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Exhibit 10.1  

 
 

VENOCO, INC.
  2007 SENIOR EXECUTIVE BONUS PLAN    
    

SECTION 1

ESTABLISHMENT AND PURPOSE  

        1.1    Purpose.    Venoco, Inc. hereby establishes the Venoco, Inc. 2007 Senior Executive Bonus Plan
(the "Plan"). The Plan is intended to increase stockholder value and the success of the Company by motivating key executives (a) to perform to the best of their abilities, and (b) to
achieve the Company's objectives. The Plan's goals are to be achieved by providing such executives with incentive awards based on the achievement of goals relating to the performance of the Company
and its individual business units. The Plan is intended to qualify as performance-based compensation under Section 162(m) of the Code. 

        1.2    Effective Date.    The Plan shall be effective upon its adoption by the Compensation Committee of the Board,
subject to approval by stockholders of the Company at the 2007 Annual Meeting. As long as the Plan remains in effect, it shall be resubmitted to stockholders as necessary to enable the Plan to
continue to qualify as performance-based compensation under Section 162(m) of the Code. 

SECTION 2

DEFINITIONS  

        The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context: 

        2.1   "Actual Award" means as to any Plan Year, the actual award (if any) payable to a Participant for the Plan Year. The
Actual Award is determined by the Payout Formula for the Plan Year, subject to the Committee's authority under Section 3.5 to reduce the award otherwise determined by the Payout Formula. 

        2.2   "Base Salary" means as to any Plan Year, 100% of the Participant's salary he or she earned for the applicable Plan Year.
Such Base Salary shall be before both (a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant to Company-sponsored plans. 

        2.3   "Beneficiary" means the person(s) or entity(ies) designated to receive payment of an Actual Award, in accordance with
Section 4.5, in the event of a Participant's death. The Beneficiary designation shall be effective when it is submitted in writing to and acknowledged by the Committee during the Participant's
lifetime on the Beneficiary Designation form provided in Appendix A. The submission of a new Beneficiary Designation form in accordance with the preceding sentence shall cancel all prior
Beneficiary Designations. 

        2.4   "Board" means the Company's Board of Directors. 

        2.5   "Code" means the Internal Revenue Code of 1986, as amended. Reference to a specific Section of the Code shall include
such Section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation. 

        2.6   "Committee" means the committee appointed by the Board to administer the Plan. The Committee shall consist of no fewer
than two members of the Board. The members of the Committee 

1

 

shall
be appointed by, and serve at the pleasure of, the Board. Each member of the Committee shall qualify as an "outside director" under Section 162(m) of the Code. 

        2.7   "Company" means Venoco, Inc., a Delaware corporation. 

        2.8   "Determination Date" means as to any Plan Year, the later of (a) the first day of the Plan Year, or (b) the
latest date possible which will not jeopardize the Plan's qualification as performance-based compensation under Section 162(m) of the Code. 

        2.9   "Maximum Award" means as to any Participant for any Plan Year, two million dollars ($2,000,000.00). The Maximum Award is
the maximum amount which may be paid to a Participant for any Plan Year. 

        2.10 "Participant" means as to any Plan Year, an officer of the Company who has been selected by the Committee for
participation in the Plan for that Plan Year. 

        2.11 "Payout Formula" means as to any Plan Year, the formula or payout matrix established by the Committee pursuant to
Section 3.4, in order to determine the Actual Awards (if any) to be paid to Participants. The formula or matrix may differ from Participant to Participant. 

        2.12 "Performance Goals" means the goal(s) (or combined goal(s)) determined by the Committee (in its discretion) to be
applicable to a Participant for a Plan Year. As determined by the Committee, the Performance Goals applicable to each Participant shall provide for a targeted level or levels of achievement using one
or more of the following measures: (a) implementation of a strategic plan, (b) stock price, (c) earnings per share, (d) total stockholder return, (e) operating
margin, (f) stock price as a multiple of cash flow, (g) return on equity, (h) return on assets, (i) return on investment, (j) operating income, (k) net
operating income, (l) pre-tax income, (m) cash flow, (n) revenue, (o) expenses, (p) earnings before interest,
taxes and depreciation, (q) economic value added, (r) reserve additions, (s) finding and development costs, (t) drilling and work-over budget,
(u) increases in average daily production, (v) return on capital invested, (w) corporate overhead costs, (x) interest coverage ratio, (y) consolidated leverage
ratio, (z) ratio of PV 10 reserves to debt, (aa) environmental and safety programs, (bb) stockholders' equity, and (cc) corporate acquisitions. The Performance Goals may be applicable to the
Company and/or any of its subsidiaries or individual business units and may differ from Participant to Participant. 

        2.13 "Plan Year" means the fiscal year of the Company beginning in 2007 and each succeeding fiscal year of the Company. 

        2.14 "Target Award" means the target award payable under the Plan to a Participant for the Plan Year, expressed as a
percentage of his or her Base Salary or an amount, as determined by the Committee in accordance with Section 3.3. 

        2.15 "2005 Stock Incentive Plan" means the Venoco, Inc. Amended and Restated 2005 Stock Incentive Plan, as amended
from time to time. 

SECTION 3

SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS  

        3.1    Selection of Participants.    On or prior to the Determination Date, the Committee, in its sole discretion,
shall select the officers of the Company who shall be Participants for the Plan Year. In selecting Participants, the Committee shall choose officers who are likely to have a significant impact on the
performance of the Company. Participation in the Plan is in the sole discretion of the Committee, and on a Plan Year by Plan Year basis. Accordingly, an officer who is a Participant for a given Plan
Year in no way is guaranteed or assured of being selected for participation in any subsequent Plan Year or Years. 

2

 

        3.2    Determination of Performance Goals.    On or prior to the Determination Date, the Committee, in its sole
discretion, shall establish the Performance Goals for each Participant for the Plan Year. Such Performance Goals shall be set forth in writing. 

        3.3    Determination of Target Awards.    On or prior to the Determination Date, the Committee, in its sole
discretion, shall establish a Target Award for each Participant. Each Participant's Target Award shall be determined by the Committee in its sole discretion, and each Target Award shall be set forth
in writing. 

        3.4    Determination of Payout Formula or Formulae.    On or prior to the Determination Date, the Committee, in its
sole discretion, shall establish a Payout Formula or Formulae for purposes of determining the Actual Award (if any) payable to each Participant. Each Payout Formula shall (a) be in writing,
(b) be based on a comparison of actual performance to the Performance Goals, (c) provide for the payment of a Participant's Target Award if the Performance Goals for the Plan Year are
achieved, and (d) provide for an Actual Award greater than or less than the Participant's Target Award, depending upon the extent to which actual performance exceeds or falls below the
Performance Goals. Notwithstanding the preceding, no participant's Actual Award under the Plan may exceed the Maximum Award. 

        3.5    Determination of Actual Awards.    As soon as administratively practicable, after the end of each Plan Year,
the Committee shall certify in writing the extent to which the Performance Goals applicable to each Participant for the Plan Year were achieved or exceeded. The Actual Award for each Participant shall
be determined by applying the Payout Formula to the level of actual performance which has been certified by the Committee. Notwithstanding any contrary provision of the Plan, (a) the Committee,
in its sole discretion, may eliminate or reduce the Actual Award payable to any Participant that would otherwise be payable under the Payout Formula, (b) if a Participant terminates employment
with the Company prior to the date the Actual Award for the Plan Year is paid, the Committee shall reduce his or her Actual Award proportionately based on the date of termination (and subject to
further reduction or elimination under clause (a) of this sentence). 

SECTION 4

PAYMENT OF AWARDS  

        4.1    Right to Receive Payment.    Each Actual Award that may become payable under the Plan shall be paid solely from
the general assets of the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant's claim of any right other than as an unsecured general
creditor with respect to any payment to which he or she may be entitled. 

        4.2    Timing of Payment.    Payment of each Actual Award shall be made within two (2) months after the
Committee determines the amount of the Actual Award (if any) under Section 3.5, but in no event prior to the date the audit of Company's financial statements for the Plan Year by its
independent auditors has been completed; provided, however, that each payment shall be made in the calendar year immediately following the end of the Plan Year for which the Actual Award is determined
under Section 3.5. 

        4.3    Form of Payment.    Each Actual Award normally shall be paid in cash (or its equivalent) in a single lump sum.
However, the Committee, in its sole discretion, may declare any Actual Award, in whole or in part, payable in the form of a restricted stock bonus granted under the 2005 Stock Incentive Plan or
successor equity compensation plan. The number of shares granted shall be determined by dividing the cash amount of the Actual Award by the fair market value of a share of Company common stock on the
date that the cash payment otherwise would have been made. For this purpose, "fair market value" shall be defined as provided in the 2005 Stock Incentive Plan or successor equity compensation plan. 

3

 

        4.4    Other Deferral of Actual Awards.    The Committee may establish one or more programs under the Plan to permit
selected Participants the opportunity to elect to defer receipt of Actual Awards. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts so deferred, and such other terms, conditions, rules and procedures that the Committee deems advisable for the administration of any such
deferral program. Any such deferral program implemented pursuant to this Section 4.4 shall comply with Section 409A of the Code. 

        4.5    Payment in the Event of Death.    If a Participant dies prior to the payment of an Actual Award earned by him
or her for a Plan Year, the Actual Award shall be paid to the Participant's Beneficiary. If a Participant fails to designate a Beneficiary or if each person designated as a Beneficiary predeceases the
Participant or dies prior to distribution of the Participant's benefits, then the Committee shall direct the distribution of such benefits to the Participant's estate. 

        4.6    Recovery of Actual Awards made in Prior Years.    Notwithstanding anything contained herein to the contrary, if
the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, the Committee shall have the discretion to
recover incentive compensation from any who benefited from prior actions or decisions that necessitated such financial restatement. In such a situation, the Committee will exercise its business
judgment to determine what action it believes is appropriate. Any action may include recovery or cancellation of any bonus made to the Participants on the basis of having met or exceeded performance
targets during a period of fraudulent activity or a material misstatement of financial results if the Committee determines that such recovery is appropriate. 

SECTION 5

ADMINISTRATION  

        5.1    Committee is the Administrator.    The Plan shall be administered by the Committee. 

        5.2    Committee Authority.    The Committee shall have all discretion and authority necessary or appropriate to
administer the Plan and to interpret the provisions of the Plan, consistent with qualification of the Plan as performance-based compensation under Section 162(m) of the Code. Any determination,
decision or action of the Committee in connection with the construction, interpretation, administration or application of the Plan shall be final, conclusive, and binding upon all persons, and shall
be given the maximum deference permitted by law. 

        5.3    Tax Withholding.    The Company shall withhold all applicable taxes from any payment, including any
non-U.S., federal, state, and local taxes. In the case of payment in the form of a restricted stock bonus pursuant to Section 4.3, the granting and vesting of such restricted stock
bonus
shall be subject to Section 10(g) of the 2005 Stock Incentive Plan, or such comparable provisions of any successor plan regarding the withholding of taxes. 

SECTION 6

GENERAL PROVISIONS  

        6.1    Nonassignability.    A Participant shall have no right to assign or transfer any interest under this Plan. 

        6.2    No Effect on Employment.    The establishment and subsequent operation of the Plan, including eligibility as a
Participant, shall not be construed as conferring any legal or other rights upon any Participant for the continuation of his or her employment for any Plan Year or any other period. Generally,
employment with the Company is on an at-will basis only. Except as may be provided in an employment contract with the Participant, the Company expressly reserves the right, which may be
exercised at any time during a Plan Year, to terminate any individual's employment without cause and 

4

 

without
regard to the effect such termination might have upon the Participant's receipt of an Actual Award under the Plan. 

        6.3    No Individual Liability.    In addition to such other rights of indemnification as they may have as members of
the Board or as officers or employees of the Company, members of the Board and any officers or employees of the Company to whom authority to act for the Board, the Committee or the Company is
delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein (each a "Claim"), to which they or any of them may
be a party by reason of any action taken or failure to act under or in connection with the Plan and against all amounts paid by them in settlement thereof (provided such settlement is approved by the
Company) or paid by them in satisfaction of a judgment in any such Claim, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that
such person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within thirty (30) days after the institution of such Claim, such person shall offer to
the Company, in writing, the opportunity at the Company's expense to defend the same. 

        6.4    Severability; Governing Law.    If any provision of the Plan is found to be invalid or unenforceable, such
provision shall not affect the other provisions of the Plan, and the Plan shall be construed in all respects as if such invalid provision has been omitted. The provisions of the Plan shall be governed
by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice
of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Delaware. 

        6.5    Affiliates of the Company.    Requirements referring to employment with the Company or payment of awards may,
in the Committee's discretion, be performed through the Company or any affiliate of the Company. 

        6.6    Section 409A of the Code.    This Plan, including any future amendments thereto which do not expressly
amend this Section 6.6, is designed, and shall be administered and operated, in the good faith determination of the Board or the Committee, to comply with Section 409A of the Code.
Although the Company intends to administer the Plan so that it complies with the requirements of Section 409A of the Code, the Company does not warrant that any Actual Award under the Plan will
in fact comply with Section 409A or qualify for favorable tax treatment under any other provision of federal, state, local or foreign law. The Company shall not be liable to any Participant for
any tax, interest or penalties the Participant might owe as a result of its participation in the Plan. 

        6.7    Savings Clause.    This Plan is intended to comply in all respects with applicable laws and regulations. In
case any one or more of the provisions of this Plan shall be held invalid, illegal or unenforceable in any respect under applicable law or regulation, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provision shall be deemed null and void; provided, however, to the extent
permissible by law, any provision which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Plan to be construed in compliance with all
applicable laws so as to foster the intent of this Plan. 

SECTION 7

AMENDMENT AND TERMINATION  

        The Board or a duly authorized committee thereof may amend or terminate the Plan at any time and for any reason; provided, however, that if and to the extent
required to ensure the Plan's qualification under Section 162(m) of the Code, any such amendment shall be subject to stockholder approval. Any amendment shall comply with Section 409A of
the Code. 

5

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VENOCO, INC. 2007 SENIOR EXECUTIVE BONUS PLANEXHIBIT 4.1

 

AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

 

 

Dated as of March 19, 2008

 

 

Among

 

 

FCP
PROPCO, LLC

 

as
Borrower

 

 

and

 

 

GERMAN
AMERICAN CAPITAL CORPORATION

 

and

 

JPMORGAN
CHASE BANK, N.A.,

 

on behalf of
the holders of the Notes,

 

 

as
Lender

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
  10

  
	
   

  	
  1.1

  	
  Definitions

  	
  10

  
	
   

  	
  1.2

  	
  Principles of Construction

  	
  47

  
	
   

  	
   

  
	
  II.

  	
  GENERAL
  TERMS

  	
  47

  
	
   

  	
  2.1

  	
  Loan; Disbursement to
  Borrower

  	
  47

  
	
   

  	
   

  	
  2.1.1

  	
  The Loan; Delegation;
  Novation

  	
  47

  
	
   

  	
   

  	
  2.1.2

  	
  Disbursement to Borrower

  	
  48

  
	
   

  	
   

  	
  2.1.3

  	
  The
  Notes, Security Instruments and Loan Documents

  	
  48

  
	
   

  	
   

  	
  2.1.4

  	
  Use
  of Proceeds

  	
  48

  
	
   

  	
  2.2

  	
  Interest; Loan Payments; Late
  Payment Charge

  	
  48

  
	
   

  	
   

  	
  2.2.1

  	
  Payment
  of Principal and Interest

  	
  48

  
	
   

  	
   

  	
  2.2.2

  	
  Method
  and Place of Payment

  	
  49

  
	
   

  	
   

  	
  2.2.3

  	
  Late
  Payment Charge

  	
  49

  
	
   

  	
   

  	
  2.2.4

  	
  Usury
  Savings

  	
  49

  
	
   

  	
  2.3

  	
  Prepayments

  	
  50

  
	
   

  	
   

  	
  2.3.1

  	
  Prepayments

  	
  50

  
	
   

  	
   

  	
  2.3.2

  	
  Prepayments
  After Event of Default; Application of Amounts Paid

  	
  50

  
	
   

  	
   

  	
  2.3.3

  	
  Release
  of Property upon Repayment of Loan in Full

  	
  50

  
	
   

  	
   

  	
  2.3.4

  	
  Release of Individual
  Properties

  	
  51

  
	
   

  	
   

  	
  2.3.5

  	
  Substitution of Properties

  	
  53

  
	
   

  	
   

  	
  2.3.6

  	
  Provisions Relating to
  Individual Properties That Go Dark

  	
  59

  
	
   

  	
   

  	
  2.3.7

  	
  Excess Account Collateral

  	
  59

  
	
   

  	
   

  	
  2.3.8

  	
  Reserve Requirements

  	
  59

  
	
   

  	
   

  	
  2.3.9

  	
  Release of Unimproved Parcels

  	
  59

  
	
   

  	
  2.4

  	
  Regulatory Change; Taxes

  	
  61

  
	
   

  	
   

  	
  2.4.1

  	
  Increased
  Costs

  	
  61

  
	
   

  	
   

  	
  2.4.2

  	
  Special
  Taxes

  	
  62

  
	
   

  	
   

  	
  2.4.3

  	
  Other
  Taxes

  	
  62

  
	
   

  	
   

  	
  2.4.4

  	
  Indemnity

  	
  62

  
	
   

  	
   

  	
  2.4.5

  	
  Change
  of Office

  	
  62

  
	
   

  	
   

  	
  2.4.6

  	
  Survival

  	
  62

  
	
   

  	
  2.5

  	
  Conditions Precedent to
  Closing

  	
  62

  
	
   

  	
   

  	
  2.5.1

  	
  Representations
  and Warranties; Compliance with Conditions

  	
  62

  
	
   

  	
   

  	
  2.5.2

  	
  Delivery
  of Loan Documents; Title Policies; Reports; Leases

  	
  63

  
	
   

  	
   

  	
  2.5.3

  	
  Delivery
  of Organizational Documents

  	
  64

  
	
   

  	
   

  	
  2.5.4

  	
  Counsel
  Opinions

  	
  65

  
	
   

  	
   

  	
  2.5.5

  	
  Consummation
  of the Merger

  	
  65

  
	
   

  	
   

  	
  2.5.6

  	
  Payments

  	
  65

  
	
   

  	
   

  	
  2.5.7

  	
  Transaction
  Costs

  	
  66

  
	
   

  	
   

  	
  2.5.8

  	
  Material
  Adverse Effect

  	
  66

  
	
   

  	
   

  	
  2.5.9

  	
  Control

  	
  66

  
						

 

 

	
   

  	
   

  	
  2.5.10

  	
  Insolvency

  	
  66

  
	
   

  	
   

  	
  2.5.11

  	
  Master
  Lease and Individual Property Subleases

  	
  66

  
	
   

  	
   

  	
  2.5.12

  	
  Equity Contribution

  	
  66

  
	
   

  	
   

  	
  2.5.13

  	
  Existing
  Indebtedness

  	
  66

  
	
   

  	
   

  	
  2.5.14

  	
  Ground
  Lease and Fee Mortgagee Estoppels

  	
  67

  
	
   

  	
   

  	
  2.5.15

  	
  Equity
  and Real Property Transfer Documents

  	
  67

  
	
   

  	
   

  	
  2.5.16

  	
  No Competing Financing

  	
  67

  
	
   

  	
   

  	
  2.5.17

  	
  Approvals

  	
  68

  
	
   

  	
   

  	
  2.5.18

  	
  Searches

  	
  68

  
	
   

  	
  2.6

  	
  [Reserved]

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  CASH
  MANAGEMENT

  	
  68

  
	
   

  	
  3.1

  	
  Cash Management

  	
  68

  
	
   

  	
   

  	
  3.1.1

  	
  Establishment
  of Accounts

  	
  68

  
	
   

  	
   

  	
  3.1.2

  	
  Pledge
  of Account Collateral

  	
  69

  
	
   

  	
   

  	
  3.1.3

  	
  Maintenance of Collateral
  Accounts

  	
  70

  
	
   

  	
   

  	
  3.1.4

  	
  Eligible
  Accounts

  	
  70

  
	
   

  	
   

  	
  3.1.5

  	
  Deposits
  into Sub-Accounts

  	
  70

  
	
   

  	
   

  	
  3.1.6

  	
  Monthly
  Funding of Sub-Accounts; Master Lease Rent Shortfalls; Sub-Account Shortfalls

  	
  71

  
	
   

  	
   

  	
  3.1.7

  	
  Required
  Payments from Sub-Accounts

  	
  74

  
	
   

  	
   

  	
  3.1.8

  	
  Cash
  Management Bank

  	
  76

  
	
   

  	
   

  	
  3.1.9

  	
  Borrower’s Account
  Representations, Warranties and Covenants

  	
  77

  
	
   

  	
   

  	
  3.1.10

  	
  Account
  Collateral and Remedies

  	
  77

  
	
   

  	
   

  	
  3.1.11

  	
  Transfers
  and Other Liens

  	
  78

  
	
   

  	
   

  	
  3.1.12

  	
  Reasonable
  Care

  	
  78

  
	
   

  	
   

  	
  3.1.13

  	
  Lender’s
  Liability

  	
  79

  
	
   

  	
   

  	
  3.1.14

  	
  Continuing
  Security Interest

  	
  79

  
	
   

  	
   

  	
  3.1.15

  	
  Distributions

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  80

  
	
   

  	
  4.1

  	
  Borrower Representations

  	
  80

  
	
   

  	
   

  	
  4.1.1

  	
  Organization

  	
  80

  
	
   

  	
   

  	
  4.1.2

  	
  Proceedings

  	
  80

  
	
   

  	
   

  	
  4.1.3

  	
  No
  Conflicts

  	
  81

  
	
   

  	
   

  	
  4.1.4

  	
  Litigation

  	
  81

  
	
   

  	
   

  	
  4.1.5

  	
  Agreements

  	
  81

  
	
   

  	
   

  	
  4.1.6

  	
  Title

  	
  82

  
	
   

  	
   

  	
  4.1.7

  	
  No
  Bankruptcy Filing

  	
  82

  
	
   

  	
   

  	
  4.1.8

  	
  Full
  and Accurate Disclosure

  	
  82

  
	
   

  	
   

  	
  4.1.9

  	
  All
  Property

  	
  83

  
	
   

  	
   

  	
  4.1.10

  	
  No
  Plan Assets

  	
  83

  
	
   

  	
   

  	
  4.1.11

  	
  Compliance

  	
  83

  
	
   

  	
   

  	
  4.1.12

  	
  Financial
  Information

  	
  84

  
	
   

  	
   

  	
  4.1.13

  	
  Condemnation

  	
  84

  
	
   

  	
   

  	
  4.1.14

  	
  Federal Reserve Regulations

  	
  84

  
	
   

  	
   

  	
  4.1.15

  	
  Utilities
  and Public Access

  	
  84

  
						

 

2

 

	
   

  	
   

  	
  4.1.16

  	
  Not
  a Foreign Person

  	
  84

  
	
   

  	
   

  	
  4.1.17

  	
  [Reserved]

  	
  84

  
	
   

  	
   

  	
  4.1.18

  	
  [Reserved]

  	
  84

  
	
   

  	
   

  	
  4.1.19

  	
  [Reserved]

  	
  84

  
	
   

  	
   

  	
  4.1.20

  	
  Enforceability

  	
  84

  
	
   

  	
   

  	
  4.1.21

  	
  [Reserved

  	
  85

  
	
   

  	
   

  	
  4.1.22

  	
  Insurance

  	
  85

  
	
   

  	
   

  	
  4.1.23

  	
  Use
  of Property

  	
  85

  
	
   

  	
   

  	
  4.1.24

  	
  Certificate
  of Occupancy; Licenses

  	
  85

  
	
   

  	
   

  	
  4.1.25

  	
  Flood
  Zone

  	
  85

  
	
   

  	
   

  	
  4.1.26

  	
  Physical
  Condition

  	
  85

  
	
   

  	
   

  	
  4.1.27

  	
  Boundaries

  	
  85

  
	
   

  	
   

  	
  4.1.28

  	
  Subleases

  	
  86

  
	
   

  	
   

  	
  4.1.29

  	
  Filing
  and Recording Taxes

  	
  86

  
	
   

  	
   

  	
  4.1.30

  	
  Single
  Purpose Entity/Separateness

  	
  86

  
	
   

  	
   

  	
  4.1.31

  	
  [Reserved

  	
  87

  
	
   

  	
   

  	
  4.1.32

  	
  Illegal
  Activity

  	
  87

  
	
   

  	
   

  	
  4.1.33

  	
  No
  Change in Facts or Circumstances; Disclosure

  	
  87

  
	
   

  	
   

  	
  4.1.34

  	
  [Reserved

  	
  87

  
	
   

  	
   

  	
  4.1.35

  	
  Tax Filings

  	
  87

  
	
   

  	
   

  	
  4.1.36

  	
  Solvency/Fraudulent
  Conveyance

  	
  87

  
	
   

  	
   

  	
  4.1.37

  	
  Investment
  Company Act

  	
  87

  
	
   

  	
   

  	
  4.1.38

  	
  Interest
  Rate Protection Agreement

  	
  87

  
	
   

  	
   

  	
  4.1.39

  	
  Labor

  	
  88

  
	
   

  	
   

  	
  4.1.40

  	
  Brokers

  	
  88

  
	
   

  	
   

  	
  4.1.41

  	
  No
  Other Debt

  	
  88

  
	
   

  	
   

  	
  4.1.42

  	
  Taxpayer
  Identification Number

  	
  88

  
	
   

  	
   

  	
  4.1.43

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

  	
  88

  
	
   

  	
   

  	
  4.1.44

  	
  Merger
  Agreement

  	
  89

  
	
   

  	
   

  	
  4.1.45

  	
  Rights
  of First Refusal or First Offer to Lease or Purchase

  	
  89

  
	
   

  	
   

  	
  4.1.46

  	
  Reserved

  	
  89

  
	
   

  	
  4.2

  	
  Survival of Representations

  	
  89

  
	
   

  	
  4.3

  	
  Borrower’s Knowledge

  	
  89

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  BORROWER
  COVENANTS

  	
  89

  
	
   

  	
  5.1

  	
  Affirmative Covenants

  	
  89

  
	
   

  	
   

  	
  5.1.1

  	
  Performance
  by Borrower

  	
  89

  
	
   

  	
   

  	
  5.1.2

  	
  Existence;
  Compliance with Legal Requirements; Insurance

  	
  90

  
	
   

  	
   

  	
  5.1.3

  	
  Litigation

  	
  90

  
	
   

  	
   

  	
  5.1.4

  	
  Single
  Purpose Entity

  	
  90

  
	
   

  	
   

  	
  5.1.5

  	
  Consents

  	
  91

  
	
   

  	
   

  	
  5.1.6

  	
  Access
  to Property

  	
  92

  
	
   

  	
   

  	
  5.1.7

  	
  Notice
  of Default

  	
  92

  
	
   

  	
   

  	
  5.1.8

  	
  Cooperate
  in Legal Proceedings

  	
  92

  
	
   

  	
   

  	
  5.1.9

  	
  [Reserved

  	
  92

  
	
   

  	
   

  	
  5.1.10

  	
  Insurance

  	
  92

  
						

 

3

 

	
   

  	
   

  	
  5.1.11

  	
  Further
  Assurances; Separate Notes; Loan Resizing

  	
  92

  
	
   

  	
   

  	
  5.1.12

  	
  Mortgage
  Taxes

  	
  94

  
	
   

  	
   

  	
  5.1.13

  	
  Operation

  	
  94

  
	
   

  	
   

  	
  5.1.14

  	
  Business
  and Operations

  	
  94

  
	
   

  	
   

  	
  5.1.15

  	
  Title
  to the Property

  	
  95

  
	
   

  	
   

  	
  5.1.16

  	
  Costs
  of Enforcement

  	
  95

  
	
   

  	
   

  	
  5.1.17

  	
  Estoppel
  Statements

  	
  95

  
	
   

  	
   

  	
  5.1.18

  	
  Loan
  Proceeds

  	
  96

  
	
   

  	
   

  	
  5.1.19

  	
  No
  Joint Assessment

  	
  96

  
	
   

  	
   

  	
  5.1.20

  	
  No
  Further Encumbrances

  	
  96

  
	
   

  	
   

  	
  5.1.21

  	
  [Reserved

  	
  96

  
	
   

  	
   

  	
  5.1.22

  	
  Master
  Lease

  	
  96

  
	
   

  	
  5.2

  	
  Negative Covenants

  	
  98

  
	
   

  	
   

  	
  5.2.1

  	
  Incur
  Debt

  	
  98

  
	
   

  	
   

  	
  5.2.2

  	
  Encumbrances

  	
  98

  
	
   

  	
   

  	
  5.2.3

  	
  Engage
  in Different Business

  	
  98

  
	
   

  	
   

  	
  5.2.4

  	
  Make
  Advances

  	
  98

  
	
   

  	
   

  	
  5.2.5

  	
  Subdivision

  	
  98

  
	
   

  	
   

  	
  5.2.6

  	
  Commingle

  	
  98

  
	
   

  	
   

  	
  5.2.7

  	
  Guarantee
  Obligations

  	
  98

  
	
   

  	
   

  	
  5.2.8

  	
  Transfer
  Assets

  	
  98

  
	
   

  	
   

  	
  5.2.9

  	
  Amend
  Organizational Documents

  	
  98

  
	
   

  	
   

  	
  5.2.10

  	
  Dissolve

  	
  99

  
	
   

  	
   

  	
  5.2.11

  	
  Bankruptcy

  	
  99

  
	
   

  	
   

  	
  5.2.12

  	
  ERISA

  	
  99

  
	
   

  	
   

  	
  5.2.13

  	
  Distributions

  	
  99

  
	
   

  	
   

  	
  5.2.14

  	
  [Reserved

  	
  99

  
	
   

  	
   

  	
  5.2.15

  	
  [Reserved

  	
  99

  
	
   

  	
   

  	
  5.2.16

  	
  [Reserved;]

  	
  99

  
	
   

  	
   

  	
  5.2.17

  	
  Modify
  Account Agreement

  	
  99

  
	
   

  	
   

  	
  5.2.18

  	
  Zoning
  Reclassification

  	
  99

  
	
   

  	
   

  	
  5.2.19

  	
  Change
  of Principal Place of Business

  	
  100

  
	
   

  	
   

  	
  5.2.20

  	
  Debt
  Cancellation

  	
  100

  
	
   

  	
   

  	
  5.2.21

  	
  Misapplication
  of Funds

  	
  100

  
	
   

  	
   

  	
  5.2.22

  	
  Single-Purpose
  Entity

  	
  100

  
	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE;
  CASUALTY; CONDEMNATION; RESTORATION

  	
  100

  
	
   

  	
  6.1

  	
  Insurance Coverage
  Requirements

  	
  100

  
	
   

  	
   

  	
  6.1.1

  	
  Property
  Insurance

  	
  100

  
	
   

  	
   

  	
  6.1.2

  	
  Liability
  Insurance

  	
  101

  
	
   

  	
   

  	
  6.1.3

  	
  Workers’
  Compensation Insurance

  	
  101

  
	
   

  	
   

  	
  6.1.4

  	
  Commercial
  Rents Insurance

  	
  101

  
	
   

  	
   

  	
  6.1.5

  	
  Builder’s
  All-Risk Insurance

  	
  101

  
	
   

  	
   

  	
  6.1.6

  	
  Boiler
  and Machinery Insurance

  	
  102

  
	
   

  	
   

  	
  6.1.7

  	
  Flood
  Insurance

  	
  102

  
	
   

  	
   

  	
  6.1.8

  	
  [Reserved

  	
  102

  
	
   

  	
   

  	
  6.1.9

  	
  Terrorism
  Insurance

  	
  102

  

 

4

 

	
   

  	
   

  	
  6.1.10

  	
  Other
  Insurance

  	
  102

  
	
   

  	
   

  	
  6.1.11

  	
  Ratings
  of Insurers

  	
  102

  
	
   

  	
   

  	
  6.1.12

  	
  Form of
  Insurance Policies; Endorsements

  	
  103

  
	
   

  	
   

  	
  6.1.13

  	
  Certificates

  	
  104

  
	
   

  	
   

  	
  6.1.14

  	
  Separate
  Insurance

  	
  104

  
	
   

  	
   

  	
  6.1.15

  	
  Blanket
  Policies

  	
  104

  
	
   

  	
  6.2

  	
  Condemnation and Insurance
  Proceeds

  	
  105

  
	
   

  	
   

  	
  6.2.1

  	
  Notification

  	
  105

  
	
   

  	
   

  	
  6.2.2

  	
  Proceeds

  	
  105

  
	
   

  	
   

  	
  6.2.3

  	
  Lender
  to Take Proceeds

  	
  106

  
	
   

  	
   

  	
  6.2.4

  	
  Borrower
  to Restore

  	
  107

  
	
   

  	
   

  	
  6.2.5

  	
  Disbursement
  of Proceeds

  	
  109

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  IMPOSITIONS,
  OTHER CHARGES, LIENS AND OTHER ITEMS

  	
  110

  
	
   

  	
  7.1

  	
  Borrower to Pay Impositions
  and Other Charges

  	
  110

  
	
   

  	
  7.2

  	
  No Liens

  	
  110

  
	
   

  	
  7.3

  	
  Contest

  	
  111

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  TRANSFERS,
  INDEBTEDNESS AND SUBORDINATE LIENS

  	
  111

  
	
   

  	
  8.1

  	
  General Restriction on
  Transfers

  	
  111

  
	
   

  	
  8.2

  	
  Sale of Building Equipment

  	
  112

  
	
   

  	
  8.3

  	
  Immaterial Transfers and
  Easements, etc.

  	
  112

  
	
   

  	
  8.4

  	
  [Reserved.]

  	
  113

  
	
   

  	
  8.5

  	
  Permitted Equity Transfers

  	
  113

  
	
   

  	
  8.6

  	
  Deliveries to Lender

  	
  114

  
	
   

  	
  8.7

  	
  Loan Assumption

  	
  114

  
	
   

  	
  8.8

  	
  Subleases

  	
  115

  
	
   

  	
   

  	
  8.8.1

  	
  Master
  Lease and Existing Subleases

  	
  115

  
	
   

  	
   

  	
  8.8.2

  	
  Leasing
  Conditions

  	
  115

  
	
   

  	
   

  	
  8.8.3

  	
  Delivery
  of New Sublease or Sublease Modification

  	
  115

  
	
   

  	
   

  	
  8.8.4

  	
  Sublease
  Amendments

  	
  116

  
	
   

  	
   

  	
  8.8.5

  	
  Security
  Deposits

  	
  116

  
	
   

  	
   

  	
  8.8.6

  	
  No
  Default Under Subleases

  	
  116

  
	
   

  	
   

  	
  8.8.7

  	
  Subordination

  	
  116

  
	
   

  	
   

  	
  8.8.8

  	
  Attornment

  	
  116

  
	
   

  	
   

  	
  8.8.9

  	
  Non-Disturbance
  Agreements

  	
  117

  
	
   

  	
   

  	
  8.8.10

  	
  Recognition Agreements

  	
  117

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  INTEREST
  RATE PROTECTION AGREEMENT

  	
  118

  
	
   

  	
  9.1

  	
  Interest Rate Protection
  Agreement

  	
  118

  
	
   

  	
  9.2

  	
  Pledge and Collateral
  Assignment

  	
  118

  
	
   

  	
  9.3

  	
  Covenants

  	
  119

  
	
   

  	
  9.4

  	
  Powers of Borrower Prior to
  an Event of Default

  	
  120

  
	
   

  	
  9.5

  	
  Representations and
  Warranties

  	
  120

  
	
   

  	
  9.6

  	
  Payments

  	
  121

  
	
   

  	
  9.7

  	
  Remedies

  	
  121

  
	
   

  	
  9.8

  	
  Sales of Rate Protection
  Collateral

  	
  123

  

 

5

 

	
   

  	
  9.9

  	
  Public Sales Not Possible

  	
  124

  
	
   

  	
  9.10

  	
  Receipt of Sale Proceeds

  	
  124

  
	
   

  	
  9.11

  	
  Replacement Interest Rate
  Protection Agreement

  	
  124

  
	
   

  	
  9.12

  	
  Swap Gain

  	
  124

  
	
   

  	
  9.13

  	
  Prepayment of Interest Rate
  Swap Notional Amount

  	
  124

  
	
   

  	
   

  	
   

  
	
  X.

  	
  MAINTENANCE
  OF PROPERTY; ALTERATIONS

  	
  124

  
	
   

  	
  10.1

  	
  Maintenance of Property

  	
  124

  
	
   

  	
  10.2

  	
  Conditions to Alteration

  	
  125

  
	
   

  	
  10.3

  	
  Costs of Alteration

  	
  125

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  BOOKS AND
  RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

  	
  126

  
	
   

  	
  11.1

  	
  Books and Records

  	
  126

  
	
   

  	
  11.2

  	
  Financial Statements

  	
  126

  
	
   

  	
   

  	
  11.2.1

  	
  Monthly
  Reports

  	
  126

  
	
   

  	
   

  	
  11.2.2

  	
  Quarterly
  Reports

  	
  127

  
	
   

  	
   

  	
  11.2.3

  	
  Annual
  Reports

  	
  128

  
	
   

  	
   

  	
  11.2.4

  	
  Disclosure
  Restrictions

  	
  128

  
	
   

  	
   

  	
  11.2.5

  	
  Capital
  Expenditures Summaries

  	
  128

  
	
   

  	
   

  	
  11.2.6

  	
  Master
  Lease

  	
  128

  
	
   

  	
   

  	
  11.2.7

  	
  Annual
  Budget; Operating Agreement Annual Budgets

  	
  128

  
	
   

  	
   

  	
  11.2.8

  	
  Other Information

  	
  129

  
	
   

  	
   

  	
  11.2.9

  	
  Proprietary
  Information

  	
  129

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  ENVIRONMENTAL
  MATTERS

  	
  129

  
	
   

  	
  12.1

  	
  Representations

  	
  129

  
	
   

  	
  12.2

  	
  Covenants

  	
  130

  
	
   

  	
   

  	
  12.2.1

  	
  Compliance
  with Environmental Laws

  	
  130

  
	
   

  	
   

  	
  12.2.2

  	
  Notices
  Regarding Environmental Events

  	
  130

  
	
   

  	
   

  	
  12.2.3

  	
  Other
  Notices

  	
  130

  
	
   

  	
  12.3

  	
  Environmental Reports

  	
  130

  
	
   

  	
  12.4

  	
  Environmental Indemnification

  	
  131

  
	
   

  	
  12.5

  	
  Recourse Nature of Certain
  Indemnifications

  	
  132

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  THE
  OPERATING AGREEMENTS

  	
  132

  
	
   

  	
  13.1

  	
  Operating Agreement
  Representations, Warranties

  	
  132

  
	
   

  	
  13.2

  	
  Cure by Lender

  	
  133

  
	
   

  	
  13.3

  	
  Option to Renew or Extend the
  Ground Lease

  	
  134

  
	
   

  	
  13.4

  	
  Operating Agreement Covenants

  	
  134

  
	
   

  	
   

  	
  13.4.1

  	
  Waiver
  of Interest In New Ground Lease

  	
  134

  
	
   

  	
   

  	
  13.4.2

  	
  No
  Election to Terminate

  	
  134

  
	
   

  	
   

  	
  13.4.3

  	
  Notice
  Prior to Rejection

  	
  134

  
	
   

  	
   

  	
  13.4.4

  	
  Lender
  Right to Perform

  	
  135

  
	
   

  	
   

  	
  13.4.5

  	
  Lender
  Attorney in Fact

  	
  135

  
	
   

  	
   

  	
  13.4.6

  	
  Payment
  of Sums Due Under Operating Agreements

  	
  135

  
	
   

  	
   

  	
  13.4.7

  	
  Performance
  of Covenants

  	
  135

  

 

6

 

	
   

  	
   

  	
  13.4.8

  	
  [Reserved

  	
  136

  
	
   

  	
   

  	
  13.4.9

  	
  No
  Modification or Termination

  	
  136

  
	
   

  	
   

  	
  13.4.10

  	
  Notices
  of Default

  	
  136

  
	
   

  	
   

  	
  13.4.11

  	
  Delivery
  of Information

  	
  136

  
	
   

  	
   

  	
  13.4.12

  	
  No
  Subordination

  	
  136

  
	
   

  	
   

  	
  13.4.13

  	
  Further
  Assurances

  	
  136

  
	
   

  	
   

  	
  13.4.14

  	
  Estoppel
  Certificates

  	
  136

  
	
   

  	
   

  	
  13.4.15

  	
  Common
  Area/Common Elements Insurance

  	
  137

  
	
   

  	
   

  	
  13.4.16

  	
  [Reserved.]

  	
  137

  
	
   

  	
  13.5

  	
  Lender Right to Participate

  	
  137

  
	
   

  	
  13.6

  	
  No Liability

  	
  137

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
  SECURITIZATION
  AND PARTICIPATION

  	
  137

  
	
   

  	
  14.1

  	
  Sale of Notes and
  Securitization

  	
  137

  
	
   

  	
  14.2

  	
  Securitization Financial
  Statements

  	
  139

  
	
   

  	
  14.3

  	
  Securitization
  Indemnification

  	
  139

  
	
   

  	
   

  	
  14.3.1

  	
  Disclosure Documents

  	
  139

  
	
   

  	
   

  	
  14.3.2

  	
  Indemnification Certificate

  	
  139

  
	
   

  	
  14.4

  	
  Retention of Servicer

  	
  141

  
	
   

  	
  14.5

  	
  Lender’s Securitization
  Expenses

  	
  142

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS

  	
  142

  
	
   

  	
  15.1

  	
  Assignment and Acceptance

  	
  142

  
	
   

  	
  15.2

  	
  Effect of Assignment and
  Acceptance

  	
  142

  
	
   

  	
  15.3

  	
  Content

  	
  143

  
	
   

  	
  15.4

  	
  Register

  	
  143

  
	
   

  	
  15.5

  	
  Substitute Notes

  	
  143

  
	
   

  	
  15.6

  	
  Participations

  	
  144

  
	
   

  	
  15.7

  	
  Disclosure of Information

  	
  144

  
	
   

  	
  15.8

  	
  Security Interest in Favor of
  Federal Reserve Bank

  	
  144

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVI.

  	
  RESERVE
  ACCOUNTS

  	
  145

  
	
   

  	
  16.1

  	
  Tax Reserve Account

  	
  145

  
	
   

  	
  16.2

  	
  Insurance Reserve Account

  	
  145

  
	
   

  	
  16.3

  	
  Ground Rent Reserve Account

  	
  146

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVII.

  	
  DEFAULTS

  	
  147

  
	
   

  	
  17.1

  	
  Event of Default

  	
  147

  
	
   

  	
  17.2

  	
  Remedies

  	
  151

  
	
   

  	
  17.3

  	
  Remedies Cumulative; Waivers

  	
  152

  
	
   

  	
  17.4

  	
  Costs of Collection

  	
  153

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVIII.

  	
  SPECIAL
  PROVISIONS

  	
  153

  
	
   

  	
  18.1

  	
  Exculpation

  	
  153

  
	
   

  	
   

  	
  18.1.1

  	
  Exculpated
  Parties

  	
  153

  
	
   

  	
   

  	
  18.1.2

  	
  Carveouts
  From Non-Recourse Limitations

  	
  154

  
	
   

  	
  18.2

  	
  Pro Rata Share

  	
  155

  

 

7

 

	
  XIX.

  	
  MISCELLANEOUS

  	
  156

  
	
   

  	
  19.1

  	
  Survival

  	
  156

  
	
   

  	
  19.2

  	
  Lender’s Discretion

  	
  156

  
	
   

  	
  19.3

  	
  Governing Law

  	
  156

  
	
   

  	
  19.4

  	
  Modification; Waiver in
  Writing

  	
  157

  
	
   

  	
  19.5

  	
  Delay Not a Waiver

  	
  157

  
	
   

  	
  19.6

  	
  Notices

  	
  158

  
	
   

  	
  19.7

  	
  TRIAL BY JURY

  	
  159

  
	
   

  	
  19.8

  	
  Headings

  	
  160

  
	
   

  	
  19.9

  	
  Severability

  	
  160

  
	
   

  	
  19.10

  	
  Preferences

  	
  160

  
	
   

  	
  19.11

  	
  Waiver of Notice

  	
  160

  
	
   

  	
  19.12

  	
  Expenses; Indemnity

  	
  160

  
	
   

  	
  19.13

  	
  Exhibits and Schedules
  Incorporated

  	
  162

  
	
   

  	
  19.14

  	
  Offsets, Counterclaims and
  Defenses

  	
  162

  
	
   

  	
  19.15

  	
  Liability of Assignees of
  Lender

  	
  163

  
	
   

  	
  19.16

  	
  No Joint Venture or
  Partnership; No Third Party Beneficiaries

  	
  163

  
	
   

  	
  19.17

  	
  Publicity

  	
  163

  
	
   

  	
  19.18

  	
  Waiver of Marshalling of
  Assets

  	
  163

  
	
   

  	
  19.19

  	
  Waiver of Counterclaim and
  other Actions

  	
  164

  
	
   

  	
  19.20

  	
  Conflict; Construction of
  Documents; Reliance

  	
  164

  
	
   

  	
  19.21

  	
  Prior Agreements

  	
  164

  
	
   

  	
  19.22

  	
  Counterparts

  	
  164

  

 

8

 

EXHIBITS AND
SCHEDULES

 

	
  EXHIBIT A

  	
  TITLE INSURANCE REQUIREMENTS,
  ENDORSEMENTS AND AFFIRMATIVE COVERAGES

  
	
  EXHIBIT B

  	
  SURVEY REQUIREMENTS

  
	
  EXHIBIT C

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT D

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT E

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT F

  	
  FORM OF MASTER LEASE

  
	
  EXHIBIT G

  	
  FORM OF TENANT ESTOPPEL
  LETTER

  
	
  EXHIBIT H

  	
  FORM OF GROUND LESSOR
  ESTOPPEL CERTIFICATE

  
	
  EXHIBIT H-1

  	
  FORM OF FEE
  MORTGAGEE ESTOPPEL CERTIFICATE

  
	
  EXHIBIT I

  	
  [RESERVED]

  
	
  EXHIBIT J

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT K

  	
  BORROWER ORGANIZATIONAL
  STRUCTURE

  
	
  EXHIBIT L

  	
  INTEREST RATE PROTECTION
  AGREEMENT

  
	
  EXHIBIT M

  	
  FORM OF ASSIGNMENT AND
  ACCEPTANCE AGREEMENT

  
	
  EXHIBIT N

  	
  FORM OF SUBORDINATION,
  NON-DISTURBANCE AND ATTORNMENT AGREEMENT

  
	
  EXHIBIT O

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT P

  	
  FORM OF RENT PAYMENT
  DIRECTION LETTER

  
	
  EXHIBIT Q

  	
  RATE HEDGE COUNTERPARTY
  ACKNOWLEDGMENT

  
	
  EXHIBIT R

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT S

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT T

  	
  FORM OF INDEPENDENT
  MANAGER/MEMBER CERTIFICATE

  
	
   

  	
   

  
	
  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
  4.1.11

  	
  COMPLIANCE QUALIFICATIONS

  
	
  SCHEDULE V

  	
  ALLOCATED LOAN AMOUNTS

  
	
  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

  	
  SUCCESSOR PRINCIPAL CONTROL PERSONS

  

 

9

 

AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT

 

THIS AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT dated as of March 19, 2008 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this “Agreement”), among FCP PROPCO, LLC, a Delaware limited
liability company (“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, “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,
“Noteholder II”) (Noteholder I and Noteholder II, individually or
collectively as the context indicates, “Lender”).

 

RECITALS:

 

WHEREAS, Borrower and Lender entered into a Loan and Security
Agreement, dated as of November 7, 2007 (the “Original Agreement”)
pursuant to which Lender made a loan in the original principal amount of
$2,050,000,000 (the “Original Loan”) to Borrower;

 

WHEREAS, Lender and Mezzanine Lender (as hereinafter defined) have
determined to decrease the principal amount of the Original Loan and
correspondingly increase the principal amount of the Mezzanine Loan (as
hereinafter defined);

 

WHEREAS, in
order to implement such resizing, Borrower shall delegate and transfer its
obligations in respect of a portion of the Original Loan to each of the Mezzanine
Borrowers (as hereinafter defined), each of the Mezzanine Borrowers will assume
the obligations of Borrower as to each such delegated portion of the Original
Loan, Lender will novate the obligations of Borrower so as to exonerate
Borrower from any obligation to Lender in respect of the delegated portions of
the Original Loan, and each of the Mezzanine Lenders (as hereinafter defined)
shall agree that the portion of the Original Loan assumed by each of the
Mezzanine Borrowers, respectively, shall be treated for all purposes as an
obligation of the applicable Mezzanine Borrower under its respective mezzanine
loan agreement;

 

WHEREAS, in order to implement such resizing, the parties desire to
amend and restate the Original Agreement in its entirety.

 

NOW, THEREFORE, in consideration of the covenants, agreements,
representations and warranties set forth in this Agreement, the parties hereto
hereby amend and restate the Original Agreement in its entirety and 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

 

10

 

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 that Borrower shall then have delivered an Officer’s Certificate certifying to the best of the
signer’s actual knowledge without investigation that as of the date of such
Officer’s Certificate no Default or Event of Default exists; 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 that Borrower shall then have delivered an Officer’s Certificate certifying to the best of the
signer’s actual knowledge without investigation that as of the date of such
Officer’s Certificate no Default or Event of Default exists; 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 Agreement” shall mean (a) the side letter
agreement dated November 7, 2007 between Cash Management Bank and
Collateral Agent or (b) at any time when Lender or Servicer is not the
Cash Management Bank, an Account Control Agreement, in form reasonably
acceptable to Lender and acceptable to the Rating Agencies among Collateral
Agent, Borrower and Cash Management Bank.

 

“Account Collateral” shall have the meaning set forth in Section 3.1.2.

 

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

 

“Actually
Known by the 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 Borrower, Sponsor, or
Lender’s counsel expressly disclosing to Lender a state of facts contrary to a
representation made by 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% (or, solely for purposes of the
definition of “Independent Purchaser” herein, 10%) of any class of ownership interests
of such Person and (iii) any Affiliate of the foregoing.

 

11

 

“Aggregate Appraised Value” as of the date determined shall mean
the sum of (a) the aggregate appraised values as of the Closing Date of all
Property which remains as of the date determined subject to the Lien of a
Security Instrument (excluding the Replaced Properties, Release Properties and
the Substitute Properties) and (b) the appraised value of the Substitute
Property as of such date of determination.

 

“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 allocated portion of the Loan applicable to
such Individual Property that is set forth on Schedule V-1 attached
hereto.

 

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

 

“Alteration” shall have the meaning set forth in Section 10.2.

 

“Amendment Effective Date” means March 19, 2008.

 

“Annual Budget” shall mean, with respect to each
Individual Property, an annual budget for the succeeding Fiscal Year with
respect to the operations of such Individual Property.

 

“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.

 

“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 Borrower (which can be an employee of Borrower or an
Affiliate), licensed to practice in the

 

12

 

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 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).

 

“Assigned Landlord Lien” shall have the meaning set forth in Section 4.1.6.

 

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

 

“Assignment of Leases” shall mean that certain first priority
Assignment of Master Lease, Subleases, Rents and Security Deposits, dated as of
the Closing Date, from Borrower, as assignor, to Lender, as assignee, assigning
to Lender all of Borrower’s interest in and to the Master Lease, the Subleases,
Rents and Security Deposits as security for the Loan, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Assignment
of Leases Counterpart” shall have the meaning provided in Section 2.3.5(d)(xiii)(2).

 

“Assignment
of Licenses” shall mean that certain first priority Assignment of License
Agreement, dated as of the Closing Date, from Borrower, as assignor, to Lender,
as assignee, assigning to Lender all of Borrower’s interest in, to and under
the License and Reservation Service Agreement as security for the Loan, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

 

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

 

“Blanket Policy” shall have the meaning provided in Section 6.1.15.

 

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

 

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

 

“Borrower’s Account” shall mean an account or
accounts maintained by Borrower for its own account at such bank and with such
account number as may be designated in writing by Borrower to Lender and Cash
Management Bank from time to time.

 

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

 

“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

 

13

 

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” shall mean any Approved Bank acting as
Cash Management Bank under the Account Agreement or other financial institution
approved by the Lender and, if a Securitization has occurred, the Rating
Agencies.

 

“Casualty Amount” shall mean twenty percent (20%)
of the Allocated Loan Amount of the affected Individual Property.

 

“Chase”
shall have the meaning set forth in Section 14.3.2(b).

 

“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 November 7, 2007.

 

“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 Accounts” 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 Lender.

 

“Combined
Allocated Loan Amount” shall mean with respect to each Individual Property,
the aggregate portions of the Loan and the Mezzanine Loans allocated
to such Individual Property that is set forth on Schedule V attached
hereto.

 

“Combined Loans” shall mean the Loan and the Mezzanine Loan,
collectively.

 

14

 

“Combined Principal Amount” shall mean the sum of the Principal
Amount and the Principal Amount (Mezzanine).

 

“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(s), minus, if applicable, the
principal amount of any prepayment of the Combined Loans 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, (a) if the Release Property is the Individual Property
commonly known as “Red Rock”, (i) 120% if the transferee of such Release
Property is a bona fide Independent Purchaser of such Individual Property, and (ii) otherwise,
135%; and (b) if the Release Property is any other Individual Property,
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

  	
  %

  

 

To the extent
the Combined Allocated Loan Amount of an Individual Property to be released,
when added to the Combined Allocated Loan Amount of previously (or
simultaneously) released Individual Properties, would exceed a benchmark set
forth under the “Range of Outstanding Aggregate Combined Allocated Loan Amounts
Following Release” column, such excess Combined Allocated Loan Amount (but only
such excess) shall be subject to the higher Combined Release Price Percentage
set forth in the second column.  For example,
if a release would result in an aggregate Combined Allocated Loan Amount which
exceeded the first benchmark by $10 million, the $10 million would bear a 110%
Combined Release Price Percentage, and the remainder a 100% Combined Release
Price Percentage.

 

“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) 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 Borrower to Master Lessee pursuant to the
Master Lease, (v) the execution and delivery of the Loan Documents or the
Mezzanine Loan Documents, Borrower’s or Mezzanine Borrower’s performance thereunder,
the recordation of the Security Instruments, and the exercise

 

15

 

of any remedies by Lender or Mezzanine
Lender, and (vi) following Lender’s or its designee’s succession in title
to any Property, the transfer of any such Property by 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, JPMorgan Chase Bank, N.A., with respect to the Interest Rate Swap Agreement, Deutsche Bank AG, and
with respect to any Replacement Interest Rate Protection Agreement, any
substitute Approved Counterparty.

 

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

 

“Cut-Off Date” shall have the meaning set forth in Section 6.2.3(a).

 

“DBS” shall have the meaning set forth in Section 14.3.2(b).

 

“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” shall mean, with respect to any particular period
of time, scheduled interest payments under the Notes.

 

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

 

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

 

16

 

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

 

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

 

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

 

“Default” shall mean the occurrence of any event hereunder or
under any other 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 Notes.

 

“Deficiency” shall have the meaning set forth in Section 6.2.4(b)(ii).

 

“Disclosure Document” shall have the meaning set forth in Section 14.3.1.

 

“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 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.

 

“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 any claim, action, cause of
action, investigation or written notice by any Person alleging potential
liability (including potential liability for investigatory costs, cleanup
costs, natural resource damages, property damages, personal injuries or
penalties) arising out of, based upon or resulting from (a) the presence,
threatened presence, release or threatened release into the environment of any
Hazardous Materials from or at the Property, or (b) the violation, or
alleged violation, of any Environmental Law relating to the Property.

 

“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

 

17

 

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.

 

“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 Account Collateral” shall have the meaning set forth in Section 2.3.7.

 

“Excess Cash Flow” shall have the meaning set forth in Section 3.1.6(a)(xv).

 

“Exchange Act” shall have the meaning set forth in Section 14.3.1.

 

“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

 

18

 

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.

 

“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 Account” shall mean account number 048818623 at Cash Management Bank.

 

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

 

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

 

“First Mezzanine Lender” shall mean the holders of the First
Mezzanine Loan.

 

“First Mezzanine Lender Monthly Debt Service Notice” shall mean
the written notice required to be delivered by First Mezzanine Lender pursuant
to Section 3.1.6 of the First Mezzanine Loan Agreement to Lender at
least five (5) Business Days prior to each Payment 

 

Date setting forth the First Mezzanine Loan Debt Service Amount payable
by First Mezzanine Borrower on the first Payment Date occurring after the date
such notice is delivered.

 

“First Mezzanine Loan” shall mean a $200,000,000 mezzanine loan,
comprised of (x) that certain $150,000,000 mezzanine loan, made by First
Mezzanine Lender to First Mezzanine

 

19

 

Borrower and (y) the assumption by First
Mezzanine Borrower pursuant to the First Mezzanine Loan Documents of
$50,000,000 in principal amount initially borrowed by Borrower.

 

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

 

“First Mezzanine Loan Debt Service Amount” shall mean, with
respect to any specified date or a particular period of time, interest payments
under the First Mezzanine Note (excluding any default or accrued interest) due
as of such date (as set forth in the First Mezzanine Lender Monthly Debt
Service Notice delivered to Lender) or payable during such period (including
the last day thereof), as applicable and repayment in full of the principal
balance of the First Mezzanine Note on the scheduled maturity of the First
Mezzanine Loan (but excluding any principal payments on account of an
acceleration of the First Mezzanine Loan or a default under any of the First
Mezzanine Loan Documents).

 

“First Mezzanine Loan Default Notice” shall mean a notice from
First Mezzanine Lender to Lender (upon which Lender may conclusively rely
without any inquiry into the validity thereof) that an “Event of Default” has
occurred and is continuing under any of the First Mezzanine Loan Documents.

 

“First Mezzanine Loan Default Revocation Notice” shall have the
meaning set forth in Section 3.1.7(vii) hereof.

 

“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 Note” shall mean, collectively, (a) that certain Amended and
Restated First Mezzanine Note A-1, dated as of March 19, 2008, made by
First Mezzanine Borrower, as maker, in favor of Noteholder I, as payee, in the
principal amount of $125,000,000 and (b) that certain Amended and Restated
First Mezzanine Note A-2, dated as of March 19, 2008, made by First
Mezzanine Borrower, as maker, in favor of Noteholder II, as payee, in the
principal amount of $75,000,000.

 

“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 Borrower may establish from time to time.

 

“Fourth Mezzanine Account” shall mean account number 048821403 at Cash Management Bank.

 

20

 

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

 

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

 

“Fourth Mezzanine Lender” shall mean the holders of the Fourth
Mezzanine Loan.

 

“Fourth Mezzanine Lender Monthly Debt Service Notice” shall mean
the written notice required to be delivered by Fourth Mezzanine Lender pursuant
to Section 3.1.6 of the Fourth Mezzanine Loan Agreement to Lender
at least five (5) Business Days prior to each Payment Date setting forth
the Fourth Mezzanine Loan Debt Service Amount payable by Fourth Mezzanine
Borrower on the first Payment Date occurring after the date such notice is
delivered.

 

“Fourth Mezzanine Loan” shall mean the assumption by Fourth
Mezzanine Borrower pursuant to the Fourth Mezzanine Loan Documents of
$150,000,000 in principal amount initially borrowed by Borrower.

 

“Fourth Mezzanine Loan Agreement” shall mean that certain
Mezzanine Loan and Security Agreement (Fourth Mezzanine), dated as of March 19,
2008, between Fourth Mezzanine Borrower, as borrower, and Fourth Mezzanine
Lender, as lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.

 

“Fourth Mezzanine Loan Debt Service Amount” shall mean, with
respect to any specified date or a particular period of time, interest payments
under the Fourth Mezzanine Note (excluding any default or accrued interest) due
as of such date (as set forth in the Fourth Mezzanine Lender Monthly Debt
Service Notice delivered to Lender) or payable during such period (including
the last day thereof), as applicable and repayment in full of the principal
balance of the Fourth Mezzanine Note on the scheduled maturity of the Fourth
Mezzanine Loan (but excluding any principal payments on account of an
acceleration of the Fourth Mezzanine Loan or a default under any of the Fourth
Mezzanine Loan Documents).

 

“Fourth Mezzanine Loan Default Notice” shall mean a notice from
Fourth Mezzanine Lender to Lender (upon which Lender may conclusively rely
without any inquiry into the validity thereof) that an “Event of Default” has
occurred and is continuing under any of the Fourth Mezzanine Loan Documents.

 

“Fourth Mezzanine Loan Default Revocation Notice” shall have the
meaning set forth in Section 3.1.7(x) hereof.

 

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

 

“Fourth Mezzanine Note” shall mean, collectively, (i) that
certain Fourth Mezzanine Note A-1-a in the principal amount of $46,875,000
dated as of March 19, 2008, from Fourth Mezzanine Borrower to Noteholder
I, (ii) that certain Fourth Mezzanine Note A-1-b in the principal amount
of $46,875,000 dated as of March 19, 2008, from Fourth Mezzanine Borrower

 

21

 

to Noteholder I, (iii) that certain
Fourth Mezzanine Note A-2-a in the principal amount of $28,125,000 dated as of March 19,
2008, from Fourth Mezzanine Borrower to Noteholder II, and (iv) that
certain Fourth Mezzanine Note A-2-b in the principal amount of $28,125,000
dated as of March 19, 2008, from Fourth Mezzanine Borrower to Noteholder
II.

 

“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 November 7, 2007, between Borrower and Lender with
respect to conditions precedent to funding the Loan and Mezzanine Loan.

 

“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 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.

 

“General Release Conditions” shall have the meaning set forth in
Section 2.3.4.

 

“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 Lender in writing or is unavoidable in order for 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 Borrower or 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)

 

22

 

consecutive days, provided that if in connection with a Material
Alteration, Borrower shall have disclosed to Lender in the notice required for
such Material Alteration pursuant to Section 10.2 hereof 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
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
Leases” shall have the meaning provided in the Security Instruments, collectively.

 

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

 

“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 Borrower pursuant to the Ground Leases.

 

“Ground
Rent Reserve Account” shall have the meaning provided in Section 3.1.1(c).

 

“Ground
Rent Reserve Amount” shall have the meaning provided in Section 16.3.

 

“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

 

23

 

(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 have the meaning set forth in Section 3.1.1.

 

“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
Closing Date 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) Borrower (including
all income, franchise, single business or other taxes imposed on 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 Lender in connection with the Loan, or any part thereof, or any Rents 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 Borrower to pay any tax, assessment,
levy or charge imposed on (i) Master Lessee, (ii) any Tenant or (iii) 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 Lender pursuant hereto,
under the Notes or in accordance with the other Loan Documents and all other
amounts, sums and expenses paid by or payable to Lender hereunder or pursuant
to the Notes or the other Loan Documents and the Interest Rate Swap Agreement.

 

“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, director or person performing
similar functions and (iii) is not a member of the immediate family of a
Person defined in (i) or (ii) above.

 

24

 

“Independent Accountant” shall mean a firm of nationally
recognized, certified public accountants which is Independent and which is
selected by Borrower and reasonably acceptable to 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 Closing Date, (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 Borrower or its Affiliates (provided that Borrower may
have the same Independent Directors, Independent Managers or Independent
Members as any Mezzanine Borrower), (ii) a customer, supplier or other
Person who derives more than 1% of its purchases or revenues from its
activities with 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 Borrower.

 

“Independent Purchaser” shall mean a Person who is not: (i) a
Person having any direct financial interest or any material indirect financial
interest in any Borrower Party or in any Affiliate of any Borrower Party, (ii) a Person connected with any
Borrower Party or any Affiliate of any Borrower Party as an officer, employee,
promoter, underwriter, trustee, partner, member, manager, director or person
performing similar functions, (iii) Frank J. Fertitta, Lorenzo J. Fertitta
or Thomas J. Barrack, Jr. (each, “Key Person”), a member of the
immediate family of any Key Person, or a Person in which a Key Person or any
Key Person’s immediate family member has a direct or indirect interest, (iv) a
member of the immediate family of a Person who is defined in (i) or
(ii) above, or (v) a Person Controlling, Controlled by
or under the common Control of anyone listed in (i) through (iv) above.

 

“Individual Property” shall mean the “Property” as defined in
each Security Instrument, severally.

 

“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 mean, collectively, (i) all
material terms of any insurance policy required pursuant to this Agreement and (ii) all
material regulations and then-current standards applicable to or affecting the
Property or any part thereof or any use or condition thereof, which may, at any
time, be recommended by the Board of Fire Underwriters, if any, having
jurisdiction over the Property, or such other body exercising similar
functions.

 

25

 

“Insurance Reserve Account” shall have the meaning set forth in Section 3.1.1(b).

 

“Insurance Reserve Amount” shall have the meaning set forth in Section 16.2(a).

 

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

 

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

 

“Interest Rate Cap Agreement” shall mean the Confirmation and
Agreement (together with the confirmation and schedules relating thereto)
between the Counterparty and Borrower, obtained by Borrower and collaterally
assigned to Lender pursuant to this Agreement, as amended from time to time
with the prior written approval of Lender. 
After delivery of a Replacement Interest Rate Cap Agreement to Lender,
the term “Interest Rate Cap Agreement” shall be deemed to mean such Replacement
Interest Rate Cap Agreement.  The
Interest Rate Cap Agreement 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 shall be equal to the
Interest Rate Cap Notional 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 Notes;

 

(b)           Remaining Term.  The
remaining term of the Interest Rate Cap Agreement shall at all times extend
through the end of the Interest Period in which the Maturity Date occurs as
extended from time to time pursuant to this Agreement and the Loan Documents;

 

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

 

(d)           Payment Stream.  The
Counterparty under the Interest Rate Cap Agreement shall be obligated to make a
stream of payments, directly to the Holding 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 multiplied by (ii) the
excess, if any, of LIBOR (including any upward rounding under the definition of
LIBOR) over the applicable Strike Price;

 

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

 

(f)            Other.  The
Interest Rate Cap Agreement 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 Lender.

 

“Interest Rate Cap Notional Amount” shall mean the initial
Principal Amount, less the Interest Rate Swap Notional Amount.

 

“Interest
Rate Protection Agreement” shall mean, collectively, (a) an Interest
Rate Cap Agreement and (b) an Interest Rate Swap Agreement.  After delivery of a Replacement Interest

 

26

 

Rate Protection Agreement to Lender, the term “Interest Rate Protection
Agreement” shall be deemed to mean such Replacement Interest Rate Protection
Agreement.

 

“Interest
Rate Swap Agreement” shall mean, collectively, one or more interest rate
swap agreements between an Approved Counterparty (which shall be an affiliate
of GACC in connection with such Interest Rate Swap Agreement being purchased by
Borrower as of the Closing Date) and Borrower obtained by Borrower as and when
required pursuant to Section 9.1 hereof, in a form reasonably
acceptable to Lender.  Such interest rate
swap agreements will require Borrower to pay a fixed interest rate on a
monthly, actual/360 basis and receive one-month LIBOR on the same basis.  Such interest rate swap agreements will pay
and receive on a net basis.

 

“Interest
Rate Swap Notional Amount” shall mean $1,362,500,000.

 

“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 not
to exceed $250 million that was entered into on February 7, 2008.

 

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

 

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

 

(a)           the numerator is Portfolio Four-Wall
EBITDAR, applied consistently, as determined by Lender based on Master Lessee’s
four most recent quarterly financial statements with respect to the Property
prepared and delivered to 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 mean all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations and requirements, and irrespective of the nature of the work to be
done, of every Governmental Authority including, without limitation,
Environmental Laws and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Borrower or to the Property and
the Improvements and the Building Equipment thereon, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of the Property and the Improvements and the Building Equipment
thereon including, without limitation, building and zoning codes and ordinances
and laws relating to handicapped accessibility.

 

27

 

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

 

“Lender Group” shall have the meaning set forth in Section 14.3.2(b).

 

“Lender-Initiated Substitution” shall mean the designation by
Lender of one or more casino and hotel projects owned (directly or through its
subsidiaries) by Master Lessee to be conveyed to Borrower in lieu of one or
more of the original Individual Properties, subject to all of the terms and
conditions of this Agreement and the other Loan Documents, so as to avoid a
Portfolio MAE.

 

“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 Lender and
entitling Lender to draw thereon in New York, New York, based solely on a
statement executed by an officer or authorized signatory of 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, 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 Borrower shall deliver a replacement Letter of Credit from an
Approved Bank within (i) as to (a) above, twenty (20) days after
Lender delivers written notice to Borrower 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.

 

“Liabilities”
shall have the meaning set forth in Section 14.3.2(b).

 

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

 

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

 

“LIBOR Rate” shall have the meaning set forth in the 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 Borrower and Master
Lessee, dated as of November 7, 2007.

 

“Lien” shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance or
charge on or affecting Borrower, 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 Loan Amount made
by Lender to Borrower pursuant to the Original Agreement as reduced to such
Loan Amount pursuant to Section 2.1 hereof.

 

28

 

“Loan
Amount” shall mean the original principal amount of the Loan equal to
$1,800,000,000.

 

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

 

“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 Borrower, as lessor, and
Master Lessee, as lessee, dated as of November 7, 2007, as more
particularly described in Section 5.1.22.

 

“Master Lease Base Rent” shall mean monthly payments under the
Master Lease of Base Rent (as defined in the Master Lease).

 

“Master Lease Default” shall mean a default by Master Lessee or
Borrower under the terms of the Master Lease beyond any applicable notice and
cure periods contained therein.

 

“Master Lease Recurrent Additional Rent” shall mean monthly
payments under the Master Lease of additional rent for Scheduled Additional
Charges (as defined in the Master Lease).

 

“Master Lease Rent” shall mean, collectively, the Master Lease
Scheduled Rent and the Master Lease Variable Additional Rent.

 

“Master Lease Rent Payment Direction Letter” shall mean a letter
in the form of Exhibit P pursuant to which Borrower instructs
Master Lessee to make payments of Master Lease Scheduled Rent directly to the
Holding Account as more particularly set forth in Section 3.1.9(a).

 

“Master
Lease Rent Shortfall” shall mean a shortfall
in the Holding Account with respect to all or any portion of the Master Lease
Rent required to be deposited therein by Master Lessee pursuant to the Master
Lease Rent Payment Direction Letter.

 

“Master
Lease Rent Shortfall Reserve Account” shall have the meaning provided in Section 3.1.1(e).

 

“Master Lease Scheduled Rent” shall mean, collectively, the
Master Lease Base Rent and the Master Lease Recurrent Additional Rent.

 

29

 

“Master
Lease SNDA” shall mean that certain Subordination, Non-Disturbance and
Attornment agreement among Borrower, Master Lessee and Lender dated November 7,
2007.

 

“Master
Lease Tenant Default” shall mean a default by Master Lessee under the terms
of the Master Lease beyond any applicable notice and cure periods contained
therein.

 

“Master
Lease Variable Additional Rent” shall mean with respect to any month,
payments payable by the Master Lessee under the Master Lease of Variable
Additional Charges (as defined in the Master Lease) but excluding any such
items expressly included in any other sub-account of the Holding Account, such
as the Monthly Tax Reserve Amount, Monthly Insurance Reserve Amount and Monthly
Ground Rent Reserve Amount.  Subject to
the Master Lease, Master Lease Variable Additional Rent shall be presumptively
established pursuant to the Annual Budget.

 

“Master
Lessee” shall mean Station Casinos, Inc., a Nevada corporation.

 

“Master
Lessee Officer’s Certificate” shall mean a certificate executed by an
authorized signatory of Master Lessee that is familiar with the financial
condition of Master Lessee and the operation of the Property.

 

“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 Borrower, or (iv) the
ability of Borrower to repay the principal and/or interest of the Loan as it
becomes due or to satisfy any of Borrower’s material obligations under the Loan
Documents.

 

“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 Borrower and 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 Notes.

 

“Maturity
Date Payment” shall have the meaning set forth in the 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 Notes and as provided
for herein or the other Loan

 

30

 

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.

 

“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 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 mean the First Mezzanine Account, Second Mezzanine Account,
Third Mezzanine Account, Fourth Mezzanine Account and/or such other mezzanine
accounts that may be opened in connection with a Mezzanine Loan, or all such
accounts collectively, as the context may require.

 

“Mezzanine
Allocated Loan Amount” shall mean with respect to each Individual Property,
the designated allocated portion of each Mezzanine Loan applicable to such
Individual Property that is set forth on Schedule V-2 attached hereto.

 

“Mezzanine
Borrowers” shall mean the First Mezzanine Borrower, Second Mezzanine
Borrower, Third Mezzanine Borrower, Fourth Mezzanine Borrower, and/or such
other mezzanine borrowers in connection with a Mezzanine Loan, or all such
borrowers collectively, as the context may require.

 

“Mezzanine Cap
Agreements” shall mean
the Confirmation and Agreements (together with the confirmation and schedules
relating thereto) between the counterparties and Mezzanine Borrowers, obtained
by Mezzanine Borrowers and collaterally assigned to Mezzanine Lenders pursuant
to the Mezzanine Loan Documents.

 

“Mezzanine Intercreditor
Agreement” shall mean an intercreditor, recognition and standstill
agreement between Lender and Mezzanine Lender.

 

“Mezzanine
Lender” shall mean the First Mezzanine Lender, Second Mezzanine Lender,
Third Mezzanine Lender, Fourth Mezzanine Lender and/or such other mezzanine
lenders in connection with a Mezzanine Loan, or all such lenders collectively,
as the context may require.

 

“Mezzanine
Loan” shall mean the First Mezzanine Loan, Second Mezzanine Loan, Third
Mezzanine Loan, Fourth Mezzanine Loan, and/or such other mezzanine loans as may
be created pursuant to Section 5.1.11(b), or all such loans collectively,
as the context may require.

 

“Mezzanine
Loan Default Notice” shall mean a First Mezzanine Loan Default Notice,
Second Mezzanine Loan Default Notice, Third Mezzanine Loan Default Notice,
Fourth Mezzanine Loan Default Notice, and/or such other notice from a Mezzanine
Lender that an event of default under a Mezzanine Loan is no longer continuing,
or all such default notices collectively, as the context may require.

 

31

 

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

 

“Mezzanine
Notes” shall mean the First Mezzanine Note, Second Mezzanine Note, Third
Mezzanine Note, Fourth Mezzanine Note and/or such other note(s) from a
Mezzanine Borrower to a Mezzanine Lender, or all such notes collectively, as
the context may require.

 

“Mezzanine Notional
Amount” shall mean the notional amounts under the Mezzanine Cap Agreements.

 

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

 

“Monetary
Default” shall mean a Default (i) that can be cured with the payment
of money or (ii) arising pursuant to Section 17.1(a)(vi) or
(vii).

 

“Monthly
Insurance Reserve Amount” shall have the meaning set forth in Section 16.2(a).

 

“Monthly
Tax Reserve Amount” shall have the meaning set forth in Section 16.1.

 

“Monthly Ground Rent
Reserve Amount” shall have the meaning provided in Section 16.3.

 

“Moody’s”
shall mean Moody’s Investors Service, Inc.

 

“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 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 (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.

 

“Non-Disturbance
Agreement” shall have the meaning set forth in Section 8.8.9.

 

32

 

“Note A-1” shall mean
that certain Amended and Restated Promissory Note dated as of March 19,
2008 in the principal amount of $687,500,000, made by Borrower in favor of
Noteholder I, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Note A-2” shall mean
that certain Amended and Restated Promissory Note dated as of March 19,
2008 in the principal amount of $412,500,000, made by Borrower in favor of
Noteholder II, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Note B-1” shall mean
that certain Promissory Note dated as of March 19, 2008 in the principal
amount of $437,500,000, made by Borrower in favor of Noteholder I, as the same
may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

“Note B-2” shall mean
that certain Promissory Note dated as of March 19, 2008 in the principal
amount of $262,500,000, made by Borrower in favor of Noteholder II, as the same
may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

“Noteholder
I” shall have the meaning set forth in the preamble hereof.

 

“Noteholder
II” shall have the meaning set forth in the preamble hereof.

 

“Notes”
shall mean, collectively, Note A-1, Note A-2, Note B-1, and Note B-2 as each
may amended, restated, replaced, supplemented, substituted, severed, or
otherwise modified from time to time.

 

“Noticed
Default” shall mean any Default as to which Borrower has received written
notice.

 

“Novated
Amounts” shall have the meaning set forth in Section 2.1.1(f).

 

“Obligations”
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 Borrower that is familiar with the financial condition of Borrower and the
operation of the Property, or, in the case of Officer’s Certificates required
under Section 11, the principal officer of 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
Borrower and reasonably acceptable to Lender, which opinion of counsel shall
include (without

 

33

 

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 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.

 

“Owner’s Title Policy
Loss Payment Direction Letter” shall mean that certain letter of November 7,
2007 from Borrower to the Mezzanine Lenders and countersigned by the Title
Companies, directing the Title Company to make certain loss payments under
certain of Borrower’s owner’s title insurance policies to Mezzanine Lender as
more particularly set forth therein.

 

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

 

“Permitted Debt”
shall mean, (i) in the case of the Borrower, the Notes and the other
obligations, indebtedness and liabilities specifically provided for in any Loan
Document and secured by this Agreement, the Security Instruments and the other
Loan Documents, and any Interest Rate Protection Agreement (including any
obligations under the Interest Rate Protection Agreement);  and (ii) in the case of the Mezzanine
Borrowers, the applicable Mezzanine Note executed by such Mezzanine Borrower
and the other obligations, indebtedness and liabilities specifically permitted
in the Mezzanine Loan Documents executed by such Mezzanine Borrower.  In no event shall Borrower or any Mezzanine
Borrower be permitted under this provision to enter into a note (other than the
Notes and the other Loan Documents or the Mezzanine Notes and the other
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; (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 Closing Date 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 Closing Date, 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

 

34

 

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 Lender, whether such insurance is made available in
consideration of payment, bonding or indemnity by Borrower (but without
limiting 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 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 Lender may approve in writing in Lender’s sole
discretion.

 

“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).

 

“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 Borrower, taken
as a whole.

 

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

 

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

 

“Principal
Amount (Mezzanine)” 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 Lender, in 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

 

35

 

on Schedule IX designated by 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 Lender, the ratio of such
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 Noteholder I is sixty-two and one-half percent (62.5%)
and the Pro Rata Share applicable to Noteholder II is thirty-seven and one-half
percent (37.5%).

 

“Proceeds”
shall have the meaning set forth in Section 6.2.2.

 

“Proceeds
Reserve Account” shall have the meaning set forth in Section 3.1.1(f).

 

“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 mean the Individual Properties collectively, provided that Property shall
not include any Individual Property or Unimproved Parcel that has been released
from the Lien of the Security Instruments and related Loan Documents pursuant
to Section 2.3.4 or Section 2.3.9, respectively, of
this Agreement.

 

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

 

“Property
Release Notice” shall have the meaning set forth in Section 2.3.4(a).

 

“Property Specific
Representations” shall mean the representations and warranties of 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.

 

36

 

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

 

“Proscribed
Assignee” shall mean Highland Capital Partners.

 

“Provided
Information” shall have the meaning set forth in Section 14.1(a).

 

“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 Borrower on or
approximately on the Closing Date.

 

“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
Protection Collateral” 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 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 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).

 

“Recourse
Guaranty” shall mean that certain Guaranty of Recourse Obligations of
Borrower, dated as of November 7, 2007, by Guarantors in favor of 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.

 

37

 

“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 Lender, or any
Person Controlling 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
Price” shall mean the product of (a) the Allocated Loan Amount of the
Loan with respect to the Release Property; and (b) the applicable Combined
Release Price Percentage(s), 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.

 

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

 

“Relevant
Portions” shall have the meaning provided in Section 14.3.2(a).

 

“Rents”
shall mean all rents, rent equivalents, moneys payable as damages or in lieu of
rent or rent equivalents, royalties (including, without limitation, all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for
the account of or benefit of Borrower from any and all sources arising from or
attributable to the Property, including, but not limited to the Master Lease
and, upon termination thereof, the Subleases, and Proceeds, if any, from
business interruption or other loss of income insurance.

 

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

 

“Replacement
Interest Rate Protection Agreement” shall mean collectively, one
or more interest rate protection agreements from an Approved Counterparty with
terms that are the same in all material respects as the terms of the Interest
Rate Protection Agreement, 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 Note, and
(ii) the notional amount shall be the Principal Amount then outstanding;
provided that to the extent any such interest rate protection agreement does
not meet the foregoing requirements, a Replacement Interest Rate Protection
Agreement shall be such interest rate cap agreement approved in writing by
Lender, or if the Loan or any portion thereof is included in a Securitization,
each of the Rating Agencies with respect thereto.

 

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

 

38

 

“Retainage
Release Threshold” shall have the meaning provided in Section 6.2.5(a).

 

“Revolving/Term
Credit Facility” shall mean that certain Credit Agreement, dated as of November 7,
2007, 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.

 

“Second
Mezzanine Account” shall mean account number 048818640 at Cash Management
Bank.

 

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

 

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

 

“Second
Mezzanine Lender” shall mean the holders of the Second Mezzanine Loan.

 

“Second
Mezzanine Lender Monthly Debt Service Notice” shall mean the written notice
required to be delivered by Second Mezzanine Lender pursuant to Section 3.1.6
of the Second Mezzanine Loan Agreement to Lender at least five (5) Business
Days prior to each Payment Date setting forth the Second Mezzanine Loan Debt
Service Amount payable by Second Mezzanine Borrower on the first Payment Date
occurring after the date such notice is delivered.

 

“Second
Mezzanine Loan” shall mean that certain $175,000,000 mezzanine loan,
comprised of (x) the original loan in the principal amount of $150,000,000
made by Second Mezzanine Lender to Second Mezzanine Borrower pursuant to the
Second Mezzanine Loan Agreement and (y) the assumption by Second Mezzanine
Borrower pursuant to the Second Mezzanine Loan Documents of $25,000,000 in
principal amount initially borrowed by Borrower.

 

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

 

“Second
Mezzanine Loan Debt Service Amount” shall mean, with respect to any
specified date or a particular period of time, interest payments under the
Second Mezzanine Note (excluding any default or accrued interest) due as of
such date (as set forth in the Second Mezzanine Lender Monthly Debt Service
Notice delivered to Lender) or payable during such

 

39

 

period (including the last day thereof), as
applicable and repayment in full of the principal balance of the Second
Mezzanine Note on the scheduled maturity of the Second Mezzanine Loan (but
excluding any principal payments on account of an acceleration of the Second
Mezzanine Loan or a default under any of the Second Mezzanine Loan Documents).

 

“Second
Mezzanine Loan Default Notice” shall mean a notice from Second Mezzanine
Lender to Lender (upon which Lender may conclusively rely without any inquiry
into the validity thereof) that an “Event of Default” has occurred and is
continuing under any of the Second Mezzanine Loan Documents.

 

“Second
Mezzanine Loan Default Revocation Notice” shall have the meaning set forth
in Section 3.1.7(viii) hereof.

 

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

 

“Second
Mezzanine Note” shall mean, collectively, that certain Amended and
Restated Second Mezzanine Note A-1 in the principal amount of $109,375,000
dated as of March 19, 2008, from Second Mezzanine Borrower to Noteholder
I, and that certain Amended and Restated Second Mezzanine Note A-2 in the
principal amount of $65,625,000 dated as of March 19, 2008, from Second
Mezzanine Borrower to Noteholder II, as the same may be amended, restated,
replaced, supplemented, substituted, severed, or otherwise modified from time
to time.

 

“Securities”
shall have the meaning set forth in Section 14.1.

 

“Securities
Act” shall have the meaning set forth in Section 14.3.1.

 

“Security Documents”
shall have the meaning set forth in Section 2.3.5(d)(xiii)(3).

 

“Securitization”
shall have the meaning set forth in Section 14.1.

 

“Security
Instrument” shall mean each of those certain first priority Deeds of Trust,
Security Agreement, Financing Statement, Fixture Filing and Assignment of
Master Lease, Subleases, Rents and Security Deposits, dated the Closing Date,
executed and delivered by Borrower to Lender (or to a trustee for the benefit
of lender, as applicable) and encumbering a portion of the Property, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

 

“Senior Mezzanine Loan
Default Revocation Notice” shall have the meaning set forth in Section 3.1.7(x).

 

“Senior Swap Breakage”
shall mean any Swap Breakage other than Subordinate Swap Breakage.

 

“Servicer”
shall mean such Person designated in writing with an address for such Person by
Lender, in its sole discretion, to act as Lender’s agent hereunder with such
powers as are specifically delegated to the Servicer by Lender, whether
pursuant to the terms of this

 

40

 

Agreement, the 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, 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, 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, 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 Mezzanine Loan) 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, (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 (xxi) 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 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

 

41

 

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
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 Loan Documents, 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.

 

“SPE
Entity” shall mean the Borrower and any of Mezzanine Borrower.

 

“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 Closing Date 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 Lender, such
taxes (including income taxes, franchise taxes and branch profit taxes) as are
imposed on or measured by Lender’s net income by the United States of America
or any Governmental Authority of the jurisdiction under the laws under which
Lender is organized or maintains a lending office.

 

“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 a rate for the Interest Rate Cap Notional Amount and the Mezzanine Loan
Notional Amount when calculated as the weighted average of (X) the Swap
Fixed Rate; (Y) the strike rate under the Cap Agreement, and (Z) the
strike rate under the Mezzanine Cap Agreements and weighted by the respective
notional amounts of the Interest Rate Swap Notional Amount, Interest Rate Cap
Notional Amount, and Mezzanine Notional

 

42

 

Amount, shall not exceed
5.50% (which rate shall be maintained regardless of any prepayments of the Loan
made hereunder)

 

“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 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.

 

“Subordinate Swap
Breakage” shall mean any Swap Breakage that (i) becomes payable under
the Interest Rate Swap Agreement by reason of an “event of default” with the
Swap Counterparty as the “defaulting party” or a “termination event” (other
than an “illegality” or “tax event”) as to which the Swap Counterparty is the
sole “affected party” under any Interest Rate Swap Agreement; or (ii) exceeds
1% of the Interest Rate Swap Notional Amount being terminated in whole or in
part.

 

“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 mean a survey of each parcel included in the Property prepared by a
surveyor licensed in the State and satisfactory to Lender and the company or
companies issuing the Title Policies, and containing a certification of such
surveyor reasonably satisfactory to Lender.

 

43

 

“Swap Breakage” shall
mean any breakage charges or amounts due from Borrower in connection with any
full or partial termination under any Interest Rate Swap Agreement.

 

“Swap Counterparty”
shall mean one or more Approved Counterparties entering into an Interest Rate
Swap Agreement.

 

“Swap Fixed Rate”
shall mean 5.279%.

 

“Swap Gain” shall
mean any net hedge gain due to Borrower in connection with any termination
under any Interest Rate Swap Agreement.

 

“Swap Payment Account”
shall have the meaning set forth in Section 3.1.1(g).

 

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

 

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

 

“Tax
Reserve Amount” shall have the meaning set forth in Section 16.1.

 

“Tenant”
shall mean any Person leasing, subleasing or otherwise occupying any portion of
the Property, other than the Master Lessee and its employees and agents.

 

“Terrorism
Insurance” shall have the meaning set forth in Section 6.1.9.

 

“Third
Mezzanine Account” shall mean account number 048818666 at Cash Management
Bank.

 

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

 

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

 

“Third
Mezzanine Lender” shall mean the holders of the Third Mezzanine Loan.

 

“Third
Mezzanine Lender Monthly Debt Service Notice” shall mean the written notice
required to be delivered by Third Mezzanine Lender pursuant to Section 3.1.6
of the Third Mezzanine Loan Agreement to Lender at least five (5) Business
Days prior to each Payment Date setting forth the Third Mezzanine Loan Debt
Service Amount payable by Third Mezzanine Borrower on the first Payment Date
occurring after the date such notice is delivered.

 

“Third
Mezzanine Loan” shall mean that certain $150,000,000 mezzanine loan,
comprised of (x) that certain $125,000,000 mezzanine loan, made by Third
Mezzanine Lender to Third Mezzanine Borrower and (y) the assumption by
Third Mezzanine Borrower pursuant to the

 

44

 

Third Mezzanine Loan Documents of $25,000,000 in
principal amount initially borrowed by Borrower.

 

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

 

“Third
Mezzanine Loan Debt Service Amount” shall mean, with respect to any
specified date or a particular period of time, interest payments under the
Third Mezzanine Note (excluding any default or accrued interest) due as of such
date (as set forth in the Third Mezzanine Lender Monthly Debt Service Notice
delivered to Lender) or payable during such period (including the last day
thereof), as applicable and repayment in full of the principal balance of the
Third Mezzanine Note on the scheduled maturity of the Third Mezzanine Loan (but
excluding any principal payments on account of an acceleration of the Third
Mezzanine Loan or a default under any of the Third Mezzanine Loan Documents).

 

“Third
Mezzanine Loan Default Notice” shall mean a notice from Third Mezzanine
Lender to Lender (upon which Lender may conclusively rely without any inquiry
into the validity thereof) that an “Event of Default” has occurred and is
continuing under any of the Third Mezzanine Loan Documents.

 

“Third
Mezzanine Loan Default Revocation Notice” shall have the meaning set forth
in Section 3.1.7(ix) hereof.

 

“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 Note” shall mean, collectively, (i) that certain Amended and Restated Third
Mezzanine Note A-1-a in the principal amount of $55,312,500 dated as of March 19,
2008, from Third Mezzanine Borrower to Noteholder I, (ii) that certain
Amended and Restated Third Mezzanine Note A-1-b in the principal amount of $38,437,500
dated as of March 19, 2008, from Third Mezzanine Borrower to Noteholder I,
(iii) that certain Amended and Restated Third Mezzanine Note A-2-a in the
principal amount of $33,187,500 dated as of March 19, 2008, from Third
Mezzanine Borrower to Noteholder II, and (iv) that certain Amended and
Restated Third Mezzanine Note A-2-b in the principal amount of $23,062,500
dated as of March 19, 2008, from Third Mezzanine Borrower to Noteholder
II.

 

“Title
Company” shall mean, collectively, Chicago Title Insurance Company and its
affiliates, Fidelity National Title Insurance Company and its affiliates,
Commonwealth Land Title Insurance Company and its affiliates, Stewart Title
Guaranty Company and its affiliates, First American Title Insurance Company and
its affiliates, Lawyers Title Insurance Company and its affiliates, Transnation
Title Insurance Company and its affiliates, and Ticor Title Insurance Company
and its affiliates, or, with respect to Substitutions from and after the
Closing Date, any one of the foregoing subject to delivery of co-insurance
endorsements or re-insurance

 

45

 

agreements from the other Title Companies and, in
states where available, tie-in endorsements from all of the Title Companies with
respect to such coverage.

 

“Title
Policies” shall mean the ALTA mortgagee title insurance policies, each in a
form reasonably acceptable to Lender (or, if an Individual Property is in a
State which does not permit the issuance of such ALTA policy, such form as
shall be permitted in such State and reasonably acceptable to Lender), issued
by the Title Company with respect to the Property and insuring the Lien of the
Security Instruments.

 

“Total
Loss” shall mean with respect to each Individual Property (i) a casualty, damage or destruction
of the Individual Property which, in the reasonable judgment of Lender,
involves the likely recovery of Proceeds in an amount exceeding forty percent
(40%) of the Allocated Loan Amount for such Individual Property, or (ii) a
permanent Taking which, in the reasonable judgment of Lender, involves (A) an
actual or constructive loss of more than fifteen percent (15%) of the Land
comprising such Individual Property, or (B) the likely recovery of
Proceeds in an amount exceeding fifteen percent (15%) of the Allocated Loan
Amount for such Individual Property, or (iii) a casualty, damage,
destruction or Taking that affects so much of the Individual Property such that
it would be impracticable, in Lender’s reasonable discretion, even after
restoration, to operate the Individual Property as an economically viable
whole.

 

“Transfer”
shall mean to, directly or indirectly, sell, assign, convey, mortgage,
transfer, lease, 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, lease, 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).

 

“Underwriter
Group” shall have the meaning set forth in Section 14.3.2(b).

 

“Unimproved
Parcels” shall mean (a) those portions of the Property identified
on Schedule IV attached hereto and made a part hereof and (b) any undeveloped portion of an Individual
Property as to which Lender has reasonably determined (x) that such
portion is not required for the primary intended use of such Individual
Property, and (y) that neither the release of such portion nor the
intended use of such portion following such release will 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 mean any direct obligations of, or
obligations guaranteed as to principal and interest by, the United States
Government or any agency or

 

46

 

instrumentality thereof, provided that such
obligations are backed by the full faith and credit of the United States.  Any such obligation must be limited to
instruments that have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change.  If
any such obligation is rated by S&P, it shall not have an “r” highlighter
affixed to its rating.  Interest must be
fixed or tied to a single interest rate index plus a single fixed spread (if
any), and move proportionately with said index. 
U.S. Government Obligations include, but are not limited to:  U.S. Treasury direct or fully guaranteed
obligations, Farmers Home Administration certificates of beneficial ownership,
General Services Administration participation certificates, U.S. Maritime
Administration guaranteed Title XI financing, Small Business Administration
guaranteed participation certificates or guaranteed pool certificates, U.S.
Department of Housing and Urban Development local authority bonds, and
Washington Metropolitan Area Transit Authority guaranteed transit bonds.  In no event shall any such obligation have a
maturity in excess of 365 days.

 

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

 

“Work”
shall have the meaning provided in Section 6.2.4(a).

 

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 Loan Document or in any certificate or
other document made or delivered pursuant thereto.  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 Borrower.

 

2.1.1        The Loan; Delegation; Novation.

 

(a)           Subject to and upon the
terms and conditions set forth herein, each Lender has made, on a several (but
not joint) basis, its Pro Rata Share of the Original Loan, and Borrower has
accepted the Original Loan.

 

(b)           Borrower hereby assigns,
delegates and transfers to First Mezzanine Borrower a portion of the Original
Loan in the principal amount $50,000,000.

 

(c)           Borrower hereby assigns,
delegates and transfers to Second Mezzanine Borrower  a portion of the Original Loan in the
principal amount $25,000,000.

 

47

 

(d)           Borrower hereby assigns,
delegates and transfers to Third Mezzanine Borrower a portion of the Original
Loan in the principal amount $25,000,000.

 

(e)           Borrower hereby assigns,
delegates and transfers to Fourth Mezzanine Borrower a portion of the Original
Loan in the principal amount $150,000,000.

 

(f)            Lender hereby acknowledges
the assignment, delegation and transfer by Borrower of $250,000,000 of the
Original Loan as set forth in Subsections (b) through (e) above (the “Novated
Amounts”) and agrees that, in consideration of the assumption of such
Novated Amounts by the applicable Mezzanine Borrower, Borrower shall have no
further obligation to Lender under this Agreement, the other Loan Documents or
the Notes in respect of the Novated Amounts and the aggregate outstanding
principal balance due as of the date hereof under this Agreement, the other
Loan Documents and the Notes shall be reduced for all purposes to the Loan
Amount.

 

(g)           Lender hereby agrees with
Borrower that Lender shall not assert against Borrower or any Affiliate of
Borrower any claim for indemnification or other rights of recovery pursuant to
this Agreement or otherwise in respect of any damages incurred by Lender solely
as a result of the modification of the Loan pursuant to this Agreement.

 

2.1.2        Disbursement to Borrower. 
Borrower has requested and received 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.  Borrower
acknowledges and agrees that the full proceeds of the Loan have been disbursed
by Lender to Borrower as of the Closing Date.

 

2.1.3        The Notes, Security
Instruments and Loan Documents.  The Loan
shall be evidenced by the Notes and secured by the Security Instruments, the Assignment
of Leases, this Agreement and the other Loan Documents.

 

2.1.4        Use of Proceeds.  Borrower
shall use the proceeds of the Loan 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 hereunder, (e) pay costs and expenses
incurred in 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 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

 

48

 

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 the Security Instruments. 
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 Lender by reason of the occurrence of any
Event of Default, and Lender retains its rights under the 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, Borrower shall pay to Lender interest accruing pursuant to
the Notes for the entire Interest Period during which said Payment Date shall
occur.

 

(b)           All
amounts advanced by Lender pursuant to the applicable provisions of the 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 Loan Documents. 
In the event any such advance or charge is not so repaid by Borrower,
Lender may, at its option, first apply any payments received under the Notes to
repay such advances, together with any interest thereon, or other charges as
provided in the 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.  The Maturity Date Payment
shall be applied, first, pro rata and pari passu, to the outstanding balances
of Note A-1 and Note A-2 until Note A-1 and Note A-2 are paid in full, and
second, pro rata and pari passu, to the outstanding balances of Note B-1 and
Note B-2.

 

2.2.3        Late Payment Charge.  If any
principal, interest or any other sums due under the Loan Documents (other than
the outstanding Principal Amount due and payable on the Maturity Date) is not
paid by Borrower on or prior to the date on which it is due, Borrower shall pay
to 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 Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment.  Any such amount
shall be secured by this Agreement, the Security Instruments and the other 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 Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject 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 Loan Documents, Borrower is at any time required or obligated to
pay interest on the principal balance due under the 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

 

49

 

interest due under the Notes. 
All sums paid or agreed to be paid to 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.

 

2.3.1        Prepayments. 
No prepayments of the Indebtedness shall be permitted except as set
forth in Section 4 of the Notes and this Section 2.3.  If 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) 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 Loan Documents, including
without limitation, Swap Breakage.  All
prepayments of the Indebtedness shall be applied, first, pro rata and pari
passu, to the outstanding balances of Note A-1 and Note A-2 until Note A-1 and
Note A-2 are paid in full, and second, pro rata and pari passu, to the
outstanding balances of Note B-1 and Note B-2.

 

2.3.2        Prepayments After Event of Default; Application of
Amounts Paid.  If, following an Event of Default, Lender
shall accelerate the Indebtedness and Borrower thereafter tenders payment of
all or any part of the Indebtedness, or if all or any portion of the
Indebtedness is recovered by 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 Loan
Documents, including without limitation, interest that has accrued at the
Default Rate, and any Late Payment Charges, and Swap Breakage), (b) such
payment shall be deemed a voluntary prepayment by Borrower, and (c) Borrower
shall pay, in addition to the Indebtedness, an amount equal to the Prepayment
Fee and any Swap Breakage.

 

2.3.3        Release of Property upon
Repayment of Loan in Full.  Lender shall, upon the written
request of Borrower, upon payment in full of the Principal Amount and interest
on the Loan and all other amounts due and payable under the Loan Documents in
accordance with the terms and provisions of the Notes and this Agreement
(including, without limitation, Swap Breakage, if applicable), release the Lien
of (i) this Agreement upon the Account Collateral and the Rate Protection
Collateral and (ii) the Security Instruments and Assignment of Leases on
the Property (or assign it (together with the Notes), in whole or in part, to a
new lender without representation, warranty or recourse).  In such event, Borrower shall submit to
Lender, not less than ten (10) Business Days prior to the date of such
release or assignment, a release of lien or assignment of lien, as applicable,
for such property for execution by Lender. 
Such release or

 

50

 

assignment, as applicable, shall be in a form appropriate in each
jurisdiction in which the Property is located and satisfactory to Lender in its
reasonable discretion.  In addition,
Borrower shall provide all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such release or assignment, as
applicable.

 

2.3.4        Release of Individual Properties.  Subject to
satisfaction of each of the conditions set forth below with respect to any
Individual Property or Individual Properties (collectively, the “General
Release Conditions”), Lender shall (i) release 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 (or to the extent so
requested by Borrower, assign the Lien of the applicable Security Instrument to
a new lender without representation, warranty or recourse) (each release under this Section 2.3.4
or Section 2.3.5, a “Property Release”), (ii) authorize
a reduction in the notional amounts of the Interest Rate Protection Agreements
in proportion to the reduction of the Principal Amount (which may be pro rata
to the notional amounts thereof or otherwise as reasonably determined by
Borrower), (iii) instruct the Cash Management Bank to return to Borrower
any Excess Account Collateral subject to and in accordance with Section 2.3.7
except to the extent otherwise provided in such Section, (iv) comply with Section 2.3.8
with regard to adjusting the ongoing reserve requirements hereunder, (v) authorize
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) require 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, (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)           Borrower
delivers a written notice (a “Property Release Notice”) to 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 Borrower desires that Lender release its
interest in such Release Property.

 

(b)           Lender
and each Mezzanine Lender shall have received all prepayment fees required to
be paid to them under the Loan Documents and Mezzanine Loan Documents, as
applicable, and the Lender shall have received the full Release Price and
evidence that each Mezzanine Lender has received its full applicable Mezzanine
Release Price.  Interest payable under
the Notes and the 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)).

 

51

 

(c)           Borrower
shall submit to Lender, concurrently with the Property Release Notice (except
that Borrower may deliver the release of Liens hereinafter described to 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) for each
applicable Release Property (for execution by Lender) in a form appropriate in
the State and otherwise satisfactory to Lender in its reasonable discretion and
all other documentation Lender reasonably requires to be delivered by 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 affect the Liens,
security interests and other rights of Lender under the Loan Documents not
being released (or as to the Individual Properties subject to the Loan
Documents not being released) 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 Borrower delivers the Property Release Notice and on the Release
Date.

 

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

 

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

 

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

 

(i)            Prior
to the Release Date, Borrower shall deliver to Lender evidence reasonably
satisfactory to 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 Borrower in cash with respect to
contingent or other liabilities that may arise out of such

 

52

 

transaction and for which Borrower is not adequately indemnified or
insured against as reasonably determined by Lender.

 

(j)            As
a condition precedent to a Release but not as a direct covenant of the
Borrower, on the Release Date, each Mezzanine Borrower shall have paid to each
Mezzanine Lender the Mezzanine Release Price and any other sums required to be
paid under Section 2.3.4 of each Mezzanine Loan Agreement.  This Section 2.3.4(j) shall
not create a debtor-creditor relationship between Borrower and any Mezzanine
Lender.

 

(k)           In the event 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 Lender.

 

2.3.5        Substitution of Properties.

 

(a)           Generally.  Borrower may, 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 represent not greater than
twenty percent (20%) of the Loan Amount. 
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, Mezzanine 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,
Lender shall release such Replaced Property from the Lien of the applicable
Security Instrument and related Loan Documents. 
In the event of a Substitution, the 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
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 Materials requiring remediation or other action under any

 

53

 

Environmental Law the
presence of which violates Environmental Laws (with the exception of any
immaterial remediation, as determined by 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 Lender
applying the standards of a prudent commercial mortgage 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 Borrower will hold a leasehold interest rather than
fee title), the ground lease shall be financeable (as reasonably determined by
Lender, including, without limitation, having a memorandum of lease of record
in the applicable real property records, not containing rental adjustments that
reset the ground lease rent to fair market rent, and otherwise containing terms
and conditions and having a state of title that comports with then-current
guidelines of the Rating Agencies for ground leases in commercial
mortgage-backed security transactions); 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 Borrower
shall submit to the 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 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 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,

 

54

 

(xii) upon the
reasonable request of the Lender, a PML study, (xiii) a FIRREA appraisal
conducted by Cushman & Wakefield (or another Independent appraiser
reasonably acceptable to Lender), (xiv) if such proposed Substitute
Property is not then owned by the 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 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 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 Lender with respect to the title holder of such proposed
Substitute Property on the date immediately prior to acquisition thereof by
Borrower, in each of the locations reasonably specified by the Lender and not
revealing any Liens other than Permitted Encumbrances.  In addition, Borrower shall permit the Lender
at all reasonable times and upon reasonable prior notice to make an inspection
of such proposed Substitute Property. 
Lender shall confirm Borrower’s compliance with this paragraph (c) with
respect to each proposed Substitute Property within thirty (30) days after
Lender’s receipt of the complete applicable Substitution Due Diligence Package
and Lender’s failure to so confirm or deny Borrower’s compliance within such
thirty (30) day period shall be deemed compliance by 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, Lender’s receipt of a Rating Agency Confirmation and 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.  Borrower’s compliance with the conditions 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 Property), shall not be less
than the greater of (A) the Closing Date LCR and (B) the LCR for the

 

55

 

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 Lender by 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
Lender, applying the standards of a prudent commercial mortgage 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. Borrower
shall pay for any and all reasonable out-of-pocket costs and expenses of Lender
incurred in connection with any proposed Substitution, including Lender’s reasonable
attorneys’ fees and disbursements, all title insurance premiums for any
endorsements to any existing Title Policies reasonably required by Lender in
connection with such proposed Substitution, title premiums, mortgage recording
taxes, transfer taxes and recording fees;

 

(v)           Transaction Costs.  Borrower shall deliver to Lender evidence
reasonably satisfactory to 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 Borrower in cash with
respect to contingent or other liabilities that may arise out of such
transaction and for which Borrower is not adequately indemnified or insured
against as reasonably determined by Lender;

 

(vi)          Opinions of Counsel.  Delivery to 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 Lender and addressed to the Lender on behalf of the
holders of the 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 

 

56

 

to the effect that each of
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 or amendments thereto have been duly authorized,
executed and delivered by 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 Borrower delivers the Substitution
Notice and on the Substitution Date;

 

(viii)        Accuracy of Representations
and Warranties.  The
representations and warranties set forth in the 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 Borrower which do not violate the
provisions of the 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 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 Borrower, Mezzanine
Borrower, 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 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 Borrower, Master Lessee and Guarantors
approving the execution, delivery and performance of the Loan Documents or amendments
thereto being executed and delivered in connection with the Substitution, duly
adopted by the 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;

 

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

 

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

 

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

 

57

 

(2)           a
first priority Assignment of Master Lease, Subleases, Rents and Security
Deposits, from Borrower, as assignor, to Lender, as assignee, assigning to
Lender all of Borrower’s interest in and to the Master Lease, the Subleases,
Rents and Security Deposits as security for the Loan with respect to the
Substitute Property, or a counterpart original of the Assignment of Leases,
modified as necessary, duly executed and acknowledged by 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 Borrower as debtor and 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 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 Lender pursuant to the Substitute Property Mortgage
Spreader Agreement, together with any title insurance premiums, fees or charges
due in connection therewith, and the Borrower shall cooperate with the Lender
and execute such further instruments and documents and perform such further
acts as the 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;

 

(6)           updates to any Exhibits and
Schedules to the 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)        Mezzanine Loan Deliveries.  The Mezzanine Lender shall have received all
deliveries required under Section 2.3.5 of the Mezzanine Loan
Agreement, including, but not limited to, insurance certificates naming
Mezzanine Lender with respect to the Substitute Property, a copy of the owner’s
title insurance policy and related mezzanine endorsement (if

 

58

 

available in such State) and
copies of the Substitution Due Diligence Package and all final deliveries to
Lender under this Section 2.3.5.

 

(xv)         Additional Deliveries.  Lender shall have received such other
deliveries reasonably requested by 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)           Borrower shall not 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,
Borrower shall:

 

(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, Borrower will promptly send written notice thereof to
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 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, Lender shall promptly perform
an analysis of the Account Collateral in order to reasonably determine the
amount of the Account Collateral (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 Borrower the
Excess Account Collateral, if any, except to the extent that 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, Borrower shall 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, and shall promptly
provide Lender and Cash Management Bank 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 Borrower, Lender shall

 

59

 

release such Unimproved Parcel from the Lien of the applicable Security
Instrument and related Loan Documents without the payment of any Release Price:

 

(a)           Borrower
delivers a written notice to Lender (i) identifying the Unimproved Parcel
to be released and the date on which Borrower desires the release to be
effective, which date shall not be less than thirty (30) days from the date of
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
Borrower delivers its notice to Lender or on the date on which the release of
the Unimproved Parcel is to become effective, and on each such date Borrower
shall have delivered an Officer’s Certificate
certifying to the best of the signer’s actual knowledge without investigation
that as of such date no Default or Event of Default exists.

 

(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 and including, without
limitation, applicable requirements for parking following the intended
development of each such Unimproved Parcel.

 

(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)           Borrower
shall submit to 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 Lender under the Loan Documents not being released (or as to
the Property subject to the Loan Documents not being released) and (iv) the
requirements 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 Borrower or any other SPE
Entity.

 

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

 

60

 

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

 

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

 

2.4           Regulatory Change; Taxes.

 

2.4.1        Increased Costs.  Prior to the Securitization of the Loan, if
as a result of any Regulatory Change or compliance of Lender therewith, the
basis of taxation of payments to Lender or any company Controlling Lender of
the principal of or interest on the Loan is changed or Lender or the company
Controlling 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 Lender or the company Controlling
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 Lender or any company Controlling Lender is imposed,
modified or deemed applicable; or (iii) any other condition affecting
loans to borrowers subject to LIBOR-based interest rates is imposed on Lender
or any company Controlling Lender and Lender determines that, by reason
thereof, the cost to Lender or any company Controlling Lender of making,
maintaining or extending the Loan to Borrower is increased, or any amount
receivable by Lender or any company Controlling Lender hereunder in respect of
any portion of the Loan to Borrower is reduced, in each case by an amount
deemed by Lender in good faith to be material (such increases in cost and
reductions in amounts receivable being herein called “Increased Costs”),
then Lender shall provide notice thereof to Borrower and Borrower agrees that
it will pay to Lender upon Lender’s written request such additional amount or
amounts as will compensate Lender or any company Controlling Lender for such
Increased Costs to the extent Lender determines that such Increased Costs are
allocable to the Loan.  If Lender
requests compensation under this Section 2.4.1, Borrower may, by
notice to Lender, require that Lender furnish to Borrower a statement setting
forth the basis for requesting such compensation and the method for determining
the amount thereof.  In the event that
Borrower is required to pay any Increased Costs in accordance with the terms
hereof, 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.  Borrower shall have up to ninety
(90) days following the later to occur of (1) Lender furnishing a
statement setting forth the basis for requesting compensation for Increased
Costs if requested by Borrower and (2) receipt from 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), Borrower shall pay to
Lender upon Lender’s written request such additional amount or amounts as will
compensate Lender or any company Controlling Lender for Increased Costs
incurred in the interim to the extent Lender determines that such Increased
Costs are allocable to the Loan.

 

61

 

2.4.2        Special Taxes.  Borrower shall make all payments hereunder
free and clear of and without deduction for Special Taxes.  If Borrower shall be required by law to
deduct any Special Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to 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)
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, and (iii) 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,
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 Lender.

 

2.4.3        Other Taxes.  In addition, Borrower agrees 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 Loan Documents, or the Loan (hereinafter referred to as “Other
Taxes”).

 

2.4.4        Indemnity.  Borrower shall indemnify Lender for the full
amount of Special Taxes (unless 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 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 Lender makes written demand therefor.

 

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

 

2.4.6        Survival.  Without prejudice to the survival of any
other agreement of Borrower hereunder, the agreements and obligations of
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 following
conditions precedent to the obligation of Lender to make the Loan hereunder
were either fulfilled by, or on behalf of, Borrower or waived by Lender as of
the Closing Date; provided, however, that unless a condition precedent expressly
survived the Closing Date pursuant to a separate agreement, by funding the Loan
and recording the Security Instruments, Lender is deemed to have waived any
such conditions not theretofore fulfilled or satisfied; and provided that the
funding of the Loan was 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 Borrower contained in this Agreement and the
other Loan

 

62

 

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 or Event of
Default shall have occurred and be continuing; and Borrower shall be in
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other 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 Portfolio MAE, Lender may
require Borrower to effect a Lender-Initiated Substitution.

 

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

 

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

 

(b)           Security Instruments, Assignment of Leases. 
Lender shall have received evidence that original counterparts of the
Security Instruments and Assignment of Leases, in proper form for recordation,
have been delivered to the Title Company for recording, so as effectively to
create, in the reasonable judgment of Lender, upon such recording valid and
enforceable first priority Liens upon the Property, in favor of Lender (or such
other trustee as may be required or desired under local law), subject only to
the Permitted Encumbrances and such other Liens as are permitted pursuant to
the Loan Documents.

 

(c)           Interest Rate
Protection Agreement.  Lender shall
have received the original Interest Rate Cap Agreement which shall be in form
and substance reasonably satisfactory to Lender and an original counterpart of
the Acknowledgment executed and delivered by the Counterparty, and an original
Interest Rate Swap Agreement which shall be in form and substance reasonably
satisfactory to Lender.

 

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

 

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

 

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

 

(g)           Title Insurance. 
Lender shall have received the Title Policies issued by the Title
Company and dated as of the Closing Date. 
Such Title Policies shall (i) provide coverage in an amount
equal to 100% of the Loan, (ii) insure
Lender that the Security Instruments create a valid, first priority Lien on the
Property, free and clear of all exceptions from coverage other than Permitted
Encumbrances and standard exceptions and exclusions from coverage (as modified
by 

 

63

 

the terms of any endorsements), (iii) contain the endorsements and
affirmative coverages set forth on Exhibit A and such additional
endorsements and affirmative coverages as Lender may reasonably request to the
extent available in such State, and (iv) name Lender as the insured.  Lender also shall have received evidence that
all premiums in respect of such Title Policies have been paid.  Lender shall have received evidence that all
appropriate releases or discharges of encumbrances necessary for the delivery
of the Title Policies have been delivered for recording.  In addition, Lender shall have received
evidence of Borrower’s ownership of the Property in the form of owner’s
title policies insuring 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 Lenders

 

(h)           Surveys.  Lender shall have received a
current Survey for each of the Individual Properties, containing the survey
certification substantially in the form attached hereto as Exhibit B.  Each such Survey shall reflect the same legal
description contained in the Title Policies referred to in paragraph (g) above
and shall include, among other things, a metes and bounds description or such
other description as is required by Title Company, of the real property
comprising part of the Property, any such description to be reasonably
satisfactory to Lender.  The surveyor’s
seal shall be affixed to the Survey.

 

(i)            Insurance.  Lender shall have received valid
certificates of insurance for the policies of insurance required hereunder,
satisfactory to 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. 
Lender shall have received Environmental Reports in respect of the
Property from a firm, and in form and substance, reasonably satisfactory to
Lender.

 

(k)           Encumbrances. 
Borrower shall have taken or caused to be taken such actions in such a
manner so that Lender has a valid and perfected first Lien as of the Closing
Date on the Property, subject only to Permitted Encumbrances and such other
Liens as are permitted pursuant to the Loan Documents, and Lender shall have
received satisfactory evidence thereof.

 

2.5.3        Delivery of Organizational Documents.  On or before the Closing Date, Borrower shall
deliver, or cause to be delivered, to Lender copies, certified by an Officer’s
Certificate, of all organizational documentation related to Borrower, Sponsor,
each Guarantor, Master Lessee and Mezzanine Borrower as have been requested by
Lender and/or the formation, structure, existence, good standing and/or
qualification to do business of Borrower, Sponsor, each Guarantor, Master
Lessee and Mezzanine Borrower as 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
Lender.  Each of the organizational
documents of any SPE Entity shall contain single purpose entity provisions
reasonably approved by Lender prior to the Closing Date.

 

64

 

2.5.4        Counsel Opinions.

 

(a)           Lender
shall have received or Borrower shall have delivered into escrow (for release
to 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 Lender (the “Non-Consolidation Opinion”).

 

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

 

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

 

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

 

(e)           [Reserved]

 

(f)            Lender shall have received or Borrower
shall have delivered into escrow (for release to Lender concurrently with the
delivery of the Security Instruments to the Title Company for recording) the Opinion of Counsel in such form
reasonably approved by the Lender.

 

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

 

2.5.5        Consummation of the Merger.  Borrower shall have delivered to 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,
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 Lender shall have been given and no condition
material to the interests of the Lender shall have been waived except, in ease
such case, with the prior written consent of Lender (which 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 Borrower under this Agreement, the Notes
and the other Loan Documents on or before the Closing Date shall have been
paid.

 

65

 

2.5.7        Transaction Costs.  Borrower shall have paid or reimbursed 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
Lender’s counsel and all other reasonable third party out-of-pocket expenses
incurred in connection with the origination of the Loan; and Borrower shall
have paid the fees due to 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 Lender.

 

2.5.10      Insolvency.  Neither Borrower nor any of its constituent
Persons shall be the subject of any bankruptcy, reorganization, or insolvency
proceeding.

 

2.5.11      Master Lease and Individual Property
Subleases. 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 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 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 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
Mezzanine Loan, and (D) the Loan; (ii) preferred equity held by
Holdco in its subsidiaries and preferred equity held by one

 

66

 

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 Lender (provided that Lender shall approve such
terms so long as they are not adverse to the interests of 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 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.  Borrower shall have delivered to 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 Borrower
structure set forth on Exhibit K, (ii) any preliminary
transfers of the Property into Affiliates of Borrower and (iii) the
acquisition of such Affiliates by and the merger of such Affiliates into
Borrower.  In addition, Borrower shall
have delivered to Lender a copy of the ALTA
owner’s title insurance policy(ies) issued by the Title Company with respect to
the Property and insuring Borrower’s fee and/or leasehold title thereto, in
form and substance reasonably acceptable to Lender.

 

2.5.16      No Competing
Financing.  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 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.

 

67

 

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, Borrower and their respective subsidiaries (including
shareholder or member approvals, if any) shall have been obtained on terms
reasonably satisfactory to 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.  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 Borrower
or the SPE Entities other than as contemplated by the 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.  Borrower hereby acknowledges that,
simultaneously with the execution of this Agreement, pursuant to the Account
Agreement, Borrower has established with Cash Management Bank a holding account
(the “Holding Account”), which has been established as a non-interest
bearing deposit account with interest-bearing sub-accounts.  The Holding Account and each sub-account of
such account and the funds deposited therein shall serve as additional security
for the Loan.  Pursuant to the Account
Agreement, Borrower shall irrevocably instruct and authorize Cash Management
Bank to disregard any and all orders for withdrawal from the Collateral
Accounts made by, or at the direction of, Borrower.  Borrower agrees that, prior to the payment in
full of the Indebtedness, the terms and conditions of the Account Agreement
shall not be amended or modified in any material respect without the prior
written consent of Lender (which consent Lender may grant or withhold in its
sole discretion), and if a Securitization has occurred, the delivery by
Borrower of a Rating Agency Confirmation. 
In recognition of Lender’s security interest in the funds deposited into
the Collateral Accounts, the Holding Account shall be named as follows: “FCP
PropCo, LLC Holding Account in favor of German American Capital Corporation, as
Collateral Agent” (Account Number 048818470). 
Borrower confirms that it has established with Cash Management Bank the
following sub-accounts of the Holding Account (each, a “Sub-Account”
and, collectively, the “Sub-Accounts” and together with the Holding
Account, the “Collateral Accounts”), which (i) may be ledger or
book entry sub-accounts and need not be actual sub-accounts, (ii) shall
each be linked to the Holding Account, (iii) shall each be a “deposit
account” (as such term is defined in Section 9-102(a)(29)

 

68

 

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 in respect of
Impositions and Other Charges for the Property (the “Tax Reserve Account”);

 

(b)           a sub-account for the retention of Account Collateral in respect of
insurance premiums for the Property (the “Insurance Reserve Account”);

 

(c)           a sub-account for the retention of Account Collateral in respect of
Ground Rent (the “Ground Rent Reserve Account”);

 

(d)           a sub-account for the retention of Account Collateral in respect of Debt
Service on the Loan (the “Debt Service Reserve Account”);

 

(e)           a
sub-account for the retention of Account Collateral in respect of reserves
relating to shortfalls in Master Lease Rent (the “Master Lease Rent
Shortfall Reserve Account”);

 

(f)            a sub-account for the retention of Account
Collateral in respect of certain Proceeds as more fully set forth in Section 6.2
(the “Proceeds Reserve Account”);

 

(g)           a
sub-account for the retention of Account Collateral in respect of sums required
to be paid to the Swap Counterparty under the Interest Rate Swap Agreement with
account number 048818542 (the “Swap Payment Account”);

 

(h)           a sub-account for the retention of Account Collateral in respect of Debt
Service (First Mezzanine) (the “First Mezzanine Debt Service Reserve Account”);

 

(i)            a sub-account for the retention of Account
Collateral in respect of Debt Service (Second Mezzanine) (the “Second
Mezzanine Debt Service Reserve Account”); and

 

(j)            a sub-account for the retention of Account
Collateral in respect of Debt Service (Third Mezzanine) (the “Third
Mezzanine Debt Service Reserve Account”).

 

(k)           a sub-account for the retention of Account
Collateral in respect of Debt Service (Fourth Mezzanine) (the “Fourth
Mezzanine Debt Service Reserve Account”).

 

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

 

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

 

69

 

(b)           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; and

 

(c)           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, Lender shall
have all of the rights and remedies with respect to the Account Collateral
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)           Borrower agrees that each of the Collateral Accounts 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 Lender shall have control (within
the meaning of Section 9-104(a)(2) of the UCC) over the Holding
Account and (iii) such that no Person other than Lender shall have any
right of withdrawal from the Collateral Accounts and, except as provided
herein, no Account Collateral shall be released to the Borrower or any
Affiliate of Borrower from the Collateral Accounts.  Without limiting the Borrower’s obligations
under the immediately preceding sentence, Borrower shall only establish and
maintain the Holding Account with a financial institution that has executed an
agreement substantially in the form of the Account Agreement or in such other
form acceptable to Lender in its sole discretion.

 

3.1.4        Eligible Accounts.  The Collateral Accounts shall be Eligible
Accounts.  The Collateral Accounts 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
authority or Governmental Authority, as may now or hereafter be in effect.  Income and interest accruing on the
Collateral Accounts 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 Account Agreement.  Borrower shall be
the beneficial owner of the Collateral Accounts for federal income tax purposes
and shall report all income on the Collateral Accounts.

 

3.1.5        Deposits into Sub-Accounts.  On the Closing Date, Borrower deposited the
following amounts into the Sub-Accounts:

 

(i)                    $2,392,298.65 into the Tax Reserve Account;

 

(ii)                   $0.00 into the Insurance Reserve Account;

 

(iii)                  $183,333.33 into the Ground Rent Reserve
Account;

 

(iv)                  $0.00 into the Debt Service Reserve Account;

 

70

 

(v)                   $0.00
into the Swap Payment Account;

 

(vi)                  $0.00 into the Master Lease Rent Shortfall
Reserve Account;

 

(vii)                 $0.00 into the Proceeds Reserve
Account;

 

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

 

(ix)                   $0.00 into the Second Mezzanine Debt
Service Reserve Account; and

 

(x)                    $0.00 into the Third Mezzanine Debt
Service Reserve Account.

 

(xi)                   $0.00 into the Fourth Mezzanine Debt
Service Reserve Account.

 

3.1.6        Monthly Funding of Sub-Accounts; Master Lease
Rent Shortfalls; Sub-Account Shortfalls.

 

(a)           Monthly Funding of Sub-Accounts. 
Borrower hereby irrevocably authorizes Lender to transfer (and, pursuant
to the Account Agreement shall irrevocably authorize Cash Management Bank to
execute any corresponding instructions of Lender), and, subject to Section 3.1.10,
Lender shall transfer, from the Holding Account by 11:00 a.m. New York
time on the date on which each payment of Master Lease Rent under the Master
Lease is made to the Holding Account, or as soon thereafter as sufficient funds
are in the Holding Account to make the applicable transfers, commencing on the
date of the first payment of Master Lease Rent under the Master Lease, funds in
the following amounts and in the following order of priority:

 

(i)                    funds in an amount equal to the Monthly Tax
Reserve Amount and any other amounts required pursuant to Section 16.1
for the month in which the transfer from the Holding Account is made to the Tax
Reserve Account;

 

(ii)                   funds in an amount equal to the Monthly
Insurance Reserve Amount and any other amounts required pursuant to Section 16.2
for the month in which the transfer from the Holding Account is made to the
Insurance Reserve Account;

 

(iii)                  funds
in an amount equal to the Monthly Ground Rent Reserve Amount due on the Payment
Date immediately following the date on which the transfer from the Holding
Account is made to the Ground Rent Reserve Account;

 

(iv)                  funds sufficient to pay Senior Swap
Breakage, if any, to be paid to Swap Counterparty pursuant to the Interest Rate
Swap Agreement, as certified to Lender by Swap Counterparty, which amount shall
be deposited into the Swap Payment Account;

 

(v)                   (i) funds in an amount equal to
the amount of Debt Service due on the Interest Rate Swap Notional Amount (as
the same may have been reduced in accordance with this Agreement) on the
Payment Date immediately following the date the transfer from the Holding
Account is made to the Debt Service Reserve Account, and (ii) funds
sufficient to pay the net amount, if any (taking into consideration the current
monthly amount to be paid by the Swap Counterparty under 

 

71

 

the Interest Rate Swap Agreement) due to Swap Counterparty under the
Interest Rate Swap Agreement, as certified to Lender by Swap Counterparty,
which amount shall be deposited into the Swap Payment Account and applied on a
pro rata basis among the amounts due under subclauses (i) and (ii) of
this clause;

 

(vi)                  funds sufficient to pay the next
monthly payment of Debt Service for the remaining Principal Amount (other than
in respect of the Interest Rate Swap Notional Amount), which amount shall be
deposited into the Debt Service Account;

 

(vii)                 to
the extent Lender receives a First Mezzanine Lender Monthly Debt Service
Notice, funds in an amount equal to the First Mezzanine Loan Debt Service
Amount for the month in which the Payment Date immediately following the date
of the transfer from the Holding Account occurs and transfer the same to the
First Mezzanine Debt Service Reserve Account;

 

(viii)                to the
extent Lender receives a Second Mezzanine Lender Monthly Debt Service Notice,
funds in an amount equal to the Second Mezzanine Loan Debt Service Amount for
the month in which the Payment Date immediately following the date of the
transfer from the Holding Account occurs and transfer the same to the Second
Mezzanine Debt Service Reserve Account;

 

(ix)                   to the extent Lender receives a
Third Mezzanine Lender Monthly Debt Service Notice, funds in an amount equal to
the Third Mezzanine Loan Debt Service Amount for the month in which the Payment
Date immediately following the date of the transfer from the Holding Account
occurs and transfer the same to the Third Mezzanine Debt Service Reserve
Account;;

 

(x)                    to
the extent Lender receives a Fourth Mezzanine Lender Monthly Debt Service
Notice, funds in an amount equal to the Fourth Mezzanine Loan Debt Service
Amount for the month in which the Payment Date immediately following the date of
the transfer from the Holding Account occurs and transfer the same to the
Fourth Mezzanine Debt Service Reserve Account;

 

(xi)                   to
the extent Lender receives a comparable Monthly Debt Service Notice from a
Mezzanine Lender under any other Mezzanine Loan, funds in an amount equal to
the applicable debt service amount under such notice for the month in which the
Payment Date immediately following the date of the transfer from the Holding
Account occurs and transfer the same to the applicable Mezzanine Debt Service
Reserve Account, in order of priority of the applicable Mezzanine Loans;

 

(xii)                  funds sufficient to pay Subordinate
Swap Breakage, if any, to be paid to Swap Counterparty pursuant to the Interest
Rate Swap Agreement, as certified to Lender by Swap Counterparty, which amount
shall be deposited into the Swap Payment Account;

 

(xiii)                 during any 90% Cash Sweep Period, funds in an
amount equal to eighty percent (80%) of the balance (if any) remaining or
deposited in the Holding Account after the foregoing transfers, to the Master
Lease Rent Shortfall Reserve Account;

 

72

 

(xiv)                if a Noticed Default is then continuing, the
balance remaining on Deposit in the Holding Account after the foregoing
transfers, to the Master Lease Rent Shortfall Reserve Account;

 

(xv)                 provided no Noticed Default or Event of
Default is then continuing, and Lender has not received a Mezzanine Loan
Default Notice, funds in an amount equal to the balance (if any) remaining or
deposited in the Holding Account after the foregoing transfers (such remainder
being hereinafter referred to as “Excess Cash Flow”), to the Borrower’s
Account.

 

(b)           Master Lease Rent Shortfalls; Release of
Funds in Master Lease Rent Shortfall Reserve Account.

 

(i)                    If there is a Master Lease Rent
Shortfall, Lender shall have the right at its election to direct the Cash
Management Bank to transfer (but shall not be obligated to so direct the Cash
Management Bank to transfer) from the Master Lease Rent Shortfall Reserve Account
to the Holding Account, without prior notice to Borrower or Master Lessee, an
amount equal to such Master Lease Rent Shortfall.  Lender shall endeavor to give prompt notice
to Borrower of the occurrence of such a transfer from the Master Lease Rent
Shortfall Reserve Account, but it shall not be a breach of this Agreement, and
Lender shall have no liability to Borrower or any other Person, if Lender shall
fail to do so.

 

(ii)                   In the event that no 90% Cash Sweep Period, Default or Event of Default is then continuing,
Lender shall direct the Cash Management Bank to transfer the unapplied portion,
if any, of the funds in the Master
Lease Rent Shortfall Reserve Account to the Borrower’s Account.

 

(c)           Sub-Account Shortfalls.  If
(after taking into account any sums Lender may elect to deposit into the
Holding Account pursuant to Section 3.1.6(b)) there are
insufficient funds in the Holding Account to make any of the transfers required
under Section 3.1.6(a)(i), (ii), (iii) or (iv),
as reasonably determined by Lender, Lender shall provide notice to Borrower of
such insufficiency (it being understood that in no event shall Lender be
required to notify Borrower of any deficiency in the Debt Service Reserve
Account, such deficiency on any Payment Date being an Event of Default) and,
within five (5) Business Days after receipt of said notice and,
notwithstanding such five (5) Business Day period, prior to the expiration
of any grace period applicable to such payment, Borrower shall deposit into the
Holding Account an amount equal to the shortfall of available funds in the
Holding Account taking into account any funds which accumulate in the Holding
Account during such five (5) Business Day period.  Notwithstanding anything to the contrary
contained in this Agreement or in the other Loan Documents, Borrower shall not
be deemed to be in default hereunder or thereunder in the event funds
sufficient for a required transfer are held in an appropriate Sub-Account
(other than the Master Lease Rent Shortfall Reserve Account) and Lender or Cash
Management Bank fails to timely make any transfer from such Sub-Account (other
than the Master Lease Rent Shortfall Reserve Account) as contemplated by this
Agreement unless due to the negligence or willful misconduct of Borrower.  Any amounts
deposited by Borrower pursuant to this Section 3.1.6(c) in
excess of the amount necessary to cure a shortfall of available funds in the
Holding Account shall be promptly returned to Borrower.

 

73

 

(d)           To the extent that Borrower shall fail to pay any mortgage recording tax,
costs, expenses or other amounts pursuant to Section 19.12 of this
Agreement (other than any such costs, expenses or other amounts to be paid at
closing) within the time period set forth therein, Lender shall have the right,
at any time, without prior notice to Borrower, to withdraw from the Holding
Account (excluding to the extent required under the last sentence of Section 3.1.10(a) any
funds that would otherwise be directed into the Tax Reserve Account, the Insurance Reserve Account, the Ground Rent
Reserve Account and, to the extent the Master Lessee is entitled to Proceeds
under the Master Lease or such Proceeds are required for restoration under the
Master Lease, the Proceeds Reserve Account), an amount equal to such unpaid
taxes, costs, expenses and/or other amounts and pay such amounts to the Person(s) entitle
thereto.  Lender shall endeavor to give prompt notice to Borrower of the occurrence
of such a withdrawal from the Holding Account, but it shall not be a breach of
this Agreement, and Lender shall have no liability to Borrower or any other
Person, if Lender shall fail to do so.

 

(e)           In the event that
Lender has received a Mezzanine Loan Default Notice and no Event of Default or
90% Cash Sweep Period has occurred and is continuing, Borrower hereby
irrevocably directs that all Excess Cash Flow shall (in lieu of transferring
such funds to the Borrower’s Account):  (i) to
the extent Lender has received a First Mezzanine Loan Default Notice and until
such time as Lender receives a First Mezzanine Loan Default Revocation Notice,
be deposited directly into the First Mezzanine Account for application as
provided in the First Mezzanine Loan Agreement; (ii) provided Lender has
not received a First Mezzanine Loan Default Notice but has received a Second
Mezzanine Loan Default Notice and until such time as Lender receives a Second
Mezzanine Loan Default Revocation Notice, be deposited directly in the Second
Mezzanine Account; (iii) provided Lender has not received a First
Mezzanine Loan Default Notice or a Second Mezzanine Loan Default Notice but has
received a Third Mezzanine Loan Default Notice and until such time as Lender
receives a Third Mezzanine Loan Default Revocation Notice from Third Mezzanine
Lender, be deposited directly in the Third Mezzanine Account; (iv) provided
Lender has not received a First Mezzanine Loan Default Notice, a Second
Mezzanine Loan Default Notice or a Third Mezzanine Loan Default Notice but has
received a Fourth Mezzanine Loan Default Notice and until such time as Lender
receives a Fourth Mezzanine Loan Default Revocation Notice from Fourth
Mezzanine Lender, be deposited directly in the Fourth Mezzanine Account; (v) provided
Lender has not received a First Mezzanine Loan Default Notice, a Second
Mezzanine Loan Default Notice, a Third Mezzanine Loan Default Notice or a
Fourth Mezzanine Loan Default Notice, but has received a Senior Mezzanine Loan
Default Notice from a more junior Mezzanine Lender and until such time as
Lender receives a Senior Mezzanine Loan Default Revocation Notice from such
Mezzanine Lender, be deposited directly in the Mezzanine Account of the most
senior Mezzanine Lender delivering such default notice.  The direction set forth in the immediately
preceding sentence shall not be changed or terminated without the written
consent of the applicable Mezzanine Lender. 
Notwithstanding any provision herein to the contrary, no Mezzanine Loan
Default Notice shall be required for the deposit of Proceeds into the
respective Mezzanine Account in accordance with the terms of Section 6.2.3(b) hereof.

 

3.1.7        Required Payments from Sub-Accounts.  Borrower irrevocably authorizes Lender to
make and, subject to Section 3.1.10, Lender hereby agrees to make
or to direct the Cash Management Bank to make, the following payments from the
Sub-Accounts to the extent of the monies on deposit therefor:

 

74

 

(i)                    funds from the Tax Reserve Account to Lender
sufficient to permit Lender to pay (A) Impositions and (B) Other
Charges, on the respective due dates therefor, and Lender shall so pay such
funds to the Governmental Authority having the right to receive such funds;

 

(ii)                   funds from the Insurance Reserve Account to
Lender sufficient to permit Lender to pay insurance premiums for the insurance
required to be maintained pursuant to the terms of this Agreement and the
Security Instruments, on the respective due dates therefor, and Lender shall so
pay such funds to the insurance company having the right to receive such funds;

 

(iii)                  funds from the Ground Rent Reserve
Account to Lender sufficient to permit Lender to pay all Ground Rent on the due
dates therefor and Lender shall so pay such funds to the Person having the
right to receive such funds on the respective due dates therefor;

 

(iv)                  funds from the Debt Service Reserve Account
to Lender sufficient to pay Debt Service on each Payment Date, and Lender, on
each Payment Date, shall apply such funds to the payment of the Debt Service
payable on such Payment Date;

 

(v)                   funds
from the Swap Payment Account to Swap Counterparty on the date each month as
required under the Interest Rate Swap Agreement;

 

(vi)                  provided
no Event of Default has occurred and is continuing, funds on deposit in the
First Mezzanine Debt Service Reserve Account to the First Mezzanine Account;

 

(vii)                 provided (a) no Event of Default
has occurred and is continuing and (b) Lender has not received a First
Mezzanine Loan Default Notice, funds on deposit in the Second Mezzanine Debt
Service Reserve Account to the Second Mezzanine Account; however, if no Event
of Default has occurred and is continuing and Lender has received a First
Mezzanine Loan Default Notice, any amounts that would otherwise have been
distributed to the Second Mezzanine Account, Third Mezzanine Account, Fourth
Mezzanine Account or such other Mezzanine Account junior thereto pursuant to
this Section 3.1.7 absent such notice shall instead be distributed
to the First Mezzanine Account for application in accordance with the First
Mezzanine Loan Documents until such time as Lender receives a notice from First
Mezzanine Lender that such event of default under the First Mezzanine Loan is
no longer continuing (a “First Mezzanine Loan Default Revocation Notice”);

 

(viii)                provided
(a) no Event of Default has occurred and is continuing and (b) Lender
has not received a First Mezzanine Loan Default Notice or a Second Mezzanine
Loan Default Notice, funds on
deposit in the Third Mezzanine Debt Service Reserve Account to the Third
Mezzanine Account; however, (x) if no Event of Default has occurred
and is continuing and Lender has not received a First Mezzanine Loan Default
Notice, and (y) Lender has received a Second Mezzanine Loan Default
Notice, any amounts that would otherwise have been distributed to the Third
Mezzanine Account, the Fourth Mezzanine Account or such other Mezzanine Account
junior thereto pursuant to this Section 3.1.7 absent such notice
shall instead be distributed to the Second Mezzanine Account for application in
accordance with the Second Mezzanine Loan Documents until such time as Lender
receives a notice from Second Mezzanine 

 

75

 

Lender that such event of default under the Second Mezzanine Loan is no
longer continuing (a “Second Mezzanine Loan Default Revocation Notice”);

 

(ix)                   provided
(a) no Event of Default has occurred and is continuing and (b) Lender
has not received a First Mezzanine Loan Default Notice, a Second Mezzanine Loan
Default Notice, or a Third Mezzanine Loan Default Notice, funds on deposit in the Fourth Mezzanine Debt
Reserve Account to the Fourth Mezzanine Account; however, (x) if no
Event of Default has occurred and is continuing and Lender has not received a
First Mezzanine Loan Default Notice or Second Mezzanine Loan Default Notice and
(y) Lender has received a Third Mezzanine Loan Default Notice, any amounts
that would otherwise have been distributed to the Fourth Mezzanine Account or
such other Mezzanine Account junior thereto pursuant to this section 3.1.7
absent such notice shall instead be distributed to the Third Mezzanine Account
for application in accordance with the Third Mezzanine Loan Documents until
such time as Lender receives a notice from Third Mezzanine Lender that such
event of default under the Third Mezzanine Loan is no longer continuing (a “Third
Mezzanine Loan Default Revocation Notice”); and

 

(x)                    provided
(a) no Event of Default has occurred and is continuing and (b) Lender
has not received a First Mezzanine Loan Default Notice, a Second Mezzanine Loan
Default Notice, a Third Mezzanine Loan Default Notice or a Fourth Mezzanine
Loan Default Notice, funds on
deposit in any other Mezzanine Debt Service Reserve Account to the Mezzanine
Account of the applicable Mezzanine Lender, in order of priority of the
applicable Mezzanine Loans; however, (x) if no Event of Default has
occurred and is continuing and Lender has not received a First Mezzanine Loan
Default Notice, Second Mezzanine Loan Default Notice or Third Mezzanine Loan
Default Notice, and (y) Lender has received a Fourth Mezzanine Loan
Default Notice or a comparable Mezzanine Loan Default Notice from another
Mezzanine Lender subordinate to the Fourth Mezzanine Lender, any amounts that
would otherwise have been distributed pursuant to this Section 3.1.7
to a Mezzanine Lender more junior in priority to the Fourth Mezzanine Lender or
such other Mezzanine Lender providing the default notice shall not receive any
such sums, but rather such sums shall instead be distributed (following
delivery of a Fourth Mezzanine Loan Default Notice) to the Fourth Mezzanine
Account or (provided there has been no
Fourth Mezzanine Loan Default Notice, following delivery of a comparable
Mezzanine Loan Default Notice from another Mezzanine Lender subordinate to the
Fourth Mezzanine Lender) to the applicable senior Mezzanine Lender that
delivered such default notice for application in accordance with Fourth
Mezzanine Loan Documents or such senior Mezzanine Lender’s Mezzanine Loan
Documents, as applicable, until such time as Lender receives a notice from
Fourth Mezzanine Lender or such senior Mezzanine Lender that such event of
default under the Fourth Mezzanine Loan or such senior Mezzanine Lender’s
Mezzanine Loan is no longer continuing (respectively, a “Fourth Mezzanine
Loan Default Revocation Notice” or a “Senior Mezzanine Loan Default
Revocation Notice”).

 

3.1.8        Cash Management Bank.

 

(a)           Lender shall have the right at Borrower’s sole cost and expense to
replace the Cash Management Bank with a financial institution reasonably
satisfactory to Borrower in the event that (i) the Cash Management Bank
fails, in any material respect, to comply with the Account Agreement  or (ii) the Cash Management Bank is no
longer an Approved Bank.  Upon 

 

76

 

the occurrence and during the continuance of an Event of Default,
Lender shall have the right at Borrower’s sole cost and expense to replace Cash
Management Bank at any time, without notice to Borrower.  Borrower shall cooperate with Lender in
connection with the appointment of any replacement Cash Management Bank and the
execution by the Cash Management Bank and the Borrower of an Account Agreement
and delivery of same to Lender (with a copy to the Mezzanine Lender).

 

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

 

3.1.9       Borrower’s
Account Representations, Warranties and Covenants.

 

(a)           Borrower
represents, warrants and covenants that as of the Closing Date, Borrower
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 Loan and Borrower shall cause all such sums to be
deposited in the Holding Account.

 

(b)           Borrower further represents, warrants and covenants that (i) Borrower
shall cause Master Lessee to deposit all amounts payable to Borrower pursuant
to the Master Lease directly into the Holding Account, (ii) Borrower shall
pay or cause to be paid all Rents, 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 Borrower or its Affiliates directly into
the Holding Account and, until so deposited, any such amounts held by Borrower
or its Affiliates  shall be deemed to be
Account Collateral and shall be held in trust by it for the benefit, and as the
property, of Lender and shall not be commingled with any other funds or
property of Borrower or its Affiliates, (iii) there are no accounts other
than the Collateral Accounts maintained by Borrower or any other Person with
respect to the Property or the collection of Rents, and (iv) so long as
the Loan shall be outstanding, neither Borrower nor any other Person shall open
any other operating accounts with respect to the Property or the collection of
Rents, except for the Collateral Accounts; provided that, Borrower shall not be
prohibited from utilizing one or more separate accounts for the disbursement or
retention of funds that have been transferred to the Borrower’s Account
pursuant to Section 3.1.6.

 

3.1.10     Account Collateral and Remedies.

 

(a)           Notwithstanding anything to the contrary contained in this Agreement,
upon the occurrence and during the continuance of an Event of Default, without
additional notice from Lender to Borrower, (i) Lender may, in addition to
and not in limitation of Lender’s other rights, make any and all withdrawals
from, and transfers between and among, the Collateral Accounts as Lender shall
determine in its sole and absolute discretion to pay any Indebtedness,
Obligations, operating expenses and/or capital expenditures for the Property
in such order and

 

77

 

priority as
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. Notwithstanding
anything to the contrary contained herein, except to the extent that Borrower
is entitled to such funds under the terms and provisions of the Master Lease
due to the continuance of a Master Lease Event of Default thereunder or
otherwise, funds deposited into the Tax
Reserve Account, the Insurance Reserve Account, and the Ground Rent Reserve
Account (i) may not be applied by Lender in satisfaction of the
Obligations and (ii) shall continue to be disbursed by Lender as provided
in Article XVI and this Article III as if no Event of
Default has occurred.

 

(b)           Upon the occurrence and during the continuance of an Event of Default,
Borrower hereby irrevocably constitutes and appoints Lender as 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 Borrower with respect to the
Account Collateral, and do in the name, place and stead of Borrower, all such
acts, things and deeds for and on behalf of and in the name of Borrower, which
Borrower could or might do or which Lender may deem necessary or desirable to
more fully vest in 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, Lender may perform or cause performance
of any such agreement, and any reasonable out-of-pocket expenses of Lender
incurred in connection therewith shall be paid by Borrower as provided in Section 5.1.16.

 

(c)           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. 
Borrower acknowledges and agrees that ten (10) days’ prior written
notice of the time and place of any public sale of the Account Collateral or
any other intended disposition thereof shall be reasonable and sufficient
notice to Borrower within the meaning of the UCC.

 

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

 

3.1.12      Reasonable Care.  Beyond the exercise of reasonable care in the
custody thereof, Lender shall have no duty as to any Account Collateral 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.  Lender shall be deemed to have
exercised reasonable care in the custody of the Account Collateral in its
possession if the Account Collateral is accorded treatment substantially equal
to that which Lender accords its own property, it being understood that Lender
shall not be liable or responsible for any loss or damage to any of the Account
Collateral, or for any diminution in value thereof, by reason of the act or
omission of Lender, its Affiliates, agents, employees or bailees, except to the
extent that such loss or damage results from the Lender’s gross negligence or
willful misconduct.  In no event shall 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 Lender’s reasonable control or for indirect, special or 

 

78

 

consequential damages except to the extent of Lender’s gross negligence
or willful misconduct.  Notwithstanding
the foregoing, Borrower acknowledges and agrees that (i) Lender does not
have custody of the Account Collateral, (ii) Cash Management Bank has
custody of the Account Collateral, (iii) the initial Cash Management Bank
was chosen by Borrower and (iv) Lender has no obligation or duty to
supervise Cash Management Bank or to see to the safe custody of the Account
Collateral.

 

3.1.13      Lender’s Liability.

 

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

 

(b)           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.  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.

 

3.1.14      Continuing Security Interest.  This Agreement shall create a continuing
security interest in the Account Collateral 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 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 Lender shall execute such instruments
and documents as may be reasonably requested by Borrower to evidence such
termination and the release of the Account Collateral.

 

3.1.15      Distributions.  Transfers of Borrower’s funds from any of the
Collateral Accounts to or for the benefit of any of the Mezzanine Borrowers
shall constitute distributions to First Mezzanine Borrower, and deemed
distributions by the First Mezzanine Borrower to the Second Mezzanine Borrower,
by the Second Mezzanine Borrower to the Third Mezzanine Borrower, by the Third
Mezzanine Borrower to the Fourth Mezzanine Borrower, and by the Fourth
Mezzanine Borrower to such other Mezzanine Borrower as may be junior thereto,
as applicable, and, in each case, must comply with the requirements as to
distributions of the Delaware Limited Liability Company Act.  The provisions of this Article III
shall not create a debtor-creditor relationship between Borrower and any
Mezzanine Lender.  Notwithstanding
anything to the contrary

 

79

 

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

 

IV.           REPRESENTATIONS
AND WARRANTIES

 

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

 

4.1.1        Organization. 
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
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) Borrower has
agreed to so qualify in accordance with a post-closing side letter entered into
on Closing Date, and (d) no such failure to qualify would be reasonably
likely to have a Material Adverse Effect. 
Each of 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 Borrower is the ownership of
the Property.  The organizational
structure of Borrower, each Guarantor and Master Lessee is accurately depicted
by the schematic diagrams attached hereto as Exhibit K.  Borrower shall not change its name, identity,
limited liability company form or jurisdiction of organization unless it shall
have given Lender thirty (30) days prior written notice of any such change and
shall have taken all steps reasonably requested by Lender to grant, perfect,
protect and/or preserve the liens and security interest granted to Lender under
the Loan Documents.

 

4.1.2        Proceedings.  Each of Borrower, Mezzanine Borrower,
Guarantors and Master Lessee has full power to and has taken all necessary
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party.

 

80

 

4.1.3        No Conflicts.  The execution, delivery and performance of
this Agreement and the other Loan Documents by Borrower, Mezzanine Borrower,
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 Loan Documents) 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 Borrower,
Mezzanine Borrower, Guarantors and Master Lessee of this Agreement, 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 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 Borrower’s knowledge,
threatened against or affecting Borrower, Mezzanine Borrower, 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 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 Loan Documents and are being
diligently defended by 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 Borrower, Mezzanine Borrower, 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 Borrower or any of its Affiliates are party or are
bound which are material to the ownership and operation of any Individual
Property.  Borrower is not a party to any
agreement or instrument or subject to any restriction which is reasonably
likely to materially and adversely affect Borrower or Borrower’s business,
properties or assets, operations or condition, financial or otherwise.  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 Borrower or the Property is
bound.  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
Borrower is a party or by which Borrower or the Property is otherwise bound,
other than (a) obligations constituting the 

 

81

 

Permitted Debt of Borrower which are incurred in the ordinary course of
the ownership and operation of the Property and (b) obligations under the Loan
Documents.

 

4.1.6        Title.  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 all Individual Properties other than the Ground Lease Properties,
in each case free and clear of all Liens whatsoever except the Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. 
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 Borrower, as
landlord, under the Master Lease, and such landlord Lien has been assigned to
Lender, along with 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 other
than the Permitted Encumbrances.  Borrower
represents and warrants that 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.  Borrower shall preserve its right, title and
interest in and to the Property for so long as the Notes remain outstanding and
will 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.

 

4.1.7        No Bankruptcy Filing.  None of Borrower, 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 Borrower has
no knowledge of any Person contemplating the filing of any such petition
against it, Mezzanine Borrower, any Guarantor or Master Lessee.

 

4.1.8        Full and Accurate Disclosure.  To the best of Borrower’s knowledge no
statement of material fact made by Borrower in this Agreement or in any of the
other 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 Borrower
which has not been disclosed which could reasonably be expected to have a
Material Adverse Effect.

 

82

 

4.1.9        All Property.  The Property constitutes all of the real
property, personal property, equipment and fixtures currently (i) owned or
leased by Borrower and (ii) used in the operation of the business located
on the Property, other than the Excluded Personal Property (but a portion of
which Excluded Personal Property is subject to the Assigned Landlord Lien).

 

4.1.10      No Plan Assets.

 

(a)           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 Borrower (i) has no
knowledge of any material liability which has been incurred or is expected to
be incurred by 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 Borrower or by any entity
that is under common control with 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

 

(b)           Borrower is not an employee benefit plan, as defined in Section 3(3) of
ERISA, subject to Title I of ERISA, none of the assets of 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 Borrower is not a governmental plan
within the meaning of Section 3(32) of ERISA and Borrower is not 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, Borrower
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 Borrower’s
knowledge, Borrower is not in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority.  To the best of Borrower’s knowledge, there
has not been committed by Borrower any act or omission affording the federal
government or any other Governmental Authority the right of forfeiture as
against the Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents.

 

83

 

4.1.12      Financial Information.  The information set forth in the certificate
of Borrower regarding financial information dated as of the Closing Date (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.  Borrower does not have
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 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 Borrower’s knowledge, is contemplated with
respect to all or any portion of the Property. 
No Taking is pending or, to the best of 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 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 Borrower or
the Lender to be in violation of Regulation U. 
As of the Closing Date, 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.  Borrower is not a foreign person within the
meaning of § 1445(f)(3) of the Code.

 

4.1.17      [Reserved].

 

4.1.18      [Reserved].

 

4.1.19      [Reserved].

 

4.1.20      Enforceability.  The Loan Documents to which each of Borrower,
Mezzanine Borrower, Guarantors and Master Lessee is a party have been duly
executed and delivered by, or on behalf of, Borrower, 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 

 

84

 

enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

4.1.21      [Reserved.]

 

4.1.22      Insurance.  Borrower has obtained and has delivered to
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.  Borrower
has not, and to the best of 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 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).  Borrower shall
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 Closing Date, and Borrower has
obtained the insurance required under Article VI with respect to any
Improvements located in any such special flood hazards.

 

4.1.26      Physical Condition.  To the best of 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 Borrower’s knowledge, there exists no structural or other
material defects or damages in or to the Property, whether latent or otherwise,
and 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 Borrower’s knowledge and, where
applicable, in reliance on the Surveys (a) all of the Improvements lie
wholly within the boundaries and building restriction lines of the Real 

 

85

 

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 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 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 assigned to Lender on the Closing Date.

 

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 Borrower and the granting and
recording of the Security Instruments and the UCC financing statements required
to be filed in connection with the 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 Loan Documents, including, without limitation, the
Security Instruments, have been paid, and, under current Legal Requirements,
the Security Instruments are enforceable against Borrower in accordance with
its terms by 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, Borrower hereby represents,
warrants and covenants that Borrower, and each of the Mezzanine Borrowers 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 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.  Borrower and each other 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.  Borrower and each
other SPE Entity will have complied and will comply with all of 

 

86

 

the assumptions made with respect to it in any Additional
Non-Consolidation Opinion.  Each entity
other than 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 Borrower to Lender in writing in connection with the
Loan or in satisfaction of the terms hereof and all material statements of fact
made by any Borrower in this Agreement or in any other Loan Document, are to
the best of 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.  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 Borrower.

 

4.1.36      Solvency/Fraudulent Conveyance.  Borrower has not entered into the transaction
contemplated by this Agreement or any Loan Document with the actual intent to
hinder, delay or defraud any creditor. 
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. 
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 Borrower and the
amounts to be payable on or in respect of obligations of Borrower).

 

4.1.37      Investment Company Act.  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.

 

4.1.38      Interest Rate Protection Agreement.  A complete and correct copy of the Interest
Rate Protection Agreement is attached hereto as Exhibit L.  The Interest Rate Protection Agreement is in
full force and effect and enforceable against Borrower in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws generally
affecting the 

 

87

 

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 Borrower or Master Lessee, (i) is involved in or, to the
best knowledge of 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 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 Borrower or Master
Lessee.

 

4.1.40      Brokers.  Neither Borrower nor Lender has dealt with
any broker or finder with respect to the transactions contemplated by the 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 Loan Documents.  Borrower and 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.  Borrower has not borrowed or received debt
financing that has not been heretofore repaid in full, other than the Permitted
Debt of Borrower.

 

4.1.42      Taxpayer Identification Number.  Borrower’s Federal taxpayer identification
number is 26-1259366.

 

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

 

88

 

4.1.44      Merger Agreement.  Borrower has delivered to 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 Lender shall have
requested, to the extent that such deliveries are within the possession or
control of 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 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.

 

4.1.46      Reserved.

 

4.2           Survival of Representations.  Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall be deemed
given and made as of the Closing Date and survive for so long as any amount
remains owing to Lender under this Agreement or any of the other Loan Documents
by Borrower or Guarantor unless a longer survival period is expressly stated in
a 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 Loan Documents by Borrower shall be deemed to have been relied
upon by Lender notwithstanding any investigation heretofore or hereafter made
by Lender or on its behalf.

 

4.3           Borrower’s
Knowledge.  Whenever a representation
or warranty is made “to Borrower’s knowledge,” “to 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 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.            BORROWER
COVENANTS

 

5.1           Affirmative
Covenants.  From the Closing Date and
until payment and performance in full of all obligations of Borrower under the
Loan Documents, Borrower hereby covenants and agrees with Lender that:

 

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

 

89

 

5.1.2        Existence;
Compliance with Legal Requirements; Insurance.  Subject to Borrower’s right of contest
pursuant to Section 7.3 and Schedule 4.1.11, Borrower shall
at all times comply and cause the Property to be in compliance in all material
respects with all Legal Requirements applicable to the Borrower, any SPE Entity
and the Property and the uses permitted upon the Property.  Borrower shall do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
existence, rights, licenses, permits and franchises necessary to comply with
all material Legal Requirements applicable to it and the Property.  There shall never be committed by Borrower,
and Borrower shall not 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 Borrower’s obligations under any of the Loan Documents.  Borrower hereby covenants and agrees not to
commit, knowingly permit or suffer to exist any act or omission affording such
right of forfeiture.  Borrower shall 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 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, all as more fully set forth in the Security Instruments.  Borrower shall 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.

 

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

 

5.1.4        Single Purpose Entity.

 

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

 

(b)           Borrower 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
Borrower will be diverted to any other Person for anything other than business
uses of Borrower, nor will such funds be commingled with the funds of any other
Affiliate.

 

(c)           To the extent that Borrower shares the same officers or other employees
as any of its 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 Borrower jointly contracts with any of its Affiliates,
to do business with vendors or service providers or to share overhead expenses,
the costs incurred in so 

 

90

 

doing shall be allocated fairly among such entities, and each such
entity shall bear its fair share of such costs. 
To the extent that Borrower 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) Borrower and any of its Affiliates shall be conducted on substantially
the same terms (or on more favorable terms for Borrower) as would be conducted
with third parties.

 

(e)           To the extent that Borrower, or any of its 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)            Borrower 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, Borrower shall: (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 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 Borrower 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 Borrower 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 Borrower shall 

 

91

 

be required to (i) file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings or to authorize Borrower to do so or
(ii) file an involuntary bankruptcy petition against any Affiliate,
Manager, or any Affiliate of Manager. 
Furthermore, Borrower’s formation documents shall expressly state that
for so long as the Loan is outstanding, Borrower shall not be permitted to (i) dissolve,
liquidate, consolidate, merge or sell all or substantially all of Borrower’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, Borrower
shall permit agents, representatives and employees of 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.  Borrower shall promptly advise Lender (a) of
any event or condition of which Borrower has knowledge that has a Material
Adverse Effect and (b) of the occurrence of any Default or Event of
Default of which Borrower has knowledge.

 

5.1.8        Cooperate in Legal Proceedings.  Borrower shall cooperate fully with 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 Lender hereunder or under any of the other Loan Documents
and, in connection therewith, permit Lender, at its election, to participate in
any such proceedings which may have a Material Adverse Effect.

 

5.1.9        [Reserved.]

 

5.1.10      Insurance.

 

(a)           Borrower shall cooperate with Lender in obtaining for Lender the benefits
of any Proceeds lawfully or equitably payable in connection with the Property,
and Lender shall be reimbursed for any reasonable out-of-pocket expenses
incurred in connection therewith (including reasonable attorneys’ fees and
disbursements) out of such Proceeds.

 

(b)           Borrower shall comply with all Insurance Requirements and shall not 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 to be maintained by Borrower on or with respect to any part of the
Property pursuant to Section 6.1.

 

5.1.11      Further Assurances; Separate Notes; Loan
Resizing.

 

(a)           Borrower shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Lender all documents, and take all actions,
reasonably required by Lender from time to time to confirm the rights created
or now or hereafter intended to be created under this Agreement and the other
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 Loan Documents, to subject to the Loan Documents
any 

 

92

 

property of Borrower intended by the terms of any one or more of the
Loan Documents to be encumbered by the Loan Documents, or otherwise carry out
the purposes of the Loan Documents and the transactions contemplated thereunder.  Borrower agrees that it shall, upon request
and at Lender’s cost (including, without limitation, any costs related to the
modification or replacement of the Interest Rate Protection Agreement (but not
including any breakage costs associated with or arising under the Interest Rate
Protection Agreement),  reasonably
cooperate with Lender in connection with any request by Lender to sever one or
more of the 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 Lender new substitute notes to replace the
applicable Note or Notes, amendments to or replacements of existing Loan
Documents to reflect such severance and/or Opinions of Counsel with respect to
such substitute notes, amendments and/or replacements, provided that Borrower
shall bear no costs or expenses in connection therewith (other than internal
administrative costs and expenses of 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 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 Note being substituted immediately
prior to the issuance of such substitute notes; and (iii) the economics of
the Loan shall not change in a manner which is adverse to Borrower.  Upon the occurrence and during the
continuance of an Event of Default, Lender may apply payment of all sums due
under such substitute notes (and in respect of any other Indebtedness and
Obligations) in such order and priority as Lender shall elect in its sole and
absolute discretion.

 

(b)           Borrower further agrees that if Lender determines, in its sole
discretion, to increase the principal amount of the Loan and correspondingly
decrease the principal amount of the Mezzanine Loan, or to decrease the
principal amount of the Loan and correspondingly increase the principal amount
of the Mezzanine Loan, or to reallocate the aggregate principal amount of the
Mezzanine Loan among the Mezzanine Notes or among the Mezzanine Notes plus
additional tiers of mezzanine notes, then in any such event, the Borrower shall
cooperate with Lender’s “resizing” of the Mezzanine Loan and the Loan, and such
cooperation shall include any one or more of the following (either individually
or in combination): (A) if on the date of the “resizing” of the Loan, a
Mezzanine Lender lends to the applicable Mezzanine Borrower (by way of a
reallocation of the principal amounts of the Loan and the Mezzanine Loan) such
additional amount equal to the amount of the principal reduction of the Loan,
Borrower and each Mezzanine Borrower shall execute and deliver any and all
amendments or modifications to the Loan Documents and the Mezzanine Loan
Documents reasonably required by Lender or Mezzanine Lender to implement such
resizing; (B) if on the date of the “resizing” of the Loan, Lender lends
to the Borrower (by way of a reallocation of the principal amount of the Loan
and the Mezzanine Loan) an additional amount equal to the amount of principal
reduction of the applicable Mezzanine Loan, Borrower and each Mezzanine
Borrower shall execute and deliver any and all modifications to the Loan
Documents and Mezzanine Loan 

 

93

 

Documents reasonably required by Lender or Mezzanine Lender to
implement such resizing; and/or (C) in the event of any reallocation of
the principal amount of the Mezzanine Loan among the various Mezzanine Notes,
or among the various Mezzanine Notes plus newly created additional tiers of
mezzanine notes, Borrower and Mezzanine Borrower shall execute and deliver any
and all necessary amendments, modifications and/or supplements to the Loan
Documents and Mezzanine Loan Documents 
reasonably required by Lender or Mezzanine Lender to effect such
reallocation.  In connection with the
foregoing, Borrower and Lender agree that the execution of such documents and
other agreements reasonably required by Mezzanine Lender and/or Lender to “re-size”
or reallocate the Loan and the Mezzanine Loan shall be at Lender’s sole cost
and expense. If the principal amount of the Loan is increased, a fully paid
endorsement to the Title Policies reflecting an increase in the insured amount
thereunder shall be obtained by Borrower at Lender’s sole cost and expense and
Borrower shall pay any related mortgage taxes or mortgage recording taxes.  Notwithstanding the foregoing, Lender agrees
that (a) any “resizing” of the Loan and the Mezzanine Loan (and any
reallocation of the Mezzanine Loan) shall not change the economics of the Loan
and the Mezzanine Loan taken as a whole in a manner which is adverse to
Borrower and (b) no amendment of any of the Loan Documents
in connection with such “resizing” or reallocation shall (taken as a whole with
the Mezzanine Loan Documents) increase in any respect the obligations or
liabilities of, or decrease the rights of, Borrower, in each case other than to
a de minimis extent.

 

(c)           Any amounts recovered
from the Property or any other
collateral delivered or pledged to Lender in connection with the Loan, 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 or the Interest Rate Swap Agreement in
such order, priority, or proportions as Lender in its sole discretion shall
determine.

 

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

 

5.1.13      Operation.

 

Borrower shall, and shall 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 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 Borrower shall 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 Borrower is obligated to cause the Master Lessee to
take or refrain from taking a certain action, and whenever this Agreement or
any Loan Document shall set forth an obligation of Master Lessee, then such
provisions shall be construed to mean that Borrower shall 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 Borrower under the Master Lease and applicable law.

 

5.1.14      Business and Operations.  Borrower shall continue to engage in the
businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Property.  Borrower shall qualify to do
business 

 

94

 

and shall remain in good standing under the laws of the State in which
the Property is located as and to the extent required for the ownership,
maintenance, management and operation of the Property.

 

5.1.15      Title to the
Property.

 

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

 

(b)           Borrower
agrees to comply with the provisions contained in Section 3(e) of
the Security Instruments regarding the spreading of the Lien of Security
Instruments to cover additional property intended to be secured thereby.

 

5.1.16      Costs of Enforcement.  In the event (a) that this Agreement or
any Security Instrument is foreclosed upon in whole or in part or that by
reason of Borrower’s default hereunder this Agreement or any Security
Instrument 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 Lender is made a party, or a
mortgage prior to or subsequent to any Security Instrument in which proceeding
Lender is made a party, or (c) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower or any of its
constituent Persons or an assignment by Borrower or any of its constituent
Persons for the benefit of its creditors, 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 Lender or 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.  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 Lender, execute,
acknowledge and deliver to the Lender, an Officer’s Certificate, stating that
this Agreement and the other Loan Documents are unmodified and in full force
and effect (or, if there have been modifications, that this Agreement and the
other Loan Documents 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 Notes and containing such other information
with respect to the Borrower, the Property and the Loan as Lender shall
reasonably request.  Lender shall, from
time to time, but no more often than once in any calendar quarter, upon thirty
(30) days’ prior written request from Borrower, execute, acknowledge and
deliver to Borrower, a certificate signed by an officer of Lender, stating that
this Agreement and the other Loan Documents are unmodified and in full force
and effect (or, if there have been modifications, that this Agreement and the
other Loan Documents are in full force and effect as modified and setting forth
such modifications).  The estoppel
certificate from 

 

95

 

Borrower shall also state either that, to the best of Borrower’s
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 Lender shall state whether Lender has
delivered notice of a Default or an Event of Default.

 

5.1.18      Loan Proceeds.  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.  Borrower shall not 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, Borrower
shall do, or cause to be done, all things necessary to keep and protect the
Property and all portions thereof unencumbered from any Liens, easements or
agreements granting rights in or restricting the use or development of the
Property, except for Permitted Encumbrances.

 

5.1.21      [Reserved.]

 

5.1.22      Master Lease.

 

(a)           Each
Individual Property shall at all times be leased directly and exclusively by
the 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
Lender for its reference, not for its approval.

 

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

 

96

 

(f)            Except
for the Assignment of Leases and the Permitted Encumbrances, neither the
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 Lender. 
The Borrower shall not 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 Borrower its interest in the “FF&E” as
defined in the Master Lease, subject to the Assigned Landlord Lien.

 

(g)           Neither
the Borrower nor the Master Lessee shall, without the prior written consent of
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 (as such term is defined in the Master
Lease), (iv) waive any provisions of the Master Lease, provided that
subject to clause (i), 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 Borrower or Master Lessee is prohibited from taking under this Agreement
or any other Loan Document, or preventing Borrower and/or Master Lessee from
complying with an obligation on the part of Borrower or Master Lessee under
this Agreement or any other Loan Document, (v) amend or modify in any
respect in a manner adverse to Lender or that would decrease Master Lessee’s
obligations or increase 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 Lender or that would decrease Master Lessee’s obligations or
increase Borrower’s obligations thereunder, provided
that nothing in this Section 5.1.22(g) 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.

 

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

 

(i)            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 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.

 

97

 

(j)            The form of the Master Lease is attached hereto as Exhibit F.  Lender hereby approves of the form of the
Master Lease.  Notwithstanding the
foregoing, or anything else in 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.

 

5.2           Negative Covenants.

 

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

 

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

 

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

 

5.2.3        Engage in Different Business.  Engage, directly or indirectly, in any
business other than that of entering into this Agreement and the other Loan
Documents to which 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 Loan Document;

 

5.2.5        Subdivision. 
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 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 except in each case
(including in connection with a Release or Substitution) as may be permitted
hereby or in the other Loan Documents;

 

5.2.9        Amend Organizational Documents.  Amend or modify any of its organizational
documents without Lender’s consent, other than in connection with any Transfer
permitted 

 

98

 

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 Borrower 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 Borrower’s
assets other than in connection with the repayment of the Loan, or (iii) file
or solicit the filing of an involuntary bankruptcy petition against Borrower,
Mezzanine Borrower, a Master Lessee Party or any Guarantor, 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
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 Borrower’s assets do not and will not constitute plan
assets within the meaning of 29 C.F.R. Section 2510.3-101;

 

5.2.13      Distributions.  From and after the occurrence and during the
continuance of an Event of Default or an event of default (a “Mezzanine
Event of Default”) under any Mezzanine Loan Agreement, 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 Borrower solely for the purpose
of enabling a Mezzanine Borrower to cure a Mezzanine Event of Default, and
which distributions are in fact sufficient to completely cure such Mezzanine
Event of Default and are used for their intended purpose, shall be permitted.

 

5.2.14      [Reserved;]

 

5.2.15      [Reserved;]

 

5.2.16      [Reserved;]

 

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

 

5.2.18      Zoning
Reclassification.  Without the prior written
consent of Lender (which in the case of clause (a) shall not be
unreasonably withheld), (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;

 

99

 

5.2.19      Change of
Principal Place of Business.  Change
its principal place of business and chief executive office set forth on the
first page of this Agreement without first giving 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 Lender, as may be necessary to maintain fully the effect, perfection and
priority of the security interest of Lender hereunder in the Account Collateral
and the Rate Protection Collateral at all times;

 

5.2.20      Debt Cancellation.  Cancel or otherwise forgive or release any
material claim or debt owed to it 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;

 

5.2.21      Misapplication of Funds.  Distribute any revenue from the Property or
any Proceeds in violation of the provisions of this Agreement, fail to remit
amounts to the Holding Account, as applicable, as required by Section 3.1,
misappropriate any security deposit or portion thereof or apply the proceeds of
the Loan in violation of Section 2.1.4; or

 

5.2.22      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 to cease
to be a Single Purpose Entity.

 

VI.                                 INSURANCE; CASUALTY; CONDEMNATION;
RESTORATION

 

6.1           Insurance
Coverage Requirements.  Borrower
shall, at its sole cost and expense, keep in full force and effect, or cause
the Master Lessee or, to the extent within Borrower’s control, the applicable
party to the Operating Agreements to keep in full force and effect, insurance
coverage of the types and minimum limits as follows during the term of this
Agreement (it being understood that to the extent that Master Lessee or any
party to any Operating Agreement maintains any such coverage on the Closing
Date, but thereafter fails to maintain such coverage, Borrower shall obtain
such coverage at its sole cost and expense):

 

6.1.1        Property
Insurance.  Insurance against loss
customarily included under so called “All Risk” policies including flood
(subject to a $50 million sublimit), earthquake (subject to a $50 million
sublimit), windstorm, vandalism, and malicious mischief, boiler and machinery,
and such other insurable hazards as, under good insurance practices, from time
to time are insured against for other property and buildings similar to the
Improvements and Building Equipment in nature, use, location, height, and type
of construction.  Such insurance policy
shall also insure the additional expense of demolition and if any of the
Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses, provide coverage for contingent liability
from Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements and containing an “Ordinance or Law Coverage” or “Enforcement”
endorsement. The amount of such “All Risk” insurance shall be not less than one
hundred percent (100%) of the replacement cost value of the Improvements and
the Building Equipment.  Each such
insurance policy shall contain an agreed amount (coinsurance waiver) and
replacement cost value endorsement and shall cover, without limitation, all
tenant improvements and betterments which Borrower is required to insure in
accordance with any Sublease.  If the
insurance required under this paragraph is not obtained by blanket insurance
policies, the insurance policy shall be endorsed to also provide guaranteed
building replacement cost.  Lender shall
be named “Loss 

 

100

 

Payee” on a “Standard Mortgagee Endorsement” and be provided not less
than thirty (30) days advance notice of cancellation or non-renewal.

 

6.1.2        Liability Insurance.  “General Public Liability” insurance,
including, without limitation, “Commercial General Liability” insurance; “Owned”
(if any), “Hired” and “Non Owned Auto Liability”; and “Umbrella Liability”
coverage for “Personal Injury,” “Bodily Injury,” “Death, Accident and Property
Damage,” providing in combination no less than $100 million per occurrence and
in the annual aggregate, per location. 
The policies described in this paragraph shall cover, without
limitation: elevators, escalators, independent contractors, “Contractual
Liability” (covering, to the maximum extent permitted by law, Borrower’s
obligation to indemnify Lender as required under this Agreement and “Products
and Completed Operations Liability” coverage). 
All public liability insurance shall name Lender as “Additional Insured”
either on a specific endorsement or under a blanket endorsement satisfactory to
Lender.  Borrower shall be permitted to
maintain the foregoing coverage under an insurance program containing primary
self-insured retention with respect to the first $500,000 in losses.    Notwithstanding the foregoing, Borrower shall not be
obligated to maintain terrorism public liability insurance in an amount greater
than that which can be purchased for a sum equal to $225,000.

 

6.1.3        Workers’ Compensation Insurance.  Workers compensation and disability insurance
as required by law.

 

6.1.4        Commercial Rents Insurance.  “Commercial rents” insurance in an amount
equal to eighteen (18) months actual rental loss plus a 365-day extended period
of indemnity endorsement and with a limit of liability sufficient to avoid any
co-insurance penalty and to provide Proceeds which will cover the actual loss
of profits and rents sustained during the period of at least eighteen (18)
months following the date of casualty. 
Such policies of insurance shall be subject only to exclusions that are
reasonably acceptable to Lender; provided, however, that such exclusions are
reasonably consistent with those required for loans similar to the Loan
provided herein.  Such insurance shall be
deemed to include “loss of rental value” insurance where applicable.  The term “rental value” means the sum of (A) the
total then ascertainable Rents payable under the Master Lease and the Subleases
and (B) the total ascertainable amount of all other amounts to be received
by Borrower from third parties which are the legal obligation of Tenants,
reduced to the extent such amounts would not be received because of operating
expenses not incurred during a period of non-occupancy of that portion of the
Property then not being occupied.  Lender
shall be named “Loss Payee” on a “Standard Mortgagee Endorsement” and be
provided not less than thirty (30) days advance notice of cancellation or
non-renewal.

 

6.1.5        Builder’s All-Risk Insurance.  During any period of repair or restoration to
an Individual Property, builder’s “All-Risk” insurance in an amount equal to
not less than the full insurable value of such Individual Property against such
risks (including so called “All Risk” perils coverage and collapse of the
Improvements to agreed limits as Lender may request, in form and substance
reasonably acceptable to Lender).  Lender
shall be named “Loss Payee” on a “Standard Mortgagee Endorsement” and be provided
not less than thirty (30) days advance notice of cancellation or non-renewal.

 

101

 

6.1.6        Boiler and Machinery Insurance.  Comprehensive boiler and machinery insurance
(without exclusion for explosion) covering all mechanical and electrical
equipment against physical damage, rent loss and improvements loss and
covering, without limitation, all tenant improvements and betterments that
Borrower or Master Lessee is required to insure pursuant to the Master Lease or
any Sublease on a replacement cost basis. 
The minimum amount of limits to be provided shall be $10,000,000 per
accident.  Lender shall be named “Loss
Payee” on a “Standard Mortgagee Endorsement” and be provided not less than
thirty (30) days advance notice of cancellation or non-renewal.

 

6.1.7        Flood Insurance.  If any portion of the Improvements is located
within an area designated as “flood prone” or a “special flood hazard area” (as
defined under the regulations adopted under the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973), flood insurance shall be
provided, in an amount not less than the maximum limit of coverage available
under the Federal Flood Insurance plan with respect to the Property.  Lender reserves the right to require flood
insurance in excess of that available under the Federal Flood Insurance
plan.  Lender shall be named “Loss Payee”
on a “Standard Mortgagee Endorsement” and be provided not less than thirty (30)
days advance notice of cancellation or non-renewal.

 

6.1.8        [Reserved.]

 

6.1.9        Terrorism Insurance.  Borrower shall be required to carry insurance
with respect to the Improvements and Building Equipment covering acts of
sabotage or acts by terrorist groups or individuals (“Terrorism Insurance”)
throughout the Loan term in an amount equal to the lesser of (x) the
Combined Release Price, reduced by land value as defined in the Appraisal, for
the Individual Property with the largest Combined Allocated Loan Amount of any Individual Property then subject to a Security
Instrument and (y) the replacement cost for the Individual Property
with the largest Combined Allocated Loan Amount of any Individual Property then subject to a Security Instrument.  The Terrorism Insurance shall also include 18
months of business interruption coverage. 
Notwithstanding
the foregoing, Borrower shall not be obligated to maintain Terrorism Insurance
in an amount greater than that which can be purchased for a sum equal to $1,800,000.  Lender agrees that Terrorism Insurance
coverage may be provided under a blanket policy that is acceptable to
Lender.  Notwithstanding anything to the
contrary in this Section 6.1.9, Borrower shall not be obligated to
maintain Terrorism Insurance except to the extent commercially available.  Terrorism Insurance policies shall name
Lender as loss payee and additional insured.

 

6.1.10      Other Insurance.  At Lender’s reasonable request, such other
insurance with respect to the Property against loss or damage of the kinds from
time to time customarily insured against and in such amounts as are generally
required under Rating Agency criteria or by institutional lenders on loans of
similar amounts and secured by properties comparable to, and in the general
vicinity of, the Property.

 

6.1.11      Ratings of Insurers.  Borrower shall maintain the insurance
coverage described in Section 6.1 above, in all cases, with one or
more financially sound and responsible insurance companies authorized to do
business in the State and having a claims paying ability rating of “A” or
better by S&P, provided that if five (5) or more insurance companies
issue any of the policies required hereunder, and at least sixty percent (60%)
of the applicable insurance coverage is 

 

102

 

provided by insurance companies having a claims paying ability of “A”
or better (and the equivalent thereof), then the remaining forty percent (40%)
or less of the applicable insurance coverage required hereunder may be provided
by insurance companies having a claims paying ability of “BBB” or better (and
the equivalent thereof).

 

6.1.12      Form of Insurance Policies; Endorsements.  All insurance policies shall be in such form
and with such endorsements as are reasonably satisfactory to Lender (and Lender
shall have the right, subject to the provisions of this Agreement, to approve
amounts, form, risk coverage, deductibles, loss payees and insureds).  A certificate of insurance with respect to
all of the above-mentioned insurance policies has been delivered to Lender and
originals or certified copies of all such policies shall be delivered to Lender
when the same are available (but no later than thirty (30) days after the
Closing Date) and shall be held by Lender. 
All policies shall name Lender as an additional insured, shall provide
that all Proceeds (except with respect to Proceeds of general liability and
workers’ compensation insurance) be payable to Lender as and to the extent set
forth in Section 6.2, and shall contain: (i) a standard “non-contributory
mortgagee” endorsement or its equivalent relating, inter  alia, to
recovery by Lender notwithstanding the negligent or willful acts or omissions
of Borrower; (ii) a waiver of subrogation endorsement in favor of Lender; (iii) an
endorsement providing that no policy shall be impaired or invalidated by virtue
of any act, failure to act, negligence of, or violation of declarations,
warranties or conditions contained in such policy by Borrower, Lender or any
other named insured, additional insured or loss payee, except for the willful
misconduct of Lender knowingly in violation of the conditions of such policy; (iv) an
endorsement providing for a deductible per loss of an amount not more than that
which is customarily maintained by prudent owners of properties with a standard
of operation and maintenance comparable to and in the general vicinity of the
Property, but in no event in excess of an amount reasonably acceptable to
Lender; and (v) a provision that such policies shall not be canceled,
terminated or expire without at least thirty (30) days’ prior written notice to
Lender, in each instance.  Each insurance
policy shall contain a provision whereby the insurer: (i) agrees that such
policy shall not be canceled or terminated, the coverage, deductible, and
limits of such policy shall not be modified, other provisions of such policy
shall not be modified if such policy, after giving effect to such modification,
would not satisfy the requirements of this Agreement, and such policy shall not
be canceled or fail to be renewed, without in each case, at least thirty (30)
days prior written notice to Lender, (ii) waives any right to claim any
premiums and commissions against Lender, provided that the policy need not
waive the requirement that the premium be paid in order for a claim to be paid
to the insured, and (iii) provides that Lender at its option, shall be
permitted to make payments to effect the continuation of such policy upon
notice of cancellation due to non-payment of premiums.  In the event any insurance policy (except for
general public and other liability and workers compensation insurance) shall
contain breach of warranty provisions, such policy shall provide that with
respect to the interest of Lender, such insurance policy shall not be
invalidated by and shall insure Lender regardless of (A) any act, failure
to act or negligence of or violation of warranties, declarations or conditions
contained in such policy by any named insured, (B) the occupancy or use of
the Property for purposes more hazardous than permitted by the terms thereof,
or (C) any foreclosure or other action or proceeding taken by Lender
pursuant to any provision of this Agreement. Lender hereby confirms and
acknowledges that Borrower has delivered to Lender certificates of insurance
with respect to Master Lessee’s insurance program, in amount, form and content
so as to satisfy the requirements of this Section 6.1 in all
material respects as of the Closing Date other than with respect to Section 6.1.9,
and that any renewals or modifications that 

 

103

 

comply with Section 6.1.11 and are otherwise not, in
substance, materially different from the approved program in place on the
Closing Date shall be deemed to be in compliance.

 

6.1.13      Certificates.  Borrower shall deliver to Lender annually,
concurrently with the renewal of the insurance policies required hereunder, a
certificate from Borrower’s insurance agent stating that the insurance policies
required pursuant to this Section 6.1 are maintained with insurers
who comply with the terms of Section 6.1.11, setting forth a
schedule describing all premiums required to be paid by Borrower to maintain
the policies of insurance required under this Section 6.1, and
stating that Borrower has paid such premiums. 
Certificates of insurance with respect to all replacement policies shall
be delivered to 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.  Borrower shall
deliver to 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 and (ii)  five (5) Business Days after
Borrower’s receipt thereof.  If Borrower
fails to maintain and deliver to Lender the certificates of insurance and
certified copies or originals required by this Agreement, upon five (5) Business
Days’ prior notice to Borrower, Lender may procure such insurance, and all
costs thereof (and interest thereon at the Default Rate) shall be added to the
Indebtedness.  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
Borrower hereby expressly assumes full responsibility therefor and all
liability, if any, with respect to such matters.

 

6.1.14      Separate Insurance.  Borrower shall not take out separate
insurance contributing in the event of loss with that required to be maintained
pursuant to this Section 6.1 unless such insurance complies with
this Section 6.1.

 

6.1.15      Blanket Policies.  The insurance coverage required under this Section 6.1
may be effected under a blanket policy or policies covering the Property and
other properties and assets not constituting a part of the Property (a “Blanket
Policy”); provided that any such Blanket Policy shall specify, except in
the case of public liability insurance, the portion of the total coverage of
such policy that is allocated to the Property, and any sublimits in such
Blanket Policy applicable to the Property, which amounts shall not be less than
the amounts required pursuant to this Section 6.1 and which shall
in any case comply in all other respects with the requirements of this Section 6.1.  In addition, Borrower shall provide evidence
satisfactory to Lender that the insurance premiums for the Property are
separately allocated under such Blanket Policy to the Property and that payment
of such allocated amount (A) shall maintain the effectiveness of such
Blanket Policy as to the Property and (B) shall otherwise provide the same
protection as would a separate policy that complies with the terms of this
Agreement as to the Property, notwithstanding the failure of payment of any
other portion of the insurance premiums. 
If no such allocation is available, Lender shall have the right to
increase the amount required to be deposited into the Insurance Reserve Account
in an amount sufficient to purchase a non-blanket policy covering the Property
from insurance companies which qualify under this Agreement.  Upon Lender’s request, Borrower shall deliver
to Lender an Officer’s Certificate setting forth (i) the number of
Individual Properties covered by such policy, (ii) the location by city
(if available, otherwise, county) and state of such Individual Properties, (iii) the
average 

 

104

 

square footage of such Individual Properties (or the aggregate square
footage), (iv) a brief description of the typical construction type included
in the Blanket Policy and (v) such other information as Lender may
reasonably request.

 

6.2           Condemnation
and Insurance Proceeds.

 

6.2.1        Notification.  Borrower shall promptly notify Lender in
writing upon obtaining knowledge of (i) the institution of any proceedings
relating to any Taking (whether material or immaterial) of, or (ii) the
occurrence of any casualty, damage or injury to, the Property or any portion
thereof, the restoration of which is estimated by Borrower in good faith to
cost more than the Casualty Amount as to any Individual Property.  In addition, each such notice shall set forth
such good faith estimate of the cost of repairing or restoring such casualty,
damage, injury or Taking in reasonable detail if the same is then available
and, if not, as soon thereafter as it can reasonably be provided.  Borrower shall promptly provide Lender with
copies of any material documentation available to Borrower and requested by
Lender relating to any Taking, including, but not limited to, documentation
relating to the Taking matters set forth on Schedule II.

 

6.2.2        Proceeds.  In the event of any Taking of or any casualty
or other damage or injury to the Property, including, but not limited to,
pursuant to the Taking matters set forth on Schedule II, Borrower’s
right, title and interest in and to all compensation, awards, proceeds,
damages, claims, insurance recoveries, causes and rights of action (whether
accrued prior to or after the Closing Date) and payments which Borrower may
receive or to which Borrower may become entitled with respect to the Property
or any part thereof other than payments received in connection with any
liability or loss of rental value or business interruption insurance, including
all such right, title and interest in and to all compensation, awards,
proceeds, damages, claims, insurance recoveries, causes and rights of action
under insurance required to be maintained for the benefit of Borrower or Lender
under the Master Lease (collectively, “Proceeds”), in connection with
any such Taking of, or casualty or other damage or injury to, the Property or
any part thereof are hereby assigned by Borrower to Lender and, except as
otherwise herein provided, shall be paid to the Lender.  Borrower shall, in good faith and in a
commercially reasonable manner, file and prosecute the adjustment, compromise
or settlement of any claim for Proceeds and, subject to Borrower’s right to
receive the direct payment of any Proceeds as herein provided, will cause the
same to be paid directly to Lender to be held and applied in accordance with
the provisions of this Agreement.  Except
upon the occurrence and during the continuance of a Monetary Default or an
Event of Default, Borrower may settle any insurance claim with respect to
Proceeds which does not exceed the Casualty Amount as to any Individual
Property.  Whether or not a Monetary
Default or an Event of Default shall have occurred and be continuing, Lender
shall have the right to approve, such approval not to be unreasonably withheld,
any settlement which might result in any Proceeds in excess of the Casualty
Amount as to any Individual Property and Borrower shall deliver or cause to be
delivered to Lender all instruments reasonably requested by Lender to permit
such approval.  Borrower shall pay all
reasonable out-of-pocket costs, fees and expenses reasonably incurred by Lender
(including all reasonable attorneys’ fees and expenses, the reasonable fees of
insurance experts and adjusters and reasonable costs incurred in any litigation
or arbitration), and interest thereon at the Default Rate to the extent not
paid within ten (10) Business Days after delivery of a request for
reimbursement by Lender, in connection with the settlement of any claim for
Proceeds and seeking and obtaining of any payment on account thereof in
accordance with the foregoing 

 

105

 

provisions.  If any Proceeds are
received by Borrower and may be retained by Borrower pursuant to this Section 6.2,
such Proceeds shall, until the completion of the related Work, be held in trust
for Lender and shall be segregated from other funds of Borrower to be used to
pay for the cost of the Work in accordance with the terms hereof, and in the
event such Proceeds exceed the Casualty Amount as to any Individual Property,
such Proceeds shall be forthwith paid directly to and held by Lender in the
Proceeds Reserve Account in trust for Borrower, in each case to be applied or
disbursed in accordance with this Section 6.2.  If an Event of Default shall have occurred
and be continuing, or if Borrower fails to file and/or prosecute any insurance
claim for a period of fifteen (15) Business Days following Borrower’s receipt
of written notice from Lender, Borrower hereby irrevocably empowers Lender, in
the name of Borrower as its true and lawful attorney-in-fact, to file and
prosecute such claim (including settlement thereof) with counsel satisfactory
to Lender and to collect and to make receipt for any such payment, all at
Borrower’s expense (including payment of interest at the Default Rate for any
amounts advanced by Lender pursuant to this Section 6.2).  Notwithstanding anything to the contrary set
forth in this Agreement, however, and excluding situations requiring prepayment
of the Notes, to the extent any Proceeds (either singly or when aggregated with
all other then unapplied Proceeds with respect to the Property) do not exceed
the Casualty Amount as to any Individual Property, such Proceeds are to be paid
directly to Borrower to be applied to restoration of the Property in accordance
with the terms hereof (except that Proceeds paid in respect of the insurance
described in Section 6.1.4 shall be deposited directly to the
Holding Account as revenue of the Property).

 

6.2.3        Lender to Take
Proceeds.

 

(a)           If (i) a Monetary
Default or an Event of Default shall have occurred and be continuing, (ii) a
Total Loss with respect to the Property shall have occurred, (iii) the
Work is not capable of being completed before the earlier to occur of the date
which is six (6) months prior to the earlier of the Maturity Date (as the
same may be extended pursuant to the terms of the Notes) and the date on which
the business interruption insurance carried by Borrower with respect to the
Property shall expire (the “Cut-Off Date”), unless on or prior to the
Cut-Off Date the Borrower shall deliver to the Lender and there shall remain in
effect a binding written offer, subject only to customary conditions, of an
Approved Bank or such other financial institution or investment bank reasonably
satisfactory to Lender for a loan from such Approved Bank or such other
financial institution or investment bank to the Borrower in a principal amount
of not less than the then Principal Amount and which shall, in the Lender’s
reasonable judgment, enable the Borrower to refinance the Loan prior to the
Maturity Date, (iv) the Property is not capable of being restored
substantially to its condition prior to such Taking or casualty and such
incapacity shall have a Material Adverse Effect, (v) Subleases demising in
the aggregate less than 40% of the total rentable space in the Property which
has been demised under executed and delivered Subleases in effect as of the
date of the occurrence of such fire or other casualty remain in full force and
effect during and after the completion of the restoration, (vi) the Master
Lessee or Borrower shall exercise any termination right under the Master Lease
or (vii) Lender determines that upon the completion of the restoration,
the Portfolio Four-Wall EBITDAR of the Property will not be restored to a level
sufficient to cover all Master Lease Base Rent at a coverage ratio of at least
1.4  to 1.0, which coverage ratio shall
be determined by Lender in its reasonable discretion; then in any such case,
all Proceeds shall be paid over to Lender (if not paid directly to Lender) for
repayment of the Loan and the Mezzanine Loan as set forth in clause (b) below.

 

106

 

(b)           Any Proceeds remaining
after reimbursement of Lender’s or its agent’s reasonable out-of-pocket costs
and expenses actually incurred in connection with recovery of any such Proceeds
(including, without limitation, reasonable out-of-pocket administrative costs
and inspection fees) shall, except to the extent required to be applied for
restoration under Section 6.2.4(b) below, or otherwise agreed between
Lender and Borrower, be applied by Lender to prepay the Notes (in order of
seniority or as otherwise allocated by Lender, and without regard for the
affect on the weighted average interest rate) to the extent of the Release
Price for the Individual Property affected by the Taking or casualty giving
rise to such Proceeds in accordance with the provisions thereof (without the
imposition of any Prepayment Fee), and the balance, if any shall be paid over
to (i) the First Mezzanine Lender to be applied in accordance with the
terms of the First Mezzanine Loan Agreement to the extent of the Mezzanine
Release Price set forth therein for such Individual Property, (ii) with
the balance, if any, to the Second Mezzanine Lender to be applied in accordance
with the terms of the Second Mezzanine Loan Agreement to the extent of the
Mezzanine Release Price set forth therein, or (iii) with the balance, if
any, to the Third Mezzanine Lender to be applied in accordance with the terms
of the Third Mezzanine Loan Agreement to the extent of the Mezzanine Release
Price set forth therein, (iv) with the balance, if any, to each other
Mezzanine Lender in the order of priority of the applicable Mezzanine Loan to
be applied in accordance with the terms of the applicable Mezzanine Loan
Agreements to the extent of the Mezzanine Release Price set forth therein, and (v) if
the Mezzanine Loans are no longer outstanding, the balance, if any, to the
Borrower’s Account.  If the Proceeds
applied by Lender and Mezzanine Lenders pursuant to the preceding sentence
equal or exceed the Combined Release Price for such Individual Property,
Borrower shall be entitled to obtain a Property Release subject to and in
accordance with Section 2.3.4. 
Transfers of Proceeds to or for the benefit of any of the Mezzanine
Borrowers shall constitute distributions to First Mezzanine Borrower, and
deemed distributions by the First Mezzanine Borrower to the Second Mezzanine
Borrower, by the Second Mezzanine Borrower to the Third Mezzanine Borrower, and  by the Third Mezzanine Borrower to the Fourth Mezzanine
Borrower and so on with respect to each other Mezzanine Borrower, as
applicable, and, in each case, must comply with the requirements as to
distributions of the Delaware Limited Liability Company Act.  The provisions of this Section 6.2.3
shall not create a debtor-creditor relationship between Borrower and any
Mezzanine Lender.

 

6.2.4        Borrower to
Restore.

 

(a)           Subject to Section 2.3.4 and the last sentence of this Section 6.2.4(a),
promptly after the occurrence of any damage or destruction to all or any
portion of the Property or a Taking of a portion of the Property, unless the
Proceeds therefrom are sufficient to entitle Borrower to obtain a Property
Release with respect to the Individual Property subject to such damage,
destruction or Taking as described in Section 6.2.3(b) and
such Proceeds have been made available to Lender for prepayment of the Loan and
Mezzanine Loan in accordance with Section 6.2.3(b), Borrower shall
commence and diligently prosecute, or cause to be commenced and diligently
prosecuted, to completion, subject to Excusable Delays, the repair, restoration
and rebuilding of the Property (in the case of a partial Taking, to the extent
it is capable of being restored) so damaged, destroyed or remaining after such
Taking in full compliance with all material Legal Requirements and free and
clear of any and all Liens except Permitted Encumbrances (such repair,
restoration and rebuilding are collectively referred to herein as the “Work”).  The plans and specifications shall require
that the Work be done in a first-class 

 

107

 

workmanlike manner at least equivalent to the quality and character
prior to the damage or destruction (provided, however, that in the case of a
partial Taking, the Property restoration shall be done to the extent reasonably
practicable after taking into account the consequences of such partial Taking),
so that upon completion thereof, the Property shall be at least equal in value
and general utility to the Property prior to the damage or destruction; it
being understood, however, that Borrower shall not be obligated to restore the
Property to the precise condition of the Property prior to any partial Taking
of, or casualty or other damage or injury to, the Property, if the Work
actually performed, if any, or failed to be performed, shall have no Material
Adverse Effect on the value of the Property from the value that the Property
would have had if the same had been restored to its condition immediately prior
to such Taking or casualty.  Subject to
Borrower’s rights pursuant to Sections 2.3.4 and 2.3.9 to cause
the Property and Unimproved Parcels to be released from the Lien of the
applicable Security Instrument(s), Borrower shall be obligated to restore the
Property suffering a casualty or which has been subject to a partial Taking in
accordance with the provisions of this Section 6.2 at Borrower’s
sole cost and expense whether or not the Proceeds shall be sufficient; provided
however, that in the event Lender has the right to apply Proceeds toward the
payment of the Indebtedness pursuant to Section 6.2.3(a), and
Lender has, in fact, elected to apply such Proceeds to the payment of
Indebtedness pursuant to Section 6.2.3(b), then Borrower shall have
a period of 90 days commencing on the date the Proceeds are so applied to
either (i) commence restoration as otherwise provided under this Section; (ii) comply
with all requirements necessary to obtain a release of the Individual Property
subject to such casualty, Taking, damage, or injury from the Lien of the
applicable Security Instrument and related Loan Documents pursuant to Section 2.3.4
(including the payment of the applicable Combined Release Price), provided
that, in the case of both clauses (i) and (ii) above, during such
period, Affiliates of Borrower are diligently pursuing financing (which may
consist of a construction loan with respect to the restoration of the Individual
Property subject to casualty, Taking, damage or injury) to fund the payment of
the Combined Release Price as otherwise provided in Section 2.3.4.

 

(b)           If Proceeds are not required to be applied toward payment of the
Indebtedness pursuant to Section 6.2.3(a), then Lender shall make
the Proceeds which it is holding pursuant to the terms hereof (after payment of
any reasonable out-of-pocket expenses actually incurred by Lender pursuant to
the penultimate sentence of Section 6.2.2 in connection with the
collection thereof plus interest thereon at the Default Rate (from the date
advanced through the date of reimbursement) to the extent the same are not paid
within ten (10) Business Days after request for reimbursement by Lender)
available to Borrower for payment of or reimbursement of Borrower’s, Master
Lessee’s or the applicable Tenant’s expenses incurred with respect to the Work,
upon the terms and subject to the conditions set forth in paragraphs (i), (ii) and
(iii) below and in Section 6.2.5:

 

(i)                    at the time of loss or damage or at any time
thereafter while Borrower is holding any portion of the Proceeds, there shall
be no continuing Monetary Default or Event of Default;

 

(ii)                   if, at any time, the estimated cost of the
Work (as estimated by the Architect referred to in clause (iii) below)
shall exceed the Proceeds (a “Deficiency”) and for so long as such
Deficiency shall exist, Lender shall not be required to make any Proceeds
disbursement to Borrower unless Borrower (within a reasonable period of time
after receipt of 

 

108

 

such estimate), at its election, either
deposits with or delivers to Lender (A) Cash and Cash Equivalents or a
Letter or Letters of Credit in an amount equal to the estimated cost of the
Work less the Proceeds available, or (B) such other evidence of Borrower’s
ability to meet such excess costs and which is satisfactory to Lender and the
Rating Agencies;

 

(iii)                  Lender and the Architect shall have
reasonably approved the plans and specifications for the Work and any change
orders in connection with such plans and specifications within a reasonable
period of time; and

 

(iv)                  Lender shall, within a reasonable period of
time prior to request for initial disbursement, be furnished with an estimate
of the cost of the Work accompanied by an Architect’s certification as to such
costs and appropriate plans and specifications for the Work.  Borrower shall restore all Improvements such
that when they are fully restored and/or repaired, such Improvements and their
contemplated use comply in all material respects with all applicable Legal
Requirements including zoning, environmental and building laws, codes,
ordinances and regulations.

 

6.2.5        Disbursement of
Proceeds.

 

(a)           Disbursements
of the Proceeds in Cash or Cash Equivalents to Borrower hereunder shall be made
from time to time (but not more frequently than once in any month) by Lender
but only for so long as no Monetary Default or Event of Default shall have
occurred and be continuing, as the Work progresses upon receipt by Lender of (i) an
Officer’s Certificate dated not more than ten (10) Business Days prior to
the application for such payment, requesting such payment or reimbursement and
describing the Work performed that is the subject of such request, the parties
that performed such Work and the actual cost thereof, and also certifying that
such Work and materials are or, upon disbursement of the payment requested to
the parties entitled thereto, will be free and clear of Liens other than Permitted
Encumbrances, (ii) subject to Borrower’s right to contest under Section 7.3,
evidence reasonably satisfactory to Lender that (A) all materials
installed and work and labor performed in connection with such Work have been
paid for in full and (B) there exists no notices of pendency, stop orders,
mechanic’s liens or notices of intention to file same (unless the same is
required by the applicable State law as a condition to the payment of a
contractor) or any Liens or encumbrances of any nature whatsoever on the
Property arising out of the Work which have not been either fully bonded to the
satisfaction of Lender or discharged of record or in the alternative, fully
insured to the satisfaction of Lender by the Title Company, and (iii) an
Architect’s certificate certifying performance of the Work together with an
estimate of the cost to complete the Work. 
No payment made prior to the final completion of the Work, as certified
by the Architect, except for payment made to contractors or subcontractors
whose Work shall have been fully completed and from which final lien waivers
have been received, shall exceed ninety percent (90%) (the “Retainage
Release Threshold”) of the value of the Work performed and materials
furnished and incorporated into the Improvements by such contractor or
subcontractor, as applicable, from time to time until such time as fifty
percent (50%) of such Work has been satisfactorily completed (as certified by
the Architect), at which time the Retainage Release Threshold with respect to such
Work may be increased to ninety-five (95%), and at all times the undisbursed
balance of said Proceeds together with all amounts deposited, bonded,
guaranteed or otherwise provided for pursuant to Section 6.2.4(b) above,
shall be at least sufficient to pay for the estimated cost of

 

109

 

completion of the Work; final payment of all Proceeds remaining with
Lender shall be made upon receipt by Lender of a certification by an Architect,
as to the completion of the Work substantially in accordance with the submitted
plans and specifications, final lien releases, and the filing of a notice of
completion and the expiration of the period provided under the law of the
applicable State for the filing of mechanics’ and materialmens’ liens which are
entitled to priority as to other creditors, encumbrances and purchasers, as
certified pursuant to an Officer’s Certificate, and delivery of a certificate
of occupancy with respect to the Work, or, if not applicable, an Officer’s
Certificate to the effect that a certificate of occupancy is not required.

 

(b)           If, after the Work is completed in accordance with the provisions hereof
and Lender receives evidence that all costs of completion have been paid, there
are excess Proceeds, such excess Proceeds shall be paid over to Lender for
application in accordance with Section 6.2.3(b).

 

VII.          IMPOSITIONS,
OTHER CHARGES, LIENS AND OTHER ITEMS

 

7.1           Borrower to
Pay Impositions and Other Charges. 
Borrower shall 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 shall pay all Other Charges on or before the date they
are due.  Borrower shall deliver to
Lender annually, no later than thirty (30) calendar days after the first day of
each Fiscal Year of 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 or Borrower.  Subject to Borrower’s right of contest set
forth in Section 7.3, as set forth in the next two sentences and provided
that there are sufficient funds available in the Tax Reserve Account, Lender,
on behalf of Borrower, shall pay all Impositions and Other Charges which are
attributable to or affect the Property or 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.  Lender shall, or 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 or any Security Instrument shall be construed to require Borrower to
pay any tax, assessment, levy or charge imposed on Lender in the nature of a
franchise, capital levy, estate, inheritance, succession, income or net revenue
tax.

 

7.2           No Liens.  Subject to its right of contest set forth in Section 7.3
and to Permitted Encumbrances, Borrower shall 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 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 Lender, the lienor
or any other Person) thereof.  Borrower
shall do or cause to be done, at the sole cost of 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 an Event of Default with respect to its Obligations as set forth
in this Article VII, Lender may (but shall not be obligated 

 

110

 

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 Event of Default]), and Borrower shall reimburse Lender on demand for all
such advances pursuant to Section 19.12 (together with interest
thereon at the Default Rate).

 

7.3           Contest.  Nothing contained herein shall be deemed to
require 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 Borrower is 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) Borrower
shall keep Lender informed of the status of such contest at reasonable
intervals, (iii) if Borrower is not providing security as provided in
clause (vi) below, adequate reserves with respect thereto are maintained
on Borrower’s books in accordance with GAAP or in the Tax Reserve Account or
Insurance Reserve Account, as applicable, or in the Proceeds Reserve Account
pursuant to Article VI, 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
of Borrower to comply therewith shall not impair the validity of any insurance
required to be maintained by Borrower under Section 6.1 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, Borrower, shall deposit with or deliver to
Lender either Cash and Cash Equivalents or a Letter or Letters of Credit in an
amount equal to 110% of (A) the amount of Borrower’s 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, Borrower promptly shall 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, if, at
any time the Property or any portion thereof shall be, in Lender’s reasonable
judgment, in imminent danger of being forfeited or lost or Lender is likely to
be subject to criminal damages as a result thereof.  If such action or proceeding is terminated or
discontinued adversely to Borrower, (a) provided no Event of Default has
occurred and is continuing hereunder, Lender shall disburse to Borrower or the
Person entitled to such sums, the security provided therefor under this Section 7.3
and (b) Borrower shall deliver to Lender reasonable evidence of Borrower’s
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 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,
Borrower shall not, and shall not permit any other Person holding 

 

111

 

any direct or indirect ownership interest in Borrower, Mezzanine
Borrower, any Guarantor, Master Lessee or the Property to, except with the
prior written consent of 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 for (A) the security interests granted in
connection with the Loan or the Mezzanine Loan and (B) the Revolving/Term
Credit Facility Lien granted under Revolving/Term Credit Facility (which shall
be solely a pledge, hypothecation, encumbrance or granting of a security
interest in or lien on the direct interest in Master Lessee as security for the
Revolving/Term Credit Facility), and in each case the enforcement thereof,
permit any Transfer (directly or indirectly) of any interest in Borrower or any
Mezzanine Borrower, or (iii) except for the Revolving/Term Credit Facility
Lien granted under Revolving/Term Credit Facility and the enforcement thereof,
permit any Transfer (directly or indirectly) of any interest in any Guarantor
or Master Lessee.  For avoidance of
doubt, the foregoing shall not prohibit (i) the Master Lessee from
granting a Lien to Borrower on portions of the Excluded Personal Property,
subject to the Assigned Landlord Lien, or (ii) the 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.  Borrower may
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 Borrower (and not so disposed of) shall be
subject to the Lien of the applicable Security Instrument.  Lender shall, from time to time, upon receipt
of an Officer’s Certificate requesting the same and confirming satisfaction of
the conditions set forth above, execute a written instrument in form reasonably
satisfactory to Lender to confirm that such Building Equipment which is to be,
or has been, sold or disposed of is free from the Lien of the applicable
Security Instrument.

 

8.3           Immaterial
Transfers and Easements, etc. 
Borrower may, without the consent of Lender, (i) make immaterial
Transfers of portions of the Property to Governmental Authorities for
dedication or public use (subject to 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.  In connection with any Transfer permitted
pursuant to this Section 8.3, Lender shall execute and deliver any
instrument reasonably necessary or appropriate, in the case of the Transfers
referred to in clause (i) above, to release the portion of the Property
affected by such Taking or such Transfer from the Lien of the applicable
Security Instrument or, in the case of clause (ii) above, to subordinate
the Lien of the applicable Security Instrument to such easements, restrictions,
covenants, reservations and rights of way or other similar grants upon receipt
by Lender of:

 

112

 

(a)           thirty (30) days prior written notice thereof;

 

(b)           a copy of the instrument or instruments of Transfer;

 

(c)           an Officer’s Certificate stating (x) with respect to any Transfer,
the consideration, if any, being paid for the Transfer and (y) that such
Transfer does not 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; and

 

(d)           reimbursement
of all of Lender’s reasonable out-of-pocket costs and expenses incurred in
connection with such Transfer.

 

8.4           [Reserved.]

 

8.5           Permitted
Equity Transfers.

 

(a)           A
Transfer of an ownership interest in Borrower or any Mezzanine Borrower that is
otherwise prohibited hereunder shall nevertheless be permitted without Lender’s
prior written consent or a Rating Agency Confirmation if all of the following
conditions are satisfied with respect to such Transfer: (i) 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 ownership
interests in Borrower or any Mezzanine Borrower is being Transferred (in the
aggregate of all such Transfers), (iv) the transferee is not a
Disqualified Transferee, (v) the Principal Control Persons collectively
retain Control of Borrower and Mezzanine Borrower, and (vi) the Principal
Investors collectively continue to own, directly and/or indirectly, at least
51% of the ownership interests in Borrower and Mezzanine Borrower.

 

(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 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, 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%) of the voting
power and economic interest in Master Lessee where such ownership represents a 

 

113

 

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, 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 Borrower, Mezzanine Borrower or any SPE Entities, any Guarantor or
Sponsor.

 

8.6           Deliveries to
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
Lender under the provisions of Sections 8.1, 8.3 and 8.5,
Borrower shall deliver to 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,
Borrower shall provide 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, Borrower shall have the right, with the prior
written consent of Lender, 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 Lender an assumption agreement in form and substance
acceptable to Lender.  Any such assumption
of the Loan shall be conditioned upon, 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 

 

114

 

reasonably requested by Lender, (iv) the delivery of Opinions of
Counsel requested by Lender, including, without limitation, a Non-Consolidation
Opinion with respect to the purchaser and other entities identified by 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 Loan Documents and any other
matters requested by Lender, (v) the delivery of an endorsement to each of
the Title Policies in form and substance acceptable to Lender, insuring the
lien of the Security Instruments, as assumed, subject only to the Permitted
Encumbrances and (vi) the payment of all of Lender’s reasonable
out-of-pocket fees, costs and expenses, including, without limitation,
reasonable attorneys’ fees and costs, actually incurred by Lender in connection
with such assumption.

 

8.8           Subleases

 

8.8.1        Master Lease and Existing Subleases.  Borrower represents, warrants, and covenants
that each Individual Property shall be leased 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, Borrower shall not, and shall not
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 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 Lender. Any New Sublease or Sublease Modification that
requires Lender’s consent shall be delivered to Lender for approval not less
than five (5) Business Days prior to the effective date of such New
Sublease or Sublease Modification.  If
Lender fails to respond to a request for Lender’s consent pursuant to this Section 8.8.2
within five (5) Business Days of Lender’s receipt of Borrower’s request
therefor, Borrower may deliver to Lender a second request in an envelope or
under cover of a letter marked “URGENT” and including a legend in bold typeface
that 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 Lender fails to
respond to such second request within ten (10) Business Days of its
receipt thereof, Lender’s consent shall be 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, Borrower may 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, Borrower
shall deliver to Lender an executed copy of the Sublease.

 

115

 

8.8.4        Sublease Amendments.  Borrower agrees that it shall not have the
right or power, as against 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 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 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 Lender, Borrower, Master Lessee or Tenant under
an Individual Property Sublease, as appropriate, shall furnish to 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.  Borrower shall or shall cause Master Lessee
to (i) promptly perform and observe all of the material terms, covenants
and conditions required to be performed and observed by 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 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 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 collect other charges in accordance with the terms of
each Sublease).

 

8.8.7        Subordination.  All Sublease Modifications and New Subleases
entered into by Borrower after the Closing Date shall by their express terms be
subject and subordinate to this Agreement and the Security Instruments (through
a subordination provision contained in such Sublease or otherwise).

 

8.8.8        Attornment.  Each New Sublease entered into from and after
the Closing Date shall provide that in the event of the enforcement by Lender
of any remedy under this Agreement or the Security Instruments, the Tenant
under such Sublease shall, at the option of Lender or of any other Person
succeeding to the interest of Lender as a result of such enforcement, attorn to
Lender or to such Person and shall recognize Lender or such successor in the
interest as lessor under such Sublease without change in the provisions
thereof; provided, however, Lender or such successor in interest shall not be
liable for or bound by (i) any payment of an installment of rent or
additional rent made more than thirty (30) days before the due date of such
installment, (ii) any act or omission of or default by Master Lessee under
any such Sublease (but the Lender, or such successor, shall be subject to the
continuing obligations of the landlord to the extent arising from and after
such succession to the extent of Lender’s, or such successor’s, interest in the
Property), (iii) any credits, claims, setoffs or defenses which any Tenant
may have against Master Lessee, (iv) any obligation on Master Lessee’s
part, pursuant to such Sublease, to perform any tenant improvement work, or (vi) any
obligation on Master Lessee’s part, pursuant to such Sublease, to pay any sum
of money to any Tenant.  Each such New
Sublease shall also 

 

116

 

provide that, upon the reasonable request by Lender or such successor
in interest, the Tenant shall execute and deliver an instrument or instruments
confirming such attornment.

 

8.8.9        Non-Disturbance Agreements.  Lender shall enter into, and, if required by
applicable law to provide constructive notice or requested by a Tenant, record
in the county where the subject Property is located, a subordination,
attornment and non-disturbance agreement, substantially in form and substance
substantially similar to the form attached hereto as Exhibit N (a “Non-Disturbance
Agreement”), with any Tenant (other than an Affiliate of Borrower) entering
into a New Sublease or Sublease Modification, within twenty (20) Business Days
after written request therefor by Borrower; provided that such request
is accompanied by an Officer’s Certificate stating that such Sublease or
Sublease Modification (as applicable) complies in all material respects with
this Section 8.8 and payment of all reasonable out-of-pocket costs
and expenses incurred by Lender in connection with the negotiation,
preparation, execution and delivery of any Non-Disturbance Agreement,
including, without limitation, reasonable attorneys’ fees and disbursements.

 

8.8.10            Recognition Agreements.  Master Lessee and the subsidiaries of Master
Lessee under the Individual Property Subleases shall have the right to enter
into recognition agreements or nondisturbance and attornment agreements with
Tenants under Subleases without Lender’s consent.

 

117

 

IX.           INTEREST RATE PROTECTION AGREEMENT

 

9.1           Interest Rate
Protection Agreement.  Prior to or
contemporaneously with the Amendment Effective Date, Borrower shall enter into (x) an
amendment to the Interest Rate Cap Agreement with respect to the Interest Rate
Cap Notional Amount, satisfactory in form and substance to the Lender, and (y) a
Interest Rate Swap Agreement with respect to the Interest Rate Swap Notional
Amount.  The aggregate notional amount of
the Interest Rate Cap Agreement, as so amended, and Interest Rate Swap
Agreement shall be at least equal to the Principal Amount.  Each Interest Rate Protection Agreement shall
(i) at all times be in a form and substance reasonably acceptable to
Lender, (ii) at all times be with an Approved Counterparty, (iii) direct
such Approved Counterparty to deposit directly into the Holding Account any net
amounts due to Borrower under such Interest Rate Protection Agreement 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, (iv) with respect to the
Interest Rate Swap Agreement shall have a notional amount that does not exceed
the original Interest Rate Swap Notional Amount and be for a period through the
end of the Interest Period during which the Maturity Date occurs, (v) in
the case of an Interest Rate Cap Agreement, have a strike rate no greater than
the Strike Price, and (vi) with respect to each Interest Rate Swap
Agreement for the Interest Rate Swap Notional Amount (A) the obligations
of Borrower thereunder shall not be secured by or encumber any Individual
Property or any of the other collateral securing Borrower’s obligations under
the Loan Documents, (B) Borrower’s obligations thereunder cannot be
assigned to or guaranteed by any other Person, (C) the applicable Approved
Counterparty thereunder shall agree that the Borrower’s obligations thereunder
shall be paid from the Holding Account in the order and priority set forth in Section 3.1.6,
and (D) provide that the Swap Counterparty shall receive a monthly payment
equal to the interest accrued on the Interest Rate Swap Notional Amount at a per
annum rate equal to the Swap Fixed Rate and Borrower shall receive in return
from such Swap Counterparty a monthly payment equal to the interest accrued in
respect of the Interest Rate Swap Notional Amount at a per annum rate equal to
one (1) month LIBOR.

 

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

 

118

 

9.3           Covenants.

 

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

 

(b)           Borrower shall defend Lender’s right, title and interest in and to the
Rate Protection Collateral pledged by 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 Protection Agreement, Borrower shall replace the Interest Rate
Protection Agreement with a Replacement Interest Rate Protection Agreement from
an Approved Counterparty not later than ten (10) Business Days following
receipt of notice from Lender, Servicer or any other Person of such downgrade,
withdrawal or qualification. In the event that the Counterparty is downgraded
below A- by S&P, a Replacement Interest Rate Protection Agreement shall be
required regardless of the posting of collateral.

 

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

 

(e)           Borrower shall not sell, assign, or otherwise dispose of, or mortgage,
pledge or grant a security interest in, any of the Rate Protection Collateral
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 Lender, shall forthwith be cancelled
or satisfied by an appropriate instrument in writing.

 

(f)            Borrower shall not (i) without the prior
written consent of Lender modify, amend or supplement the terms of the Interest
Rate Protection Agreement, (ii) without the prior written consent of
Lender, except in accordance with the terms of the Interest Rate Protection
Agreement, cause the termination of the Interest Rate Protection Agreement
prior to its stated maturity date, (iii) without the prior written consent
of Lender, except as aforesaid, waive or

 

119

 

release any obligation of the Counterparty (or any successor or
substitute party to the Interest Rate Protection Agreement) under the Interest
Rate Protection Agreement, (iv) without the prior written consent of
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
Protection Agreement) which, without such consent or agreement, would
constitute a default under the Interest Rate Protection Agreement, (v) fail
to exercise promptly and diligently each and every material right which it may
have under the Interest Rate Protection Agreement, (vi) take or
intentionally omit to take any 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 Protection
Agreement or any defense by the Counterparty (or any successor or substitute
party to the Interest Rate Protection Agreement) to payment or (vii) fail
to give prompt notice to Lender of any notice of default given by or to
Borrower under or with respect to the Interest Rate Protection Agreement,
together with a complete copy of such notice. 
If Borrower shall have received written notice that the Securitization
shall have occurred, no consent by Lender provided for in this Section 9.3
(f) shall be given by Lender unless Lender shall have received a
Rating Agency Confirmation.

 

(g)           In connection with an Interest Rate Protection Agreement, Borrower shall
obtain and deliver to Lender an Opinion of Counsel from counsel (which counsel
may be in-house counsel for the Counterparty) for the Counterparty upon which
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 Lender.

 

9.4           Powers of
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, Borrower shall be entitled to
exercise all rights, powers and privileges of Borrower under, and to control
the prosecution of all claims with respect to, the Interest Rate Protection
Agreement and the other Rate Protection Collateral.

 

9.5           Representations
and Warranties.  Borrower hereby
covenants with, and represents and warrants as of the Closing Date (and, with
respect to the amendment to the Interest Rate Cap Agreement, as of the
Amendment Effective Date) to, Lender as follows:

 

(a)           The Interest Rate Protection Agreement (including the Interest Rate Cap
Agreement, as amended) constitutes the legal, valid and binding obligation of
Borrower, enforceable against 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 Protection Collateral 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 Loan Documents, and 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.

 

120

 

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

 

(d)           Giving effect to the aforesaid grant and assignment to Lender, Lender
has, as of the date of this Agreement, and as to Rate Protection Collateral
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 Protection Collateral; provided that no representation or warranty
is made with respect to the perfected status of the security interest of Lender
in the proceeds of Rate Protection Collateral 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 Lender
as secured party, there are no financing statements under the UCC covering any
or all of the Rate Protection Collateral and Borrower shall not, without the
prior written consent of Lender, until payment in full of all of the Indebtedness
and the Obligations, execute and file in any public office, any enforceable
financing statement or statements covering any or all of the Rate Protection
Collateral, except financing statements filed or to be filed in favor of Lender
as secured party.

 

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

 

9.7           Remedies.  Subject to the provisions of the Interest
Rate Protection Agreement, if an Event of Default shall occur and then be
continuing:

 

(a)           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 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 Protection Collateral (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 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 Protection
Collateral are being purchased for investment only, 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 Protection Collateral is sold by Lender upon
credit or for future delivery, 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, Lender may resell such Rate Protection Collateral.  It is expressly agreed that Lender may
exercise its rights with respect to less than all of the Rate Protection
Collateral, leaving unexercised its rights with respect to the remainder of the
Rate Protection Collateral, provided, however, that such partial exercise shall
in no way restrict or jeopardize Lender’s right to exercise its rights with
respect to all or any other portion of the Rate Protection Collateral at a
later time or times.

 

121

 

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

 

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

 

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

 

(e)           Pursuant to the powers-of-attorney provided for above, 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 Lender
shall not be permitted to take any action pursuant to said power-of-attorney
that would conflict with any limitation on Lender’s rights with respect to the
Rate Protection Collateral.  Without
limiting the generality of the foregoing, 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
Borrower representing:  (i) any
payment of obligations owed pursuant to the Interest Rate 

 

122

 

Protection Agreement, (ii) interest accruing on any of the Rate
Protection Collateral or (iii) any other payment or distribution payable
in respect of the Rate Protection Collateral or any part thereof, and for and
in the name, place and stead of 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 Protection Collateral hereunder.

 

(f)            Without limiting any other provision of this
Agreement or any of Borrower’s rights hereunder, and without waiving or
releasing Borrower from any obligation or default hereunder, 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 Lender’s
security interest in the Rate Protection Collateral 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
Protection Agreement to be performed or observed by Borrower to be promptly
performed or observed on behalf of Borrower. 
All amounts advanced by, or on behalf of, Lender in exercising its
rights under this Section 9.7(g) (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 Borrower to Lender upon demand and shall
be secured by this Agreement.

 

9.8           Sales of Rate
Protection Collateral.  No demand,
advertisement or notice, all of which are, to the fullest extent permitted by
law, hereby expressly waived by Borrower, shall be required in connection with
any sale or other disposition of all or any part of the Rate Protection
Collateral following and during the continuance of an Event of Default, except
that Lender shall give 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 Borrower hereby agrees is reasonable, all other demands, advertisements
and notices being hereby waived.  To the
extent permitted by law, Lender shall not be obligated to make any sale of the
Rate Protection Collateral if it shall determine not to do so, regardless of
the fact that notice of sale may have been given, and 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 Protection Collateral of a type customarily sold in a recognized market
and upon each public sale, unless prohibited by any applicable statute which
cannot be waived, Lender (or its nominee or designee) may purchase any or all
of the Rate Protection Collateral being sold, free and discharged from any
trusts, claims, equity or right of redemption of 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 Indebtedness or Obligations in lieu of
cash or any other obligations.  In the case
of all sales of the Rate Protection Collateral, public or private, 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 Protection Collateral shall be available to cover such
costs and expenses, and, after deducting such costs and expenses from the
proceeds of sale, Lender shall apply any residue to the payment of any interest
and/or principal of the Loan and/or any other amounts due under the Loan
Documents or the Interest Rate Swap Agreement in such order, priority, or
proportions as Lender in its sole discretion shall determine.

 

123

 

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

 

9.10         Receipt of Sale
Proceeds.  Upon any sale of the Rate
Protection Collateral by Lender hereunder (whether by virtue of the power of
sale herein granted, pursuant to judicial process or otherwise), the receipt by
Lender or the officer making the sale of the proceeds of such sale shall be a
sufficient discharge to the purchaser or purchasers of the Rate Protection
Collateral 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 Lender or
such officer or be answerable in any way for the misapplication or
non-application thereof.

 

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

 

9.12         Swap Gain.  Any Swap Gain, including Swap Gain in
connection with a prepayment of the Loan pursuant to Section 2.3,
shall be held by Lender as additional collateral for the Loan or, upon the
written request of Borrower, applied by Lender as a voluntary prepayment of the
outstanding Principal Amount of the Loan, together with the applicable
Prepayment Fee and Swap Breakage due thereon, if any.

 

9.13         Prepayment of
Interest Rate Swap Notional Amount. 
Simultaneously with any full or partial prepayment in respect of the
Rate  Swap Notional Amount, Borrower
shall cause an equivalent portion of the notional amount of Interest Rate Swap
Agreement to be terminated.

 

X.                                    MAINTENANCE OF PROPERTY; ALTERATIONS

 

10.1         Maintenance of
Property.  Borrower shall 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.  Borrower shall not 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, Borrower
shall, or shall cause Master Lessee, to complete the items of deferred
maintenance and environmental remediation identified on Schedule III
attached hereto.

 

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10.2         Conditions to
Alteration.  Provided that no Noticed
Default or Event of Default shall have occurred and be continuing hereunder,
and that Borrower shall then have delivered an Officer’s Certificate certifying
to the best of the signer’s actual knowledge without investigation that as of
the date of such Officer’s Certificate no Default on Event of Default exists,
Borrower and Master Lessee shall have the right, without Lender’s consent, to
undertake any alteration, improvement, demolition or removal of the Property or
any portion thereof (any such alteration, improvement, demolition or removal,
an “Alteration”) so long as (i) Borrower provides 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 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, Borrower shall deliver to Lender concurrently with the notice of
such Material Alteration, for information purposes only and not for approval by
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 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 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 Borrower, or an Affiliate of Master Lessee.  Notwithstanding anything to the contrary
contained in this Section 10.2, Borrower shall obtain 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 so long as Borrower shall then have delivered an Officer’s
Certificate certifying to the best of the signer’s actual knowledge without
investigation that as of the date of such Officer’s Certificate no Default or
Event of Default exists, and shall be deemed given unless Lender shall give
notice of its disapproval with the reasons therefor within ten (10) Business
Days after 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 Borrower involves costs estimated in writing by
Master Lessee (which costs shall be reasonably acceptable to Borrower and
Lender) to be incurred in implementing the Alterations 

 

125

 

that exceed the Material Alteration Collateralization Threshold, shall
be performed by or on behalf of Borrower unless Borrower shall have delivered
to 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).  Borrower shall deliver to Lender 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 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 Borrower may be entitled to withdraw pursuant to Section 6.2
and which are held by Lender in accordance with Section 6.2.  Payment or reimbursement of 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 Borrower (or if a Letter of Credit originally shall have been
deposited, returned to Borrower upon the substitution of a Letter of Credit in
a lesser amount) as Borrower shall provide written evidence, in form reasonably
satisfactory to 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 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.  Borrower shall 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 Notes, the Property and the
business and affairs of 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.  Subject to Section 11.2.9, Lender
and its authorized representatives shall have the right at reasonable times and
upon reasonable notice to examine the books and records of Borrower relating to
the operation of the Property and to make such copies or extracts thereof as
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 

 

126

 

last day of a Fiscal Quarter, concurrently with the delivery of the
applicable quarterly reports pursuant to Section 11.2.2), Borrower
shall cause Master Lessee, pursuant to the Master Lease, to deliver to Lender
monthly revenue reports in respect of the Property for such month, for the
corresponding month of the previous 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 an Officer’s Certificate and a Master Lessee Officer’s
Certificate certifying to the best of the signer’s knowledge, (1) that the
requirements in clause (A) above have been satisfied; and (2) that as
of the date of such Officer’s Certificate, no Event of Default exists under
this Agreement, the Notes or any other Loan Document or, if so, specifying the
nature and status of each such Event of Default and the action then being taken
by 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 Lender for purposes of
calculations to be made by Lender pursuant to the terms hereof.  Notwithstanding the foregoing, Borrower shall
deliver promptly to Lender reports detailing any non recurring charges of
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 December 31 2007), Borrower shall cause Master Lessee, pursuant to
the Master Lease, to deliver to 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 an Officer’s Certificate and a Master Lessee
Officer’s Certificate certifying to the best of the signer’s knowledge, (1) that
the requirements in clause (A) above have been satisfied; (2) that as
of the date of such Officer’s Certificate, no Event of Default exists under
this Agreement, the Notes or any other Loan Document or, if so, specifying the
nature and status of each such Event of Default and the action then being taken
by Borrower or proposed to be taken to remedy such Event of Default, and (3) that
as of the date of each Officer’s Certificate, no litigation exists involving
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 

 

127

 

be reasonably requested by Lender for
purposes of calculations to be made by 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 Borrower’s operations (commencing with the
Fiscal Year ending December 31, 2007), Borrower shall cause Master Lessee,
pursuant to the Master Lease, to deliver to 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 Borrower, Borrower
shall not be required to deliver financial information hereunder to 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 Lender only when also disclosed publicly.

 

11.2.5      Capital Expenditures Summaries.  Borrower shall, or shall cause Master Lessee
to, within ninety (90) days after the end of each calendar year during the term
of the Notes, deliver to 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 Loan Documents, Borrower shall deliver to Lender,
within ten (10) Business Days of the receipt thereof by 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)           Borrower shall or shall
cause Master Lessee to deliver to Lender the Annual Budget for 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 Lender for its review, but not approval.  Notwithstanding the foregoing, while an 80%
Trigger Approval Period shall exist, 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)           Borrower shall or shall
cause Master Lessee to deliver to Lender the Annual Budget and any
modifications thereto under any Operating Agreement for Lender’s review, but
not approval, prior to Borrower’s or Master Lessee’s approval of any such
annual budget or 

 

128

 

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, Lender shall have the
right to exercise any right of approval that 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.  Borrower shall, promptly after written request
by Lender or, if a Securitization shall have occurred, the Rating Agencies,
furnish or cause to be furnished to Lender, in such manner and in such detail
as may be reasonably requested by Lender, such reasonable additional
information as may be reasonably requested with respect to the Property,
Borrower, Master Lessee or any Guarantor.

 

11.2.9      Proprietary Information.

 

(a)           The Lender shall keep
confidential all revenue reports and any other proprietary information
delivered to Lender pursuant to this Agreement, (provided any such other
proprietary information is clearly marked by Borrower as confidential)
(collectively, “Proprietary Information”), including specifically, but
not limited to, any financial information provided pursuant to this Article XI
and  any information provided in
connection with a securitization pursuant to Article XIV.  Notwithstanding the foregoing, Lender shall
be permitted to freely deliver Proprietary Information to Rating Agencies,
Servicer and Securitization trustees, to prospective participants and
purchasers of the Loan and interests therein other than the Proscribed Assignee
and to prospective holders of securities backed by the Loan other than the
Proscribed Assignee, and to its and their respective agents and representatives
provided that Lender shall inform such parties of the confidential nature of
such information.

 

(b)           Notwithstanding
anything to the contrary contained herein, 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 books and records) unless
requested by holders or prospective holders of (a) the Mezzanine Loan or
any interest therein or (b) the unrated or lower-rated securities backed
by the Loan (collectively, “Requesting Parties”).  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 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 Borrower and Master Lessee and (ii) is not
the Proscribed Assignee.

 

XII.                            ENVIRONMENTAL MATTERS

 

12.1         Representations.  Borrower hereby represents and warrants, as
of the Closing Date, that except as set forth in the environmental reports and
studies delivered to Lender prior to the Closing Date (the “Environmental
Reports”) or as would not reasonably be expected to have a Material Adverse
Effect, (i) Borrower has not engaged in or, to the 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,

 

129

 

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 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 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 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 Borrower; and (v) to
the 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 Borrower.

 

12.2         Covenants.

 

12.2.1      Compliance with Environmental Laws.  Subject to Borrower’s right to contest under Section 7.3,
Borrower covenants and agrees with Lender that it shall, and shall cause 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 Security Instruments
are foreclosed, Borrower shall deliver the Property in compliance with all
applicable Environmental Laws.

 

12.2.2      Notices Regarding Environmental Events.  If at
any time during the continuance of the Lien of the Security Instruments, 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”), Borrower shall
deliver prompt notice of the occurrence of such Environmental Event to
Lender.  Within thirty (30) days after
Borrower has knowledge of the occurrence of an Environmental Event, Borrower
shall deliver to 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.  Borrower shall promptly
provide 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 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 and 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, 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
Lender and may include a visual survey, a

 

130

 

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 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,
Borrower grants 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 Borrower to Lender upon demand and shall be
secured by the Lien of the Security Instruments.  Lender shall not unreasonably interfere with,
and Lender shall direct the environmental consultant to use its commercially
reasonable efforts not to hinder, 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,
Lender shall not be deemed to be exercising any control over the operations of
Borrower or the handling of any environmental matter or hazardous wastes or
substances of Borrower for purposes of incurring or being subject to liability
therefor.

 

12.4         Environmental
Indemnification.  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
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 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 Borrower; (f) the
failure of 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 

 

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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,
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 Security Instruments, (2) the delivery by Borrower to Lender or its
designee of a deed-in-lieu of foreclosure with respect to the Property, or (3) Lender’s
or its designee’s taking possession and control of the Property after the
occurrence of an Event of Default hereunder. 
If any such action or other proceeding shall be brought against Lender,
upon written notice from Borrower to Lender (given reasonably promptly
following Lender’s notice to Borrower of such action or proceeding), Borrower
shall be entitled to assume the defense thereof, at Borrower’s expense, with
counsel reasonably acceptable to Lender; provided, however, Lender may, at its
own expense, retain separate counsel to participate in such defense, but such
participation shall not be deemed to give Lender a right to control such
defense, which right Borrower expressly retains.  Notwithstanding the foregoing, each
Indemnified Party shall have the right to employ separate counsel at Borrower’s
expense if, in the reasonable opinion of legal counsel, a conflict or potential
conflict exists between the Indemnified Party and Borrower that would make such
separate representation advisable. 
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 Loan Document, the indemnification provided in Section 12.4
shall be fully recourse to Borrower and shall be independent of, and shall
survive, the discharge of the Indebtedness, the release of the Liens created by
the Security Instruments, and/or the conveyance of title to the Property to
Lender or any purchaser or designee in connection with a foreclosure of the
Security Instruments or conveyance in lieu of foreclosure.

 

XIII.                        THE OPERATING AGREEMENTS

 

13.1         Operating
Agreement Representations, Warranties. 
Borrower hereby represents and warrants as of the Closing Date (and,
solely with respect to the Master Lease, the Individual Property Subleases and
the Ground Leases, as of the Amendment Effective Date) as follows:

 

(a)           the Operating Agreements to which 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
Borrower has not waived, canceled or surrendered any of its rights thereunder;

 

132

 

(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 Closing Date
and notices delivered prior to or on the Closing Date or (2) will
constitute a default under any Operating Agreement that would have a Material
Adverse Effect;

 

(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)           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 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)           Borrower has delivered to Lender a true, accurate and complete copy of
each of the Operating Agreements;

 

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

 

(i)            To the best of 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 Lender.  In the event of a default by 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, Lender may, at its option, cause the default or defaults to be
remedied and otherwise exercise any and all rights of Borrower thereunder in
the 

 

133

 

name of and on behalf of Borrower. 
Borrower shall, on demand, reimburse Lender for all advances made and
reasonable out-of-pocket expenses incurred by Lender in curing any such default
(including, without limitation, reasonable attorneys’ fees and disbursements),
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 Lender.

 

13.3         Option to Renew
or Extend the Ground Lease.  Borrower
shall give 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 Lender, Borrower shall duly exercise any renewal or extension
option with respect to any of the Ground Leases if Lender reasonably determines
that the exercise of such option is necessary to protect Lender’s security for
the Loan.  If Borrower intends to renew
or extend the term of any of the Ground Leases, it shall deliver to 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
Borrower does not renew or extend the term of a Ground Lease, Lender may, at
its option if Lender reasonably determines that the exercise of such option is
necessary to protect Lender’s security for the Loan, exercise the option to
renew or extend in the name of and on behalf of Borrower.  Borrower hereby irrevocably appoints Lender
as its attorney-in-fact, coupled with an interest, to execute and deliver, for
and in the name of 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 Borrower and Lender shall
require that the related Fee Owner enter into a new ground lease, 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.  Borrower shall not 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 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, Borrower
shall, in the event of a bankruptcy of Fee Owner or any other party to an
Operating Agreement, 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.

 

13.4.3      Notice Prior to Rejection.  Borrower shall give Lender not less than
thirty (30) days prior written notice of the date on which 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 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 

 

134

 

Borrower determines to reject an Operating Agreement.  Lender shall have the right, but not the
obligation, to serve upon Borrower within such thirty (30) day period a notice
stating that (i) Lender demands that Borrower assume and assign such
Operating Agreement to Lender subject to and in accordance with the Bankruptcy
Code, and (ii) Lender covenants to cure or provide reasonably adequate
assurance thereof with respect to all defaults reasonably susceptible of being
cured by Lender and of future performance under such Operating Agreement.  If Lender serves upon Borrower the notice
described above, Borrower shall not seek to reject such Operating Agreement and
shall comply with the demand provided for in clause (i) above within
fifteen (15) days after the notice shall have been given by Lender.

 

13.4.4      Lender Right to Perform.  During the continuance of an Event of
Default, Lender shall have the right, but not the obligation, (i) to
perform and comply with all obligations of 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 Lender deems
necessary or desirable to prevent or cure any default by Borrower under the
Operating Agreements, including, without limitation, any act, deed, matter or
thing whatsoever that 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 Lender deems necessary or desirable in order to prevent or cure any
default of Borrower under the Operating Agreements.  Borrower shall, within five (5) Business
Days after written request is made therefor by Lender, execute and deliver to
Lender or to any party designated by 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 Lender
pursuant to this Section or as may otherwise be required by Lender.

 

13.4.5      Lender Attorney in Fact.  In the event of any arbitration under or
pursuant to any Operating Agreement in which Lender elects to participate,
Borrower hereby irrevocably appoints 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 Borrower in connection with such arbitration, including,
without limitation, the right to appoint arbitrators and to conduct arbitration
proceedings on behalf of Borrower and Lender. 
All reasonable out-of-pocket costs and expenses incurred by Lender in
connection with such arbitration and the settlement thereof shall be borne
solely by Borrower, including, without limitation, reasonable attorneys’ fees
and disbursements.  Nothing contained in
this Section shall obligate Lender to participate in any such arbitration.

 

13.4.6      Payment of Sums
Due Under Operating Agreements. 
Subject to Section 7.3, Borrower shall 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.  Borrower shall promptly perform and observe
in all material respects all of the terms, covenants and conditions required to
be performed and observed by 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 

 

135

 

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
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)  Borrower
shall not, except as permitted hereunder or with the prior written consent of Lender,
not to be unreasonably withheld, (i) 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)           Borrower shall not vote
for, agree to or acquiesce in any cancellation, termination or surrender of any
Operating Agreement without the prior written consent of Lender.  Any agreement to which 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.  Borrower shall deliver to 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.  Borrower shall promptly furnish to Lender
copies of such information and evidence as Lender may reasonably request
concerning Borrower’s due observance, performance and compliance with the
terms, covenants and conditions of the Operating Agreements.

 

13.4.12    No Subordination.  Borrower shall not 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.  Borrower, at its sole cost and expense, shall
execute and deliver to Lender, within five (5) Business Days after
request, such documents, instruments or agreements as may be reasonably
required to permit Lender to cure any default under the Operating Agreements.

 

13.4.14    Estoppel
Certificates.  In addition to and
without limitation of any obligations of Borrower under Section 2.3.9
and under any post-closing side letter delivered on the Closing Date, Borrower
shall use commercially reasonable efforts to obtain and deliver to Lender
within thirty (30) days after written demand by Lender, an estoppel certificate
in the applicable form attached hereto from each Fee Owner and other parties to
the Operating Agreements designated 

 

136

 

by 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 Lender shall reasonably request.

 

13.4.15    Common Area/Common Elements Insurance.  Borrower shall 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 Borrower under such Operating Agreements to be
delivered to Lender.  Without limitation
of 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.

 

13.4.16    [Reserved.]

 

13.5         Lender Right to
Participate.  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.  Lender shall have no liability or obligation
under the Operating Agreements by reason of its acceptance of the Security
Instruments, this Agreement and the other Loan Documents.  Lender shall be liable for the obligations of
Borrower arising under the Operating Agreements for only that period of time
during which Lender is in possession of the portion of the Property covered by
said Operating Agreement or has acquired, by foreclosure or otherwise, and is
holding all of Borrower’s right, title and interest therein.

 

XIV.                        SECURITIZATION AND PARTICIPATION

 

14.1         Sale of Notes
and Securitization.  Borrower acknowledges
and agrees that each Lender may sell all or any portion of its Pro Rata Share
of the Loan and the Loan Documents, or issue one or more participations
therein, or consummate one or more private or public Securitizations (as
hereinafter defined) of rated single or multi-class Securities (as hereinafter
defined) secured by or evidencing ownership interests in all or any portion of
its Pro Rata Share of the Loan and the Loan Documents or a pool of assets that
include its Pro Rata Share of the Loan and the Loan Documents.  At the request of Lender and, to the extent
not already required to be provided by Borrower under this Agreement, Borrower
shall use reasonable efforts to satisfy the market standards which may be
reasonably required in the marketplace or by the 

 

137

 

Rating Agencies in connection with the sale of one or more of the Notes
or a participation interest therein as part of a securitization (such sale
and/or securitization, the “Securitization”) of rated single or
multi-class securities (the “Securities”) secured by or evidencing
ownership interests in the applicable Note or Notes and this Agreement,
including using reasonable efforts to do (or cause to be done) the following,
at Borrower’s sole cost and expense (subject in the case of Lender’s
Securitization costs and expenses to Section 14.5), but (i) in
complying with this Section 14.1, Borrower shall not be required to
incur, suffer or accept (except to a de minimis extent) any lesser rights or
greater obligations or potential liabilities than as currently set forth in the
Loan Documents, except after an Event of Default, any increase in the weighted
average interest rate of the Notes that may result after certain prepayments of
the Loan have been made and applied in accordance with the terms hereof, (ii) in
complying with this Section 14.1, Borrower shall not have to
provide Regulation S-X compliant financials or auditors consents, and (iii) nothing
contained in this Section 14.1 shall result in any economic change
or other adverse change in the transaction contemplated by the Security
Instruments or the Loan Documents (unless Borrower is made whole by the holder
of Notes), other than to a de minimis extent, or result in any operational changes
that are unduly burdensome to the Property or Borrower:

 

(a)           Provided
Information.  (i) Provide such
financial and other information (but not projections) with respect to the
Property, Borrower, Master Lessee and Guarantors to the extent such information
is reasonably available to Borrower (provided
that Borrower shall not be obligated hereby to provide property-specific
information other than with respect to the Property), (ii) provide
business plans (but not projections) and budgets relating to the Property, to
the extent prepared by the Borrower or Master Lessee and (iii) cooperate
with the holder of the Notes (and its representatives) in obtaining such site
inspection, appraisals, market studies, environmental reviews and reports,
engineering reports and other due diligence investigations of the Property, as
may be reasonably requested by the holder of the Notes or reasonably requested
by the Rating Agencies (all information provided pursuant to this Section 14.1
together with all other information heretofore provided to Lender in connection
with the Loan in the scope of that described in clauses (i), (ii) and (iii) above,
as such may be updated, at Lender’s request, in connection with the
Securitization, or hereafter provided to Lender in connection with the Loan or
the Securitization, being herein collectively called the “Provided
Information”);

 

(b)           Opinions of
Counsel.  Use reasonable efforts to
cause to be rendered such customary updates or customary modifications to the
Opinions of Counsel delivered at the closing of the Loan as may be reasonably
requested by the holder of the Notes or the Rating Agencies in connection with
the Securitization, including without limitation, true lease and
non-consolidation opinions but specifically excluding 10b-5, “no fraudulent
conveyance” and/or true sale opinions. 
Borrower’s failure to use reasonable efforts to deliver or cause to be
delivered the opinion updates or modifications required hereby within twenty
(20) Business Days after written request therefor shall constitute an “Event of
Default” hereunder;

 

(c)           Modifications
to Loan Documents.  Execute such
amendments to the Security Instruments and Loan Documents as may be reasonably
requested by Lender or the Rating Agencies in order to achieve the required
rating or to effect the Securitization (including, without limitation,
modifying the Payment Date and modifying the commencement and expiration of the
Interest Period, in each case to dates other than as originally set forth in
the Notes), and

 

138

 

(d)           Cooperation
with Rating Agencies.  Borrower
shall, (i) at Lender’s request, meet with representatives of the Rating
Agencies at reasonable times to discuss the business and operations of the
Property, and (ii) cooperate with the reasonable requests of the Rating
Agencies in connection with the Property. 
Until the Obligations are paid in full, Borrower shall provide the
Rating Agencies with all financial reports required hereunder and such other
information as they shall reasonably request, including copies of any default
notices or other material notices delivered to and received from Lender
hereunder, to enable them to continuously monitor the creditworthiness of
Borrower and to permit an annual surveillance of the implied credit rating of
the Securities.

 

14.2         Securitization
Financial Statements.  Borrower
acknowledges that all financial information delivered by Borrower to Lender
pursuant to Article XI may, at Lender’s option, be delivered to the
Rating Agencies, subject to compliance with Section 11.2.9.

 

14.3         Securitization
Indemnification.

 

14.3.1      Disclosure
Documents.  Borrower understands that
certain of the Provided Information may be included in disclosure documents in
connection with the Securitization, including a prospectus, private placement
memorandum, collateral term sheet or a public registration statement (each, a “Disclosure
Document”) and may also be included in filings with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities
Act”) or the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”), or provided or made available to investors or prospective investors
in the Securities, the Rating Agencies, and service providers relating to the
Securitization.  In the event that the
Disclosure Document is required to be revised prior to the sale of all
Securities, upon request, Borrower shall reasonably cooperate with the holder
of the Notes in updating the Provided Information for inclusion or summary in
the Disclosure Document by providing all updates to the Provided Information
available to Borrower reasonably requested by Lender.

 

14.3.2      Indemnification
Certificate.  In connection with each
applicable Disclosure Document, Borrower agrees to provide, at Lender’s
reasonable request, an indemnification certificate:

 

(a)           certifying that Borrower has carefully examined those portions of such
memorandum or prospectus, as applicable, reasonably designated in writing by
Lender for Borrower’s review pertaining to Borrower, the Property, the
Guarantors, the Loan and/or the Provided Information and insofar as such
sections or portions thereof specifically pertain to Borrower, the Property,
the Guarantors, the Provided Information or the Loan (such portions, the “Relevant
Portions”), the Relevant Portions do not (except to the extent specified by
Borrower if Borrower does not agree with the statements therein), as of the
date of such certificate, to Borrower’s knowledge, contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were
made, not misleading.

 

(b)           indemnifying Lender and the Affiliates of Deutsche Bank Securities, Inc.
(collectively, “DBS”) as well as JPMC and its Affiliates (“Chase”),
as applicable, that have prepared the Disclosure Document relating to the
Securitization, each of their respective

 

139

 

directors, each of their respective officers who have signed the
Disclosure Document and each person or entity who controls DBS or Chase, as
applicable, within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (collectively, the “Lender Group”), and DBS and
Chase, together with the Lender Group, each of their respective directors and
each person who controls DBS or Chase or the Lender Group, within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange
Act (collectively, the “Underwriter Group”) for any actual,
out-of-pocket losses, third party claims, damages (excluding lost profits,
diminution in value and other consequential damages) or liabilities arising out
of third party claims (the “Liabilities”) to which any member of the
Underwriter Group may become subject to the extent such Liabilities arise out
of or are based upon any untrue statement of any material fact contained in the
Relevant Portions and in the Provided Information or arise out of or are based
upon the omission by Borrower to state therein a material fact required to be
stated in the Relevant Portions in order to make the statements in the Relevant
Portions in light of the circumstances under which they were made, not
misleading (except that (w) Borrower’s obligation to indemnify in respect
of any information contained in a Disclosure Document that is derived in part
from information provided by Borrower or any Affiliate of Borrower and in part
from information provided by others unrelated to or not employed by Borrower
shall be limited to any untrue statement or omission of material fact therein
known to Borrower that results directly from an error in any information
provided (or which should have been provided) by Borrower, (x) Borrower shall have no responsibility or obligation
to indemnify in respect of any information related to the Underwriter Group
which is provided by the Underwriter Group, (y) Borrower shall have no responsibility for the failure of any
member of the Underwriter Group to accurately transcribe written information
supplied by Borrower or to include such portions of the Provided Information and
(z) Borrower shall have no responsibility or obligation to indemnify in
respect of any untrue or misleading statement in the Relevant Portions or
Provided Information which is not corrected upon a request for such correction
by Borrower or which is caused by the
gross negligence or willful misconduct of the Underwriter Group).  The
indemnity contained in the indemnification certificate will be in addition to
any liability which Borrower may otherwise have.

 

(c)           The indemnification certificate shall provide that Borrower’s liability
under clauses (a) and (b) of the indemnification certificate shall be
limited to Liabilities arising out of or based upon any such untrue statement
or omission made in a Disclosure Document in reliance upon and in conformity
with information furnished to Lender by, or furnished at the direction and on
behalf of, Borrower in connection with the preparation of those portions of
the  relevant Disclosure Document
pertaining to Borrower, the Property, any Guarantor, the Sponsor or the Loan,
including financial statements of Borrower and operating statements with respect
to the Property.

 

(d)           The indemnification certificate shall also provide that promptly after
receipt by an indemnified party of notice of the commencement of any action
covered by the indemnification certificate, such indemnified party will notify
the indemnifying party in writing of the commencement thereof, but the omission
to so notify the indemnifying party will not relieve the indemnifying party
from any liability which the indemnifying party may have to any indemnified
party thereunder except to the extent that failure to notify causes prejudice
to the indemnifying party.  In the event
that any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly 

 

140

 

with any other indemnifying party, to participate therein and, to the
extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. 
After such notice from the indemnifying party to such indemnified party
of its assumption of such defense, the indemnifying party shall not be liable
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof; provided, however, if an indemnified
party shall have reasonably concluded that there are any legal defenses
available to it that are different from or in conflict with those available to
the indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties at the expense of the indemnifying party.

 

(e)           The indemnification certificate shall also provide that in order to
provide for just and equitable contribution in circumstances in which the
indemnity provided for therein is for any reason held to be unenforceable by an
indemnified party in respect of any actual, out-of-pocket losses, claims,
damages or liabilities relating to third party claims (or action in respect
thereof) referred to therein which would otherwise be indemnifiable thereunder,
the indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such actual, out of pocket losses, third party
claims, damages or liabilities (or action in respect thereof) (but excluding damages
for lost profits, diminution in value of the Property and consequential
damages); provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution for Liabilities arising
therefrom from any person who was not guilty of such fraudulent
misrepresentation.  In determining the
amount of contribution to which the respective parties are entitled, the
following factors shall be considered:  (i) the
Lender Group’s and Borrower’s relative knowledge and access to information
concerning the matter with respect to which the claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; (iii) the
limited responsibilities and obligations of Borrower as specified herein; and (iv) any
other equitable considerations appropriate in the circumstances.

 

(f)            Notwithstanding anything to the contrary contained
herein, Borrower shall have no obligation to (and Lender shall not take any
action to cause Borrower to) act as an issuer, co-registrant or registrant with
respect to the securities issued in any securitization.

 

14.4         Retention of
Servicer.  Lender reserves the right
to retain the Servicer but Lender agrees to
consult with Borrower prior to retaining (or replacing) the Servicer (provided
that Borrower hereby agrees that Lender may retain Midland Loan Services
without any obligation to consult with Borrower and Borrower acknowledges and
agrees that Borrower shall not have any approval or veto rights over Lender’s
choice of Servicer).  Lender has advised Borrower that
the Servicer initially retained by Lender shall be KeyBank Real Estate Capital
or its Affiliate.  Borrower shall pay any
reasonable fees and expenses of the Servicer and any reasonable third party
fees and expenses of the Servicer, special servicing fees, work-out fees and
reasonable attorneys fees and disbursements, in connection with a prepayment,
release or substitution of the Property, assumption or modification of the
Loan, or following an Event of Default, special servicing or work-out of the
Loan or enforcement of the Loan Documents. In addition, Borrower shall pay the
standard monthly servicing fee of the Servicer on or prior to each Payment
Date.

 

141

 

14.5         Lender’s
Securitization Expenses.  Borrower
has deposited into escrow with the Title Company on the Closing Date an amount
equal to $2,730,000 in full satisfaction of any obligation of Borrower to pay
Lender’s costs and expenses in connection with any Securitization, including
but not limited to Lender’s out-of-pocket costs and expenses for legal fees,
fees of Rating Agencies and their counsel, printing and distribution of
offering materials, trustee acceptance fee and legal fees and accounting
expenses.  The Title Company shall
release to Lender, upon Lender’s written request, amounts from such escrow to
reimburse Lender for its costs and expenses in connection with any
Securitization.  In the event that Lender’s
total costs and expenses in connection with the Securitization are less than
the amount Borrower deposited into escrow, Lender shall instruct the Title
Company to remit to Borrower the difference.

 

XV.                            ASSIGNMENTS AND PARTICIPATIONS

 

15.1         Assignment and
Acceptance.  Each 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 Loan Documents
(including, without limitation, all or a portion of one or more of the Notes); provided
that the parties to each such assignment shall execute and deliver to Lender,
for its acceptance and recording in the Register (as hereinafter defined), an
Assignment and Acceptance and deliver to Borrower a copy of same.  In addition, each 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 Loan Documents
(including without limitation, all or a portion of one or more of the Notes)
utilizing such documentation to evidence such participation and the parties’
respective rights thereunder as such Lender, in its sole discretion, shall
elect.  Notwithstanding anything in the
foregoing sentences of this Section 15.1 to the contrary, there
shall be no Proscribed  Assignee
restriction on the ability of a Lender (other
than either GACC or JPMC or any Affiliate thereof solely with respect to such
portion of the Loan, if any, that is not the subject of Securitization but is
retained by any of them) to assign or participate its rights and
obligations under this Agreement and the other Loan Documents after
Securitization.

 

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 Lender, as the case may be, hereunder and
such assignee shall be deemed to have assumed such rights and obligations, and (ii) 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 Loan Documents
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of a Lender’s rights and obligations under this Agreement and the other
Loan Documents, such 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 Borrower to such Lender pursuant to the terms
of the 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 the Security Instruments and the other Loan Documents)
delivered to or for the benefit of or deposited with GACC or JPMC, on behalf of
the holders of the 

 

142

 

Notes, as Lender, for which GACC or JPMC, as applicable, on behalf of
the holders of the 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, 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,
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 Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or
the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any
other Loan Documents or any other instrument or document furnished pursuant hereto
or thereto; (ii) Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under any 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 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 Loan Documents; (v) such
assignee appoints and authorizes Lender to take such action as agent on its
behalf and to exercise such powers and discretion under the Loan Documents as
are delegated to 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 Loan Documents
are required to be performed by Lender.

 

15.4         Register.  Each Lender (solely for this purpose, as
agent for Borrower) 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 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”) in a manner and with the intent that the Loan will
be considered to be in registered form within the meaning of Section 163(f) of
the Code, and this Section 15.4 shall be interpreted consistently
with such intent.  The entries in the
Register shall, with respect to such assignees, be conclusive and binding for
all purposes, absent manifest error.  A
copy of each change to the Register shall be delivered by Lender to Borrower
promptly after such change is made and the Register shall be available for
inspection by 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
Notes.  Upon its receipt of an
Assignment and Acceptance executed by an assignee, together with any Note or
Notes subject to such assignment, 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 Borrower. 
Within five (5) Business Days after its receipt of such notice,
Borrower, at Lender’s expense, shall execute and 

 

143

 

deliver to Lender in exchange and substitution for the surrendered Note
or Notes a new Note to the order of such assignee in an amount equal to the
portion of the Loan assigned to it and a new Note to the order of Lender in an
amount equal to the portion of the Loan retained by it hereunder.  Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate then outstanding principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the Notes (modified, however, to the extent necessary so as not to impose
duplicative or increased obligations on Borrower and to delete obligations
previously satisfied by Borrower). 
Notwithstanding the provisions of this Article XV, 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 (except as provided in Article XIV)
or any interest or 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 Note contemplated by this Section 15.5,
including, without limitation, any mortgage tax.  Lender and/or the assignees, as the case may
be, shall from time to time designate one agent through which Borrower shall
request all approvals and consents required or contemplated by this Agreement
and the other Loan Documents and on whose statements Borrower may rely.  Lender hereby initially designates 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 Borrower or any of
its Affiliates) in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of the Note held by it); provided, however, that (i) such
assignee’s obligations under this Agreement and the other 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 Note for all purposes of this
Agreement and the other Loan Documents, and (iv) Borrower, Lender and the
assignees pursuant to this Article XV 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 Loan Documents.  In the event that more than one (1) party
comprises Lender, Lender shall designate one party to act on the behalf of all
parties comprising Lender in providing approvals and all other necessary
consents under the Loan Documents and on whose statements Borrower may rely.

 

15.7         Disclosure of
Information.  Any assignee pursuant
to this Article XV may, in connection with any subsequent
assignment or participation or subsequent proposed assignment or participation
pursuant to this Article XV, disclose to the subsequent assignee or
participant or subsequent proposed assignee or participant, any information
relating to Borrower furnished to such assignee by or on behalf of 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 Loan Document, any assignee pursuant to this Article XV may
at any time create a security interest in all or any portion of its rights
under this Agreement or the other Loan Documents (including, without
limitation, the amounts owing to it and the Note or 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.

 

144

 

XVI.                        RESERVE ACCOUNTS

 

16.1         Tax Reserve
Account.  In accordance with the time
periods set forth in Section 3.1, Borrower shall cause to be
deposited into the Tax Reserve Account (which deposit may be effected by the
transfers contemplated under Section 3.1.6(a))  an amount equal to (a) one-twelfth of
the annual Impositions that Lender reasonably estimates, based on the most
recent tax bill for the Property, will be payable during the next ensuing
twelve (12) months in order to accumulate with Lender sufficient funds to pay
all such Impositions at least thirty (30) days prior to the imposition of any
interest, charges or expenses for the non-payment thereof and (b) one-twelfth
of the annual Other Charges that Lender reasonably estimates will be payable
during the next ensuing twelve (12) months (said monthly amounts in (a) and
(b) above hereinafter called the “Monthly Tax Reserve Amount,” and
the aggregate amount of funds held in the Tax Reserve Account being the “Tax
Reserve Amount”).  As of the Closing
Date, the Monthly Tax Reserve Amount is $996,522.60, but such amount is subject to adjustment by Lender in its
reasonable discretion upon notice to Borrower. The Monthly Tax Reserve Amount
shall be paid by Borrower to Lender on each Payment Date.  Lender will apply the Monthly Tax Reserve
Amount to payments of Impositions and Other Charges required to be made by
Borrower pursuant to Article V and Article VII and
under the Security Instruments, subject to Borrower’s right to contest
Impositions in accordance with Section 7.3.  In making any payment relating to the Tax
Reserve Account, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office, without inquiry into the accuracy
of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof subject to
Borrower’s right to contest.  If the
amount of funds in the Tax Reserve Account shall exceed the amounts due for
Impositions and Other Charges pursuant to Article V and Article VII,
Lender shall credit such excess against future payments to be made to the Tax
Reserve Account.  If at any time Lender
reasonably determines that the Tax Reserve Amount is not or will not be
sufficient to pay Impositions and Other Charges by the dates set forth above,
Lender shall notify Borrower of such determination and Borrower shall increase
its monthly payments to Lender by the amount that Lender reasonably estimates
is sufficient to make up the deficiency at least thirty (30) days prior to the
imposition of any interest, charges or expenses for the non-payment of the
Impositions and Other Charges.  Upon
payment of the Impositions and Other Charges, Lender shall reassess the amount
necessary to be deposited in the Tax Reserve Account for the succeeding period,
which calculation shall take into account any excess amounts remaining in the
Tax Reserve Account.

 

16.2         Insurance
Reserve Account.

 

(a)           Insurance
Reserve.  Subject to clause (b) below,
Borrower shall, in accordance with the time periods set forth in Section 3.1,
cause to be deposited into the Insurance Reserve Account (which deposit may be
effected by the transfers contemplated under Section 3.1.6(a)) an
amount equal to one-twelfth of the insurance premiums that Lender reasonably
estimates, based on the most recent bill, will be payable for the renewal of
the coverage afforded by the insurance policies upon the expiration thereof in
order to accumulate with Lender sufficient funds to pay all such insurance
premiums at least thirty (30) days prior to the expiration of the policies
required to be maintained by Borrower pursuant to the terms hereof (said
monthly amounts hereinafter called the “Monthly Insurance Reserve Amount,”
and the aggregate amount of funds held in the “Insurance Reserve Account”
being the “Insurance Reserve Amount”). 
The Monthly 

 

145

 

Insurance Reserve Amount shall be
subject to adjustment by Lender upon notice to Borrower.  The Monthly Insurance Reserve Amount shall be
paid by Borrower to Lender on each Payment Date.  Lender will apply the Monthly Insurance
Reserve Amount to payments of insurance premiums required to be made by
Borrower pursuant to Article VI and under the Security
Instruments.  In making any payment
relating to the Insurance Reserve Account, Lender may do so according to any
bill, statement or estimate procured from the insurer or agent, without inquiry
into the accuracy of such bill, statement or estimate or into the validity
thereof.  If the amount of funds in the
Insurance Reserve Account shall exceed the amounts due for insurance premiums
pursuant to Article VI, Lender shall credit such excess against
future payments to be made to the Insurance Reserve Account.  If at any time Lender reasonably determines
that the Insurance Reserve Amount is not or will not be sufficient to pay
insurance premiums by the dates set forth above, Lender shall notify Borrower
of such determination and Borrower shall increase its monthly payments to
Lender by the amount that Lender reasonably estimates is sufficient to make up
the deficiency at least thirty (30) days prior to expiration of the applicable
insurance policies.  Upon payment of such
insurance premiums, Lender shall reassess the amount necessary to be deposited
in the Insurance Reserve Account for the succeeding period, which calculation
shall take into account any excess amounts remaining in the Insurance Reserve
Account.

 

(b)           Blanket
Policies.  Notwithstanding the
foregoing, provided no Noticed Default or Event of Default has occurred and is
continuing, Borrower shall not be required to deposit funds into the Insurance
Reserve Account at any time when the insurance required to be maintained
pursuant to this Agreement is provided under a Blanket Policy in accordance
with Article VI hereof and the premiums in respect of such Blanket
Policy are paid or caused to be paid at least sixty (60) days before such
premiums become due and payable.

 

16.3         Ground Rent
Reserve Account.  In accordance with
the time periods set forth in Section 3.1, Borrower shall, on each
Payment Date, cause to be deposited into the Ground Rent Reserve Account (which
deposit may be effected by the transfers contemplated under Section 3.1.6(a))
an amount (without duplication of any amounts required to be deposited in the
Tax Reserve Account in respect of real estate taxes payable with respect to the
Leasehold Estate) equal to one-twelfth of the annual Ground Rent that Lender
reasonably estimates will be payable during the next ensuing twelve (12)
months, or if such Ground Rent is payable monthly, the sum of the next month’s
Ground Rent due, in order to accumulate with Lender sufficient funds to pay all
such Ground Rent at least thirty (30) days prior to the imposition of any
interest, charges or expenses for the non-payment thereof (said monthly amounts
above hereinafter called the “Monthly Ground Rent Reserve Amount,”  and the aggregate amount of funds held in
the Ground Rent Reserve Account being the “Ground Rent Reserve Amount”).
The Monthly Ground Rent Reserve Amount shall be subject to adjustment by Lender
upon notice to Borrower. The Monthly Ground Rent Reserve Amount shall be paid
by Borrower to Lender on each Payment Date. 
Subject to the terms hereof, Lender will apply the Ground Rent Reserve
Amount to payments of Ground Rent required to be made by Borrower pursuant to
the Ground Lease.  In making any payment
relating to the Ground Rent Reserve Account, Lender may do so according to any
bill, statement or estimate procured from the Fee Owner, without inquiry into
the accuracy of such bill, statement or estimate or into the validity
thereof.  If the amount of funds in the
Ground Rent Reserve Account shall exceed the amounts due as Ground Rent
pursuant to the Ground Lease, Lender shall credit such excess against future
payments to be made to the Ground Rent Reserve 

 

146

 

Account.  If at any time Lender
reasonably determines that the Ground Rent Reserve Amount is not or will not be
sufficient to pay Ground Rent by the dates set forth above, Lender shall notify
Borrower of such determination and Borrower shall increase its monthly payments
to Lender by the amount that Lender reasonably estimates is sufficient to make
up the deficiency at least thirty (30) days prior to the imposition of any
interest, charges or expenses for the non-payment of Ground Rent.

 

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 Notes is not paid in full on the applicable Payment
Date, (C) any prepayment of principal due under this Agreement or the
Notes is not paid when due, (D) the Prepayment Fee is not paid when due, (E) any
deposit to the Holding 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 Notes or any other Loan Document is not
paid in full when due and payable in accordance with the provisions of the
applicable Loan Document, with the failure described in this clause (F) continuing
for ten (10) Business Days after Lender delivers written notice thereof to
Borrower;

 

(ii)                   subject to Borrower’s right to contest as set
forth in Section 7.3, 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 Borrower shall not
be deemed to be in default hereunder in the event funds sufficient for a
required payment of such Imposition or Other Charge under Section 3.1.7(i) are held in the Tax Reserve Account and Lender or Cash Management Bank
fails to timely make payment from such Sub-Account as contemplated by this Agreement
unless due to the negligence or willful misconduct of Borrower;

 

(iii)                  if (A) the insurance policies required
by Section 6.1 are not kept in full force and effect at all times
required under such Section, or (B) Borrower fails to deliver to 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 Lender delivers written notice thereof to Borrower, provided,
that Borrower shall not be deemed to be in default hereunder in the event funds
sufficient for a required payment under Section 3.1.7(ii) of
the premiums required to keep the insurance policies in full force and effect are held in the Insurance Reserve
Account and Lender or Cash
Management Bank fails to timely make payment from such Sub-Account as
contemplated by this Agreement unless due to the negligence or willful
misconduct of Borrower;

 

(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 

 

147

 

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 Borrower, Mezzanine Borrower, Master
Lessee, or any Guarantor, (c) Borrower grants any Lien or encumbrance
against all or any portion of the Property, (d) any pledge, hypothecation,
creation of a security interest in or other encumbrance of any direct or indirect
interests in Borrower, Mezzanine Borrower, Master Lessee, or any Guarantor or (e) Borrower’s
filing of a declaration of condominium with respect to any portion of the
Property;

 

(v)                   if (i) any
representation or warranty made by 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 Borrower of
notice from Lender in writing of such breach or a longer period of time not to
exceed thirty (30) additional days if 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 Borrower herein or by Borrower or any
Affiliate of Borrower in any other Loan Document, or in any report,
certificate, financial statement or other instrument, agreement or document
furnished to 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 Borrower’s knowledge, false
or misleading in any material respect when made, then same shall not constitute
an Event of Default unless Borrower has not cured same within thirty (30) days
after receipt by Borrower of notice from Lender in writing of such breach;

 

(vi)                  if Borrower, a Master Lessee Party, or any
Guarantor shall make an assignment for the benefit of creditors;

 

(vii)                 if a receiver, liquidator or trustee shall be
appointed for Borrower, a Master Lessee Party, or any Guarantor or Borrower, a
Master Lessee Party, or any Guarantor 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, Borrower, a Master
Lessee Party, or any Guarantor, or if any proceeding for the dissolution or
liquidation of Borrower, a Master Lessee Party, or any Guarantor shall be instituted;
provided, however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower, a Master Lessee Party, or any
Guarantor, upon the same not being discharged, stayed or dismissed within
ninety (90) days;

 

(viii)                if Borrower, Master Lessee, or Guarantor as
applicable, attempts to assign its rights under this Agreement or any of the
other Loan Documents or any interest herein or therein in contravention of the
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 Lender in connection with the
Loan, or in any other non-consolidation delivered subsequent to the closing of
the Loan, is untrue in any material respect;

 

148

 

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

 

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

 

(xiii)                 if 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
Borrower shall fail to comply with any covenants set forth in Article V
or Article XI with such failure continuing for ten (10) Business
Days after Lender delivers written notice thereof to Borrower;

 

(xv)                 if Borrower shall fail to comply with the
covenants set forth in Section 3(d) or Section 8
of any Security Instrument with such failure continuing for ten (10) Business
Days after Lender delivers written notice thereof to Borrower;

 

(xvi)                if this Agreement or any other 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 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 (except in any of
the foregoing cases in accordance with the terms hereof or under any other Loan
Document or by reason of any affirmative act of Lender);

 

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

 

(xviii)              [Reserved];

 

(xix)                 if there shall occur any default by 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 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 Lender, which consent shall not be
unreasonably withheld, conditioned or delayed, or if 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 Borrower under a

 

149

 

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
funds sufficient for a required transfer under Section 3.1.7(iii) are held in the Ground Rent Reserve
Account and Lender or Cash
Management Bank fails to timely make any transfer from such Sub-Account as
contemplated by this Agreement unless due to the negligence or willful
misconduct of Borrower;

 

(xx)                  [Reserved];

 

(xxi)                 [Reserved];

 

(xxii)                [Reserved];

 

(xxiii)               if, without the prior written consent of
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 Lender, except as expressly
permitted hereunder or any other Loan Document;

 

(xxvi)               if Borrower shall be in default in any
material obligation on the part of 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 Borrower shall not have caused such
Individual Property to reopen for business to the public, obtained a release of
such Individual Property or provided a substitute therefor in accordance with Section 2.3.6
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 Borrower shall continue to be in Default
under any of the other terms, covenants or conditions of this Agreement or of
any Loan Document not specified in subsections (i) to (xxvii)
above (including, without limitation, in Default under Section 8.8.2
or 13.4.9), for thirty (30) days after notice from 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 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 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 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 Borrower) Lender may, without notice or demand, in addition to any
other rights or remedies available to it pursuant to this Agreement and the
other Loan Documents or at law or in equity, take such action that Lender deems
advisable to protect and enforce its rights against Borrower and in the
Property, including, without limitation, (i) declaring immediately due and
payable the entire Principal Amount together with interest 

 

150

 

thereon and all other sums due by Borrower under the Loan Documents, (ii) collecting
interest on the Principal Amount at the Default Rate whether or not Lender
elects to accelerate the Notes and (iii) enforcing or availing itself of
any or all rights or remedies set forth in the Loan Documents against Borrower
and the Property, including, without limitation, all rights or remedies
available at law or in equity; and upon any Event of Default described in subsections
(a)(vi), (a)(vii) or (a)(viii) above in respect of
Borrower, the Indebtedness and all other obligations of Borrower hereunder and
under the other Loan Documents shall immediately and automatically become due
and payable, without notice or demand, and Borrower hereby expressly waives any
such notice or demand, anything contained herein or in any other Loan Document
to the contrary notwithstanding.  The
foregoing provisions shall not be construed as a waiver by Lender of its right
to pursue any other remedies available to it under this Agreement, the Security
Instruments or any other 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 Lender in the Loan
Documents.

 

17.2         Remedies.

 

(a)           Unless waived in writing by 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 Lender against Borrower
under this Agreement or any of the other Loan Documents executed and delivered
by, or applicable to, Borrower or at law or in equity may be exercised by
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 Lender shall
have commenced any foreclosure proceeding or other action for the enforcement
of its rights and remedies under any of the Loan Documents with respect to the
Property.  Any such actions taken by
Lender shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as
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
Lender permitted by law, equity or contract or as set forth herein or in the
other Loan Documents.  Without limiting
the generality of the foregoing, Borrower agrees that if an Event of Default is
continuing (i) 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 Lender (including the Assigned Landlord Lien) shall
remain in full force and effect until Lender has exhausted all of its remedies
against the Property and the Security Instruments 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 and during the continuance of an Event of Default,
with respect to the Account Collateral, the Lender may:

 

(i)                    without notice to 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 against the
Indebtedness, Obligations, operating expenses and/or capital expenditures for
the Property or any part thereof;

 

151

 

(ii)                   in 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;

 

(iii)                  demand, collect, take possession of or
receipt for, settle, compromise, adjust, sue for, foreclose or realize upon the
Account Collateral (or any portion thereof) as Lender may determine in its sole
discretion; and

 

(iv)                  take all other actions provided in, or
contemplated by, this Agreement.

 

(c)           With respect to Borrower, the Account Collateral, the Rate Protection
Collateral and the Property, nothing contained herein or in any other Loan
Document shall be construed as requiring Lender to resort to the Property for
the satisfaction of any of the Indebtedness, and Lender may seek satisfaction
out of the Property or any part thereof, or exercise its rights under the
Security Instruments, the Assignment of Leases, or the other Loan Documents, in
its absolute discretion in respect of the Indebtedness.  In addition, Lender shall have the right from
time to time to partially foreclose or exercise remedies under this Agreement,
the Security Instruments, and the other Loan Documents, in any manner and for
any amounts secured by this Agreement, the Security Instruments, or the other
applicable Loan Documents then due and payable as determined by Lender in its
sole discretion including, without limitation, the following circumstances: (i) in
the event Borrower defaults beyond any applicable grace period in the payment
of one or more scheduled payments of principal or interest, Lender may
foreclose under this Agreement, the Security Instruments, and the applicable
Loan Documents to recover such delinquent payments, or (ii) in the event
Lender elects to accelerate less than the entire outstanding principal balance
of the Loan, Lender may foreclose under this Agreement, the Security
Instruments, and the other applicable Loan Documents to recover so much of the
principal balance of the Loan as Lender may accelerate and such other sums
secured by this Agreement, the Security Instruments, and the other applicable
Loan Documents as Lender may elect. 
Notwithstanding one or more partial foreclosures, the Property shall
remain subject to this Agreement, the Security Instruments, and the applicable
Loan Documents to secure payment of sums secured by this Agreement, the
Security Instruments, and the applicable Loan Documents and not previously
recovered.

 

17.3         Remedies
Cumulative; Waivers.  The rights,
powers and remedies of Lender under this Agreement and the Security Instruments
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise.  Lender’s rights, powers and remedies may be
pursued singly, concurrently or otherwise, at such time and in such order as
Lender may determine in Lender’s sole discretion.  No delay or omission to exercise any remedy,
right or power accruing upon a Default or 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 Borrower or any Guarantor shall not be construed to be a waiver of
any subsequent Default or Event of Default by Borrower or any Guarantor or to
impair any remedy, right or power consequent thereon.

 

152

 

17.4         Costs of
Collection.  In the event that after
an Event of Default:  (i) the Notes
or any of the 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 attorney is retained to represent Lender in any
bankruptcy, reorganization, receivership, or other proceedings affecting
creditors’ rights and involving a claim under the Notes or any of the Loan
Documents; or (iii) an attorney is retained to protect or enforce the lien
or any of the terms of this Agreement, any Security Instrument or any of the
Loan Documents; then Borrower shall pay to 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 Lender at
the Default Rate.

 

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 Lender or enforceable against (i) Borrower, (ii) any
Affiliate of Borrower, (iii) any Person owning, directly or indirectly,
any legal or beneficial interest in Borrower or any Affiliate of 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, this Agreement, the Security
Instruments, the Notes, the Property or any other Loan Document, or the making,
issuance or transfer thereof, all such liability, if any, being expressly
waived by Lender.  The foregoing limitation
shall not in any way limit or affect Lender’s right to any of the following and
Lender shall not be deemed to have waived any of the following:

 

(a)           Foreclosure of the lien of this Agreement and the Security Instruments in
accordance with the terms and provisions set forth herein and in the Security
Instruments;

 

(b)           Action against any other security at any time given to secure the payment
of the Notes and the other Obligations;

 

(c)           Exercise of any other remedy set forth in this Agreement or in any other
Loan Document which is not inconsistent with the terms of this Section 18.1;

 

(d)           Any right which 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
Security Instruments or to require that all collateral shall continue to secure
all of the Indebtedness owing to Lender in accordance with the 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).

 

153

 

18.1.2      Carveouts From Non-Recourse Limitations.  Notwithstanding the foregoing or anything in
this Agreement or any of the Loan Documents to the contrary, there shall at no
time be any limitation on Borrower’s or any Guarantor’s liability for the
payment, in accordance with the terms of this Agreement, the Notes, the
Security Instruments and the other Loan Documents, to Lender of:

 

(a)           any loss, damage, cost or expense incurred by or on behalf of Lender by
reason of the fraudulent acts of Borrower or any Affiliate of Borrower;

 

(b)           Proceeds which Borrower or any Affiliate of Borrower has received and to
which Lender is entitled pursuant to the terms of this Agreement or any of the
Loan Documents to the extent the same have not been applied toward payment of
the Indebtedness, or used for the repair or replacement of the Property in
accordance with the provisions of this Agreement;

 

(c)           all loss, damage, cost or expense as incurred by Lender and arising from
any intentional misrepresentation of Borrower or any Affiliate of Borrower;

 

(d)           any misappropriation of Rents or security deposits or other funds
relating to the Properties by Master Lessee, Borrower or any of their
respective Affiliates;

 

(e)           any loss, damage, cost or expense incurred by or on behalf of Lender by
reason of all or any part of the Property, the Account Collateral or the Rate
Protection Collateral being encumbered by a Lien or Transferred by reason of
the acts of Borrower or any Affiliate of Borrower from and after the Closing
Date (other than this Agreement and the Security Instruments) in violation of
the 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 Borrower or any Affiliate of Borrower (other
than Rent sent to the Holding Account or paid directly to Lender pursuant to
any notice of direction delivered to tenants of the Property) and not applied
to payment of the Indebtedness or the Obligations or used to pay normal and
verifiable operating expenses of the Property or otherwise applied in a manner
permitted under the Loan Documents;

 

(g)           any loss, damage, cost or expense incurred by or on behalf of Mezzanine
Lender by reason of physical damage to the Property from intentional waste or
other willful destruction (other than in connection with a permitted
alteration) committed by Borrower or any Affiliate of Borrower;

 

(h)           any loss, damage, cost or expense incurred by or on behalf of Lender by
reason of the failure of Borrower to comply with any of the provisions of Article XII;

 

(i)            any loss, damage, cost
or expense incurred by or on behalf of 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 or Section 5.2.22;

 

(j)            any loss, damage, cost or expense incurred by
or on behalf of Lender by reason of the failure of Borrower to deliver
to Lender the net sales proceeds of a Transfer of an Individual 

 

154

 

Property
described in Section 2.3.4 together with any shortfall  necessary to pay in full the Release Price
for such Individual Property, in
accordance with the provisions of Section 2.3.4;

 

(k)           all of the Indebtedness and the Obligations 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 or 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 or 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 Party 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 Lender, in the event (and arising out of such
circumstances) that Borrower should raise any defense, counterclaim and/or
allegation in any foreclosure action by Lender relative to the Property, the
Account Collateral or the Rate Protection Collateral or any part thereof which
is found by a court to have been raised by Borrower in bad faith or to be
without basis in fact or law; or

 

(m)          reasonable attorney’s fees and expenses actually incurred by Lender in
connection with any successful suit filed on account of any of the foregoing
clauses (a) through (l).

 

18.2         Pro Rata Share.  The obligations of each Lender hereunder and
under any of the other Loan Documents are several (but not joint).  Subject to the terms hereof, each Lender
shall be obligated to fund on a pari passu basis only its respective Pro Rata
Share of the Loan.  Each 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 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 Lender hereunder or under the other Loan Documents which is
greater than its Pro Rata Share, then such Lender receiving such
proportionately greater payment shall (i) notify the other Lender of the
receipt of such payment, and (ii) appropriate payments or other
adjustments shall be made by each Lender to ensure each Lender receives its
respective Pro Rata Share of such aggregate amount due.

 

155

 

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 Lender
of the Loan and the execution and delivery to Lender of the 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 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 Borrower, shall inure to the benefit of
the  successors and assigns of Lender.  If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder and under the
other Loan Documents shall be joint and several.

 

19.2         Lender’s
Discretion.  Whenever pursuant to
this Agreement, Lender exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to Lender, the
decision of 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 Lender and shall be
final and conclusive.

 

19.3         Governing Law.

 

(A)          THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE
BY LENDER AND ACCEPTED BY 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, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT
AND THE NOTES, 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 LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT MAY AT 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
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, 

 

156

 

AND BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.  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 BORROWER IN
THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF
NEW YORK.  BORROWER (I) SHALL GIVE
PROMPT NOTICE TO 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 Notes, or of any other 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, if a
Securitization shall have occurred, a Rating Agency Confirmation is obtained),
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. 
Except as otherwise expressly provided herein, no notice to or demand on
Borrower shall entitle 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 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 Notes or under any other 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 Notes or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of
all other amounts due under this Agreement, the Notes or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.

 

157

 

19.6         Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) 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 Lender:

  	
   

  	
  German American Capital Corporation, on behalf of the holders of the Notes

  
	
   

  	
   

  	
  60 Wall Street, 10th floor

  
	
   

  	
   

  	
  New York, NY 10005

  
	
   

  	
   

  	
  Attention: Robert Pettinato and General Counsel

  
	
   

  	
   

  	
  Telecopy No.: (212) 797-4489

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and to JPMorgan Chase Bank, N.A., on behalf of the
  holders of 

  the Notes  

  270 Park Avenue 

  New York, New York 10017 

  Attention: Michael Mesard 

  Telecopy No.: (212) 834-6592

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  KeyBank Real Estate Capital, 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 Borrower:

  	
   

  	
  FCP PropCo, LLC  

  1505 South Pavilion Center Drive 
 Las
  Vegas, Nevada 89135  

  Attention: General Counsel 

  Telecopy No.: (702) 495-4260

  

 

158

 

	
  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

  

 

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, or (iii) 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.  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 SECURITY INSTRUMENTS, THE NOTES OR ANY OTHER 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 SECURITY INSTRUMENTS, THE NOTES OR ANY OTHER 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 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.

 

159

 

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 Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.

 

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

 

19.12       Expenses; Indemnity

 

(a)           Borrower covenants and agrees to pay or, if
Borrower fails to pay, to reimburse, Lender upon receipt of written notice from
Lender for all reasonable out-of-pocket costs and expenses (including
reasonable attorneys’ fees and disbursements), except as may be otherwise
expressly provided in Article XIV or elsewhere in this Agreement or the
Loan Documents, incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of the Loan Documents (other than this
Agreement and the documents executed in connection with the resizing of the
Combined Loans concurrently herewith) and the consummation of the transactions
contemplated hereby and thereby (other than such resizing) and all the costs of
furnishing all opinions by counsel for Borrower (excluding any opinions
requested by Lender pursuant to this Agreement in conjunction with such
resizing); (ii) Lender’s ongoing performance of and compliance with all
agreements and conditions contained in this Agreement and the other 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, 

 

160

 

amendments, waivers or other modifications to this Agreement and the
other Loan Documents and any other documents or matters as required herein or
under the other Loan Documents; (iv) securing Borrower’s compliance with
any requests made pursuant to the provisions of this Agreement; (v) the
filing and recording fees and expenses, mortgage recording taxes, title
insurance and reasonable fees and expenses of counsel for providing to Lender
all required legal opinions, and other similar expenses incurred in creating
and perfecting the Lien in favor of Lender pursuant to this Agreement and the
other 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
Borrower, this Agreement, the other Loan Documents, the Property, or any other security
given for the Loan; (vii) enforcing any obligations of or collecting any
payments due from Borrower under this Agreement, the other Loan Documents or
with respect to 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; provided, however, that
Borrower shall not be liable for the payment of any such costs and expenses to
the extent the same arise by reason of the gross negligence, illegal acts,
fraud or willful misconduct of Lender. Any cost and expenses due and payable to
Lender may be paid from any amounts in the Holding Account subject to the
provisions of Section 3.1.10(a).

 

(b)           Subject to the non-recourse provisions of Section 18.1,
Borrower shall protect, indemnify and save harmless Lender, and all officers,
directors, stockholders, members, partners, employees, managers, 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 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 Lender or its
designee of a deed-in-lieu of foreclosure with respect to the Property, or (ii) an
Indemnified Party or its designee taking possession or control of the Property
or (iii) the foreclosure of the Security Instruments, 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 Property):  (1) ownership of Borrower’s interest in
the Property, or any interest therein, or receipt of any Rents 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 Lender and any claim the insurance as to
which is inadequate, (4) any Default under this Agreement or any of the
other Loan Documents or any failure on the part of 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 Borrower or any of its 

 

161

 

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 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 the
Security Instruments.  In case any
action, suit or proceeding is brought against the Indemnified Parties by reason
of any such occurrence, Borrower shall at Borrower’s expense resist and defend
such action, suit or proceeding or will cause the same to be resisted and
defended by counsel at Borrower’s reasonable expense for the insurer of the
liability or by counsel designated by Borrower (unless reasonably disapproved
by Lender promptly after Lender has been notified of such counsel); provided,
however, that nothing herein shall compromise the right of Lender (or any
Indemnified Party) to appoint its own counsel at Borrower’s expense for its
defense with respect to any action which in its reasonable opinion presents a
conflict or potential conflict between Lender or such Indemnified Party and
Borrower that would make such separate representation advisable; provided
further that if Lender or such Indemnified Party shall have appointed separate
counsel pursuant to the foregoing, Borrower shall not be responsible for the
expense of additional separate counsel of any Indemnified Party or Lender
unless in the reasonable opinion of Lender a conflict or potential conflict
exists between such Indemnified Party and Lender.  So long as Borrower is resisting and
defending such action, suit or proceeding as provided above in a prudent and
commercially reasonable manner, Lender and the Indemnified Parties shall not be
entitled to settle such action, suit or proceeding without 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 Lender agrees that it will not settle any such action, suit or proceeding
without the consent of Borrower; provided, however, that if Borrower is not
diligently defending such action, suit or proceeding in a prudent and
commercially reasonable manner as provided above, and Lender has provided
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, 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 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 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 Lender’s interest in and to this Agreement, the Notes and the other
Loan Documents shall take the same free and clear of all offsets, counterclaims
or defenses which are unrelated to such documents which Borrower may otherwise
have against any assignor of such documents, and no such unrelated counterclaim
or defense shall be interposed or asserted by Borrower in any action or
proceeding brought by any 

 

162

 

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 Borrower.

 

19.15       Liability of
Assignees of Lender.  No assignee of
Lender shall have any personal liability, directly or indirectly, under or in
connection with this Agreement or any other Loan Document or any amendment or
amendments hereto made at any time or times, heretofore or hereafter, any
different than the liability of 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, 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
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)           Borrower and Lender intend that the relationships created hereunder and
under the other 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 Borrower and Lender nor to grant Lender any interest in
the Property other than that of mortgagee, beneficiary or lender.

 

(b)           This Agreement and the other Loan Documents are solely for the benefit of
Lender and Borrower and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lender and 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 Lender to make the Loan hereunder
are imposed solely and exclusively for the benefit of 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 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 Lender if, in Lender’s sole discretion, 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, Borrower, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s
members and others with interests in Borrower and of the Property, and agrees
not to assert any right under any laws pertaining to the marshalling of assets,
the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of the Property for the collection of the Indebtedness without any prior or 

 

163

 

different resort for collection or of the right of Lender to the
payment of the Indebtedness out of the net proceeds of the Property in
preference to every other claimant whatsoever.

 

19.19       Waiver of
Counterclaim and other Actions. 
Borrower hereby expressly and unconditionally waives, in connection with
any suit, action or proceeding brought by Lender on this Agreement, the Notes,
any Security Instrument or any 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 Lender on
this Agreement, the Notes, any Security Instrument or any 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 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 Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. 
Borrower acknowledges that, with respect to the Loan, 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
Lender or any parent, subsidiary or Affiliate of Lender.  Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the 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
Lender of any equity interest any of them may acquire in Borrower, and Borrower
hereby irrevocably waives the right to raise any defense or take any action on
the basis of the foregoing with respect to Lender’s exercise of any such rights
or remedies.  Borrower acknowledges that
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 Borrower or its Affiliates.

 

19.21       Prior Agreements.  This Agreement and the other 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 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.

 

[NO FURTHER
TEXT ON THIS PAGE]

 

164

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  FCP PROPCO LLC, a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  M. Friel

  
	
   

  	
  Name:
  Thomas M. Friel

  
	
   

  	
  Title:
  Authorized Signatory

  

 

 

[Lender’s
signature appears on following page]

 

 

Borrower’s
Execution Page

 

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GERMAN AMERICAN CAPITAL

  CORPORATION, a Maryland corporation, on 

  behalf of the holders of the Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Beacham

  
	
   

  	
   

  	
  Name: John Beacham

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey E. Paige

  
	
   

  	
   

  	
  Name: Jeffrey E. Paige

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., a
  national 

  banking association, on behalf of the holders of the 

  Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Mesard

  
	
   

  	
   

  	
  Name: Michael Mesard

  
	
   

  	
   

  	
  Title: Executive Director

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