and
payable (or bond over) all claims and demands of mechanics, materialmen,
laborers and others 


 


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which, if unpaid, might result in or permit
the creation of a Lien on the Property or any portion thereof and shall in any
event cause the prompt, full and unconditional discharge of all Liens imposed
on or against the Property or any portion thereof within forty-five (45) days
after receiving written notice of the filing (whether from Mortgage Lender or
Mezzanine Lender, the lienor or any other Person) thereof.  Mezzanine Borrower shall cause Mortgage
Borrower to do or cause to be done, at the sole cost of Mortgage Borrower,
everything reasonably necessary to fully preserve the first priority of the
Lien of the Security Instruments against the Property, subject to the Permitted
Encumbrances.  Upon the occurrence and
during the continuance of a Mortgage Event of Default with respect to the
Obligations (Mortgage), each of Mortgage Lender and Mezzanine Lender may (but
shall not be obligated to) make any such payment or discharge any such Lien
(other than Permitted Encumbrances excluding therefrom any Liens described in
clauses (d) and (e) of the definition of “Permitted Encumbrances” which are the
subject of such Mortgage Event of Default), and Mezzanine Borrower shall
reimburse Mezzanine Lender and Mortgage Borrower on demand for all such
advances pursuant to Section 19.12 of this Agreement and the Loan
Agreement (Mortgage) (together with interest thereon at the Default Rate).


7.3           Contest.  Nothing contained herein shall be deemed to
require Mezzanine Borrower to pay, or cause to be paid, any Imposition or to
satisfy any Lien, or to comply with any Legal Requirement or Insurance
Requirement, so long as Mezzanine Borrower is (or has caused Mortgage Borrower
to be) in good faith, and by proper legal proceedings, where appropriate,
diligently contesting the validity, amount or application thereof, provided
that in each case, at the time of the commencement of any such action or
proceeding, and during the pendency of such action or proceeding (i) no Event
of Default shall exist and be continuing hereunder, (ii) Mezzanine Borrower
shall keep Mezzanine Lender informed of the status of such contest at
reasonable intervals, (iii) if Mezzanine Borrower is not providing (or has not
caused Mortgage Borrower to provide) security as provided in clause (vi) below,
adequate reserves with respect thereto are maintained on Mezzanine Borrower’s
(or Mortgage Borrower’s as applicable) books in accordance with GAAP (or, in
the case of Mortgage Borrower, such reserves are maintained in the Tax Reserve
Account or Insurance Reserve Account, as applicable, or in the Proceeds Reserve
Account pursuant to Article VI of the Loan Agreement (Mortgage), as
applicable), (iv) either such contest operates to suspend collection or
enforcement as the case may be, of the contested Imposition, Lien or Legal
Requirement and such contest is maintained and prosecuted continuously and with
diligence or the Imposition or Lien is bonded, (v) in the case of any Insurance
Requirement, the failure to comply therewith shall not impair the validity of
any insurance required to be maintained under this Agreement or the right to
full payment of any claims thereunder, and (vi) in the case of Impositions and
Liens which are not bonded in excess of Two Million Dollars ($2,000,000)
individually, or Ten Million Dollars ($10,000,000) in the aggregate, during
such contest, Mezzanine Borrower shall (or shall cause Mortgage Borrower to)
deposit with or deliver to Mezzanine Lender (or, if required under the Loan
Agreement (Mortgage), Mortgage Lender) either Cash and Cash Equivalents or a
Letter or Letters of Credit in an amount equal to 110% of (A) the amount of the
obligations being contested plus (B) any additional interest, charge, or
penalty arising from such contest. 
Notwithstanding the foregoing, the creation of any such reserves or the
furnishing of any bond or other security, Mezzanine Borrower shall (or shall
cause Mortgage Borrower to) promptly comply with any contested Legal
Requirement or Insurance Requirement or shall pay any contested Imposition or
Lien, and compliance therewith or payment thereof shall not be deferred, 


 


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if, at any time the Property,
the Collateral, or any portion thereof shall be, in Mezzanine Lender’s
reasonable judgment, in imminent danger of being forfeited or lost or Mezzanine
Lender is likely to be subject to criminal damages as a result thereof.  If such action or proceeding is terminated or
discontinued adversely to Mezzanine Borrower or Mortgage Borrower, as
applicable (a) provided no Event of Default has occurred and is continuing
hereunder, Mezzanine Lender shall (or, as applicable, Mortgage Lender may)
disburse to the Person entitled to such sums, the security provided therefore
under this Section 7.3 and (b) Mezzanine Borrower shall deliver to
Mezzanine Lender reasonable evidence of compliance with such contested
Imposition, Lien, Legal Requirements or Insurance Requirements, as the case may
be. Notwithstanding the foregoing, any contest conducted by the Master Lessee
in accordance with the Master Lease will be deemed to satisfy the requirements
of this Section 7.3 provided that any security deposited by Master
Lessee pursuant to the provisions of the Master Lease in connection with such
contest is delivered to Mezzanine Lender (or, if required under the Loan
Agreement (Mortgage), the Mortgage Lender).


 


VIII.                         TRANSFERS, INDEBTEDNESS AND
SUBORDINATE LIENS


8.1           General
Restriction on Transfers.  Unless
such action is permitted by the provisions of this Article VIII,
Mezzanine Borrower shall not, and shall not permit Mortgage Borrower or any
other Person holding any direct or indirect ownership interest in Mortgage
Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, any Junior Mezzanine
Borrower, any Guarantor, Master Lessee, any SPE Entity or the Property to,
except with the prior written consent of Mezzanine Lender and, if a
Securitization has occurred, delivery of a Rating Agency Confirmation, (i)
Transfer all or any part of the Property, or (ii) except in connection with the
Loan, Senior Mezzanine Loan, Junior Mezzanine Loans or the Revolving/Term
Credit Facility, permit any Transfer (directly or indirectly) of any interest
in Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, any Junior
Mezzanine Borrower, any Guarantor, Master Lessee or any SPE Entity.  For avoidance of doubt, the foregoing shall
not prohibit (i) the Master Lessee from granting a Lien to Mortgage Borrower on
portions of the Excluded Personal Property, subject to the Assigned Landlord
Lien, or (ii) the Mortgage Borrower, Master Lessee or any Tenant under any
Individual Property Sublease or Sublease permitted under Section 8.8.2
from entering into any Permitted Encumbrance.


8.2           Sale of Building
Equipment.  Mezzanine Borrower may
cause Mortgage Borrower to Transfer or dispose of Building Equipment which is
being replaced or which is no longer necessary in connection with the operation
of an Individual Property free from the Lien of the applicable Security
Instrument provided that such Transfer or disposal will not have a Material
Adverse Effect on the value of such Individual Property, will not materially
impair the utility of such Individual Property, and will not result in a reduction
or abatement of, or right of offset against, the Rents payable under the Master
Lease or any Sublease, in either case as a result thereof, and provided further
that any new Building Equipment acquired by Mortgage Borrower (and not so
disposed of) shall be subject to the Lien of the applicable Security
Instrument.


8.3           Immaterial Transfers and
Easements, etc.  Mezzanine Borrower may cause Mortgage Borrower,
without the consent of Mezzanine Lender to, (i) make immaterial Transfers of
portions of the Property to Governmental Authorities for dedication or public
use (subject to 


 


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the provisions of Section
6.2) or, portions of the Property to third parties for the purpose of
erecting and operating additional structures whose use is integrated with the
use of the Property, and (ii) grant easements, restrictions, covenants,
reservations and rights of way in the ordinary course of business for access,
water and sewer lines, telephone and telegraph lines, electric lines or other
utilities or for other similar purposes, provided that no such Transfer,
conveyance or encumbrance set forth in the foregoing clauses (i) and (ii) shall
materially impair the utility and operation of the Property or have a Material
Adverse Effect on the value of the Property taken as a whole.


8.4           Reserved.


8.5           Permitted Equity
Transfers.


(a)           A
Transfer of a direct or indirect ownership interest in Mezzanine Borrower,
Mortgage Borrower or the SPE Entities that is otherwise prohibited hereunder
shall nevertheless be permitted without Mezzanine Lender’s prior written
consent or a Rating Agency Confirmation if (i) Mezzanine Lender receives
fifteen (15) days prior written notice thereof, (ii) immediately prior to such
Transfer, no Event of Default shall have occurred and be continuing, (iii) no
more than forty-nine percent (49%) of the direct or indirect ownership
interests in Mortgage Borrower,, Senior Mezzanine Borrower, Mezzanine Borrower,
any Junior Mezzanine Borrower or any other SPE Entity is being Transferred (in
the aggregate of all such Transfers), (iv) the transferee is not a Disqualified
Transferee, and (v) the Principal Control Persons collectively retain Control
of Mortgage Borrower, Senior Mezzanine Borrower, and Mezzanine Borrower and the
Principal Investors collectively continue to own, directly and/or indirectly,
at least 51% of the ownership interests in Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower and the SPE Entities.


(b)           Notwithstanding anything herein to the
contrary, the following Transfers shall not require the prior written consent
of or, except as otherwise required in clause (y) below, notice to Mezzanine
Lender or a Rating Agency Confirmation so long as (x) (except with respect to Section
8.5(b)(ii) and (iv) below) Section 8.5(a)(v) above is
complied with and (y) with respect to (1) any Transfer of interests in any
Guarantor or Sponsor that alters the ratio of ownership interests in Master
Lessee between that owned by Colony Capital, LLC and its Affiliates, on the one
hand, and that owned by the Fertitta Brothers and their Affiliates and Family
Trusts, on the other hand, and (2) any Transfer of interests in the Fertitta
Brothers and their Affiliates and Family Trusts to Persons other than Principal
Investors, Mezzanine Lender shall receive prior written notice:


(i)            a
Transfer of (A) interests in any Guarantor or Sponsor between or among its
existing owners and any Principal Investors, and (B) any interests in the
parent entities of such owners;


(ii)           a
Transfer of equity interests in any Guarantor, Sponsor or Master Lessee in
conjunction with or after an initial public offering of shares, provided that
from and after the consummation of such initial public offering, no Person or
group other than the Principal Control Persons and Principal Investors (A)
shall have acquired beneficial ownership, directly or indirectly, of equity
interests in Master Lessee representing more than twenty-five percent (25%) 


 


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of the voting power and economic interest in Master Lessee where such
ownership represents a greater amount of the voting power or economic interest
in Master Lessee than that which is then owned by the Principal Control Persons
and Principal Investors in aggregate, or (B) shall have obtained the power
(whether or not exercised) to elect a majority of the members of the board of
directors (or similar governing body) of Master Lessee;


(iii)          Transfers
of direct or indirect interests in the Guarantors (including, without
limitation, any combination of one or more Guarantors or a Guarantor with
Sponsor), and the pledge or grant of security interests, as permitted under the
terms of the organizational documents for each of the Guarantors; and


(iv)          the
pledge, hypothecation, encumbrance or granting of a security interest in or
lien on the direct interest in Master Lessee to an Approved Bank as security
for the Revolving/Term Credit Facility (the “Revolving/Term Credit Facility
Lien”), provided that the Revolving/Term Credit Facility Lien shall not be
foreclosed upon unless (A) the ownership of such direct interest in Master
Lessee following such foreclosure shall be held by an Approved Bank or a
Qualified Transferee and comply with all Gaming Laws and (B) such foreclosure
shall not create or cause a Default or Event of Default hereunder (provided
that the occurrence of such foreclosure, so long as clause (A) is complied
with, shall not of itself constitute a Default or Event of Default).  For purposes solely of this Section
8.5(b)(iv), the term “Qualified Transferee” shall have the meaning set
forth in Section 1.1 except that the “$2 Billion” figure in clause (b)
of the definition in Section 1.1 is replaced with “$1 Billion.”


Notwithstanding the foregoing, Mezzanine Borrower shall not, and shall
not permit or suffer any person to, pledge, hypothecate, encumber or grant a
security interest in or lien on any direct or, except as set forth in this Section
8.5, indirect interest in Mortgage Borrower, Senior Mezzanine Borrower,
Mezzanine Borrower, any Junior Mezzanine Borrower or any SPE Entities, any
Guarantor or Sponsor.


8.6           Deliveries to
Mezzanine Lender.  Not less than
thirty (30) days prior to (or, in the case of the transactions described in Section
8.5, promptly following) the closing of any transaction that requires
consent of Mezzanine Lender under the provisions of Sections 8.1, 8.3
and 8.5, Mezzanine Borrower shall deliver or cause Mortgage Borrower to
deliver to Mezzanine Lender an Officer’s Certificate describing the proposed
transaction and stating that such transaction is permitted by this Article
VIII, together with any appraisal or other documents upon which such
Officer’s Certificate is based.  In
addition, Mezzanine Borrower shall provide or cause Mortgage Borrower to
provide Mezzanine Lender with copies of executed deeds or other similar closing
documents within ten (10) Business Days after such closing.


8.7           Loan Assumption.  Provided no Event of Default is then
continuing, Mezzanine Borrower shall have the right, with the prior written
consent of Mezzanine Lender, to cause Mortgage Borrower to sell, assign, convey
or transfer (but not mortgage, hypothecate or otherwise encumber or grant a
security interest in) legal or equitable title to all (but not less than all)
of the Property only if after giving effect to the proposed transaction the
Property will be owned by a Single Purpose Entity wholly owned by a Qualified
Transferee which shall have executed and delivered to Mezzanine Lender an
assumption agreement in form and substance acceptable to Mezzanine Lender.  Any such assumption of the Loan shall be
conditioned upon, 


 


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among other things, (i) the delivery of
financial information, including, without limitation, audited financial
statements, for such purchaser and the direct and indirect owners of such
purchaser, (ii) the delivery of evidence that the purchaser is a Single Purpose
Entity and is not a Disqualified Transferee, (iii) the execution and delivery of
all documentation reasonably requested by Mezzanine Lender, (iv) the delivery
of Opinions of Counsel requested by Mezzanine Lender, including, without
limitation, a Non-Consolidation Opinion with respect to the purchaser and other
entities identified by Mezzanine Lender or requested by the Rating Agencies and
opinions with respect to the valid formation, due authority and good standing
of the purchaser and any additional pledgors and the continued enforceability
of the Mezzanine Loan Documents and any other matters requested by Mezzanine
Lender, (v) the delivery of an endorsement to each of the Title Policies in
form and substance acceptable to Mortgage Lender, insuring the lien of the
Security Instruments, as assumed, subject only to the Permitted Encumbrances
and (vi) the payment of all of Mezzanine Lender’s reasonable out-of-pocket
fees, costs and expenses, including, without limitation, reasonable attorneys’
fees and costs, actually incurred by Mezzanine Lender in connection with such
assumption.


8.8           Subleases.


8.8.1        Master Lease and Existing Subleases.  Mezzanine Borrower represents, warrants, and
covenants that each Individual Property shall be leased by Mortgage Borrower to
Master Lessee pursuant to the Master Lease, and substantially occupied by a wholly-owned
subsidiary of Master Lessee under an Individual Property Sublease, and with
respect to the retail components of the Individual Properties, occupied in part
by other Tenants under the applicable Subleases.


8.8.2        Leasing Conditions.  Except as otherwise provided in this Section
8.8.2, none of Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage
Borrower shall, and Mezzanine Borrower shall cause Mortgage Borrower not to
permit Master Lessee to (i) enter into any Material Sublease (a “New Sublease”)
or (ii) modify any Material Sublease (including, without limitation, accept a
surrender of any portion of the Property subject to a Material Sublease (unless
otherwise permitted or required by law), allow a reduction in the term of any
Material Sublease or a reduction in the Rent payable under any Material
Sublease, change any renewal provisions of any Material Sublease, materially
increase the obligations of the landlord or materially decrease the obligations
of any Tenant under a Material Sublease) or terminate any Material Sublease unless the Tenant under such Lease is
in default (any such action referred to in clause (ii) being referred to herein
as a “Sublease Modification”) without the prior written consent of
Mezzanine Lender. Any New Sublease or Sublease Modification that requires
Mezzanine Lender’s consent shall be delivered to Mezzanine Lender for approval
not less than five (5) Business Days prior to the effective date of such New
Sublease or Sublease Modification.  If
Mezzanine Lender fails to respond to a request for Mezzanine Lender’s consent
pursuant to this Section 8.8.2 within five (5) Business Days of
Mezzanine Lender’s receipt of Mezzanine Borrower’s request therefor, Mezzanine
Borrower may deliver to Mezzanine Lender a second request in an envelope or
under cover of a letter marked “URGENT” and including a legend in bold typeface
that Mezzanine Lender’s failure to grant or deny the requested consent within
ten (10) Business Days of the receipt thereof will result in the requested
consent being deemed to have been granted. 
If Mezzanine Lender fails to respond to such second request within ten
(10) Business Days of its receipt thereof, Mezzanine Lender’s consent shall be 


 


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deemed granted.  Notwithstanding
the foregoing, but subject to terms of Sections 8.8.7 and 8.8.8,
provided no Event of Default shall have occurred and be continuing, Mezzanine
Borrower may cause Mortgage Borrower to permit Master Lessee to enter into a
New Sublease or Sublease Modification in accordance with the Subleasing
Standards.


8.8.3        Delivery of New Sublease or Sublease
Modification.  Upon the
execution of any New Sublease or Sublease Modification, as applicable,
Mezzanine Borrower shall cause Mortgage Borrower to deliver to Mezzanine Lender
an executed copy of the Sublease.


8.8.4        Sublease Amendments.  Mezzanine Borrower agrees that none of
Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage Borrower shall have
the right or power, as against Mezzanine Lender without its consent (which
consent shall not be unreasonably withheld or delayed as provided herein), to
cancel, abridge, amend or otherwise modify any Sublease unless such
modification complies with this Section 8.8.


8.8.5        Security Deposits.  All security or other deposits of Tenants of
the Property shall be treated as trust funds and shall not be commingled with
any other funds of Mortgage Borrower, Master Lessee or Tenant under an
Individual Property Sublease, as appropriate, and such deposits shall be deposited,
upon receipt of the same in a separate trust account maintained by Mortgage
Borrower, Master Lessee or Tenant under an Individual Property Sublease, as
appropriate, expressly for such purpose. 
Within ten (10) Business Days after written request by Mezzanine Lender,
Mezzanine Borrower shall cause Mortgage Borrower to furnish to Mezzanine Lender
reasonably satisfactory evidence of compliance with this Section 8.8.5,
together with a statement of all lease securities deposited by the Tenants and
the location and account number of the account in which such security deposits
are held.


8.8.6        No Default Under Subleases.  Mezzanine Borrower shall and shall cause
Mortgage Borrower or Master Lessee to (i) promptly perform and observe all
of the material terms, covenants and conditions required to be performed and
observed by Mortgage Borrower under the Subleases, if the failure to perform or
observe the same would have a Material Adverse Effect; (ii) exercise, within
ten (10) Business Days after a written request by Mezzanine Lender, any right
to request from the Tenant under any Material Sublease a certificate with
respect to the status thereof and (iii) not collect any of the Rents under any
Sublease, more than one (1) month in advance (except that Mortgage Borrower may
collect such security deposits and last month’s Rents as are permitted by Legal
Requirements and are commercially reasonable in the prevailing market and
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IX.                                INTEREST RATE CAP AGREEMENT (SECOND
MEZZANINE)


9.1           Interest Rate Cap
Agreement (Second Mezzanine).  Prior
to or contemporaneously with the Closing Date, Mezzanine Borrower shall enter
into (x) an Interest Rate Cap Agreement (Second Mezzanine).  The notional amount of the Interest Rate Cap
Agreement (Second Mezzanine) shall be at least equal to the Principal
Amount.  The Interest Rate Cap Agreement
(Second Mezzanine) shall (i) at all times be in a form and substance reasonably
acceptable to Mezzanine Lender, (ii) at all times be with an Approved
Counterparty, (iii) direct such Approved Counterparty to deposit directly into
the Mezzanine Account any payments due to Borrower under such Interest Rate Cap
Agreement (Second Mezzanine) so long as any portion of the Loan is outstanding,
provided that the Loan shall be deemed to be outstanding if the Properties are
transferred by judicial or non-judicial foreclosure or deed-in-lieu thereof,
and (iv) have a strike rate no greater than the Strike Price.


9.2           Pledge and
Collateral Assignment.  As security
for the full and punctual payment and performance of the Obligations (Second
Mezzanine) when due (whether upon stated maturity, by acceleration, early
termination or otherwise), Mezzanine Borrower, as pledgor, hereby pledges,
assigns, hypothecates, transfers and delivers to Mezzanine Lender as collateral
and hereby grants to Mezzanine Lender a continuing first priority lien on and
security interest in, to and under all of the following whether now owned or
hereafter acquired and whether now existing or hereafter arising (the “Rate
Cap Collateral (Second Mezzanine)”): all of the right, title and interest
of Mezzanine Borrower in and to (i) the Interest Rate Cap Agreement (Second
Mezzanine); (ii) all payments, distributions, disbursements or proceeds due,
owing, payable or required to be delivered to Mezzanine Borrower in respect of
the Interest Rate Cap Agreement (Second Mezzanine) or arising out of the
Interest Rate Cap Agreement (Second Mezzanine), whether as contractual
obligations, damages or otherwise; and (iii) all of Mezzanine Borrower’s
claims, rights, powers, privileges, authority, options, security interests,
liens and remedies, if any, under or arising out of the Interest Rate Cap
Agreement (Second Mezzanine), in each case including all accessions and
additions to, substitutions for and replacements, products and proceeds of any
or all of the foregoing.


9.3           Covenants.


(a)           Mezzanine Borrower shall comply with all of its obligations
under the terms and provisions of the Interest Rate Cap Agreement (Second
Mezzanine).  All amounts paid by the
Counterparty under the Interest Rate Cap Agreement (Second Mezzanine) to
Mezzanine Borrower or Mezzanine Lender shall be deposited immediately into the
Mezzanine Account pursuant to Section 3.1.  Subject to terms hereof, provided no Event of
Default has occurred and is continuing, Mezzanine Borrower shall be entitled to
exercise all rights, powers and privileges of Mezzanine Borrower under, and to
control the prosecution of all claims with respect to, the Interest Rate Cap
Agreement (Second Mezzanine) and the other Rate Cap Collateral (Second
Mezzanine).  Mezzanine Borrower shall
take all actions reasonably requested by Mezzanine Lender to enforce Mezzanine
Borrower’s rights under the Interest Rate Cap Agreement (Second Mezzanine) in
the event of a default by the Counterparty thereunder and shall not waive,
amend or otherwise modify any of its rights thereunder.


 


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(b)           Mezzanine Borrower shall defend Mezzanine Lender’s right,
title and interest in and to the Rate Cap Collateral (Second Mezzanine) pledged
by Mezzanine Borrower pursuant hereto or in which it has granted a security
interest pursuant hereto against the claims and demands of all other Persons.


(c)           In the event of any downgrade, withdrawal or qualification
of the rating of the Counterparty such that it ceases to qualify as an “Approved
Counterparty,” unless the Counterparty shall have posted collateral on terms
acceptable to each Rating Agency, or in the event of any default
by any Counterparty under the Interest Rate Cap Agreement (Second Mezzanine), Mezzanine Borrower shall replace the
Interest Rate Cap Agreement (Second Mezzanine) with a Replacement Interest Rate
Cap Agreement (Second Mezzanine) from an Approved Counterparty not later than
ten (10) Business Days following receipt of notice from Mezzanine Lender,
Servicer or any other Person of such downgrade, withdrawal or qualification. In
the event that the Counterparty is downgraded to A2 or lower by Moody’s, a
Replacement Interest Rate Cap Agreement (Second Mezzanine) shall be required
regardless of the posting of collateral.


(d)           In the event that Mezzanine Borrower fails to purchase and
deliver to Mezzanine Lender the Interest Rate Cap Agreement (Second Mezzanine)
as and when required hereunder, Mezzanine Lender may upon written notice to
Mezzanine Borrower purchase the Interest Rate Cap Agreement (Second Mezzanine)
and the actual cost incurred by Mezzanine Lender in purchasing the Interest
Rate Cap Agreement (Second Mezzanine) shall upon written demand be paid by
Mezzanine Borrower to Mezzanine Lender with interest thereon at the Default
Rate from the date such cost was incurred by Mezzanine Lender and demand made
until such cost is paid by Mezzanine Borrower to Mezzanine Lender.


(e)           Mezzanine Borrower shall not sell, assign, or otherwise
dispose of, or mortgage, pledge or grant a security interest in, any of the
Rate Cap Collateral (Second Mezzanine) or any interest therein, and any sale,
assignment, mortgage, pledge or security interest whatsoever made in violation
of this covenant shall be a nullity and of no force and effect, and upon demand
of Mezzanine Lender, shall forthwith be cancelled or satisfied by an
appropriate instrument in writing.


(f)            Mezzanine Borrower shall not (i) without the prior
written consent of Mezzanine Lender modify, amend or supplement the terms of
the Interest Rate Cap Agreement (Second Mezzanine), (ii) without the prior
written consent of Mezzanine Lender, except in accordance with the terms of the
Interest Rate Cap Agreement (Second Mezzanine), cause the termination of the
Interest Rate Cap Agreement (Second Mezzanine) prior to its stated maturity
date, (iii) without the prior written consent of Mezzanine Lender, except as
aforesaid, waive or release any obligation of the Counterparty (or any
successor or substitute party to the Interest Rate Cap Agreement (Second
Mezzanine)) under the Interest Rate Cap Agreement (Second Mezzanine), (iv)
without the prior written consent of Mezzanine Lender, consent or agree to any
act or omission to act on the part of the Counterparty (or any successor or
substitute party to the Interest Rate Cap Agreement (Second Mezzanine)) which,
without such consent or agreement, would constitute a default under the
Interest Rate Cap Agreement (Second Mezzanine), (v) fail to exercise promptly
and diligently each and every material right which it may have under the
Interest Rate Cap Agreement (Second Mezzanine), (vi) take or intentionally omit
to take any 


 


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action or intentionally suffer or permit any
action to be omitted or taken, the taking or omission of which would result in
any right of offset against sums payable under the Interest Rate Cap Agreement
(Second Mezzanine) or any defense by the Counterparty (or any successor or
substitute party to the Interest Rate Cap Agreement (Second Mezzanine)) to
payment or (vii) fail to give prompt notice to Mezzanine Lender of any notice
of default given by or to Mezzanine Borrower under or with respect to the
Interest Rate Cap Agreement (Second Mezzanine), together with a complete copy
of such notice.


(g)           In connection with an Interest Rate Cap Agreement (Second
Mezzanine), Mezzanine Borrower shall obtain and deliver to Mezzanine Lender an
Opinion of Counsel from counsel (which counsel may be in-house counsel for the
Counterparty) for the Counterparty upon which Mezzanine Lender and its
successors and assigns may rely (the “Counterparty Opinion”), under New
York law and, if the Counterparty is a non-U.S. entity, the applicable foreign
law, in a form approved by the Mezzanine Lender.


9.4           Powers of
Mezzanine Borrower Prior to an Event of Default.  Subject to the provisions of Section
9.3(a), provided no Event of Default has occurred and is continuing,
Mezzanine Borrower shall be entitled to exercise all rights, powers and
privileges of Mezzanine Borrower under, and to control the prosecution of all
claims with respect to, the Interest Rate Cap Agreement (Second Mezzanine) and the other Rate Cap Collateral (Second
Mezzanine).


9.5           Representations
and Warranties.  Mezzanine Borrower
hereby covenants with, and represents and warrants to, Mezzanine Lender as follows:


(a)           The Interest Rate Cap Agreement (Second Mezzanine)
constitutes the legal, valid and binding obligation of Mezzanine Borrower,
enforceable against Mezzanine Borrower in accordance with its terms, subject
only to applicable bankruptcy, insolvency and similar laws generally affecting
the enforcement of creditors’ rights and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).


(b)           The Rate Cap Collateral (Second Mezzanine) is free and
clear of all claims or security interests of every nature whatsoever, except
such as are created pursuant to this Agreement and the other Mezzanine Loan
Documents, and Mezzanine Borrower has the right to pledge and grant a security
interest in the same as herein provided without the consent of any other Person
other than any such consent that has been obtained and is in full force and
effect.


(c)           The Rate Cap Collateral (Second Mezzanine) has been duly
and validly pledged hereunder.  All
consents and approvals required to be obtained by Mezzanine Borrower for the
consummation of the transactions contemplated by the Interest Rate Cap
Agreement (Second Mezzanine) and this Article IX have been obtained.


(d)           Giving effect to the aforesaid grant and assignment to
Mezzanine Lender, Mezzanine Lender has, as of the date of this Agreement, and
as to Rate Cap Collateral (Second Mezzanine) acquired from time to time after
such date, shall have, a valid, and upon proper filing, perfected and continuing
first priority lien upon and security interest in the Rate Cap Collateral
(Second Mezzanine); provided that no representation or warranty is made with
respect 


 


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to the perfected status of the security
interest of Mezzanine Lender in the proceeds of Rate Cap Collateral (Second
Mezzanine) consisting of “cash proceeds” or “non-cash proceeds” as defined in
the UCC except if, and to the extent, the provisions of Section 9-306 of the
UCC shall be complied with.


(e)           Except for financing statements filed or to be filed in
favor of Mezzanine Lender as secured party, there are no financing statements
under the UCC covering any or all of the Rate Cap Collateral (Second Mezzanine)
and Mezzanine Borrower shall not, without the prior written consent of
Mezzanine Lender, until payment in full of all of the Obligations (Second
Mezzanine), execute and file in any public office, any enforceable financing
statement or statements covering any or all of the Rate Cap Collateral (Second
Mezzanine), except financing statements filed or to be filed in favor of
Mezzanine Lender as secured party.


9.6           Payments.  If Mezzanine Borrower at any time shall be
entitled to receive any payments with respect to the Interest Rate Cap Agreement
(Second Mezzanine), such amounts
shall, immediately upon becoming payable to Mezzanine Borrower, be deposited by
Counterparty into the Mezzanine Account.


9.7           Remedies.  Subject to the provisions of the Interest
Rate Cap Agreement (Second Mezzanine),
if an Event of Default shall occur and then be continuing:


(a)           Mezzanine Lender, without obligation to resort to any
other security, right or remedy granted under any other agreement or
instrument, shall have the right to, in addition to all rights, powers and
remedies of a secured party pursuant to the UCC (all of which Mezzanine Lender
may exercise), at any time and from time to time, sell, resell, assign and
deliver, in its sole discretion, any or all of the Rate Cap Collateral (Second
Mezzanine) (in one or more parcels and at the same or different times) and all
right, title and interest, claim and demand therein and right of redemption
thereof, at public or private sale, for cash, upon credit or for future
delivery, and in connection therewith Mezzanine Lender may grant options and
may impose reasonable conditions such as requiring any purchaser to represent
that any “securities” constituting any part of the Rate Cap Collateral (Second
Mezzanine) are being purchased for investment only, Mezzanine Borrower hereby
waiving and releasing any and all equity or right of redemption to the fullest
extent permitted by the UCC or applicable law. 
If all or any of the Rate Cap Collateral (Second Mezzanine) is sold by
Mezzanine Lender upon credit or for future delivery, Mezzanine Lender shall not
be liable for the failure of the purchaser to purchase or pay for the same and,
in the event of any such failure, Mezzanine Lender may resell such Rate Cap
Collateral (Second Mezzanine).  It is
expressly agreed that Mezzanine Lender may exercise its rights with respect to
less than all of the Rate Cap Collateral (Second Mezzanine), leaving
unexercised its rights with respect to the remainder of the Rate Cap Collateral
(Second Mezzanine), provided, however, that such partial exercise shall in no
way restrict or jeopardize Mezzanine Lender’s right to exercise its rights with
respect to all or any other portion of the Rate Cap Collateral (Second
Mezzanine) at a later time or times.


(b)           Mezzanine Lender may exercise, either by itself or by its
nominee or designee, in the name of Mezzanine Borrower, all of Mezzanine Lender’s
rights, powers and remedies in respect of the Rate Cap Collateral (Second
Mezzanine), hereunder and under law.


 


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(c)           Mezzanine Borrower hereby irrevocably, in the name of
Mezzanine Borrower or otherwise, authorizes and empowers Mezzanine Lender and
assigns and transfers unto Mezzanine Lender, and constitutes and appoints
Mezzanine Lender its true and lawful attorney-in-fact, and as its agent,
irrevocably, with full power of substitution for Mezzanine Borrower and in the
name of Mezzanine Borrower, (i) to exercise and enforce every right, power,
remedy, authority, option and privilege of Mezzanine Borrower under the
Interest Rate Cap Agreement (Second Mezzanine), including any power to
subordinate or modify the Interest Rate Cap Agreement (Second Mezzanine) (but
not, unless an Event of Default exists and is continuing, the right to
terminate or cancel the Interest Rate Cap Agreement (Second Mezzanine)), or to
give any notices, or to take any action resulting in such subordination,
termination, cancellation or modification and (ii) in order to more fully vest
in Mezzanine Lender the rights and remedies provided for herein, to exercise
all of the rights, remedies and powers granted to Mezzanine Lender in this
Agreement, and Mezzanine Borrower further authorizes and empowers Mezzanine
Lender, as Mezzanine Borrower’s attorney-in-fact, and as its agent,
irrevocably, with full power of substitution for Mezzanine Borrower and in the
name of Mezzanine Borrower, to give any authorization, to furnish any
information, to make any demands, to execute any instruments and to take any
and all other action on behalf of and in the name of Mezzanine Borrower which
in the opinion of Mezzanine Lender may be necessary or appropriate to be given,
furnished, made, exercised or taken under the Interest Rate Cap Agreement
(Second Mezzanine), in order to comply therewith, to perform the conditions
thereof or to prevent or remedy any default by Mezzanine Borrower thereunder or
to enforce any of the rights of Mezzanine Borrower thereunder.  These powers-of-attorney are irrevocable and
coupled with an interest, and any similar or dissimilar powers heretofore given
by Mezzanine Borrower in respect of the Rate Cap Collateral (Second Mezzanine)
to any other Person are hereby revoked.


(d)           Mezzanine Lender may, without notice to, or assent by,
Mezzanine Borrower or any other Person (to the extent permitted by law), but
without affecting any of the Obligations (Second Mezzanine), in the name of
Mezzanine Borrower or in the name of Mezzanine Lender, notify the Counterparty,
or if applicable, any other counterparty to the Interest Rate Cap Agreement
(Second Mezzanine), to make payment and performance directly to Mezzanine
Lender; extend the time of payment and performance of, compromise or settle for
cash, credit or otherwise, and upon any terms and conditions, any obligations
owing to Mezzanine Borrower, or claims of Mezzanine Borrower, under the
Interest Rate Cap Agreement (Second Mezzanine); file any claims, commence,
maintain or discontinue any actions, suits or other proceedings deemed by
Mezzanine Lender necessary or advisable for the purpose of collecting upon or
enforcing the Interest Rate Cap Agreement (Second Mezzanine); and execute any
instrument and do all other things deemed necessary and proper by Mezzanine
Lender to protect and preserve and realize upon the Rate Cap Collateral (Second
Mezzanine) and the other rights contemplated hereby.


(e)           Pursuant to the powers-of-attorney provided for above,
Mezzanine Lender may take any action and exercise and execute any instrument
which it may deem necessary or advisable to accomplish the purposes hereof; provided,
however, that Mezzanine Lender shall not be permitted to take any action
pursuant to said power-of-attorney that would conflict with any limitation on
Mezzanine Lender’s rights with respect to the Rate Cap Collateral (Second
Mezzanine).  Without limiting the
generality of the foregoing, Mezzanine Lender, after the occurrence of an Event
of Default, shall have the right and power to receive, endorse and collect all
checks and other orders for the payment of money made payable to Mezzanine
Borrower 


 


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representing: 
(i) any payment of obligations owed pursuant to the Interest Rate Cap
Agreement (Second Mezzanine), (ii) interest accruing on any of the Rate Cap
Collateral (Second Mezzanine) or (iii) any other payment or distribution
payable in respect of the Rate Cap Collateral (Second Mezzanine) or any part
thereof, and for and in the name, place and stead of Mezzanine Borrower, to
execute endorsements, assignments or other instruments of conveyance or transfer
in respect of any property which is or may become a part of the Rate Cap
Collateral (Second Mezzanine) hereunder.


(f)            Without limiting any other provision of this Agreement or
any of Mezzanine Borrower’s rights hereunder, and without waiving or releasing
Mezzanine Borrower from any obligation or default hereunder, Mezzanine Lender
shall have the right, but not the obligation, to perform any act or take any
appropriate action, as it, in its reasonable judgment, may deem necessary to
protect Mezzanine Lender’s security interest in the Rate Cap Collateral (Second
Mezzanine) created pursuant to this Agreement, to cure such Event of Default or
to cause any term, covenant, condition or obligation required under this
Agreement or the Interest Rate Cap Agreement (Second Mezzanine) to be performed
or observed by Mezzanine Borrower to be promptly performed or observed on
behalf of Mezzanine Borrower.  All
amounts advanced by, or on behalf of, Mezzanine Lender in exercising its rights
under this Section 9.7(f) (including, but not limited to, reasonable
legal expenses and disbursements incurred in connection therewith), together
with interest thereon at the Default Rate from the date of each such advance,
shall be payable by Mezzanine Borrower to Mezzanine Lender upon demand and
shall be secured by this Agreement.


9.8           Sales of Rate Cap
Collateral (Second Mezzanine).  No
demand, advertisement or notice, all of which are, to the fullest extent
permitted by law, hereby expressly waived by Mezzanine Borrower, shall be required
in connection with any sale or other disposition of all or any part of the Rate
Cap Collateral (Second Mezzanine) following and during the continuance of an
Event of Default, except that Mezzanine Lender shall give Mezzanine Borrower at
least thirty (30) Business Days’ prior written notice of the time and place of
any public sale or of the time when and the place where any private sale or
other disposition is to be made, which notice Mezzanine Borrower hereby agrees
is reasonable, all other demands, advertisements and notices being hereby
waived.  To the extent permitted by law,
Mezzanine Lender shall not be obligated to make any sale of the Rate Cap
Collateral (Second Mezzanine) if it shall determine not to do so, regardless of
the fact that notice of sale may have been given, and Mezzanine Lender may
without notice or publication adjourn any public or private sale, and such sale
may, without further notice, be made at the time and place to which the same
was so adjourned.  Upon each private sale
of the Rate Cap Collateral (Second Mezzanine) of a type customarily sold in a
recognized market and upon each public sale, unless prohibited by any
applicable statute which cannot be waived, Mezzanine Lender (or its nominee or
designee) may purchase any or all of the Rate Cap Collateral (Second Mezzanine)
being sold, free and discharged from any trusts, claims, equity or right of
redemption of Mezzanine Borrower, all of which are hereby waived and released
to the extent permitted by law, and may make payment therefor by credit against
any of the Obligations (Second Mezzanine) in lieu of cash or any other
obligations.  In the case of all sales of
the Rate Cap Collateral (Second Mezzanine), public or private, Mezzanine Borrower
shall pay all reasonable out-of-pocket costs and expenses of every kind for
sale or delivery, including brokers’ and attorneys’ fees and disbursements and
any tax imposed thereon.  However, the
proceeds of sale of Rate Cap Collateral (Second Mezzanine) shall be available
to 


 


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cover such costs and expenses, and, after
deducting such costs and expenses from the proceeds of sale, Mezzanine Lender
shall apply any residue to the payment of the Obligations (Second Mezzanine).


9.9           Public Sales Not
Possible.  Mezzanine Borrower
acknowledges that the terms of the Interest Rate Cap Agreement (Second Mezzanine) may prohibit public
sales, that the Rate Cap Collateral (Second Mezzanine) may not be of the type
appropriately sold at public sales, and that such sales may be prohibited by
law.  As a result, Mezzanine Borrower
agrees that private sales of the Rate Cap Collateral (Second Mezzanine) shall
not be deemed to have been made in a commercially unreasonably manner by mere
virtue of having been made privately.


9.10         Receipt of Sale
Proceeds.  Upon any sale of the Rate
Cap Collateral (Second Mezzanine) by Mezzanine Lender hereunder (whether by
virtue of the power of sale herein granted, pursuant to judicial process or
otherwise), the receipt by Mezzanine Lender or the officer making the sale or
the proceeds of such sale shall be a sufficient discharge to the purchaser or
purchasers of the Rate Cap Collateral (Second Mezzanine) so sold, and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to Mezzanine Lender or such officer or be
answerable in any way for the misapplication or non-application thereof.


9.11         Replacement
Interest Rate Cap Agreement (Second
Mezzanine).  If, in connection
with Mezzanine Borrower’s exercise of any extension option pursuant to Section
5 of the Mezzanine Notes,
Mezzanine Borrower delivers a Replacement Interest Rate Cap Agreement (Second
Mezzanine), all the provisions of this Article IX applicable to the
Interest Rate Cap Agreement (Second
Mezzanine) delivered on the Closing Date shall be applicable to the
Replacement Interest Rate Cap Agreement (Second Mezzanine).


X.                                    MAINTENANCE OF PROPERTY; ALTERATIONS


10.1         Maintenance of
Property.  Mezzanine Borrower shall
cause Mortgage Borrower to keep and maintain, or cause to be kept and
maintained, the Property and every part thereof in good condition and repair,
subject to ordinary wear and tear, and, subject to Excusable Delays and the
provisions of this Agreement with respect to damage or destruction caused by
casualty events or Takings, shall not permit or commit any waste of any portion
of the Property in any material respect. 
Mezzanine Borrower shall not permit Mortgage Borrower to  remove or demolish any Improvement on the
Property except as the same may be necessary in connection with an Alteration
or a restoration in connection with a Taking or casualty, or as otherwise
permitted herein, in each case in accordance with the terms and conditions
hereof.  Without limiting the foregoing,
within one (1) year of the Closing Date, Mezzanine Borrower shall cause
Mortgage Borrower, or shall cause Mortgage Borrower to cause Master Lessee, to
complete the items of deferred maintenance and environmental remediation
identified on Schedule III attached hereto.


10.2         Conditions to
Alteration.  Provided that no Noticed
Default or Event of Default shall have occurred and be continuing hereunder,
Mortgage Borrower and Master Lessee shall have the right, without Mezzanine
Lender’s consent, to undertake any alteration, improvement, demolition or
removal of the Property or any portion thereof (any such alteration,
improvement, 


 


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demolition or removal, an “Alteration”)
so long as (i) Mezzanine Borrower causes Mortgage Borrower to provide Mezzanine
Lender with not less than ten (10) Business Days prior written notice of any
Material Alteration, and (ii) such Alteration is undertaken in accordance with
the applicable provisions of the Master Lease, this Agreement and the other
Mezzanine Loan Documents and in compliance with all applicable Legal
Requirements, is not prohibited by any relevant Operating Agreements and shall
not, upon completion (giving credit to rent and other charges attributable to
Subleases executed upon such completion), have a Material Adverse Effect on the
value, use or operation of the Property taken as a whole or otherwise.  Any Material Alteration shall be conducted
under the supervision of an Architect and, in connection with any Material
Alteration, Mezzanine Borrower shall cause Mortgage Borrower to deliver to
Mezzanine Lender concurrently with the notice of such Material Alteration, for
information purposes only and not for approval by Mezzanine Lender, detailed
plans and specifications, cost estimates therefor as set forth in an Officer’s
Certificate, and an estimated date of completion therefore, which date shall be
not later than the date which is six (6) months prior to the Maturity Date
(unless otherwise consented to in writing by Mezzanine Lender, which consent
shall not be unreasonably withheld, conditioned or delayed), all prepared and
approved by such Architect.  Such plans
and specifications may be revised at any time and from time to time by such
Architect provided that material revisions of such plans and specifications are
filed with Mezzanine Lender, for information purposes only.  All work done in connection with any
Alteration shall be performed with due diligence in a good and workmanlike
manner, all materials used in connection with any Alteration shall not be less
than the standard of quality of the materials currently used at the applicable
Individual Property and all materials used shall be in accordance with all
applicable Legal Requirements and Insurance Requirements.  The cost of any Alteration shall be promptly
and fully paid for, subject to a five percent (5%) retainage, provided that
such retainage shall not be required if such Alteration is being performed by
Master Lessee, an Affiliate of Mortgage Borrower, or an Affiliate of Master
Lessee.  Notwithstanding anything to the
contrary contained in this Section 10.2, Mezzanine Borrower shall cause
Mortgage Borrower to obtain Mezzanine Lender’s prior written approval (which
approval shall not be unreasonably withheld, conditioned or delayed so long as
no Noticed Default or Event of Default shall then exist, and shall be deemed
given unless Mezzanine Lender shall give notice of its disapproval with the
reasons therefor within ten (10) Business Days after Mezzanine Lender’s receipt
of the notice of Material Alteration described in clause (i) of this Section
10.2 above) for any Material Alteration if (x) an 80% Trigger Approval Period
shall then be in effect or existence, or (y) such proposed Material Alteration
is reasonably likely to result in more than a ten percent (10%) reduction in
the pro forma LCR during the twelve (12) months following the commencement of
such proposed Material Alteration.


10.3         Costs of
Alteration.  Notwithstanding anything
to the contrary contained in this Article X, no Alteration which when
aggregated with all other Alterations then being undertaken by Mortgage
Borrower involves costs
estimated in writing by Master Lessee (which costs shall be reasonably
acceptable to Mezzanine Borrower and Mezzanine Lender) to be incurred in
implementing the Alterations exceeds the Material Alteration Collateralization
Threshold, shall be performed by or on behalf of Mortgage Borrower unless
Mezzanine Borrower shall have caused Mortgage Borrower to deliver to Mortgage
Lender Cash and Cash Equivalents and/or a Letter of Credit as security in an
amount not less than the estimated cost of the Alterations minus the Material
Alteration Collateralization Threshold 
(as set forth in the written estimate referred to above).  Mezzanine Borrower shall cause Mortgage
Borrower to deliver to Mortgage Lender 


 


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any security
deposited by the Master Lessee for any Alteration under the Master Lease.  Costs which are subject to retainage
(which in no event shall be less than 5% in the aggregate with respect to each
trade contract) shall be treated as due and payable and unpaid from the date
they would be due and payable but for their characterization as subject to retainage.  In the event that any Material Alteration or
Alteration shall be made in conjunction with any restoration with respect to
which Mortgage Borrower shall be entitled to withdraw Proceeds pursuant to Section
6.2, the amount of the Cash and Cash Equivalents and/or Letter of Credit to
be furnished pursuant hereto need not exceed the aggregate cost of such
restoration and such Material Alteration or Alteration (as estimated by the
Architect), less the sum of the amount of any Proceeds which Mortgage Borrower
may be entitled to withdraw pursuant to Section 6.2 and which are held
by Mortgage Lender in accordance with Section 6.2.  Payment or reimbursement of Mortgage Borrower’s
expenses incurred with respect to any Material Alteration or any such Alteration
shall be accomplished upon the terms and conditions specified in Section 6.2.


Any Cash and Cash Equivalents and/or Letter of Credit deposited
pursuant hereto shall be returned to Mortgage Borrower (or if a Letter of
Credit originally shall have been deposited, returned to Mortgage Borrower upon
the substitution of a Letter of Credit in a lesser amount) as Mortgage Borrower
shall provide written evidence, in form reasonably satisfactory to Mortgage
Lender of (a) the payment of the costs of such Alteration in such amount,
free and clear of Liens (i.e., assuming that the first costs paid are those in
excess of the Material Alteration Collateralization Threshold) or (b) a
reduction in the written estimate of the cost to complete the Material
Alteration or the Alterations (including any retainages) approved by the
Architect and reasonably approved by Mortgage Lender, free and clear of Liens,
other than Permitted Encumbrances.


XI.                                BOOKS AND RECORDS, FINANCIAL STATEMENTS,
REPORTS AND OTHER INFORMATION


11.1         Books and Records.  Mezzanine Borrower shall cause Mortgage
Borrower to keep and maintain on a fiscal year basis proper books and records
separate from any other Person, in which accurate and complete entries shall be
made of all dealings or transactions of or in relation to the Mortgage Notes,
the Property and the business and affairs of Mortgage Borrower relating to the
Property which shall reflect all items of income and expense in connection with
the operation of the Property and in connection with any services, equipment or
furnishings provided in connection with the operation of the Property, in
accordance with GAAP.  Mezzanine Lender
and its authorized representatives shall have the right at reasonable times and
upon reasonable notice to examine the books and records of Mortgage Borrower
and Mezzanine Borrower and to make such copies or extracts thereof as Mezzanine
Lender may reasonably require.


11.2         Financial Statements.


11.2.1      Monthly Reports.  Commencing in November 2007, not later than
thirty (30) days following the end of each calendar month (or, with respect to
calendar months that end on the last day of a Fiscal Quarter, concurrently with
the delivery of the applicable quarterly reports pursuant to Section 11.2.2),
Mezzanine Borrower shall cause Mortgage Borrower to cause Master Lessee,
pursuant to the Master Lease, to deliver to Mezzanine Lender monthly revenue
reports in respect of the Property for such month, for the corresponding month
of the previous 


 


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Fiscal Year and for the year to date, and
financial statements, internally prepared on an accrual basis for such month,
reporting Portfolio Four-Wall EBITDAR
as of the end of such month, for the corresponding month of the previous Fiscal
Year and for the year to date, and a comparison of the year to date results
with (i) the results for the same period of the previous year and (ii) the
Annual Budget for such period and the Fiscal Year, and a calculation of the
LCR, LTV Ratio, Master Lease Variable Additional
Rent and Master Lease Recurrent Additional Rent for such period.  Such
statements for each month shall: (A) fairly represent the financial condition
and results of operations of Master Lessee and (B) be accompanied by a
Master Lessee Officer’s Certificate certifying to the best of the signer’s
knowledge, that the requirements in clauses (A) and (B) above have been
satisfied.  Such statements shall also be
accompanied by an Officer’s Certificate certifying to the best of the signer’s
knowledge that as of the date of such Officer’s Certificate, (1) no Mortgage
Event of Default exists under the Loan Agreement (Mortgage), the Mortgage Notes
or any other (Mortgage) Loan Document or, if so, specifying the nature and
status of each such Mortgage Event of Default and the action then being taken
by Mortgage Borrower or proposed to be taken to remedy such Mortgage Event of
Default, (2) no Senior Mezzanine Event of Default exists under the Senior
Mezzanine Loan Agreement, the Senior Mezzanine Notes or any other Senior
Mezzanine Loan Document or, if so, specifying the nature and status of each
such Senior Mezzanine Event of Default and the action then being taken by
Senior Mezzanine Borrower or proposed to be taken to remedy such Senior
Mezzanine Event of Default, and (3) no Event of Default exists under this
Agreement, the Mezzanine Notes or any other Mezzanine Loan Document or, if so,
specifying the nature and status of each such Event of Default and the action
then being taken by Mezzanine Borrower or proposed to be taken to remedy such
Event of Default.  Such financial
statements shall contain such other information as shall be reasonably
requested by Mezzanine Lender for purposes of calculations to be made by
Mezzanine Lender pursuant to the terms hereof.  Notwithstanding the foregoing, Mezzanine
Borrower shall cause Mortgage Borrower to deliver promptly to Mezzanine Lender
reports detailing any non recurring charges of Mortgage Borrower or Master
Lessee including, among other things, any charges assessed under any Operating
Agreement.  Subject to Section
11.2.9(b), revenue reports and Portfolio Four-Wall EBITDAR shall each be
prepared on an aggregate basis for all of the Individual Properties.


11.2.2      Quarterly Reports.  Commencing not later than forty-five (45)
days following the end of each Fiscal Quarter (commencing with the Fiscal
Quarter ending in December 31, 2007), Mezzanine Borrower shall cause
Mortgage Borrower to cause Master Lessee, pursuant to the Master Lease, to
deliver to Mezzanine Lender quarterly revenue reports in respect of the
Property and unaudited financial statements, internally prepared on an accrual
basis, reporting Portfolio Four-Wall
EBITDAR as of the end of such Fiscal Quarter and for the corresponding
Fiscal Quarter of the previous year, including a statement of net income (in
respect of the Property) for the year to date and a statement of revenues and
expenses for such Fiscal Quarter, and a comparison of the year to date results
with (i) the results for the same period of the previous year and (ii) the
Annual Budget for such period and the Fiscal Year, and a calculation of the
LCR, LTV Ratio, Master Lease Variable
Additional Rent and Master Lease Recurrent Additional Rent for such
period.  Such statements for each Fiscal Quarter shall: (A) fairly represent
the financial condition and results of operations of Master Lessee and
(B) be accompanied by a Master Lessee Officer’s Certificate certifying to
the best of the 


 


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signer’s
knowledge, that the requirements in clauses (A) and (B) above have been
satisfied.  Such statements shall also be
accompanied by an Officer’s Certificate certifying to the best of the signer’s
knowledge that as of the date of such Officer’s Certificate, (1) no Mortgage
Event of Default exists under the Loan Agreement (Mortgage), the Mortgage Notes
or any other Loan Document (Mortgage), or, if so, specifying the nature and
status of each such Mortgage Event of Default and the action then being taken
by Mortgage Borrower or proposed to be taken to remedy such Mortgage Event of
Default, (2) no Senior Mezzanine Event of Default exists under the Senior
Mezzanine Loan Agreement, the Senior Mezzanine Notes or any other Senior
Mezzanine Loan Document or, if so, specifying the nature and status of each
such Senior Mezzanine Event of Default and the action then being taken by
Senior Mezzanine Borrower or proposed to be taken to remedy such Senior
Mezzanine Event of Default, (3) no Event of Default exists under this Agreement,
the Mezzanine Notes or any other Mezzanine Loan Document or, if so, specifying
the nature and status of each such Event of Default and the action then being
taken by Mezzanine Borrower or proposed to be taken to remedy such Event of
Default and (4) that as of the date of each Officer’s Certificate, no
litigation exists involving Mortgage Borrower, Master Lessee or the Property in
which the amount involved is $5,000,000 (in the aggregate) or more or in which
all or substantially all of the potential liability is not covered by
insurance, or, if so, specifying such litigation and the actions being taken in
relation thereto.  Such financial
statements shall contain such other information as shall be reasonably
requested by Mezzanine Lender for purposes of calculations to be made by
Mezzanine Lender pursuant to the terms hereof.


11.2.3      Annual Reports.  Not later than one-hundred twenty (120) days
after the end of each Fiscal Year of Mortgage Borrower’s operations (commencing
with the Fiscal Year ending in December 31, 2007), Mezzanine Borrower
shall cause Mortgage Borrower to cause Master Lessee, pursuant to the Master
Lease, to deliver to Mezzanine Lender annual revenue reports in respect of the
Property, audited financial statements for Master Lessee certified by an
Independent Accountant in accordance with GAAP which shall contain unaudited
schedules as follows: a statement of Master Lessee’s net income for the Fiscal
Year and for the fourth Fiscal Quarter thereof and a statement of Master Lessee’s
revenues and expenses for such year, and stating in comparative form the
figures for the previous fiscal year, and a calculation of the LCR, LTV Ratio, Master Lease Variable Additional Rent and
Master Lease Recurrent Additional Rent for such period.  Such annual financial statements shall: (A) fairly represent the financial condition
and results of operations of Master Lessee and (B) be accompanied by a Master
Lessee Officer’s Certificate in the form required pursuant to Section
11.2.1 and a schedule which reflects the amount
by which actual operating expenses were greater than or less than operating
expenses anticipated in the applicable Annual Budget.


11.2.4      Disclosure Restrictions.  Notwithstanding anything to the contrary
contained in this Article XI, unless such information is otherwise
disclosed publicly by Mezzanine Borrower, Senior Mezzanine Borrower, or
Mortgage Borrower, Mezzanine Borrower shall not be required to deliver or cause
to be delivered financial information hereunder to Mezzanine Lender to the
limited extent and only during any such period that any applicable federal or
state securities laws or regulations promulgated thereunder (a) expressly
prohibit such delivery or (b) permit such delivery to be made to Mezzanine
Lender only when also disclosed publicly.


11.2.5      Capital Expenditures Summaries.  Mezzanine Borrower shall cause Mortgage
Borrower, or shall cause Mortgage Borrower to cause Master Lessee to, within
ninety (90) days after the end of each calendar year during the term of the Mezzanine Notes, deliver to
Mezzanine 


 


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Lender an annual summary of any
and all capital expenditures made at the Property during the prior twelve (12)
month period.


11.2.6      Master Lease.  Without duplication of any other provision of
this Agreement or any other Mezzanine Loan Documents, Mezzanine Borrower shall
cause Mortgage Borrower to deliver to Mezzanine Lender, within ten (10)
Business Days of the receipt thereof by Mortgage Borrower, a copy of all
reports prepared by Master Lessee pursuant to the Master Lease, including,
without limitation, the Annual Budget and any inspection reports.


11.2.7      Annual Budget; Operating Agreement Annual
Budgets.


(a)           Mezzanine
Borrower shall cause Mortgage Borrower, or shall cause Mortgage Borrower to
cause Master Lessee to deliver to Mezzanine Lender the Annual Budget for
Mezzanine Lender’s review, but not approval, prior to the expiration of each
Fiscal Year.  Any proposed modifications
to such Annual Budget shall be delivered to Mezzanine Lender for its review,
but not approval.  Notwithstanding the
foregoing, while an 80% Trigger Approval Period shall exist, Mezzanine Lender
shall have the right to approve all aspects of the Annual Budget relating to
expenditures for FF&E, which approval shall not be unreasonably withheld,
delayed or conditioned.


(b)           Mezzanine
Borrower shall cause Mortgage Borrower, or shall cause Mortgage Borrower to
cause Master Lessee to deliver to Mezzanine Lender the annual budget and any
modifications thereto under any Operating Agreement for Mezzanine Lender’s
review, but not approval, prior to Mortgage Borrower’s or Master Lessee’s
approval of any such annual budget or modification.  Notwithstanding the foregoing, upon the
occurrence and during the continuation of an Event of Default and if there is a
Master Lease Tenant Default, Mezzanine Lender shall have the right to exercise
any right of approval that Mezzanine Borrower, on behalf of Mortgage Borrower,
may have to approve the annual budgets and any amendments thereto under any
Operating Agreements subject to any constraints in the Operating Agreement in
question, in its sole and absolute discretion.


11.2.8      Other
Information.  Mezzanine Borrower
shall cause Mortgage Borrower to, promptly after written request by Mezzanine
Lender, furnish or cause to be furnished to Mezzanine Lender, in such manner
and in such detail as may be reasonably requested by Mezzanine Lender, such
reasonable additional information as may be reasonably requested with respect
to the Property, Mortgage Borrower, Mezzanine Borrower, Senior Mezzanine
Borrower, Master Lessee or any Guarantor.


11.2.9      Proprietary Information.


(a)           The
Mezzanine Lender shall keep confidential all revenue reports and any other
proprietary information delivered to Mezzanine Lender pursuant to this
Agreement, (provided any such other proprietary information is clearly marked
by Mezzanine Borrower, Senior Mezzanine Borrower, or Mortgage Borrower as
confidential) (collectively, “Proprietary Information”), including
specifically, but not limited to, any financial information provided pursuant
to this Article XI. 
Notwithstanding the foregoing, Mezzanine Lender shall be permitted to
freely deliver Proprietary Information to Rating Agencies, and Servicer, to
prospective 


 


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participants and purchasers of the Loan and interests therein other
than the Proscribed Assignee, and to its and their respective agents and
representatives provided that Mezzanine Lender shall inform such parties of the
confidential nature of such information.


(b)           Notwithstanding
anything to the contrary contained herein, Mezzanine Borrower shall not
identify any specific property to which any Proprietary Information relates (“Asset-Specific
Proprietary Information”) (and shall not be required to permit inspection
of Property-specific information contained in its or Mortgage Borrower’s books
and records) unless requested by holders or prospective holders of (a) the Loan
or any interest therein or (b) the unrated or lower-rated securities backed by
the Mortgage Loan (collectively, “Requesting Parties”).  Mezzanine Lender shall be permitted to
deliver Asset-Specific Proprietary Information to Requesting Parties that
request such information (and such Requesting Parties shall be permitted to
inspect Property-specific information contained in its or Mortgage Borrower’s
books and records), provided that each such Person (i) executes a
commercially reasonable confidentiality agreement with respect to such
information for the benefit of Mortgage Borrower, Senior Mezzanine Borrower,
Mezzanine Borrower and Master Lessee and (ii) is not the Proscribed Assignee.


XII.                            ENVIRONMENTAL MATTERS


12.1         Representations.  Mezzanine Borrower hereby represents and
warrants that except as set forth in the environmental reports and studies
delivered to Mezzanine Lender prior to the Closing Date (the “Environmental
Reports”) or as would not reasonably be expected to have a Material Adverse
Effect, (i) none of Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage
Borrower has engaged in or, to the Mezzanine Borrower’s knowledge, permitted
any operations or activities upon, or any use or occupancy of the Property, or
any portion thereof, for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials on, under, in or about the
Property, or transported any Hazardous Materials to, from or across the
Property, except in all cases in compliance with Environmental Laws; (ii) to
Mezzanine Borrower’s knowledge, no tenant, occupant or user of the Property, or
any other Person, has engaged in or permitted any operations or activities
upon, or any use or occupancy of the Property, or any portion thereof, for the
purpose of or in any material way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of any Hazardous Materials on, in or about the Property, or transported
any Hazardous Materials to, from or across the Property, except in all cases in
compliance with Environmental Laws; (iii) to the Mezzanine Borrower’s
knowledge, no Hazardous Materials are presently constructed, deposited, stored,
or otherwise located on, under, in or about the Property except in compliance
with Environmental Laws; (iv) to the best of Mezzanine Borrower’s knowledge, no
Hazardous Materials have migrated from the Property upon or beneath other
properties which would reasonably be expected to result in material liability
for Mortgage Borrower, Senior Mezzanine Borrower or Mezzanine Borrower; and (v)
to the Mezzanine Borrower’s knowledge, no Hazardous Materials have migrated or
threaten to migrate from other properties upon, about or beneath the Property
which would reasonably be expected to result in material liability for Mortgage
Borrower, Senior Mezzanine Borrower or Mezzanine Borrower.


 


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12.2         Covenants.


12.2.1      Compliance with Environmental Laws.  Subject to Section 7.3 and Mortgage Borrower’s
right to contest under Section 7.3 of the Loan Agreement (Mortgage),
Mezzanine Borrower covenants and agrees with Mezzanine Lender that it shall,
and shall cause the Mortgage Borrower and the Property to, comply with all
Environmental Laws, except for any such
non-compliance that would not reasonably be expected to have a Material Adverse
Effect.  If the Pledge is
foreclosed, Mezzanine Borrower shall cause Mortgage Borrower to deliver the
Property in compliance with all applicable Environmental Laws.


12.2.2      Notices Regarding Environmental Events.  If at
any time prior to the repayment in full of the Obligations (Second Mezzanine),
a Governmental Authority having jurisdiction over the Property requires, in
writing, remedial action to correct the presence of Hazardous Materials in,
around, or under the Property (an “Environmental Event”), Mezzanine
Borrower shall or shall cause Mortgage Borrower to deliver prompt notice of the
occurrence of such Environmental Event to Mezzanine Lender.  Within thirty (30) days after Mezzanine
Borrower or Mortgage Borrower has knowledge of the occurrence of an
Environmental Event, Mezzanine Borrower shall or shall cause Mortgage Borrower
to deliver to Mezzanine Lender an Officer’s Certificate (an “Environmental
Certificate”) explaining the Environmental Event in reasonable detail and
setting forth the proposed remedial action, if any.


12.2.3      Other Notices.  Mezzanine Borrower shall or
shall cause Senior Mezzanine Borrower and Mortgage Borrower to promptly provide
Mezzanine Lender with copies of all written notices which allege or identify
any actual or potential violation or noncompliance received by or prepared by
or for Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage Borrower in
connection with any Environmental Law. 
For purposes of this paragraph, the term “notice” shall mean any
summons, citation, directive, order, claim, pleading, letter, application,
filing, report, findings, declarations or other written materials pertinent to
compliance of the Property, Mortgage Borrower, Senior Mezzanine Borrower
or  Mezzanine Borrower with such
Environmental Laws.


12.3         Environmental
Reports.  Upon the occurrence and
during the continuance of an Environmental Event with respect to the Property
or any Event of Default, Mezzanine Lender shall have the right to have its
consultants perform an environmental audit of the Property.  Such audit shall be conducted by an
environmental consultant chosen by Mezzanine Lender and may include a visual
survey, a non-privileged record review, an area reconnaissance assessing the
presence of hazardous or toxic waste or substances, PCBs or storage tanks at
the Property, an asbestos survey of the Property, which may include random
sampling of the Improvements and air quality testing, and such further site
assessments as Mezzanine Lender may reasonably require due to the results
obtained from the foregoing, provided that if
such audit shall be undertaken with respect to an Environmental Event, such
audit shall be limited to a scope reasonably necessary to assess the subject
matter of the Environmental Event. 
Subject to applicable Gaming Laws, Mezzanine Borrower grants (and shall
cause Mortgage Borrower to grant to) Mezzanine Lender, its agents, consultants
and contractors the right to enter the Property as reasonable or appropriate
for the circumstances, during normal business hours on Business Days upon
reasonable advance written notice, for the purposes of performing such studies
and the reasonable cost of such studies shall be due and payable by Mezzanine
Borrower to Mezzanine Lender upon demand and shall be secured by the Lien of
this Agreement and the Pledge.  Mezzanine
Lender shall not unreasonably interfere with, and Mezzanine Lender shall 


 


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direct the environmental consultant to use
its commercially reasonable efforts not to hinder, Mortgage Borrower’s, Master
Lessee’s or any Tenant’s or other occupant’s operations upon the Property when
conducting such audit, sampling or inspections. 
By undertaking any of the measures identified in and pursuant to this Section
12.3, Mezzanine Lender shall not be deemed to be exercising any control
over the operations of Mortgage Borrower or Mezzanine Borrower, Senior
Mezzanine Borrower or the handling of any environmental matter or hazardous
wastes or substances of Mortgage Borrower, Senior Mezzanine Borrower or
Mezzanine Borrower for purposes of incurring or being subject to liability
therefor.


12.4         Environmental
Indemnification.  Mezzanine Borrower,
at its sole cost and expense, shall protect, indemnify, save, defend (at trial
and at appellate levels and with attorneys, consultants and experts selected by
Mezzanine Borrower and reasonably acceptable to Indemnified Parties), and hold
harmless the Indemnified Parties from and against any and all liability, loss,
lien, damage, obligations, settlement payments, penalties, assessments,
citations, directives, litigation, actions, demands, defenses, proceedings, causes
of action, costs, disbursements, or expenses of any kind or of any nature
whatsoever (including, without limitation, but subject to the provisions
hereof, reasonable attorneys’, consultants’ and experts’ fees and disbursements
reasonably incurred in investigating, defending against, settling or
prosecuting any claim, litigation or proceeding) and any and all claims, suits
and judgments which may at any time be imposed upon, incurred by or asserted or
awarded against any Indemnified Party or any Individual Property, as a result
of or with respect to or arising from or out of:  (a) any Environmental Claim relating to or
arising from the Property; (b) the violation of any Environmental Law in
connection with the Property; (c) any actual or threatened release, spill, or
the presence of any Hazardous Materials affecting the Property; (d) the
presence at, in, on or under, or the release, escape, seepage, leakage,
discharge or migration at or from, the Property of any Hazardous Materials,
whether or not such condition was known or unknown to Mezzanine Borrower; (e)
the actual or threatened presence, release, seepage, leakage, discharge or
migration of Hazardous Materials at any other location if the Hazardous
Materials were generated, treated, stored, transported or disposed of by or on
behalf of the Mortgage Borrower or Mezzanine Borrower; (f) the failure of
Mezzanine Borrower to comply fully with the terms and conditions of this
Article XII; or (g) the enforcement of this Article XII, including, without limitation,
(i) the reasonable costs of assessment, containment and/or removal of any and
all Hazardous Materials from all or any portion of any Individual Property, any
adjacent areas, (ii) the costs of any actions taken in response to an actual or
threatened release, escape, seepage, leakage, discharge, migration or presence
of any Hazardous Materials on, in, under or affecting all or any portion of any
Individual Property, any adjacent areas, or any other areas to prevent or
minimize such actual or threatened release, escape, seepage, leakage,
discharge, migration or presence of any Hazardous Materials so that it does not
migrate or otherwise cause or threaten danger to present or future public
health, safety, welfare or the environment, and (iii) costs incurred to comply
with the Environmental Laws in connection with all or any portion of any
Individual Property, any adjacent areas, or any other areas for violations;
provided that, in each case, Mezzanine Borrower shall be relieved of its
obligation under this subsection if any of the matters referred to in clauses
(a) through (g) above did not occur (but need not have been discovered) prior
to (1) the foreclosure of the Pledge or (2) the delivery by Mezzanine Borrower
to Mezzanine Lender or its designee of a transfer-in-lieu of foreclosure with
respect to the Ownership Interests.  If
any such action or other proceeding shall be brought against Mezzanine Lender,
upon written notice from Mezzanine Borrower to Mezzanine Lender (given
reasonably 


 


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promptly following Mezzanine Lender’s notice
to Mezzanine Borrower of such action or proceeding), Mezzanine Borrower shall
be entitled to assume the defense thereof, at Mezzanine Borrower’s expense,
with counsel reasonably acceptable to Mezzanine Lender; provided, however,
Mezzanine Lender may, at its own expense, retain separate counsel to
participate in such defense, but such participation shall not be deemed to give
Mezzanine Lender a right to control such defense, which right Mezzanine
Borrower expressly retains. 
Notwithstanding the foregoing, each Indemnified Party shall have the
right to employ separate counsel at Mezzanine Borrower’s expense if, in the
reasonable opinion of legal counsel, a conflict or potential conflict exists
between the Indemnified Party and Mezzanine Borrower that would make such
separate representation advisable. 
Mezzanine Borrower shall have no obligation under this Section 12.4
to indemnify an Indemnified Party for any liability, loss, lien, damage,
obligations, settlement payments, penalties, assessments, citations,
directives, litigation, actions, demands, defenses, proceedings, causes of
action, costs, disbursements, or expenses of any kind or of any nature
whatsoever (including, without limitation, but subject to the provisions
hereof, reasonable attorneys’, consultants’ and experts’ fees and disbursements
reasonably incurred in investigating, defending against, settling or
prosecuting any claim, litigation or proceeding) and any and all claims, suits
and judgments resulting from any Indemnified Party’s gross negligence or
willful misconduct.


12.5         Recourse Nature of
Certain Indemnifications. 
Notwithstanding anything to the contrary provided in this Agreement or
in any other Mezzanine Loan Document, the indemnification provided in Section
12.4 shall be fully recourse to Mezzanine Borrower and shall be independent
of, and shall survive, the discharge of the Indebtedness, the release of the
Liens created by this Agreement and the Pledge, and/or the conveyance of title
to the Collateral to Mezzanine Lender or any purchaser or designee in
connection with a foreclosure of the Collateral pursuant to the Pledge or this
Agreement, or transfer in lieu of foreclosure.


XIII.                        THE OPERATING AGREEMENTS


13.1         Operating
Agreement Representations, Warranties. 
Mezzanine Borrower hereby represents and warrants as follows:


(a)           the Operating
Agreements to which Mortgage Borrower or any Borrower Party or Master Lessee is
a party or is bound are, or will be as of the Closing Date, in full force and
effect, and have not been amended, restated, modified, supplemented, replaced
or assigned except as indicated on the applicable schedule attached hereto or
the Security Instruments and Mezzanine Borrower has not caused Mortgage
Borrower to waive, cancel or surrender any of its rights thereunder;


(b)           none of the
Contemplated Transactions in any case: (1) requires the consent or approval of
or notice to any party to any Operating Agreement, other than consents obtained
prior to the date hereof and notices delivered prior to or on the date hereof
or (2) will constitute a default under any Operating Agreement
that would have a Material Adverse Effect;


 


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(c)           none of the
Operating Agreements requires the continued use of any Individual Property (i)
under any designated trade name or (ii) for any single designated required use
(other than use categories such as hotel and casino operations or similarly
broad categories that would not have a Material Adverse Effect);


(d)           all sums, charges, fees, costs, expenses, rent, additional
rent, common charges, common area maintenance charges and other charges or
assessments reserved in or payable under the Operating Agreements, including
without limitation, all sums, charges, fees, assessments, costs, and expenses
in connection with any taxes, site preparation and construction,
non-shareholder contributions, and common area and other property management
activities, are current (except for any of the same which are being contested
in accordance with Section 7.3), and no Lien (other than the Existing
Matters of Record) with respect thereto has attached on any Individual Property
(or threat thereof been made in writing) for failure to pay any of the
foregoing;


(e)           Mortgage Borrower has not delivered or received any
notices of default under any of the Operating Agreements and is not in default
under any material terms of any of the Operating Agreements, except as to the
extent that such default would not reasonably be expected to
result in a  Material Adverse Effect;


(f)            To the best of Mezzanine Borrower’s knowledge, no Fee
Owner or other party to any Operating Agreement is in default under any of the
terms of any of the Operating Agreements and there are no circumstances which,
with the passage of time or the giving of notice, or both, would constitute a
default under any terms of any of the Operating Agreements by any such Fee
Owner or other party that would have a Material Adverse Effect;


(g)           Mezzanine Borrower has caused Mortgage Borrower to deliver
to Mezzanine Lender a true, accurate and complete copy of each of the Operating
Agreements;


(h)           All construction obligations of Mortgage Borrower under
all Operating Agreements have been satisfied in all material respects; and


(i)            To the best of Mezzanine Borrower’s knowledge, all
easements granted pursuant to any Operating Agreement which were to have
survived the site preparation and completion of construction, remain in full
force and effect and have not been released, terminated, extinguished or
discharged by agreement or otherwise, except to the extent it
would not be expected to result in a Material Adverse Effect.


13.2        Cure by Mezzanine
Lender.  In the event of a default by
Mortgage Borrower in the performance of any of its obligations under any
Operating Agreement beyond any applicable notice and cure periods therein,
including, without limitation, any default in the payment of any sums payable
thereunder, then, in each and every such case, Mezzanine Lender may, at its
option, cause the default or defaults to be remedied and otherwise exercise any
and all rights of Mortgage Borrower thereunder in the name of and on behalf of
Mortgage Borrower.  Mezzanine Borrower
shall cause Mortgage Borrower, on demand, reimburse Mezzanine Lender for all
advances made and reasonable out-of-pocket expenses incurred by Mezzanine
Lender in curing any such default (including, without limitation, reasonable
attorneys’ fees and disbursements), 


 


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together with interest thereon computed at
the Default Rate from the date that such advance is made to and including the
date the same is paid to Mezzanine Lender.


13.3        Option to Renew or
Extend the Ground Lease.  Mezzanine
Borrower shall cause Mortgage Borrower to give Mezzanine Lender written notice
of its intention to exercise each and every option, if any, to renew or extend
the term of any of the Ground Leases, at least thirty (30) days prior to the
expiration of the time to exercise such option under the terms thereof.  If required by Mezzanine Lender, Mezzanine
Borrower shall cause Mortgage Borrower to duly exercise any renewal or
extension option with respect to any of the Ground Leases if Mezzanine Lender
reasonably determines that the exercise of such option is necessary to protect
Mezzanine Lender’s security for the Loan. 
If Mezzanine Borrower intends to cause Mortgage Borrower to renew or
extend the term of any of the Ground Leases, it shall deliver to cause to be
delivered to Mezzanine Lender, with the notice of such decision, a copy of the
notice of renewal or extension delivered to the applicable Fee Owner, together
with the terms and conditions of such renewal or extension.  If Mezzanine Borrower does not cause Mortgage
Borrower to renew or extend the term of a Ground Lease, Mezzanine Lender may,
at its option if Mezzanine Lender reasonably determines that the exercise of
such option is necessary to protect Mezzanine Lender’s security for the Loan,
exercise the option to renew or extend in the name of and on behalf of Mortgage
Borrower.  Mezzanine Borrower, on behalf
of Mortgage Borrower, hereby irrevocably appoints Mezzanine Lender as its
attorney-in-fact, coupled with an interest, to execute and deliver, for and in
the name of Mortgage Borrower, all instruments and agreements necessary under
the Ground Leases or otherwise to cause any renewal or extension of the Ground
Leases in accordance with this Section 13.3.


13.4        Operating Agreement Covenants.


13.4.1     Waiver of Interest In New Ground Lease.  In the event any of the Ground Leases shall
be terminated by reason of a default thereunder by Mortgage Borrower and
Mezzanine Lender shall require that the related Fee Owner enter into a new
ground lease, Mezzanine Borrower, on behalf of Mortgage Borrower, hereby waives
any right, title and interest in and to such new ground lease or the leasehold
estate created thereby, waiving all rights of redemption now or hereafter
operable under any law.


13.4.2     No Election to Terminate.  Mezzanine Borrower shall not permit Mortgage
Borrower to elect to treat any of the Operating Agreements as terminated,
canceled or surrendered pursuant to the applicable provisions of the Bankruptcy
Code (including, without limitation, Section 365(h)(1) thereof) without
Mezzanine Lender’s prior written consent in the event a bankruptcy of a Fee
Owner or any other party to an Operating Agreement.  In addition, to the extent not prohibited by
applicable law, Mezzanine Borrower shall cause Mortgage Borrower, in the event
of a bankruptcy of Fee Owner or any other party to an Operating Agreement, to
reaffirm and ratify the legality, validity, binding effect and enforceability
of such Operating Agreement and shall remain in possession of the Property, the
Leasehold Estate and the other rights granted pursuant to the Operating
Agreements, notwithstanding any rejection thereof by Fee Owner, any other party
to any Operating Agreement, or any trustee, custodian or receiver.


 


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13.4.3     Notice Prior to Rejection.  Mezzanine Borrower shall cause Mortgage
Borrower to give Mezzanine Lender not less than thirty (30) days prior written
notice of the date on which Mortgage Borrower shall apply to any court or other
Governmental Authority for authority and permission to reject an Operating
Agreement in the event that there shall be filed by or against Mortgage
Borrower any petition, action or proceeding under the Bankruptcy Code or under
any other similar federal or state law now or hereafter in effect and if
Mortgage Borrower determines to reject an Operating Agreement.  Mezzanine Lender shall have the right, but
not the obligation, to serve upon Mezzanine Borrower within such thirty (30)
day period a notice stating that Mezzanine Lender demands that Mezzanine
Borrower cause Mortgage Borrower to assume such Operating Agreement and assign
same to Mortgage Lender subject to and in accordance with the Loan Agreement
(Mortgage) and the Bankruptcy Code.  If Mezzanine
Lender serves upon Mezzanine Borrower the notice described above, Mezzanine
Borrower shall not permit Mortgage Borrower to seek to reject such Operating
Agreement and shall comply with the demand provided for in the preceding
sentence within fifteen (15) days after the notice shall have been given by
Mezzanine Lender.


13.4.4     Mezzanine Lender Right to Perform.  During the continuance of an Event of
Default, Mezzanine Lender shall have the right, but not the obligation, (i) to
perform and comply with all obligations of Mortgage Borrower under the
Operating Agreements without relying on any grace period provided therein, (ii)
to do and take, without any obligation to do so, such actions as Mezzanine
Lender deems necessary or desirable to prevent or cure any default by Mortgage
Borrower under the Operating Agreements, including, without limitation, any
act, deed, matter or thing whatsoever that Mortgage Borrower may do in order to
cure a default under the Operating Agreements and (iii) subject to the terms of
the Operating Agreements, to enter in and upon the Property or any part thereof
to such extent and as often as Mezzanine Lender deems necessary or desirable in
order to prevent or cure any default of Mortgage Borrower under the Operating
Agreements.  Mezzanine Borrower shall
within five (5) Business Days after written request is made therefor by
Mezzanine Lender, to execute and deliver to Mezzanine Lender or to any party
designated by Mezzanine Lender (including Mortgage Lender), such further
instruments, agreements, powers, assignments, conveyances or the like as may be
reasonably necessary to complete or perfect the interest, rights or powers of
Mezzanine Lender pursuant to this Section or as may otherwise be required by
Mezzanine Lender.


13.4.5     Mezzanine Lender Attorney in Fact.  In the event of any arbitration under or
pursuant to any Operating Agreement in which Mezzanine Lender elects to
participate, Mezzanine Borrower (acting on behalf of Mortgage Borrower) hereby
irrevocably appoints Mezzanine Lender as its true and lawful attorney-in-fact
(which appointment shall be deemed coupled with an interest) to exercise,
during the continuance of an Event of Default, all right, title and interest of
Mezzanine Borrower in connection with such arbitration, including, without
limitation, the right to appoint arbitrators and to conduct arbitration
proceedings on behalf of Mezzanine Borrower and Mezzanine Lender.  All reasonable out-of-pocket costs and
expenses incurred by Mezzanine Lender in connection with such arbitration and
the settlement thereof shall be borne solely by Mezzanine Borrower, including,
without limitation, reasonable attorneys’ fees and disbursements.  Nothing contained in this Section shall
obligate Mezzanine Lender to participate in any such arbitration.


 


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13.4.6     Payment of Sums Due Under Operating
Agreements.  Subject to Section
7.3, Mezzanine Borrower shall cause Mortgage Borrower to pay all rent, additional rent, common charges,
common area maintenance charges and other charges or assessments reserved in or
payable under the Operating Agreements on or prior to the due date thereof.


13.4.7     Performance of Covenants.  Mezzanine Borrower shall cause Mortgage
Borrower promptly to perform and observe in all material respects all of the
terms, covenants and conditions required to be performed and observed by
Mortgage Borrower under the Operating Agreements, the breach of which could
permit any party to an Operating Agreement validly to terminate such Operating
Agreement (including, without limitation, all payment obligations) except in
the case of a Material Sublease where such termination would not have a
Material Adverse Effect, shall do all things commercially reasonable to
preserve and to keep unimpaired its rights under the Operating Agreements,
shall not waive, excuse or discharge any of the material obligations of Fee
Owner or any other party to the Operating Agreements without Mezzanine Lender’s
prior written consent in each instance, and shall diligently and continuously
enforce the material obligations of the Fee Owner and the other parties to the
Operating Agreements except in any such case where same would not have a
Material Adverse Effect.


13.4.8     [Reserved.]


13.4.9     No Modification or Termination.  (a) Mezzanine Borrower shall not permit
Mortgage Borrower, except as permitted hereunder or with the prior written
consent of Mezzanine Lender, not to be unreasonably withheld, (i)to
 institute any action or proceeding to subdivide or partition any
Individual Property other than with respect to Unimproved Parcels in accordance
with the terms of this Agreement, or (ii) materially modify or amend or vote
for or consent to any material modification of or amendment to any Operating
Agreement.


(b)           Mezzanine
Borrower shall not permit Mortgage Borrower to vote for, agree to or acquiesce
in any cancellation, termination or surrender of any Operating Agreement
without the prior written consent of Mezzanine Lender.  Any agreement to which Mortgage Borrower or
its Affiliates is a party whereby any of the Operating Agreements is terminated
or the Property is withdrawn therefrom in violation of the immediately
preceding sentence shall constitute a Transfer prohibited under this Agreement.


13.4.10    Notices
of Default.  Mezzanine
Borrower shall cause Mortgage Borrower to deliver to Mezzanine Lender copies of
any written notice of default by any party under the Operating Agreements, or
of any written notice from Fee Owner or any other party to any of the Operating
Agreements of its intention to terminate such Operating Agreement or to
re-enter and take possession of any portion of the Property, immediately upon
delivery or receipt of such notice, as the case may be.


13.4.11    Delivery
of Information.  Mezzanine Borrower
shall cause Mortgage Borrower promptly to furnish to Mezzanine Lender copies of
such information and evidence as Mezzanine Lender may reasonably request
concerning Mortgage Borrower’s due observance, performance and compliance with
the terms, covenants and conditions of the Operating Agreements.


 


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13.4.12    No
Subordination.  Mezzanine
Borrower shall not permit Mortgage Borrower to consent to the subordination of
the Operating Agreements to any mortgage or other lease of the fee interest in
any portion of the Property, other than the Security Instruments and as
permitted hereunder pursuant to Section 8.8.10.


13.4.13    Further
Assurances.  Mezzanine
Borrower shall cause Mortgage Borrower, at its sole cost and expense, to
execute and deliver to Mezzanine Lender, within five (5) Business Days after
request, such documents, instruments or agreements as may be reasonably
required to permit Mezzanine Lender to cure any default under the Operating
Agreements.


13.4.14    Estoppel
Certificates  In addition to and without limitation
of any obligations of Mezzanine Borrower under Section 2.3.9 and under
any post-closing side letter delivered on the Closing Date, Mezzanine Borrower
shall use commercially reasonable efforts to obtain and deliver to Mezzanine
Lender within thirty (30) days after written demand by Mezzanine Lender, an
estoppel certificate in the applicable form attached hereto from each Fee Owner
and other parties to the Operating Agreements designated by Mezzanine Lender
setting forth, among other things, (i) the name of the parties thereunder, (ii)
that the Operating Agreement is in full force and effect and has not been
modified or, if it has been modified, the date of each modification (together with
copies of each such modification), (iii) the date to which all rent, additional rent, common charges, common
area maintenance charges and other charges or assessments reserved in or
payable under the Operating Agreements have been paid thereunder, (iv) whether
there are any alleged defaults of the lessee under the Operating Agreements
and, if there are, setting forth the nature thereof in reasonable detail, (v)
if any party under the Operating Agreements shall be in default, the default,
and (vi) such other matters as Mezzanine Lender shall reasonably request.


13.4.15    Common
Area/Common Elements Insurance. 
Mezzanine Borrower shall cause Mortgage Borrower to use commercially
reasonable efforts to cause the parties to the Operating Agreements to maintain
the insurance required to be maintained by such parties thereunder and to
deliver any insurance proceeds payable to Mortgage Borrower under such
Operating Agreements to be delivered to Mezzanine Lender.  Without limitation of Mezzanine Borrower’s
obligations under Section 6.1, in the event any party to any Operating
Agreement fails to maintain any insurance coverage required in any Operating
Agreement and the failure would reasonably be expected to have a Material
Adverse Effect, Borrower shall obtain such insurance coverage to satisfy such
requirement.


13.5        Mezzanine Lender
Right to Participate.  Mezzanine
Lender shall have the right, but not the obligation, to proceed in respect of
any claim, suit, action or proceeding relating to the rejection of the Operating
Agreements by Fee Owner or any other party to any Operating Agreement as a
result of a bankruptcy of Fee Owner or any other party to any Operating
Agreement, including, without limitation, the right to file and prosecute any
and all proofs of claims, complaints, notices and other documents in any case
in respect of Fee Owner or any other party to any Operating Agreement under and
pursuant to the Bankruptcy Code.


13.6        No Liability.  Mezzanine Lender shall have no liability or
obligation under the Operating Agreements by reason of its acceptance of the
Pledge, this Agreement and the other Mezzanine Loan Documents.


 


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XIV.                      RESERVED


XV.                           ASSIGNMENTS AND PARTICIPATIONS


15.1        Assignment and
Acceptance.  Each Mezzanine Lender
may assign to one or more Persons, other than any Proscribed Assignee, all or a
portion of its rights and obligations under this Agreement and the other
Mezzanine Loan Documents (including, without limitation, all or a portion of
one or more of the Mezzanine Notes); provided that the parties to each such
assignment shall execute and deliver to Mezzanine Lender, for its acceptance
and recording in the Register (as hereinafter defined), an Assignment and
Acceptance and deliver to Mezzanine Borrower a copy of same.  In addition, each Mezzanine Lender may
participate to one or more Persons, other than any Proscribed Assignee, all or
any portion of its rights and obligations under this Agreement and the other
Mezzanine Loan Documents (including without limitation, all or a portion of one
or more of the Mezzanine Notes) utilizing such documentation to evidence such
participation and the parties’ respective rights thereunder as such Mezzanine
Lender, in its sole discretion, shall elect.


15.2        Effect of
Assignment and Acceptance.  Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in such Assignment and Acceptance, (i) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Mezzanine Lender, as the case may be,
hereunder and such assignee shall be deemed to have assumed such rights and
obligations, and (ii) Mezzanine Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement and the other Mezzanine Loan Documents (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a Mezzanine
Lender’s rights and obligations under this Agreement and the other Mezzanine
Loan Documents, such Mezzanine Lender shall cease to be a party hereto)
accruing from and after the effective date of the Assignment and Acceptance,
except with respect to (A) any payments made by Mezzanine Borrower to such
Mezzanine Lender pursuant to the terms of the Mezzanine Loan Documents after
the effective date of the Assignment and Acceptance and (B) any letter of
credit, cash deposit or other deposits or security (other than the Lien of this
Agreement and the Pledge and the other Mezzanine Loan Documents) delivered to
or for the benefit of or deposited with GACC or JPMC, on behalf of the holders
of the Mezzanine Notes, as Mezzanine Lender, for which GACC or JPMC, as
applicable, on behalf of the holders of the Mezzanine Notes, shall remain
responsible for the proper disposition thereof until such items are delivered
to a party who is qualified as an Approved Bank and agrees to hold the same in
accordance with the terms and provisions of the agreement pursuant to which
such items were deposited.


15.3        Content.  By executing and delivering an Assignment and
Acceptance, Mezzanine Lender and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment
and Acceptance, Mezzanine Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other
Mezzanine Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest 


 


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created or purported to be created under or
in connection with, this Agreement or any other Mezzanine Loan Documents or any
other instrument or document furnished pursuant hereto or thereto; (ii)
Mezzanine Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Mezzanine Borrower or
the performance or observance by Mezzanine Borrower of any of its obligations
under any Mezzanine Loan Documents or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon Mezzanine Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Mezzanine Loan Documents; (v) such assignee appoints
and authorizes Mezzanine Lender to take such action as agent on its behalf and
to exercise such powers and discretion under the Mezzanine Loan Documents as
are delegated to Mezzanine Lender by the terms hereof together with such powers
and discretion as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform, in accordance with their terms, all of the obligations
which by the terms of this Agreement and the other Mezzanine Loan Documents are
required to be performed by Mezzanine Lender.


15.4        Register.  Each Mezzanine Lender shall maintain a copy
of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of Mezzanine Lender and
each assignee pursuant to this Article XV and the principal amount
of the Loan owing to each such assignee from time to time (the “Register”).  The entries in the Register shall, with
respect to such assignees, be conclusive and binding for all purposes, absent
manifest error.  The Register shall be
available for inspection by Mezzanine Borrower or any assignee pursuant to this
Article XV at any reasonable time and from time to time upon
reasonable prior written notice.


15.5        Substitute Mezzanine Notes.  Upon its receipt of an Assignment and
Acceptance executed by an assignee, together with any Mezzanine Note or
Mezzanine Notes subject to such assignment, Mezzanine Lender shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit M hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register, and (iii) give prompt
written notice thereof to Mezzanine Borrower. 
Within five (5) Business Days after its receipt of such notice,
Mezzanine Borrower, at Mezzanine Lender’s expense, shall execute and deliver to
Mezzanine Lender in exchange and substitution for the surrendered Mezzanine
Note or Mezzanine Notes a new Mezzanine Note to the order of such assignee in
an amount equal to the portion of the Loan assigned to it and a new Mezzanine
Note to the order of Mezzanine Lender in an amount equal to the portion of the
Loan retained by it hereunder.  Such new
Mezzanine Note or Mezzanine Notes shall be in an aggregate principal amount
equal to the aggregate then outstanding principal amount of such surrendered
Mezzanine Note or Mezzanine Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the Mezzanine Notes (modified, however, to the extent necessary so as not to
impose duplicative or increased obligations on Mezzanine Borrower and to delete
obligations previously satisfied by Mezzanine Borrower).  Notwithstanding the provisions of this Article XV,
Mezzanine Borrower shall not be responsible or liable for any additional taxes,
reserves, adjustments or other costs and expenses that are related to, or arise
as a result of, any transfer of the Loan or any interest or 


 


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participation therein that arise solely and
exclusively from the transfer of the Loan or any interest or participation
therein or from the execution of the new Mezzanine Note contemplated by this Section 15.5,
including, without limitation, any mortgage tax.  Mezzanine Lender and/or the assignees, as the
case may be, shall from time to time designate one agent through which
Mezzanine Borrower shall request all approvals and consents required or
contemplated by this Agreement and the other Mezzanine Loan Documents and on
whose statements Mezzanine Borrower may rely. 
Mezzanine Lender hereby initially designates Mezzanine Noteholder I as
such agent.


15.6        Participations.  Each assignee pursuant to this Article XV
may sell participations to one or more Persons (other than Mezzanine Borrower
or any of its Affiliates) in or to all or a portion of its rights and
obligations under this Agreement and the other Mezzanine Loan Documents
(including, without limitation, all or a portion of the Mezzanine Note held by
it); provided, however, that (i) such assignee’s obligations under this
Agreement and the other Mezzanine Loan Documents shall remain unchanged, (ii)
such assignee shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such assignee shall remain the
holder of any such Mezzanine Note for all purposes of this Agreement and the
other Mezzanine Loan Documents, and (iv) Mezzanine Borrower, Mezzanine Lender
and the assignees pursuant to this Article XIV shall continue to deal
solely and directly with such assignee in connection with such assignee’s
rights and obligations under this Agreement and the other Mezzanine Loan
Documents.  In the event that more than
one (1) party comprises Mezzanine Lender, Mezzanine Lender shall designate one
party to act on the behalf of all parties comprising Mezzanine Lender in
providing approvals and all other necessary consents under the Mezzanine Loan
Documents and on whose statements Mezzanine Borrower may rely.


15.7        Disclosure of
Information.  Any assignee pursuant
to this Article XIV may, in connection with any subsequent assignment or
participation or subsequent proposed assignment or participation pursuant to
this Article XIV, disclose to the subsequent assignee or participant or
subsequent proposed assignee or participant, any information relating to
Mezzanine Borrower furnished to such assignee by or on behalf of Mezzanine
Borrower; provided, however, that, with respect to any Asset Specific
Proprietary Information, the terms of Section 11.2.9 shall be complied with.


15.8        Security Interest
in Favor of Federal Reserve Bank. 
Notwithstanding any other provision set forth in this Agreement or any
other Mezzanine Loan Document, any assignee pursuant to this Article XIV
may at any time create a security interest in all or any portion of its rights
under this Agreement or the other Mezzanine Loan Documents (including, without
limitation, the amounts owing to it and the Mezzanine Note or Mezzanine Notes
held by it) in favor of any Federal Reserve Bank in accordance with Regulation
A of the Board of Governors of the Federal Reserve System.


 


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XVI.             RESERVED


XVII.           DEFAULTS


17.1        Event of Default.


(a)           Each of the following events shall constitute an event of
default hereunder (an “Event of Default”):


(i)            if (A) the Indebtedness is not paid in full
on the Maturity Date, (B) any regularly scheduled monthly payment of interest
due under the Mezzanine Notes is not paid in full on the applicable Payment
Date, (C) any prepayment of principal due under this Agreement or the Mezzanine
Notes is not paid when due, (D) the Prepayment Fee is not paid when due, (E)
any deposit to the Mezzanine Account is not made on the required deposit date
therefor; or (F) except as to any amount included in (A), (B), (C), (D), and/or
(E) of this clause (i) or in clause (ii), any other amount payable pursuant to
this Agreement, the Mezzanine Notes or any other Mezzanine Loan Document is not
paid in full when due and payable in accordance with the provisions of the
applicable Mezzanine Loan Document, with the failure under this clause (F)
continuing for ten (10) Business Days after Mezzanine Lender delivers written
notice thereof to Mezzanine Borrower;


(ii)           subject to Section 7.3 and Mortgage
Borrower’s right to contest as set forth in Section 7.3 of the Loan
Agreement (Mortgage), if any of the Impositions or Other Charges are not paid
prior to the imposition of any interest, penalty, charge or expense for the
non-payment thereof, provided, that Mezzanine Borrower shall not be
deemed to be in default hereunder in the event (x) funds sufficient for a
required payment of such Imposition or Other Charge under Section 3.1.7(i)
of the Loan Agreement (Mortgage) are
held in the Tax Reserve Account, (y) Mortgage Lender or Cash Management
Bank (Mortgage) fails to timely make payment from such Sub-Account as
contemplated by the Loan Agreement (Mortgage) unless due to the negligence or
willful misconduct of Mezzanine Borrower and (z) Mezzanine Borrower causes
Mortgage Borrower to use best efforts to cause Mortgage Lender and Cash
Management Bank (Mortgage) to make such payment from such Sub-Account;


(iii)          if
the insurance policies required by Section 6.1 are not kept in full
force and effect or if Mezzanine Borrower fails to deliver to Mezzanine Lender
evidence of the insurance required by Section 6.1 at the times required
in such Section with such failure continuing for five (5) Business Days after
the Mezzanine Lender delivers written notice thereof to Mezzanine Borrower,provided, that Mezzanine Borrower
shall not be deemed to be in default hereunder in the event (x) funds
sufficient for a required payment under Section 3.1.7(ii) of the Loan
Agreement (Mortgage) of the premiums required to keep the insurance policies in
full force and effect are held in the
Insurance Reserve Account, (y) Mortgage Lender or Cash Management Bank fails to
timely make payment from such Sub-Account as contemplated by the Loan Agreement
(Mortgage) unless due to the negligence or willful misconduct of Mezzanine
Borrower and (z) Mezzanine Borrower causes Mortgage Borrower to use best
efforts to cause Mortgage Lender and Cash Management Bank (Mortgage) to make
such payment from such Sub-Account;


 


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(iv)          if, except as expressly permitted pursuant
to Article VIII or the other provisions hereof, any of the following
shall occur: (a) any Transfer of any direct or indirect legal, beneficial or
equitable interest in all or any portion of the Property, (b) any Transfer of
any direct or indirect interest in Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, Master Lessee, any
Guarantor or any SPE Entity, (c) any Lien or encumbrance is granted against all
or any portion of the Property or the Collateral, (d) any pledge,
hypothecation, creation of a security interest in or other encumbrance of any
direct or indirect interests in Borrower, Mortgage Borrower, Senior Mezzanine
Borrower, Junior Mezzanine Borrower, Master Lessee, any Guarantor or any SPE
Entity or (e) Mortgage Borrower’s filing of a declaration of condominium with
respect to the Property;


(v)           if
(i) any representation or warranty made by Mezzanine Borrower in Section
4.1.24 shall have been false or misleading in any material respect as of
the date the representation or warranty was made which incorrect, false or
misleading statement is not cured within thirty (30) days after receipt by
Mezzanine Borrower of notice from Mezzanine Lender in writing of such breach or
a longer period of time not to exceed thirty (30) additional days if Mezzanine
Borrower has commenced to cure but cannot cure within the initial thirty (30)
day period or (ii) if any other representation or warranty made by Mezzanine
Borrower herein or by Mezzanine Borrower or any Affiliate of Mezzanine Borrower
in any other Mezzanine Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Mezzanine
Lender shall have been false or misleading in any material respect as of the
date the representation or warranty was made; provided,
however, that if such representation or warranty which was false or
misleading in any material respect is, by its nature, curable and is not
reasonably likely to have a Material Adverse Effect, and such representation or
warranty was not, to the best of Mezzanine Borrower’s knowledge, false or
misleading in any material respect when made, then same shall not constitute an
Event of Default unless Mezzanine Borrower has not cured same within thirty
(30) days after receipt by Mezzanine Borrower of notice from Mezzanine Lender
in writing of such breach;


(vi)          if Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, any Master Lessee
Party, any Guarantor or any SPE Entity shall make an assignment for the benefit
of creditors;


(vii)         if a receiver, liquidator or trustee shall
be appointed for Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, any Junior Mezzanine Borrower, any Master Lessee Party, any Guarantor
or any SPE Entity or Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, any Junior Mezzanine Borrower, any Master Lessee Party, any Guarantor
or any SPE Entity shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, any Master Lessee
Party, any Guarantor or any SPE Entity, or if any proceeding for the
dissolution or liquidation of Mortgage Borrower, Senior Mezzanine Borrower,
Mezzanine Borrower, any Junior Mezzanine Borrower, any Master Lessee Party, any
Guarantor or any SPE Entity shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, any 


 


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Junior Mezzanine Borrower, any Master Lessee
Party, any Guarantor or any SPE Entity upon the same not being discharged,
stayed or dismissed within ninety (90) days;


(viii)        if Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, Master Lessee,
Guarantor or any SPE Entity, as applicable, attempts to assign its rights under
this Agreement or any of the other Mezzanine Loan Documents or any interest
herein or therein in contravention of the Mezzanine Loan Documents;


(ix)          if any of the assumptions contained in the
True Sale Opinion is untrue in any material respect;


(x)           if any of the assumptions contained in the
Non-Consolidation Opinion, in any Additional Non-Consolidation Opinion or in any
other non-consolidation opinion delivered to Mezzanine Lender in connection
with the Loan, or in any other non-consolidation opinion delivered subsequent
to the closing of the Loan, is untrue in any material respect;


(xi)          if any of the assumptions contained in the
True Lease Opinion is untrue in any material respect;


(xii)         if Mezzanine Borrower, having notified
Mezzanine Lender of its election to extend the Maturity Date as set forth in Section
5 of the Mezzanine Notes, fails to deliver the Replacement Interest Rate
Cap Agreement (Second Mezzanine) to Mezzanine Lender not later than one (1)
Business Day prior to the first day of the extended term of the Loan and
Mezzanine Borrower has not prepaid the Loan pursuant to the terms of the
Mezzanine Notes prior to such first day of the extended term;


(xiii)        if Mezzanine Borrower shall fail to comply
in any material respect with any covenants set forth in Section 5.1.4, Section
5.2.9 and 5.2.22;


(xiv)        except as provided clause (xiii) above, if
Mezzanine Borrower shall fail to comply with any covenants set forth in Article
V or Section XI with such failure continuing for ten (10) Business
Days after Mezzanine Lender delivers written notice thereof to Mezzanine
Borrower;


(xv)         Mezzanine Borrower shall fail to deposit any
sums required to be deposited in the Mezzanine Account when due;


(xvi)        if this Agreement or any other Mezzanine
Loan Document or any Lien granted hereunder or thereunder, in whole or in part,
shall terminate or shall cease to be effective or shall cease to be a legally
valid, binding and enforceable obligation of Mezzanine Borrower or any
Guarantor, or any Lien securing the Indebtedness shall, in whole or in part,
cease to be a perfected first priority Lien, subject to the Permitted
Encumbrances (Second Mezzanine) (except in any of the foregoing cases in
accordance with the terms hereof or under any other Mezzanine Loan Document or
by reason of any affirmative act of Mezzanine Lender);


(xvii)       except as expressly permitted pursuant to
the Mortgage Loan Documents, if Mortgage Borrower grants any easement, covenant
or restriction (other than the Permitted Encumbrances) over the Property;


 


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(xviii)      the occurrence of a Mortgage Event of
Default;


(xix)        if
there shall occur any default by Mortgage Borrower, as lessee under any Ground
Lease, in the observance or performance of any term, covenant or condition of
such Ground Lease on the part of Mortgage Borrower to be observed or performed,
and said default is not cured prior to the expiration of any applicable grace
or cure period therein provided, or if any one or more of the events referred
to in a Ground Lease shall occur which would cause such Ground Lease to
terminate without notice or action by the related Fee Owner under such Ground
Lease or if any Leasehold Estate shall be surrendered or any Ground Lease shall
be lawfully terminated or cancelled for any reason or under any circumstances
whatsoever, or if any of the terms, covenants or conditions of any Ground Lease
shall in any manner be modified, changed, supplemented, altered or amended in
contradiction of the provisions of Article XIII without the prior written
consent of Mortgage Lender, which consent shall not be unreasonably withheld,
conditioned or delayed, or if Mortgage Borrower or Master Lessee shall fail to
exercise any option to renew the Ground Lease or shall fail to or neglect to
pursue diligently all actions necessary to exercise such renewal rights
pursuant to the terms of the Ground Lease, provided, that if a default by
Mortgage Borrower under a Ground Lease is a Ground Rent payment default, the
occurrence or failure to cure such default shall not be deemed to be in default
hereunder in the event (x) funds sufficient for a required transfer under Section
3.1.6(a)(iii) of the Loan Agreement (Mortgage) are held in the Ground Rent Reserve Account, (y) Mortgage Lender
or Cash Management Bank (Mortgage) fails to timely make any transfer from such
Sub-Account as contemplated by this Agreement unless due to the negligence or
willful misconduct of Mortgage Borrower and (z) Mezzanine Borrower causes
Mortgage Borrower to use best efforts to cause Mortgage Lender and Cash
Management Bank (Mortgage) to make such payment from such subaccount;


(xx)         the
occurrence of a Senior Mezzanine Event of Default;


(xxi)        Reserved;


(xxii)       Reserved;


(xxiii)      if,
without the prior written consent of Mortgage Lender, any of the material terms
or provisions of any Operating Agreement are modified or amended (in a manner
prohibited by Article XIII;


(xxiv)     Reserved;


(xxv)      if
the Master Lease shall be materially modified without the prior written consent
of Mezzanine Lender, except as expressly permitted hereunder or any other
Mezzanine Loan Document;


(xxvi)     if
Mortgage Borrower shall be in default in any material obligation on the part of
Mortgage Borrower beyond any applicable notice periods and cure periods
pursuant to the terms of the Master Lease;


(xxvii)    if
an Individual Property shall Go Dark and Mortgage Borrower shall not have
caused such Individual Property to reopen for business to the public, obtained
a release of 


 


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such Individual Property or provided a substitute therefor in
accordance with Section 2.3.6 of the Loan Agreement (Mortgage) within
the time period specified for each of the foregoing in such Section; or if an
Individual Property shall Go Dark during any period when any other Individual
Property shall have “Gone Dark”;


(xxviii)   if Mezzanine Borrower shall continue to be
in Default under any of the other terms, covenants or conditions of this
Agreement or of any Mezzanine Loan Document not specified in subsections (i)
to (xxvii) above, for thirty (30) days after notice from Mezzanine Lender; provided,
however, that if such Default is susceptible of cure but cannot
reasonably be cured within such thirty (30) day period and provided further
that Mezzanine Borrower shall have commenced to cure such Default within such
thirty (30) day period and thereafter diligently proceeds to cure the same,
such thirty (30) day period shall be extended for such time as is reasonably
necessary for Mezzanine Borrower in the exercise of due diligence to cure such
Default, such additional period not to exceed ninety (90) days.


(b)           Unless waived in writing by Mezzanine Lender, upon the
occurrence and during the continuance of an Event of Default (other than an
Event of Default described in subsections (a)(vi), (vii) or (viii) above in
respect of Mezzanine Borrower) Mezzanine Lender may, without notice or demand,
in addition to any other rights or remedies available to it pursuant to this
Agreement and the other Mezzanine Loan Documents or at law or in equity, take
such action that Mezzanine Lender deems advisable to protect and enforce its
rights against Mezzanine Borrower and in the Collateral, including, without
limitation, (i) declaring immediately due and payable the entire Principal
Amount together with interest thereon and all other sums due by Mezzanine
Borrower under the Mezzanine Loan Documents, (ii) collecting interest on the
Principal Amount at the Default Rate whether or not Mezzanine Lender elects to
accelerate the Mezzanine Notes and (iii) enforcing or availing itself of any or
all rights or remedies set forth in the Mezzanine Loan Documents against
Mezzanine Borrower and the Collateral, including, without limitation, all
rights or remedies available at law or in equity; and upon any Event of Default
described in subsections (a)(vi) or (a)(vii) above in respect of
Mezzanine Borrower, the Indebtedness and all other obligations of Mezzanine
Borrower hereunder and under the other Mezzanine Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Mezzanine Borrower hereby expressly waives any such notice or demand,
anything contained herein or in any other Mezzanine Loan Document to the
contrary notwithstanding.  The foregoing
provisions shall not be construed as a waiver by Mezzanine Lender of its right
to pursue any other remedies available to it under this Agreement, the Pledge
or any other Mezzanine Loan Document. 
Any payment hereunder may be enforced and recovered in whole or in part
at such time by one or more of the remedies provided to Mezzanine Lender in the
Mezzanine Loan Documents.


(c)           Upon the occurrence of a Mortgage Default or
a Mortgage Event of Default, Mezzanine Borrower shall cause Mortgage Borrower
to deliver to Mezzanine Lender within five (5) Business Days after the first to
occur of (a) receipt by Mortgage Borrower of notice of such Mortgage Default or
Mortgage Event of Default from Mortgage Lender or (b) the date Mortgage
Borrower obtains actual knowledge of the occurrence of such Mortgage Default or
Mortgage Event of Default, a detailed description of the actions to be taken by
Mortgage Borrower to cure such Mortgage Default or Mortgage Event of Default
and the dates by which each such action shall occur.  Such schedule shall be subject to the
approval of Mezzanine Lender.  Mezzanine 


 


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Borrower shall cause Mortgage Borrower to take all such actions as are
necessary to cure such Mortgage Default or Mortgage Event of Default by the
date approved by Mezzanine Lender and shall deliver to Mezzanine Lender not
less frequently than weekly thereafter written updates concerning the status of
Mortgage Borrower’s efforts to cure such Mortgage Default or Mortgage Event of
Default.  Mezzanine Lender shall have the
right, but not the obligation, to pay any sums or to take any action which
Mezzanine Lender deems necessary or advisable to cure any default or alleged
default under the Loan Documents (Mortgage) (whether or not Mortgage Borrower
is undertaking efforts to cure such default), and such payment or such action
is hereby authorized by Mezzanine Borrower, and any sum so paid and any expense
incurred by Mezzanine Lender in taking any such action shall be evidenced by
this Agreement and secured by this Agreement and the Pledge and shall be
immediately due and payable by Mezzanine Borrower to Mezzanine Lender with
interest at the Default Rate until paid. Mezzanine Borrower shall cause
Mortgage Borrower to permit Mezzanine Lender to enter upon the Property for the
purpose of curing any default or alleged default under the Loan Documents
(Mortgage) or hereunder.  Mezzanine
Borrower hereby transfers and assigns any excess proceeds arising from any
foreclosure or sale under power pursuant to the Loan Documents (Mortgage) or
any instrument evidencing the indebtedness secured thereby, and Mezzanine
Borrower hereby authorizes and directs the holder or holders of the Loan
Documents (Mortgage) to pay such excess proceeds directly to Mezzanine Lender
up to the amount of the Obligations (Second Mezzanine).


(d)           Upon the occurrence of a Senior Mezzanine Default or a
Senior Mezzanine Event of Default, Mezzanine Borrower shall cause Senior
Mezzanine Borrower to deliver to Mezzanine Lender within five (5) Business Days
after the first to occur of (a) receipt by Senior Mezzanine Borrower of notice of
such Senior Mezzanine Default or Senior Mezzanine Event of Default from Senior
Mezzanine Lender or (b) the date Senior Mezzanine Borrower obtains actual
knowledge of the occurrence of such Senior Mezzanine Default or Senior
Mezzanine Event of Default, a detailed description of the actions to be taken
by Senior Mezzanine Borrower to cure such Senior Mezzanine Default or Senior
Mezzanine Event of Default and the dates by which each such action shall
occur.  Such schedule shall be subject to
the approval of Mezzanine Lender. 
Mezzanine Borrower shall cause Senior Mezzanine Borrower to take all
such actions as are necessary to cure such Senior Mezzanine Default or Senior
Mezzanine Event of Default by the date approved by Mezzanine Lender and shall
deliver to Mezzanine Lender not less frequently than weekly thereafter written
updates concerning the status of Senior Mezzanine Borrower’s efforts to cure
such Senior Mezzanine Default of Senior Mezzanine Event of Default.  Mezzanine Lender shall have the right, but not
the obligation, to pay any sums or to take any action which Mezzanine Lender
deems necessary or advisable to cure any default or alleged default under the
Senior Mezzanine Loan Documents (whether or not Senior Mezzanine Borrower is
undertaking efforts to cure such default), and such payment or such action is
hereby authorized by Mezzanine Borrower, and any sum so paid and any expense
incurred by Mezzanine Lender in taking any such action shall be evidenced by
this Agreement and secured by this Agreement and the Pledge and shall be
immediately due and payable by Mezzanine Borrower to Mezzanine Lender with
interest at the Default Rate until paid. 
Mezzanine Borrower hereby transfers and assigns any excess proceeds arising
from any foreclosure or sale under power pursuant to the Senior Mezzanine Loan
Documents or any instrument evidencing the indebtedness secured thereby, and
Mezzanine Borrower hereby authorizes and directs the holder 


 


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or holders of the Senior Mezzanine Loan
Documents to pay such excess proceeds directly to Mezzanine Lender up to the
amount of the Obligations (Second Mezzanine).


17.2        Remedies  Unless waived in writing
by Mezzanine Lender, upon the occurrence and during the continuance of an Event
of Default, all or any one or more of the rights, powers, privileges and other
remedies available to Mezzanine Lender against Mezzanine Borrower under this
Agreement or any of the other Mezzanine Loan Documents executed and delivered
by, or applicable to, Mezzanine Borrower or at law or in equity may be
exercised by Mezzanine Lender at any time and from time to time, whether or not
all or any of the Indebtedness shall be declared due and payable, and whether
or not Mezzanine Lender shall have commenced any foreclosure proceeding or
other action for the enforcement of its rights and remedies under any of the
Mezzanine Loan Documents with respect to the Collateral.  Any such actions taken by Mezzanine Lender
shall be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as
Mezzanine Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Mezzanine Lender permitted by law, equity or contract or as set
forth herein or in the other Mezzanine Loan Documents.  Without limiting the generality of the
foregoing, Mezzanine Borrower agrees that if an Event of Default is continuing
(i) Mezzanine Lender shall not be subject to any one action or election of
remedies law or rule and (ii) all liens and other rights, remedies or
privileges provided to Mezzanine Lender shall remain in full force and effect
until Mezzanine Lender has exhausted all of its remedies against the Collateral
and this Agreement and the Pledge have been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Indebtedness or the Indebtedness has been
paid in full.


 


(b)           Upon
the occurrence of any Event of Default, Mezzanine Lender may, but without any
obligation to do so and without notice to or demand on Mezzanine Borrower and
without releasing Mezzanine Borrower from any obligation hereunder, take any
action to cure such Event of Default. 
Mezzanine Lender may appear in, defend, or bring any action or
proceeding to protect its interests in the Collateral or to foreclose its
security interest under this Agreement and the Pledge or under any of the other
Mezzanine Loan Documents or collect the Indebtedness.


(c)           Upon the occurrence and during the continuance of an Event
of Default, with respect to the Account Collateral (Second Mezzanine), the
Mezzanine Lender may:


(i)            without notice to Mezzanine Borrower,
except as required by law, and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Account Collateral (Second
Mezzanine), against the Obligations (Second Mezzanine), operating expenses
and/or capital expenditures for the Property or any part thereof;


(ii)           in Mezzanine Lender’s sole discretion, at
any time and from time to time, exercise any and all rights and remedies
available to it under this Agreement, and/or as a secured party under the UCC;


 


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(iii)          demand, collect, take possession of or
receipt for, settle, compromise, adjust, sue for, foreclose or realize upon the
Account Collateral (Second Mezzanine), (or any portion thereof) as Mezzanine
Lender may determine in its sole discretion; and


(iv)          take all other actions provided in, or
contemplated by, this Agreement.


(d)           With respect to Mezzanine Borrower, the Account Collateral
(Second Mezzanine), the
Rate Cap Collateral (Second Mezzanine) and the Collateral, nothing contained
herein or in any other Mezzanine Loan Document shall be construed as requiring
Mezzanine Lender to resort to the Collateral for the satisfaction of any of the
Indebtedness, and Mezzanine Lender may seek satisfaction out of the Collateral
or any part thereof, or exercise its rights under this Agreement, the Pledge or
the other Mezzanine Loan Documents, in its absolute discretion in respect of
the Indebtedness.  In addition, Mezzanine
Lender shall have the right from time to time to partially foreclose or exercise
remedies under this Agreement, the Pledge and the other Mezzanine Loan
Documents, in any manner and for any amounts secured by this Agreement, the
Pledge or the other applicable Mezzanine Loan Documents then due and payable as
determined by Mezzanine Lender in its sole discretion including, without
limitation, the following circumstances: (i) in the event Mezzanine Borrower
defaults beyond any applicable grace period in the payment of one or more
scheduled payments of principal or interest, Mezzanine Lender may foreclose
under this Agreement, the Pledge and the applicable Mezzanine Loan Documents to
recover such delinquent payments, or (ii) in the event Mezzanine Lender elects
to accelerate less than the entire outstanding principal balance of the Loan,
Mezzanine Lender may foreclose under this Agreement, the Pledge and the other
applicable Mezzanine Loan Documents to recover so much of the principal balance
of the Loan as Mezzanine Lender may accelerate and such other sums secured by
this Agreement, the Pledge and the other applicable Mezzanine Loan Documents as
Mezzanine Lender may elect. 
Notwithstanding one or more partial foreclosures, the Collateral shall
remain subject to this Agreement, the Pledge and the applicable Mezzanine Loan
Documents to secure payment of sums secured by this Agreement, the Pledge and
the applicable Mezzanine Loan Documents and not previously recovered.


17.3        Remedies Cumulative; Waivers.  The
rights, powers and remedies of Mezzanine Lender under this Agreement and the
Pledge shall be cumulative and not exclusive of any other right, power or
remedy which Mezzanine Lender may have against Mezzanine Borrower pursuant to
this Agreement or the other Mezzanine Loan Documents, or existing at law or in
equity or otherwise.  Mezzanine Lender’s
rights, powers and remedies may be pursued singly, concurrently or otherwise,
at such time and in such order as Mezzanine Lender may determine in Mezzanine
Lender’s sole discretion.  No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient.  A waiver of one Default or Event of Default
with respect to Mezzanine Borrower or any Guarantor shall not be construed to
be a waiver of any subsequent Default or Event of Default by Mezzanine Borrower
or any Guarantor or to impair any remedy, right or power consequent thereon.


17.4        Costs of Collection.  In the event that after an Event of Default: 
(i) the Mezzanine Notes or any of the Mezzanine Loan Documents is placed
in the hands of an attorney for collection or enforcement or is collected or
enforced through any legal proceeding; (ii) an 


 


125

















 


attorney is retained to
represent Mezzanine Lender in any bankruptcy, reorganization, receivership, or
other proceedings affecting creditors’ rights and involving a claim under this
Agreement the Mezzanine Notes or any of the Mezzanine Loan Documents; or (iii)
an attorney is retained to protect or enforce the lien or any of the terms of
this Agreement, any Pledge or any of the Mezzanine Loan Documents; then
Mezzanine Borrower shall pay to Mezzanine Lender all reasonable attorney’s
fees, costs and expenses actually incurred in connection therewith, including
costs of appeal, together with interest on any judgment obtained by Mezzanine
Lender at the Default Rate (collectively, “Enforcement Costs”).


 


XVIII.            SPECIAL PROVISIONS


18.1        Exculpation.


18.1.1     Exculpated Parties.  Except as set forth in this Section 18.1
and the Recourse Guaranty, no personal liability shall be asserted, sought or
obtained by Mezzanine Lender or enforceable against (i) Mezzanine Borrower,
(ii) any Affiliate of Mezzanine Borrower, (iii) any Person owning, directly or
indirectly, any legal or beneficial interest in Mezzanine Borrower or any
Affiliate of Mezzanine Borrower or (iv) any direct or indirect partner, member,
principal, officer, Controlling Person, beneficiary, trustee, advisor,
shareholder, employee, agent, Affiliate or director of any Persons described in
clauses (i) through (iii) above (collectively, the “Exculpated Parties”)
and none of the Exculpated Parties shall have any personal liability (whether
by suit deficiency judgment or otherwise) in respect of the Obligations (Second
Mezzanine), this Agreement, the Pledge, the Mezzanine Notes, the Collateral or
any other Mezzanine Loan Document, or the making, issuance or transfer thereof,
all such liability, if any, being expressly waived by Mezzanine Lender.  The foregoing limitation shall not in any way
limit or affect Mezzanine Lender’s right to any of the following and Mezzanine
Lender shall not be deemed to have waived any of the following:


(a)           Foreclosure of the lien of this Agreement and the Pledge
in accordance with the terms and provisions set forth herein and in the Pledge;


(b)           Action against any other security at any time given to
secure the payment of the Mezzanine Notes and the other Obligations (Second
Mezzanine);


(c)           Exercise of any other remedy set forth in this Agreement
or in any other Mezzanine Loan Document which is not inconsistent with the
terms of this Section 18.1;


(d)           Any right which Mezzanine Lender may have under Sections
506(a), 506(b), 1111(b) or any other provisions of the
Bankruptcy Code to file a claim for the full amount of the Indebtedness secured
by this Agreement and the Pledge or to require that all collateral shall
continue to secure all of the Indebtedness owing to Mezzanine Lender in
accordance with the Mezzanine Loan Documents; or


(e)           The liability of any given Exculpated Party with respect
to any separate written guaranty or agreement given by any such Exculpated
Party in connection with the Loan (including, without limitation, the Recourse
Guaranty).


 


126

















 


18.1.2     Carveouts From Non-Recourse Limitations.  Notwithstanding the foregoing or anything in
this Agreement or any of the Mezzanine Loan Documents to the contrary, there
shall at no time be any limitation on Mezzanine Borrower’s or any Guarantor’s
liability for the payment, in accordance with the terms of this Agreement, the
Mezzanine Notes, the Pledge and the other Mezzanine Loan Documents, to
Mezzanine Lender of:


(a)           any loss, damage, cost or expense incurred by or on behalf
of Mezzanine Lender by reason of the fraudulent acts of Mezzanine Borrower,
Senior Mezzanine Borrower, Mortgage Borrower or any Affiliate of Mezzanine
Borrower, Senior Mezzanine Borrower, or Mortgage Borrower;


(b)           Proceeds which Mezzanine Borrower, Senior Mezzanine
Borrower, Mortgage Borrower or any Affiliate of Mezzanine Borrower, Senior
Mezzanine Borrower or Mortgage Borrower has received and to which Mezzanine
Lender, Senior Mezzanine Lender, or Mortgage Lender (as applicable) is entitled
pursuant to the terms of this Agreement, the Loan Agreement (Mortgage), the
Senior Mezzanine Loan Agreement or any of the Mezzanine Loan Documents, Senior
Mezzanine Loan Documents or Loan Documents (Mortgage) to the extent the same
have not been (i) applied toward payment of the Indebtedness or the Mortgage
Loan or Senior Mezzanine Loan (as applicable), or (ii) used for the repair or
replacement of the Property, all in accordance with the provisions of this Agreement;


(c)           all loss, damage, cost or expense as incurred by Mezzanine
Lender and arising from any intentional misrepresentation of Mezzanine
Borrower, Mortgage Borrower or any Affiliate of Mezzanine Borrower, Senior
Mezzanine Borrower or Mortgage Borrower;


(d)           any misappropriation of Rents or security deposits or
other funds relating to the Properties or Receipts relating to Ownership
Interests or Senior Mezzanine Ownership Interests by Master Lessee, Mortgage
Borrower, Senior Mezzanine Borrower, Mezzanine Borrower or any of their
respective Affiliates;


(e)           any loss, damage, cost or expense incurred by or on behalf
of Mezzanine Lender by reason of all or any part of the Property, the Account
Collateral (Second Mezzanine) or the Rate Cap Collateral (Second Mezzanine)
being encumbered by a Lien or Transferred by reason of the acts of Mezzanine
Borrower, Mortgage Borrower, Senior Mezzanine Borrower, or any Affiliate of
Mezzanine Borrower, Senior Mezzanine Borrower, or Mortgage Borrower from and
after the date hereof (other than as provided in this Agreement and the Pledge
and any other Mezzanine Document) in violation of the Mezzanine Loan Documents;


(f)            after the
occurrence and during the continuance of an Event of Default, any Rents,
issues, profits and/or income from the Property collected by Mezzanine
Borrower, Senior Mezzanine Borrower, Mortgage Borrower or any Affiliate of
Mezzanine Borrower, Senior Mezzanine Borrower, or Mortgage Borrower (other than
Rent sent to the Holding Account pursuant to the Loan Agreement (Mortgage) and
not paid directly to Mortgage Lender pursuant to any notice of direction
delivered to tenants of the Property) and not applied to payment of the
Obligations (Mortgage), Obligations (Senior Mezzanine) or Obligations (Second
Mezzanine), as applicable, or used to pay normal and verifiable operating
expenses of the Property or otherwise are not applied in a manner permitted
under the Mezzanine Loan Documents;


 


127
















 


(g)           any loss, damage, cost or expense incurred by or on behalf
of Mezzanine Lender by reason of any physical damage to the Property from
intentional waste or other willful destruction (other than in connection with a
permitted alteration) committed by Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower or any Affiliate of Mezzanine Borrower;


(h)           any loss, damage, cost or expense incurred by or on behalf
of Mezzanine Lender by reason of the failure of Mezzanine Borrower to comply
with any of the provisions of Article XII;


(i)            any loss, damage, cost or expense incurred
by or on behalf of Mezzanine Lender by reason of any breach of a representation
set forth in Section 4.1.30 or any covenant set forth in Section
5.1.4;


(j)            any loss, damage, cost or expense incurred by or on
behalf of Mezzanine Lender by reason of the failure of Mezzanine Borrower to deliver
to Mezzanine Lender the net sales proceeds of a Transfer of an Individual
Property described in Section 2.3.4 together with any shortfall necessary
to pay in full the Combined Release Price for such Individual Property, in accordance with the provisions of Section
2.3.4;


(k)           all of the Indebtedness and the Obligations (Second
Mezzanine) in the event of: (i) any Borrower Party or any Master
Lessee Party filing a voluntary
petition under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law; (ii) any Borrower Party , any Master Lessee Party, filing an answer consenting to or
otherwise acquiescing in or joining in any involuntary petition filed against
it, by any other Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, or soliciting or causing to be solicited, or
colluding with (or any of such Borrower Party’s, any Master Lessee Party’s Affiliates colluding with)
petitioning creditors to file any such involuntary petition from any Person;
(iii) any Borrower Party or Master Lessee Party consenting to or acquiescing in or joining in an application for
the appointment of a custodian, receiver, trustee, or examiner for any Borrower
Party or Master Lessee, or any
portion of the Property; (iv) any Borrower Party or Master Lessee Party making
an assignment for the benefit of creditors, or admitting, in writing or in any
legal proceeding, that it is insolvent;


(l)            any and all liabilities, obligations, losses, damages,
costs and expenses (including, without limitation, reasonable attorneys’ fees,
causes of action, suits, claims, demands and adjustments of any nature or
description whatsoever) which may at any time be imposed upon, incurred by or
awarded against Mezzanine Lender, in the event (and arising out of such
circumstances) that Mezzanine Borrower should raise any defense, counterclaim
and/or allegation in any foreclosure action by Mezzanine Lender relative to the
Collateral, the Account Collateral (Second Mezzanine) or the Rate Cap
Collateral (Second Mezzanine) or any part thereof which is found by a court to
have been raised by Mezzanine Borrower in bad faith or to be without basis in
fact or law;


(m)          reasonable attorney’s fees and expenses actually incurred
by Mezzanine Lender in connection with any successful suit filed on account of
any of the foregoing clauses (a) through (l); or


 


128

















 


(n)           after the occurrence and during the continuance of an
Event of Default, any Receipts from the Ownership Interests collected by
Mezzanine Borrower or any Affiliate of Mezzanine Borrower (other than Receipts
sent to the Mezzanine Account and not paid directly to Mezzanine Lender) and
not paid to Mezzanine Lender or applied to the payment of the Obligations
(Second Mezzanine).


18.2         Pro Rata Share.  The obligations of each Mezzanine Lender
hereunder and under any of the other Mezzanine Loan Documents are several (but
not joint).  Subject to the terms hereof,
each Mezzanine Lender shall be obligated to fund on a pari passu basis only its
respective Pro Rata Share of the Loan. 
Each Mezzanine Lender hereby agrees that if either of them shall,
whether by voluntary payment (other than a voluntary prepayment of the Loan
made and applied in accordance with the terms of this Agreement), by
realization upon security, through the exercise of any right of set-off or
banker’s lien, by counterclaim or cross action or by the enforcement of any
right under the Mezzanine Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code or
other applicable insolvency law, receive payment or reduction of a proportion
of the aggregate amount of principal, interest, fees and other amounts then due
and owing to that Mezzanine Lender hereunder or under the other Mezzanine Loan
Documents which is greater than its Pro Rata Share, then such Mezzanine Lender
receiving such proportionately greater payment shall (i) notify the other
Mezzanine Lender of the receipt of such payment, and (ii) appropriate payments
or other adjustments shall be made by each Mezzanine Lender to ensure each
Mezzanine Lender receives its respective Pro Rata Share of such aggregate
amount due.


XIX.                       MISCELLANEOUS


19.1         Survival.  This Agreement and all covenants,
indemnifications, agreements, representations and warranties made herein and in
the certificates delivered pursuant hereto shall survive the making by Mezzanine
Lender of the Loan and the execution and delivery to Mezzanine Lender of the
Mezzanine Notes, and shall continue in full force and effect so long as all or
any of the Indebtedness is outstanding and unpaid unless a longer period is
expressly set forth herein or in the other Mezzanine Loan Documents.  Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party.  All
covenants, promises and agreements in this Agreement, by or on behalf of
Mezzanine Borrower, shall inure to the benefit of the successors and assigns of
Mezzanine Lender.  If Mezzanine Borrower
consists of more than one person, the obligations and liabilities of each such
person hereunder and under the other Mezzanine Loan Documents shall be joint
and several.


19.2         Mezzanine Lender’s
Discretion.  Whenever pursuant to
this Agreement, Mezzanine Lender exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to Mezzanine
Lender, the decision of Mezzanine Lender to approve or disapprove or to decide
whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Mezzanine Lender and shall be final and conclusive.


 


129

















 


19.3         Governing Law.


(A)          THIS AGREEMENT WAS
NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY MEZZANINE LENDER AND
ACCEPTED BY MEZZANINE BORROWER 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, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES
OF AMERICA.  TO THE FULLEST EXTENT
PERMITTED BY LAW, MEZZANINE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE MEZZANINE NOTES AND THE OTHER MEZZANINE LOAN DOCUMENTS AND
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.


(B)           ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST MEZZANINE LENDER OR MEZZANINE BORROWER ARISING OUT
OF OR RELATING TO THIS AGREEMENT MAY AT MEZZANINE LENDER’S OPTION BE INSTITUTED
IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT
TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND MEZZANINE
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON
VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
MEZZANINE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUIT, ACTION OR PROCEEDING. 
MEZZANINE BORROWER DOES HEREBY DESIGNATE AND APPOINT:


	
   

  	
  CORPORATION
  SERVICE COMPANY

  	
   

  
	
   

  	
  80 STATE
  STREET

  	
   

  
	
   

  	
  ALBANY,
  NEW YORK 12207-2543

  	
   

  



 


AS ITS AUTHORIZED AGENT TO ACCEPT AND
ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN
ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK,
NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS
AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO MEZZANINE BORROWER IN
THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
OF PROCESS UPON MEZZANINE BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
THE STATE OF NEW YORK.  MEZZANINE
BORROWER (I) SHALL GIVE PROMPT NOTICE TO MEZZANINE 


 


130





















 


LENDER OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK
(WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND
ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW
YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.


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


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


19.6         Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Mezzanine Loan Document
shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) certified or registered United States mail, postage
prepaid, return receipt requested, (b) expedited prepaid delivery service,
either commercial or United States Postal Service, with proof of attempted
delivery or (c) telecopier (with answer back acknowledged), addressed as
follows (or at such other address and Person as shall be designated from time
to time by any party hereto, as the case may be, in a written notice to the
other parties hereto in the manner provided for in this Section):


	
  If to Mezzanine Lender:

  	
   

  	
  German American Capital Corporation, on behalf of the
  holders of the Mezzanine Notes

  
	
   

  	
   

  	
  60 Wall Street, 10th floor

  
	
   

  	
   

  	
  New York, NY 10005

  
	
   

  	
   

  	
  Attention: Todd Sammann and General Counsel

  
	
   

  	
   

  	
  Telecopy No.: (212) 797-4489

  
	
   

  	
   

  	
   

  



 


 


131

















 


	
   

  	
   

  	
  and to JPMorgan Chase Bank, N.A., on behalf of the holders of the Mezzanine Notes

  270 Park Avenue

  New York, New York 10017

  Attention: Michael Mesard

  Telecopy No.: (212) 834-6592

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Midland Loan Services, as Servicer, at such notice address as shall
  be designated by notice delivered in accordance with this Section.

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Centerline Servicing Inc.

  
	
   

  	
   

  	
  5221 N. O’Connor Boulevard, Suite 600

  
	
   

  	
   

  	
  Irving, Texas 75039

  
	
   

  	
   

  	
  Attention: Wesley Wolf, SVP, Asset Management

  
	
   

  	
   

  	
  Telecopy No.: (972) 868-5493

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Latham & Watkins LLP

  
	
   

  	
   

  	
  633 West Fifth Street, Suite 4000

  
	
   

  	
   

  	
  Los Angeles, California 90071

  
	
   

  	
   

  	
  Attention: Donald I. Berger, Esq.

  
	
   

  	
   

  	
  Telecopy No.: (213) 891-8763

  
	
   

  	
   

  	
   

  
	
  If to Mezzanine Borrower:

  	
   

  	
  FCP MEZZCO BORROWER II, LLC

  1505 South Pavilion Center Drive

  Las Vegas, Nevada 89135

  Attention: General Counsel

  Telecopy No.: (702) 495-4260

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Milbank,
  Tweed, Hadley & McCloy LLP

  601 S. Figueroa Street, 30th Floor

  Los Angeles, California 90017

  Attention: Kenneth J. Baronsky

  Telecopy No.: (213) 892-4733

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Colony
  Capital Acquisitions, LLC

  1999 Avenue of the Stars, Suite 1200

  Los Angeles, California 90067

  Attention: Jonathan H. Grunzweig

  Telecopy No.: (310) 407-7407

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Willkie Farr
  & Gallagher LLP

  787 Seventh Avenue

  New York, New York 10019

  Attention: Thomas Cerabino

  Telecopy No.: (212) 728-9208

  



 


132

















 


All notices, elections, requests
and demands under this Agreement shall be effective and deemed received upon
the earliest of (i) the actual receipt of the same by personal delivery or
otherwise, (ii) one (1) Business Day after being deposited with a nationally
recognized overnight courier service as required above, (iii) three (3)
Business Days after being deposited in the United States mail as required above
or (iv) on the day sent if sent by facsimile with confirmation on or before
5:00 p.m. New York time on any Business Day or on the next Business Day if so
delivered after 5:00 p.m. New York time or on any day other than a Business
Day.  Rejection or other refusal to
accept or the inability to deliver because of changed address of which no
notice was given as herein required shall be deemed to be receipt of the
notice, election, request, or demand sent.


19.7         Trial By Jury.  MEZZANINE BORROWER AND ALL PERSONS CLAIMING
BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, THE PLEDGE, THE MEZZANINE
NOTES OR ANY OTHER MEZZANINE LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, ANY
PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, THE PLEDGE, THE MEZZANINE NOTES OR ANY OTHER
MEZZANINE LOAN DOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND MEZZANINE BORROWER
HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT HERETO
TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. 
MEZZANINE BORROWER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL
REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN
ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN.  THIS WAIVER SHALL SURVIVE THE REPAYMENT OF
THE LOAN.


19.8         Headings.  The Article and/or Section headings and the
Table of Contents in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.


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


19.10       Preferences.  To the extent Mezzanine Borrower makes a
payment or payments to Mezzanine Lender, which payment or proceeds or any part
thereof are subsequently invalidated, 


 


133

















 


declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received by Mezzanine Lender.


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


19.12       Expenses; Indemnity


(a)           Mezzanine Borrower covenants and agrees to pay or, if
Mezzanine Borrower fails to pay, to reimburse, Mezzanine Lender upon receipt of
written notice from Mezzanine Lender for all reasonable out-of-pocket costs and
expenses (including reasonable attorneys’ fees and disbursements), except as
may be otherwise expressly provided elsewhere in this Agreement or the
Mezzanine Loan Documents, incurred by Mezzanine Lender in connection with (i)
the preparation, negotiation, execution and delivery of this Agreement and the
other Mezzanine Loan Documents and the consummation of the transactions
contemplated hereby and thereby and all the costs of furnishing all opinions by
counsel for Mezzanine Borrower (including without limitation any opinions
requested by Mezzanine Lender pursuant to this Agreement); (ii) Mezzanine
Lender’s ongoing performance of and compliance with all agreements and
conditions contained in this Agreement and the other Mezzanine Loan Documents
on its part to be performed or complied with after the Closing Date; (iii) the
negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Mezzanine Loan Documents and any other documents or matters as required
herein or under the other Mezzanine Loan Documents; (iv) securing Mezzanine
Borrower’s compliance with any requests made pursuant to the provisions of this
Agreement; (v) the filing and recording fees and expenses, title insurance and
reasonable fees and expenses of counsel for providing to Mezzanine Lender all
required legal opinions, and other similar expenses incurred in creating and
perfecting the Lien in favor of Mezzanine Lender pursuant to this Agreement and
the other Mezzanine Loan Documents; (vi) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Mezzanine Borrower, this Agreement, the other Mezzanine Loan Documents, the
Collateral or the Property, or any other security given for the Loan; (vii)
enforcing any obligations of or collecting any payments due from Mezzanine
Borrower under this Agreement, the other Mezzanine Loan Documents or with
respect to the Collateral or the Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in
the nature of a work-out or of any insolvency or bankruptcy proceedings and
(viii) procuring insurance policies pursuant to Section 6.1.1; provided,
however, that Mezzanine Borrower shall not be liable for the payment of
any 


 


134

















 


such costs and expenses to the extent the
same arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of Mezzanine Lender. Any cost and expenses due and payable to
Mezzanine Lender may be paid from any amounts in the Mezzanine Account.


(b)           Subject to the non-recourse provisions of Section 18.1,
Mezzanine Borrower shall protect, indemnify and save harmless Mezzanine Lender,
and all officers, directors, stockholders, members, partners, employees,
agents, successors and assigns thereof (collectively, the “Indemnified
Parties”) from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including all reasonable
attorneys’ fees and expenses actually incurred) imposed upon or incurred by or
asserted against the Indemnified Parties, the Collateral or the Property or any
part of its interest therein, by reason of the occurrence or existence of any
of the following (to the extent Proceeds payable on account of the following
shall be inadequate; it being understood that in no event will the Indemnified
Parties be required to actually pay or incur any costs or expenses as a
condition to the effectiveness of the foregoing indemnity) prior to (i) the
acceptance by Mezzanine Lender or its designee of a transfer-in-lieu of
foreclosure with respect to the Collateral, or (ii) an Indemnified Party or its
designee or a receiver taking possession or control of the Collateral or (iii)
the foreclosure of the Pledge, except to the extent caused by the actual
willful misconduct or gross negligence of the Indemnified Parties (other than
such willful misconduct or gross negligence imputed to the Indemnified Parties
because of their interest in the Collateral): 
(1) ownership of Mezzanine Borrower’s interest in the Mortgage Borrower,
or any interest therein, or receipt of any Receipts or other sum therefrom, (2)
any accident, injury to or death of any persons or loss of or damage to
property occurring on or about the Property or any Appurtenances thereto, (3)
any design, construction, operation, repair, maintenance, use, non-use or
condition of the Property or Appurtenances thereto, including claims or
penalties arising from violation of any Legal Requirement or Insurance
Requirement, as well as any claim based on any patent or latent defect, whether
or not discoverable by Mezzanine Lender and any claim the insurance as to which
is inadequate, (4) any Default under this Agreement or any of the other
Mezzanine Loan Documents or any Mortgage Default or any failure on the part of
Mezzanine Borrower to cause the Mortgage Borrower to perform or comply with any
of the terms of any Operating Agreement within the applicable notice or grace
periods, (5) any performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof,
(6) any negligence or tortious act or omission on the part of Mezzanine
Borrower or Mortgage Borrower or any of their agents, contractors, servants,
employees, sublessees, licensees or invitees, (7) any contest referred to in Section
7.3 hereof, or (8) any obligation or undertaking relating to the
performance or discharge of any of the terms, covenants and conditions of the
landlord contained in the Subleases or the Master Lease.  Any amounts the Indemnified Parties are
legally entitled to receive under this Section which are not paid within
fifteen (15) Business Days after written demand therefor by the Indemnified
Parties or Mezzanine Lender, setting forth in reasonable detail the amount of
such demand and the basis therefor, shall bear interest from the date of demand
at the Default Rate, and shall, together with such interest, be part of the
Indebtedness and secured by this Agreement and the Pledge.  In case any action, suit or proceeding is
brought against the Indemnified Parties by reason of any such occurrence,
Mezzanine Borrower shall at Mezzanine Borrower’s expense resist and defend such
action, suit or proceeding or will cause the same to be resisted and defended
by counsel at Mezzanine Borrower’s reasonable expense for the insurer of the
liability or by counsel designated by Mezzanine Borrower (unless reasonably
disapproved by Mezzanine Lender promptly after 


 


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Mezzanine Lender has been notified of such
counsel); provided, however, that nothing herein shall compromise
the right of Mezzanine Lender (or any Indemnified Party) to appoint its own
counsel at Mezzanine Borrower’s expense for its defense with respect to any
action which in its reasonable opinion presents a conflict or potential
conflict between Mezzanine Lender and Mezzanine Borrower that would make such
separate representation advisable; provided further that if Mezzanine Lender
shall have appointed separate counsel pursuant to the foregoing, Mezzanine
Borrower shall not be responsible for the expense of additional separate
counsel of any Indemnified Party unless in the reasonable opinion of Mezzanine
Lender a conflict or potential conflict exists between such Indemnified Party
and Mezzanine Lender.  So long as Mezzanine
Borrower is resisting and defending such action, suit or proceeding as provided
above in a prudent and commercially reasonable manner, Mezzanine Lender and the
Indemnified Parties shall not be entitled to settle such action, suit or
proceeding without Mezzanine Borrower’s consent which shall not be unreasonably
withheld or delayed, and claim the benefit of this Section 19.12 with
respect to such action, suit or proceeding and Mezzanine Lender agrees that it
will not settle any such action, suit or proceeding without the consent of
Mezzanine Borrower; provided, however, that if Mezzanine Borrower
is not diligently defending such action, suit or proceeding in a prudent and
commercially reasonable manner as provided above, and Mezzanine Lender has
provided Mezzanine Borrower with thirty (30) days’ prior written notice, or
shorter period if mandated by the requirements of applicable law, and
opportunity to correct such determination, Mezzanine Lender may settle such
action, suit or proceeding and claim the benefit of this Section 19.12
with respect to settlement of such action, suit or proceeding.  Any Indemnified Party will give Mezzanine
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification
hereunder.  The Indemnified Parties shall
not settle or compromise any action, proceeding or claim as to which it is
indemnified under this Section 19.12 without prior notice to and
reasonable consent of Mezzanine Borrower.


19.13       Exhibits and
Schedules Incorporated.  The Exhibits
and Schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.


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


19.15       Liability of
Assignees of Mezzanine Lender.  No
assignee of Mezzanine Lender shall have any personal liability, directly or
indirectly, under or in connection with this Agreement or any other Mezzanine
Loan Document or any amendment or amendments hereto made at any time or times,
heretofore or hereafter, any different than the liability of Mezzanine Lender
hereunder.  In addition, no assignee
shall have at any time or times hereafter any personal liability, directly or
indirectly, under or in connection with or secured by any agreement, lease, 


 


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instrument, encumbrance, claim or right
affecting or relating to the Property or to which the Property is now or
hereafter subject any different than the liability of Mezzanine Lender
hereunder.  The limitation of liability
provided in this Section 19.15 is (i) in addition to, and not in
limitation of, any limitation of liability applicable to the assignee provided
by law or by any other contract, agreement or instrument, and (ii) shall not
apply to any assignee’s gross negligence or willful misconduct.


19.16       No Joint Venture or Partnership; No Third
Party Beneficiaries.


(a)           Mezzanine Borrower and Mezzanine Lender intend that the
relationships created hereunder and under the other Mezzanine Loan Documents be
solely that of borrower and lender. 
Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Mezzanine
Borrower and Mezzanine Lender nor to grant Mezzanine Lender any interest in the
Collateral other than that of secured party, beneficiary or lender.


(b)           This Agreement and the other Mezzanine Loan Documents are
solely for the benefit of Mezzanine Lender and Mezzanine Borrower and nothing
contained in this Agreement or the other Mezzanine Loan Documents shall be
deemed to confer upon anyone other than Mezzanine Lender and Mezzanine Borrower
any right to insist upon or to enforce the performance or observance of any of
the obligations contained herein or therein. 
All conditions to the obligations of Mezzanine Lender to make the Loan hereunder
are imposed solely and exclusively for the benefit of Mezzanine Lender and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Mezzanine Lender will
refuse to make the Loan in the absence of strict compliance with any or all
thereof and no other Person shall under any circumstances be deemed to be a
beneficiary of such conditions, any or all of which may be freely waived in
whole or in part by Mezzanine Lender if, in Mezzanine Lender’s sole discretion,
Mezzanine Lender deems it advisable or desirable to do so.


19.17       Publicity.  Each party shall endeavor to permit the other
to review the initial press release relating to the Loan in order to provide
the other with a reasonable opportunity to comment thereon.


19.18       Waiver of
Marshalling of Assets.  To the
fullest extent permitted by law, Mezzanine Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Mezzanine Borrower, Mezzanine Borrower’s members and others with interests in
Mezzanine Borrower and of the Collateral, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Mezzanine Lender under the Mezzanine Loan Documents to a sale of the
Collateral for the collection of the Indebtedness without any prior or
different resort for collection or of the right of Mezzanine Lender to the
payment of the Indebtedness out of the net proceeds of the Collateral in
preference to every other claimant whatsoever.


19.19       Waiver of
Counterclaim and other Actions. 
Mezzanine Borrower hereby expressly and unconditionally waives, in
connection with any suit, action or proceeding brought 


 


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by Mezzanine Lender on this Agreement, the
Mezzanine Notes, the Pledge or any Mezzanine Loan Document, any and every right
it may have to (i) interpose any counterclaim therein (other than a
counterclaim which can only be asserted in the suit, action or proceeding
brought by Mezzanine Lender on this Agreement, the Mezzanine Notes, the Pledge
or any Mezzanine Loan Document and cannot be maintained in a separate action)
and (ii) have any such suit, action or proceeding consolidated with any other
or separate suit, action or proceeding.


19.20       Conflict;
Construction of Documents; Reliance  In
the event of any conflict between the provisions of this Agreement and any of
the other Mezzanine Loan Documents, the provisions of this Agreement shall
control.  The parties hereto acknowledge
that they were represented by competent counsel in connection with the
negotiation, drafting and execution of the Mezzanine Loan Documents and that
such Mezzanine Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same.  Mezzanine Borrower acknowledges that, with
respect to the Loan, Mezzanine Borrower shall rely solely on its own judgment
and advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Mezzanine Lender or any
parent, subsidiary or Affiliate of Mezzanine Lender.  Mezzanine Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Mezzanine Loan Documents or any other agreements or
instruments which govern the Loan by virtue of the ownership by it or any
parent, subsidiary or Affiliate of Mezzanine Lender of any equity interest any
of them may acquire in Mezzanine Borrower, and Mezzanine Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Mezzanine Lender’s exercise of any such
rights or remedies.  Mezzanine Borrower
acknowledges that Mezzanine Lender engages in the business of real estate
financings and other real estate transactions and investments which may be
viewed as adverse to or competitive with the business of Mezzanine Borrower or
its Affiliates.


(b)           Notwithstanding anything to the contrary set
forth in this Agreement, any right of Mezzanine Lender or obligation of
Mezzanine Borrower with respect to the Operating Agreements shall be subject to
the rights of Mortgage Lender and obligations of Mortgage Borrower under the
Loan Documents (Mortgage).


19.21       Prior Agreements.  This Agreement and the other Mezzanine Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, are
superseded by the terms of this Agreement and the other Mezzanine Loan
Documents and unless specifically set forth in a writing contemporaneous
herewith the terms, conditions and provisions of any and all such prior
agreements do not survive execution of this Agreement.


19.22       Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which
shall constitute one document.


19.23       Direction of
Mortgage Borrower with Respect to the Property.  Mezzanine Borrower and Mezzanine Lender
acknowledge and agree that, as to any clauses or provisions contained in this
Agreement or any of the other Mezzanine Loan Documents to the effect that (i)
Mezzanine Borrower shall cause Mortgage Borrower to act or to refrain from
acting in any 


 


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manner, or (ii) Mezzanine Borrower shall
cause to occur or not to occur, or otherwise be obligated in any manner with
respect to, any matters pertaining to Mortgage Borrower or the Property, or
(iii) other similar effect, such clause or provisions, in each case, is
intended to mean, and shall be construed as meaning, that Mezzanine Borrower
has undertaken to act and is obligated to act in Mezzanine Borrower’s capacity
as the indirect sole member of Mortgage Borrower (which Mortgage Borrower, in
turn, is the fee owner of the Property) but not directly with respect to
Mortgage Borrower or the Property or in any other manner which would violate
any of the covenants contained in Section 5.1.4 hereof or other similar
covenants contained in Mezzanine Borrower’s Organizational Documents.


 


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139

















 


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


	
   

  	
  MEZZANINE BORROWER:

  
	
   

  	
   

  
	
   

  	
  FCP MEZZCO BORROWER II, LLC, a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Thomas M. Friel

  
	
   

  	
  Name: Thomas M. Friel

  
	
   

  	
  Title:   Authorized Signatory

  



 


 


 


[Mezzanine Lender’s signature appears on following page]


 


 


 


 


 


Mezzanine Borrower’s Execution Page


 

















 


	
   

  	
  MEZZANINE
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GERMAN AMERICAN CAPITAL
  CORPORATION, a Maryland corporation, on behalf of the holders
  of the Mezzanine Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Todd O. Sammann

  
	
   

  	
  Name: Todd
  O. Sammann

  
	
   

  	
  Title:   Vice
  President

  



 


 


	
   

  	
  By:

  	
   /s/ John K. Beacham

  
	
   

  	
  Name: John
  K. Beacham

  
	
   

  	
  Title:   Vice
  President

  



 


 


 


	
   

  	
  JPMORGAN CHASE BANK, N.A., a
  national banking association, on behalf of the holders of the Mezzanine Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kunal K. Singh

  
	
   

  	
  Name: Kunal K. Singh

  
	
   

  	
  Title:   Vice
  President