Document:

EXHIBIT 4.2

 

AMENDED AND
RESTATED MEZZANINE LOAN AND SECURITY AGREEMENT

(FIRST MEZZANINE)

 

 

Dated as of March 19, 2008

 

 

Among

 

 

FCP
MEZZCO BORROWER I, LLC

 

as
Mezzanine Borrower

 

 

and

 

 

GERMAN
AMERICAN CAPITAL CORPORATION

 

and

 

JPMORGAN
CHASE BANK, N.A.,

 

on behalf of
the holders of the Mezzanine Notes,

 

 

as
Mezzanine Lender

 

 

TABLE OF
CONTENTS

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
   

  	
  10

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  	
  10

  
	
   

  	
  1.2

  	
  Principles of Construction

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  GENERAL
  TERMS

  	
   

  	
  40

  
	
   

  	
  2.1

  	
  Loan; Disbursement to
  Mezzanine Borrower

  	
   

  	
  40

  
	
   

  	
   

  	
  2.1.1

  	
  The Loan

  	
   

  	
  40

  
	
   

  	
   

  	
  2.1.2

  	
  Disbursement to Mezzanine
  Borrower

  	
   

  	
  40

  
	
   

  	
   

  	
  2.1.3

  	
  The
  Mezzanine Notes, Pledge and Mezzanine Loan Documents

  	
   

  	
  40

  
	
   

  	
   

  	
  2.1.4

  	
  Use
  of Proceeds

  	
   

  	
  40

  
	
   

  	
  2.2

  	
  Interest; Loan Payments; Late
  Payment Charge

  	
   

  	
  41

  
	
   

  	
   

  	
  2.2.1

  	
  Payment
  of Principal and Interest

  	
   

  	
  41

  
	
   

  	
   

  	
  2.2.2

  	
  Method
  and Place of Payment

  	
   

  	
  41

  
	
   

  	
   

  	
  2.2.3

  	
  Late
  Payment Charge

  	
   

  	
  41

  
	
   

  	
   

  	
  2.2.4

  	
  Usury
  Savings

  	
   

  	
  42

  
	
   

  	
  2.3

  	
  Prepayments

  	
   

  	
  42

  
	
   

  	
   

  	
  2.3.1

  	
  Mandatory
  Prepayments

  	
   

  	
  42

  
	
   

  	
   

  	
  2.3.2

  	
  Prepayments
  After Event of Default; Application of Amounts Paid

  	
   

  	
  42

  
	
   

  	
   

  	
  2.3.3

  	
  Release
  of Collateral upon Repayment of Loan in Full

  	
   

  	
  43

  
	
   

  	
   

  	
  2.3.4

  	
  Release of Individual
  Properties

  	
   

  	
  43

  
	
   

  	
   

  	
  2.3.5

  	
  Substitution of Properties.

  	
   

  	
  46

  
	
   

  	
   

  	
  2.3.6

  	
  Provisions Relating to
  Individual Properties That Go Dark

  	
   

  	
  52

  
	
   

  	
   

  	
  2.3.7

  	
  Excess Account Collateral

  	
   

  	
  52

  
	
   

  	
   

  	
  2.3.8

  	
  Reserve Requirements

  	
   

  	
  53

  
	
   

  	
   

  	
  2.3.9

  	
  Release of Unimproved Parcels

  	
   

  	
  54

  
	
   

  	
  2.4

  	
  Regulatory Change; Taxes

  	
   

  	
  54

  
	
   

  	
   

  	
  2.4.1

  	
  Increased
  Costs

  	
   

  	
  55

  
	
   

  	
   

  	
  2.4.2

  	
  Special
  Taxes

  	
   

  	
  55

  
	
   

  	
   

  	
  2.4.3

  	
  Other
  Taxes

  	
   

  	
  55

  
	
   

  	
   

  	
  2.4.4

  	
  Indemnity

  	
   

  	
  56

  
	
   

  	
   

  	
  2.4.5

  	
  Change
  of Office

  	
   

  	
  56

  
	
   

  	
   

  	
  2.4.6

  	
  Survival

  	
   

  	
  56

  
	
   

  	
  2.5

  	
  Conditions Precedent to
  Closing

  	
   

  	
  56

  
	
   

  	
   

  	
  2.5.1

  	
  Representations
  and Warranties; Compliance with Conditions

  	
   

  	
  56

  
	
   

  	
   

  	
  2.5.2

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

  	
   

  	
  56

  
	
   

  	
   

  	
  2.5.3

  	
  Delivery
  of Organizational Documents

  	
   

  	
  58

  
	
   

  	
   

  	
  2.5.4

  	
  Counsel
  Opinions

  	
   

  	
  58

  
	
   

  	
   

  	
  2.5.5

  	
  Consummation
  of the Merger

  	
   

  	
  59

  
	
   

  	
   

  	
  2.5.6

  	
  Payments

  	
   

  	
  59

  
	
   

  	
   

  	
  2.5.7

  	
  Transaction
  Costs

  	
   

  	
  59

  
	
   

  	
   

  	
  2.5.8

  	
  Material
  Adverse Effect

  	
   

  	
  60

  

 

 

	
   

  	
   

  	
  2.5.9

  	
  Control

  	
   

  	
  60

  
	
   

  	
   

  	
  2.5.10

  	
  Insolvency

  	
   

  	
  60

  
	
   

  	
   

  	
  2.5.11

  	
  Master Lease and Individual Property Subleases

  	
   

  	
  60

  
	
   

  	
   

  	
  2.5.12

  	
  Equity
  Contribution

  	
   

  	
  60

  
	
   

  	
   

  	
  2.5.13

  	
  Existing Indebtedness

  	
   

  	
  60

  
	
   

  	
   

  	
  2.5.14

  	
  Ground Lease and Fee Mortgagee Estoppels

  	
   

  	
  61

  
	
   

  	
   

  	
  2.5.15

  	
  Equity and Real Property Transfer Documents

  	
   

  	
  61

  
	
   

  	
   

  	
  2.5.16

  	
  No Competing
  Financing

  	
   

  	
  61

  
	
   

  	
   

  	
  2.5.17

  	
  Approvals

  	
   

  	
  61

  
	
   

  	
   

  	
  2.5.18

  	
  Searches

  	
   

  	
  62

  
	
   

  	
  2.6

  	
  [Reserved]

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  CASH
  MANAGEMENT

  	
   

  	
  62

  
	
   

  	
  3.1

  	
  Cash Management

  	
   

  	
  62

  
	
   

  	
   

  	
  3.1.1

  	
  Establishment of Accounts

  	
   

  	
  62

  
	
   

  	
   

  	
  3.1.2

  	
  Pledge of Account Collateral (First Mezzanine)

  	
   

  	
  63

  
	
   

  	
   

  	
  3.1.3

  	
  Maintenance
  of Collateral Accounts

  	
   

  	
  63

  
	
   

  	
   

  	
  3.1.4

  	
  Eligible Accounts

  	
   

  	
  64

  
	
   

  	
   

  	
  3.1.5

  	
  Deposits into Sub-Accounts

  	
   

  	
  64

  
	
   

  	
   

  	
  3.1.6

  	
  Monthly Funding

  	
   

  	
  64

  
	
   

  	
   

  	
  3.1.7

  	
  Cash Management Bank (First Mezzanine)

  	
   

  	
  66

  
	
   

  	
   

  	
  3.1.8

  	
  Mezzanine
  Borrower’s Account Representations, Warranties and Covenants

  	
   

  	
  66

  
	
   

  	
   

  	
  3.1.9

  	
  Account Collateral (First Mezzanine) and Remedies

  	
   

  	
  67

  
	
   

  	
   

  	
  3.1.10

  	
  Transfers and Other Liens

  	
   

  	
  68

  
	
   

  	
   

  	
  3.1.11

  	
  Reasonable Care

  	
   

  	
  68

  
	
   

  	
   

  	
  3.1.12

  	
  Mezzanine Lender’s Liability

  	
   

  	
  68

  
	
   

  	
   

  	
  3.1.13

  	
  Continuing Security Interest

  	
   

  	
  69

  
	
   

  	
   

  	
  3.1.14

  	
  Distributions

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  69

  
	
   

  	
  4.1

  	
  Mezzanine Borrower
  Representations

  	
   

  	
  69

  
	
   

  	
   

  	
  4.1.1

  	
  Organization

  	
   

  	
  69

  
	
   

  	
   

  	
  4.1.2

  	
  Proceedings

  	
   

  	
  70

  
	
   

  	
   

  	
  4.1.3

  	
  No Conflicts

  	
   

  	
  70

  
	
   

  	
   

  	
  4.1.4

  	
  Litigation

  	
   

  	
  70

  
	
   

  	
   

  	
  4.1.5

  	
  Agreements

  	
   

  	
  71

  
	
   

  	
   

  	
  4.1.6

  	
  Title to Property and Assets

  	
   

  	
  71

  
	
   

  	
   

  	
  4.1.7

  	
  No Bankruptcy Filing

  	
   

  	
  72

  
	
   

  	
   

  	
  4.1.8

  	
  Full and Accurate Disclosure

  	
   

  	
  72

  
	
   

  	
   

  	
  4.1.9

  	
  Ownership Interests

  	
   

  	
  72

  
	
   

  	
   

  	
  4.1.10

  	
  No Plan Assets

  	
   

  	
  72

  
	
   

  	
   

  	
  4.1.11

  	
  Compliance

  	
   

  	
  73

  
	
   

  	
   

  	
  4.1.12

  	
  Financial Information

  	
   

  	
  73

  
	
   

  	
   

  	
  4.1.13

  	
  Condemnation

  	
   

  	
  73

  
	
   

  	
   

  	
  4.1.14

  	
  Federal
  Reserve Regulations

  	
   

  	
  74

  
	
   

  	
   

  	
  4.1.15

  	
  Utilities and Public Access

  	
   

  	
  74

  

 

2

 

	
   

  	
   

  	
  4.1.16

  	
  Not a Foreign Person

  	
   

  	
  74

  
	
   

  	
   

  	
  4.1.17

  	
  Setoff, Etc

  	
   

  	
  74

  
	
   

  	
   

  	
  4.1.18

  	
  Representations
  and Warranties in the Loan Documents (Mortgage)

  	
   

  	
  74

  
	
   

  	
   

  	
  4.1.19

  	
  [Reserved.]

  	
   

  	
  74

  
	
   

  	
   

  	
  4.1.20

  	
  Enforceability

  	
   

  	
  74

  
	
   

  	
   

  	
  4.1.21

  	
  [Reserved.]

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.22

  	
  Insurance

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.23

  	
  Use of Property

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.24

  	
  Certificate of Occupancy; Licenses

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.25

  	
  Flood Zone

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.26

  	
  Physical Condition

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.27

  	
  Boundaries

  	
   

  	
  76

  
	
   

  	
   

  	
  4.1.28

  	
  Subleases

  	
   

  	
  76

  
	
   

  	
   

  	
  4.1.29

  	
  Filing and Recording Taxes

  	
   

  	
  76

  
	
   

  	
   

  	
  4.1.30

  	
  Single Purpose Entity/Separateness

  	
   

  	
  76

  
	
   

  	
   

  	
  4.1.31

  	
  [Reserved.]

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.32

  	
  Illegal Activity

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.33

  	
  No Change in Facts or Circumstances; Disclosure

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.34

  	
  [Reserved.]

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.35

  	
  Tax Filings

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.36

  	
  Solvency/Fraudulent Conveyance

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.37

  	
  Investment Company Act

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.38

  	
  Interest Rate Cap Agreement (First Mezzanine)

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.39

  	
  Labor

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.40

  	
  Brokers

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.41

  	
  No Other Debt

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.42

  	
  Taxpayer Identification Number

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.43

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

  	
   

  	
  79

  
	
   

  	
   

  	
  4.1.44

  	
  Merger Agreement

  	
   

  	
  79

  
	
   

  	
   

  	
  4.1.45

  	
  Rights of First Refusal or First Offer to Lease or Purchase

  	
   

  	
  79

  
	
   

  	
  4.2

  	
  Survival of Representations

  	
   

  	
  79

  
	
   

  	
  4.3

  	
  Mezzanine Borrower’s
  Knowledge

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  MEZZANINE
  BORROWER COVENANTS

  	
   

  	
  80

  
	
   

  	
  5.1

  	
  Affirmative Covenants

  	
   

  	
  80

  
	
   

  	
   

  	
  5.1.1

  	
  Performance by Mezzanine Borrower

  	
   

  	
  80

  
	
   

  	
   

  	
  5.1.2

  	
  Existence; Compliance with Legal Requirements; Insurance

  	
   

  	
  80

  
	
   

  	
   

  	
  5.1.3

  	
  Litigation

  	
   

  	
  81

  
	
   

  	
   

  	
  5.1.4

  	
  Single Purpose Entity

  	
   

  	
  81

  
	
   

  	
   

  	
  5.1.5

  	
  Consents

  	
   

  	
  82

  
	
   

  	
   

  	
  5.1.6

  	
  Access to Property

  	
   

  	
  82

  
	
   

  	
   

  	
  5.1.7

  	
  Notice of Default

  	
   

  	
  82

  
	
   

  	
   

  	
  5.1.8

  	
  Cooperate in Legal Proceedings

  	
   

  	
  83

  
	
   

  	
   

  	
  5.1.9

  	
  [Reserved.]

  	
   

  	
  83

  
	
   

  	
   

  	
  5.1.10

  	
  Insurance

  	
   

  	
  83

  

 

3

 

	
   

  	
   

  	
  5.1.11

  	
  Further Assurances; Separate Notes; Loan Resizing

  	
   

  	
  83

  
	
   

  	
   

  	
  5.1.12

  	
  Mortgage Taxes

  	
   

  	
  84

  
	
   

  	
   

  	
  5.1.13

  	
  Operation

  	
   

  	
  84

  
	
   

  	
   

  	
  5.1.14

  	
  Business and Operations

  	
   

  	
  85

  
	
   

  	
   

  	
  5.1.15

  	
  Title to the Collateral

  	
   

  	
  85

  
	
   

  	
   

  	
  5.1.16

  	
  Costs of Enforcement

  	
   

  	
  85

  
	
   

  	
   

  	
  5.1.17

  	
  Estoppel Statements

  	
   

  	
  85

  
	
   

  	
   

  	
  5.1.18

  	
  Loan Proceeds

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.19

  	
  No Joint Assessment

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.20

  	
  No Further Encumbrances

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.21

  	
  Loan
  (Mortgage) Covenants

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.22

  	
  Master Lease

  	
   

  	
  87

  
	
   

  	
  5.2

  	
  Negative Covenants

  	
   

  	
  89

  
	
   

  	
   

  	
  5.2.1

  	
  Incur Debt

  	
   

  	
  89

  
	
   

  	
   

  	
  5.2.2

  	
  Encumbrances

  	
   

  	
  89

  
	
   

  	
   

  	
  5.2.3

  	
  Engage in Different Business

  	
   

  	
  89

  
	
   

  	
   

  	
  5.2.4

  	
  Make Advances

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.5

  	
  Subdivision

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.6

  	
  Commingle

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.7

  	
  Guarantee Obligations

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.8

  	
  Transfer Assets

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.9

  	
  Amend Organizational Documents

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.10

  	
  Dissolve

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.11

  	
  Bankruptcy

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.12

  	
  ERISA

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.13

  	
  Distributions

  	
   

  	
  90

  
	
   

  	
   

  	
  5.2.14

  	
  Modify Mezzanine Account Agreement

  	
   

  	
  91

  
	
   

  	
   

  	
  5.2.15

  	
  Zoning Reclassification

  	
   

  	
  91

  
	
   

  	
   

  	
  5.2.16

  	
  Change of Principal Place of Business

  	
   

  	
  91

  
	
   

  	
   

  	
  5.2.17

  	
  Debt Cancellation

  	
   

  	
  91

  
	
   

  	
   

  	
  5.2.18

  	
  Misapplication of Funds

  	
   

  	
  91

  
	
   

  	
   

  	
  5.2.19

  	
  Single-Purpose Entity

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE;
  CASUALTY; CONDEMNATION; RESTORATION

  	
   

  	
  91

  
	
   

  	
  6.1

  	
  Insurance Coverage
  Requirements

  	
   

  	
  91

  
	
   

  	
   

  	
  6.1.1

  	
  Insurance
  Proceeds

  	
   

  	
  92

  
	
   

  	
   

  	
  6.1.2

  	
  Restoration
  of Property

  	
   

  	
  92

  
	
   

  	
   

  	
  6.1.3

  	
  Compliance

  	
   

  	
  92

  
	
   

  	
  6.2

  	
  Condemnation

  	
   

  	
  92

  
	
   

  	
  6.3

  	
  Certificates

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  IMPOSITIONS,
  OTHER CHARGES, LIENS AND OTHER ITEMS

  	
   

  	
  94

  
	
   

  	
  7.1

  	
  Mortgage Borrower to Pay
  Impositions and Other Charges

  	
   

  	
  94

  
	
   

  	
  7.2

  	
  No Liens

  	
   

  	
  94

  
	
   

  	
  7.3

  	
  Contest

  	
   

  	
  95

  

 

4

 

	
  VIII.

  	
  TRANSFERS,
  INDEBTEDNESS AND SUBORDINATE LIENS

  	
   

  	
  96

  
	
   

  	
  8.1

  	
  General Restriction on
  Transfers

  	
   

  	
  96

  
	
   

  	
  8.2

  	
  Sale of Building Equipment

  	
   

  	
  96

  
	
   

  	
  8.3

  	
  Immaterial Transfers and
  Easements, etc.

  	
   

  	
  96

  
	
   

  	
  8.4

  	
  [Reserved.]

  	
   

  	
  97

  
	
   

  	
  8.5

  	
  Permitted Equity Transfers

  	
   

  	
  97

  
	
   

  	
  8.6

  	
  Deliveries to Mezzanine
  Lender

  	
   

  	
  98

  
	
   

  	
  8.7

  	
  Loan Assumption

  	
   

  	
  98

  
	
   

  	
  8.8

  	
  Subleases

  	
   

  	
  99

  
	
   

  	
   

  	
  8.8.1

  	
  Master Lease and Existing Subleases

  	
   

  	
  99

  
	
   

  	
   

  	
  8.8.2

  	
  Leasing Conditions

  	
   

  	
  99

  
	
   

  	
   

  	
  8.8.3

  	
  Delivery of New Sublease or Sublease Modification

  	
   

  	
  100

  
	
   

  	
   

  	
  8.8.4

  	
  Sublease Amendments

  	
   

  	
  100

  
	
   

  	
   

  	
  8.8.5

  	
  Security Deposits

  	
   

  	
  100

  
	
   

  	
   

  	
  8.8.6

  	
  No Default Under Subleases

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  INTEREST
  RATE CAP AGREEMENT (FIRST MEZZANINE)

  	
   

  	
  101

  
	
   

  	
  9.1

  	
  Interest Rate Cap Agreement
  (First Mezzanine)

  	
   

  	
  101

  
	
   

  	
  9.2

  	
  Pledge and Collateral Assignment

  	
   

  	
  101

  
	
   

  	
  9.3

  	
  Covenants

  	
   

  	
  101

  
	
   

  	
  9.4

  	
  Powers of Mezzanine Borrower
  Prior to an Event of Default

  	
   

  	
  103

  
	
   

  	
  9.5

  	
  Representations and
  Warranties

  	
   

  	
  103

  
	
   

  	
  9.6

  	
  Payments

  	
   

  	
  104

  
	
   

  	
  9.7

  	
  Remedies

  	
   

  	
  104

  
	
   

  	
  9.8

  	
  Sales of Rate Cap Collateral
  (First Mezzanine)

  	
   

  	
  106

  
	
   

  	
  9.9

  	
  Public Sales Not Possible

  	
   

  	
  107

  
	
   

  	
  9.10

  	
  Receipt of Sale Proceeds

  	
   

  	
  107

  
	
   

  	
  9.11

  	
  Replacement Interest Rate Cap
  Agreement (First Mezzanine)

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  MAINTENANCE
  OF PROPERTY; ALTERATIONS

  	
   

  	
  107

  
	
   

  	
  10.1

  	
  Maintenance of Property

  	
   

  	
  107

  
	
   

  	
  10.2

  	
  Conditions to Alteration

  	
   

  	
  107

  
	
   

  	
  10.3

  	
  Costs of Alteration

  	
   

  	
  108

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  BOOKS AND
  RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

  	
   

  	
  109

  
	
   

  	
  11.1

  	
  Books and Records

  	
   

  	
  109

  
	
   

  	
  11.2

  	
  Financial Statements

  	
   

  	
  110

  
	
   

  	
   

  	
  11.2.1

  	
  Monthly Reports

  	
   

  	
  110

  
	
   

  	
   

  	
  11.2.2

  	
  Quarterly Reports

  	
   

  	
  110

  
	
   

  	
   

  	
  11.2.3

  	
  Annual Reports

  	
   

  	
  111

  
	
   

  	
   

  	
  11.2.4

  	
  Disclosure Restrictions

  	
   

  	
  111

  
	
   

  	
   

  	
  11.2.5

  	
  Capital Expenditures Summaries

  	
   

  	
  111

  
	
   

  	
   

  	
  11.2.6

  	
  Master Lease

  	
   

  	
  112

  
	
   

  	
   

  	
  11.2.7

  	
  Annual Budget; Operating Agreement Annual Budgets

  	
   

  	
  112

  
	
   

  	
   

  	
  11.2.8

  	
  Other
  Information

  	
   

  	
  112

  
	
   

  	
   

  	
  11.2.9

  	
  Proprietary Information

  	
   

  	
  112

  

 

5

 

	
  XII.

  	
  ENVIRONMENTAL
  MATTERS

  	
   

  	
  113

  
	
   

  	
  12.1

  	
  Representations

  	
   

  	
  113

  
	
   

  	
  12.2

  	
  Covenants

  	
   

  	
  114

  
	
   

  	
   

  	
  12.2.1

  	
  Compliance with Environmental Laws

  	
   

  	
  114

  
	
   

  	
   

  	
  12.2.2

  	
  Notices Regarding Environmental Events

  	
   

  	
  114

  
	
   

  	
   

  	
  12.2.3

  	
  Other Notices

  	
   

  	
  114

  
	
   

  	
  12.3

  	
  Environmental Reports

  	
   

  	
  114

  
	
   

  	
  12.4

  	
  Environmental Indemnification

  	
   

  	
  115

  
	
   

  	
  12.5

  	
  Recourse Nature of Certain
  Indemnifications

  	
   

  	
  116

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  THE
  OPERATING AGREEMENTS

  	
   

  	
  116

  
	
   

  	
  13.1

  	
  Operating Agreement
  Representations, Warranties

  	
   

  	
  116

  
	
   

  	
  13.2

  	
  Cure by Mezzanine Lender

  	
   

  	
  117

  
	
   

  	
  13.3

  	
  Option to Renew or Extend the
  Ground Lease

  	
   

  	
  118

  
	
   

  	
  13.4

  	
  Operating Agreement Covenants

  	
   

  	
  118

  
	
   

  	
   

  	
  13.4.1

  	
  Waiver of Interest In New Ground Lease

  	
   

  	
  118

  
	
   

  	
   

  	
  13.4.2

  	
  No Election to Terminate

  	
   

  	
  118

  
	
   

  	
   

  	
  13.4.3

  	
  Notice Prior to Rejection

  	
   

  	
  119

  
	
   

  	
   

  	
  13.4.4

  	
  Mezzanine Lender Right to Perform

  	
   

  	
  119

  
	
   

  	
   

  	
  13.4.5

  	
  Mezzanine Lender Attorney in Fact

  	
   

  	
  119

  
	
   

  	
   

  	
  13.4.6

  	
  Payment of Sums Due Under Operating Agreements

  	
   

  	
  120

  
	
   

  	
   

  	
  13.4.7

  	
  Performance of Covenants

  	
   

  	
  120

  
	
   

  	
   

  	
  13.4.8

  	
  [Reserved

  	
   

  	
  120

  
	
   

  	
   

  	
  13.4.9

  	
  No Modification or Termination

  	
   

  	
  120

  
	
   

  	
   

  	
  13.4.10

  	
  Notices of Default

  	
   

  	
  120

  
	
   

  	
   

  	
  13.4.11

  	
  Delivery of Information

  	
   

  	
  120

  
	
   

  	
   

  	
  13.4.12

  	
  No Subordination

  	
   

  	
  121

  
	
   

  	
   

  	
  13.4.13

  	
  Further Assurances

  	
   

  	
  121

  
	
   

  	
   

  	
  13.4.14

  	
  Estoppel Certificates

  	
   

  	
  121

  
	
   

  	
   

  	
  13.4.15

  	
  Common Area/Common Elements Insurance

  	
   

  	
  121

  
	
   

  	
  13.5

  	
  Mezzanine Lender Right to
  Participate

  	
   

  	
  121

  
	
   

  	
  13.6

  	
  No Liability

  	
   

  	
  121

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
  [RESERVED]

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS

  	
   

  	
  122

  
	
   

  	
  15.1

  	
  Assignment and Acceptance

  	
   

  	
  122

  
	
   

  	
  15.2

  	
  Effect of Assignment and
  Acceptance

  	
   

  	
  122

  
	
   

  	
  15.3

  	
  Content

  	
   

  	
  122

  
	
   

  	
  15.4

  	
  Register

  	
   

  	
  123

  
	
   

  	
  15.5

  	
  Substitute Mezzanine Notes

  	
   

  	
  123

  
	
   

  	
  15.6

  	
  Participations

  	
   

  	
  124

  
	
   

  	
  15.7

  	
  Disclosure of Information

  	
   

  	
  124

  
	
   

  	
  15.8

  	
  Security Interest in Favor of
  Federal Reserve Bank

  	
   

  	
  124

  

 

6

 

	
  XVI.

  	
  [RESERVED]

  	
   

  	
  125

  
	
   

  	
   

  	
   

  	
   

  
	
  XVII.

  	
  DEFAULTS

  	
   

  	
  125

  
	
   

  	
  17.1

  	
  Event of Default

  	
   

  	
  125

  
	
   

  	
  17.2

  	
  Remedies.

  	
   

  	
  130

  
	
   

  	
  17.3

  	
  Remedies Cumulative; Waivers

  	
   

  	
  131

  
	
   

  	
  17.4

  	
  Costs of Collection

  	
   

  	
  132

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVIII.

  	
  SPECIAL
  PROVISIONS

  	
   

  	
  132

  
	
   

  	
  18.1

  	
  Exculpation

  	
   

  	
  132

  
	
   

  	
   

  	
  18.1.1

  	
  Exculpated Parties

  	
   

  	
  132

  
	
   

  	
   

  	
  18.1.2

  	
  Carveouts From Non-Recourse Limitations

  	
   

  	
  133

  
	
   

  	
  18.2

  	
  Pro Rata Share

  	
   

  	
  135

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIX.

  	
  MISCELLANEOUS

  	
   

  	
  135

  
	
   

  	
  19.1

  	
  Survival

  	
   

  	
  135

  
	
   

  	
  19.2

  	
  Mezzanine Lender’s Discretion

  	
   

  	
  136

  
	
   

  	
  19.3

  	
  Governing Law

  	
   

  	
  136

  
	
   

  	
  19.4

  	
  Modification; Waiver in
  Writing

  	
   

  	
  137

  
	
   

  	
  19.5

  	
  Delay Not a Waiver

  	
   

  	
  137

  
	
   

  	
  19.6

  	
  Notices

  	
   

  	
  137

  
	
   

  	
  19.7

  	
  Trial By Jury

  	
   

  	
  139

  
	
   

  	
  19.8

  	
  Headings

  	
   

  	
  139

  
	
   

  	
  19.9

  	
  Severability

  	
   

  	
  140

  
	
   

  	
  19.10

  	
  Preferences

  	
   

  	
  140

  
	
   

  	
  19.11

  	
  Waiver of Notice

  	
   

  	
  140

  
	
   

  	
  19.12

  	
  Expenses; Indemnity

  	
   

  	
  140

  
	
   

  	
  19.13

  	
  Exhibits and Schedules
  Incorporated

  	
   

  	
  142

  
	
   

  	
  19.14

  	
  Offsets, Counterclaims and
  Defenses

  	
   

  	
  142

  
	
   

  	
  19.15

  	
  Liability of Assignees of
  Mezzanine Lender

  	
   

  	
  143

  
	
   

  	
  19.16

  	
  No Joint Venture or
  Partnership; No Third Party Beneficiaries

  	
   

  	
  143

  
	
   

  	
  19.17

  	
  Publicity

  	
   

  	
  143

  
	
   

  	
  19.18

  	
  Waiver of Marshalling of
  Assets

  	
   

  	
  143

  
	
   

  	
  19.19

  	
  Waiver of Counterclaim and
  other Actions

  	
   

  	
  144

  
	
   

  	
  19.20

  	
  Conflict; Construction of
  Documents; Reliance

  	
   

  	
  144

  
	
   

  	
  19.21

  	
  Prior Agreements

  	
   

  	
  144

  
	
   

  	
  19.22

  	
  Counterparts

  	
   

  	
  145

  
	
   

  	
  19.23

  	
  Direction of Mortgage
  Borrower with Respect to the Property

  	
   

  	
  145

  

 

7

 

EXHIBITS AND
SCHEDULES

 

	
  EXHIBIT A

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT B

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT C

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT D

  	
   

  	
  FORM OF ACKNOWLEDGEMENT

  
	
  EXHIBIT E

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT F

  	
   

  	
  FORM OF MASTER LEASE

  
	
  EXHIBIT G

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT H

  	
   

  	
  FORM OF GROUND LESSOR
  ESTOPPEL CERTIFICATE

  
	
  EXHIBIT I

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT J

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT K

  	
   

  	
  MEZZANINE BORROWER
  ORGANIZATIONAL STRUCTURE

  
	
  EXHIBIT L

  	
   

  	
  INTEREST RATE CAP AGREEMENT
  (FIRST MEZZANINE)

  
	
  EXHIBIT M

  	
   

  	
  FORM OF ASSIGNMENT AND
  ACCEPTANCE AGREEMENT

  
	
  EXHIBIT N

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT O

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT P

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT Q

  	
   

  	
  RATE CAP COUNTERPARTY
  ACKNOWLEDGMENT

  
	
  EXHIBIT R

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT S

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT T

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT U

  	
   

  	
  FORM OF MEMBER POWER

  
	
  EXHIBIT V

  	
   

  	
  PERMITTED SETTLEMENT AMOUNTS

  
	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
   

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

  
	
  SCHEDULE II

  	
   

  	
  LITIGATION SCHEDULE

  
	
  SCHEDULE III

  	
   

  	
  DEFERRED MAINTENANCE AND
  REMEDIATION

  
	
  SCHEDULE IV

  	
   

  	
  UNIMPROVED PARCELS

  
	
  SCHEDULE 4.1.11

  	
   

  	
  COMPLIANCE

  
	
  SCHEDULE VI

  	
   

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

  
	
  SCHEDULE VII

  	
   

  	
  EXISTING MATTERS OF RECORD

  
	
  SCHEDULE VIII

  	
   

  	
  RESERVED

  
	
  SCHEDULE IX

  	
   

  	
  INTERIM SUCCESSOR PRINCIPAL CONTROL PERSONS

  

 

8

 

AMENDED AND RESTATED MEZZANINE LOAN AND
SECURITY AGREEMENT

(FIRST MEZZANINE)

 

THIS AMENDED
AND RESTATED MEZZANINE 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 MEZZCO BORROWER I, LLC, a
Delaware limited liability company (“Mezzanine Borrower”) having an
office at 1505 South Pavilion Center Drive, Las Vegas, Nevada 89135, GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation (“GACC” and
together with its successors and assigns, “Mezzanine Noteholder I”),
having an address at 60 Wall Street, New York, New York 10005, and JPMORGAN
CHASE BANK, N.A., a national banking association, having an address at 270 Park
Avenue, New York, New York 10017 (“JPMC” and together with its
successors and assigns, “Mezzanine Noteholder II”) (Mezzanine Noteholder
I and Mezzanine Noteholder II, individually or collectively as the context
indicates, “Mezzanine Lender”).

 

RECITALS:

 

WHEREAS, Mezzanine Borrower and Mezzanine Lender entered into a
Mezzanine Loan and Security Agreement, dated as of November 7, 2007 (the “Original
Agreement”) pursuant to which Mezzanine Lender made a loan in the original
principal amount of $150,000,000 (the “Original Loan”) to Mezzanine
Borrower;

 

WHEREAS, Mortgage Lender (as hereinafter defined), Mezzanine Lender and
Current Junior Mezzanine Lenders (as hereinafter defined) have determined to
decrease the principal amount of the Loan (Mortgage) (as hereinafter defined)
and correspondingly increase the principal amounts of the Original Loan and the
Junior Mezzanine Loans (as hereinafter defined);

 

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

 

9

 

I.              DEFINITIONS; PRINCIPLES OF
CONSTRUCTION

 

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

 

“80% Trigger Approval Period” shall
mean any period (a) commencing on the Payment Date following the
conclusion of any two (2) consecutive Fiscal Quarters for which the LCR is
less than 80% of Closing Date LCR and (b) ending on the day immediately
preceding the Payment Date following the conclusion of any two (2) consecutive
Fiscal Quarters for which the LCR exceeds 80% of Closing Date LCR, provided
that no Noticed Default or Event of Default is then continuing and that
Mezzanine 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 Mezzanine 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 Collateral (First Mezzanine)” 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 Mezzanine Lender to the Contrary” shall mean the actual
receipt, prior to the Closing Date, by Todd Sammann and Michael Mesard of an
email, fax, memorandum, letter or other written statement from any of Mezzanine
Borrower, Sponsor, or Mezzanine Lender’s counsel expressly disclosing to
Mezzanine Lender a state of facts contrary to a representation made by
Mezzanine Borrower in Section 4.1.

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

“Amendment
Effective Date” means March 19, 2008.

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Certificate”
shall mean the certificate evidencing the Ownership Interests.

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

“Combined Release Price” shall mean the product of (a) the
Combined Allocated Loan Amount for the Release Property and (b) the
applicable Combined Release Price Percentage(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.

 

13

 

“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) Mortgage
Borrower’s acquisition of the Property from subsidiaries of Master Lessee and
the various equity transfers and merger related to such acquisition, (iv) the
leasing or subleasing of the Property from Mortgage Borrower to Master Lessee
pursuant to the Master Lease, (v) the execution and delivery of the Mortgage
Loan Documents, the Mezzanine Loan Documents, and Junior Mezzanine Loan
Documents, Mortgage Borrower’s, Mezzanine Borrower’s and Junior Mezzanine
Borrower’s performance thereunder, the recordation of the Security Instruments,
the filing of the UCC financing statements evidencing the Pledge, and the
exercise of any remedies by Mortgage Lender, Mezzanine Lender or any Junior
Mezzanine Lender, and (vi) following Mortgage Lender’s or its designee’s
succession in title to any Property, the transfer of any such Property by
Mortgage Lender or such designee.

 

“Control” shall mean (i) the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by contract
or otherwise (provided that the granting of major decision veto
rights including, without limitation, with respect to decisions regarding the
sale of material assets, the incurrence or refinancing of debt, the institution
of insolvency, bankruptcy or other 

 

14

 

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 (First Mezzanine), JPMorgan Chase Bank, N.A., and with respect to any
Replacement Interest Rate Cap Agreement (First Mezzanine), any substitute
Approved Counterparty.

 

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

 

“Current Junior Mezzanine Borrowers” shall mean, collectively,
Second Mezzanine Borrower, Third Mezzanine Borrower and Fourth Mezzanine
Borrower.

 

“Current Junior Mezzanine Lenders” shall mean, collectively,
Second Mezzanine Lender, Third Mezzanine Lender and Fourth Mezzanine Lender.

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“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.

 

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

 

17

 

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

 

“Fitch” shall mean Fitch Ratings Inc.

 

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

 

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

 

“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 Mortgage Borrower.

 

 “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 Notes” shall mean 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 Mezzanine Noteholder I, 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 to Mezzanine Noteholder I,  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 Mezzanine Noteholder II, and 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 Mezzanine Noteholder II, as the same
may be amended, restated, replaced, supplemented, substituted, severed, or
otherwise modified from time to time.

 

“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 Mortgage Borrower and Mortgage Lender with respect to conditions precedent
to funding the Loan, and Mortgage Loan and the Junior Mezzanine Loans.

 

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

 

18

 

regulation of
gaming or gaming activities in any jurisdiction, including within the State of
Nevada, specifically, the Nevada Gaming Commission, the Nevada State Gaming
Control Board, and applicable local authorities.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Guarantors” shall mean Holdco, FP and VoteCo.

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Impositions” shall mean all taxes (including all ad valorem,
sales (including those imposed on lease rentals), use, single business, gross
receipts, value added, intangible transaction, privilege or license or similar
taxes), governmental assessments (including all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
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) Mezzanine
Borrower or Mortgage Borrower (including all income, franchise, single business
or other taxes imposed on Mezzanine Borrower or Mortgage Borrower for the
privilege of doing business in the jurisdiction in which the Property is
located), (b) the Property, or any other collateral delivered or pledged
to Mortgage Lender or Mezzanine Lender in connection with the Mortgage Loan or
Loan, or any part thereof, or any Rents or Receipts therefrom or any estate,
right, title or interest therein, or (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with
the Property or the leasing or use of all or any part thereof.  Nothing contained in this Agreement shall be
construed to require Mezzanine Borrower or Mortgage Borrower to 

 

20

 

pay any tax, assessment, levy or charge imposed on (i) Master
Lessee, (ii) any Tenant or (iii) Mortgage Lender or Mezzanine Lender
in the nature of a capital levy, estate, inheritance, succession, income or net
revenue tax.

 

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

 

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

 

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

 

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

 

“Independent”
shall mean, when used with respect to any Person, a Person who: (i) does
not have any direct financial interest or any material indirect financial
interest in any Borrower Party or in any Affiliate of any Borrower Party, (ii) is
not connected with any Borrower Party or any Affiliate of any Borrower Party as
an officer, employee, promoter, underwriter, trustee, partner, member, manager,
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.

 

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

 

“Independent Director,” “Independent Manager,” or “Independent
Member” shall mean a Person who is not and will not be while serving, and
has not been in the five (5) years preceding the 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 Mezzanine Borrower or its Affiliates (provided that
Mezzanine Borrower may have the same Independent Directors, Independent
Managers or Independent Members as Mortgage Borrower or any Junior Mezzanine
Borrower), (ii) a customer, supplier or other Person who derives more than
1% of its purchases or revenues from its activities with Mezzanine Borrower or
its Affiliates, (iii) a direct or indirect legal or beneficial owner in
any entity referred to in (i) or (ii) above or any of its Affiliates,
(iv) a member of the immediate family of any member, manager, officer,
director, employee, attorney, customer, supplier or other Person referred to in
(i), (ii) or (iii) above, or (v) a person Controlling or under
the common Control of anyone listed in (i) through (iv) above.  A Person that otherwise satisfies the
foregoing shall not be disqualified from serving as an Independent Director or
Independent Manager or Independent Member if such individual is at the time of
initial appointment, or at any time while serving as such, is an Independent
Director or Independent Manager or Independent Member, as applicable, of a
Single Purpose Entity affiliated with Mezzanine Borrower.

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)               Remaining Term.  The remaining term of the Interest Rate Cap
Agreement (First Mezzanine) 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 Mezzanine Loan Documents;

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

“Land Loan” shall mean indebtedness incurred
pursuant to a senior secured delayed-draw term loan in an aggregate amount 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 Mortgage Lender for
the applicable period, in which:

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

“License and Reservation Service Agreement” shall mean the License
and Reservation Service Agreement regarding the branding rights, reservation
system and primary customer data base, by and between Mortgage Borrower and
Master Lessee, dated as of 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 Mortgage Borrower, Mezzanine Borrower, Junior Mezzanine
Borrowers, the Collateral, the Property, any portion thereof or any interest
therein, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, the filing of any financing statement, and the filing
of mechanic’s, materialmen’s and other similar liens and encumbrances.

 

“Loan” shall mean this $200,000,000 mezzanine loan, comprised of
(x) the loan in the principal amount of $150,000,000 made by Mezzanine
Lender to Mezzanine Borrower pursuant to this Agreement and (y) the
assumption by Mezzanine Borrower pursuant to the Mezzanine Loan Documents of
$50,000,000 in principal amount initially borrowed by Mortgage Borrower.

 

“Loan Agreement (Mortgage)” shall mean the Amended and Restated
Loan and Security Agreement, dated as of the Amendment Effective Date, between
FCP PROPCO, LLC, a Delaware limited liability company, as borrower, and GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation and JPMORGAN CHASE BANK,
N.A., a national banking association, collectively as the initial lenders, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

 

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

 

25

 

“Loan (Mortgage)” or “Mortgage Loan” shall mean the loan
in the amount of $1,800,000,000 made by Mortgage Lender to Mortgage Borrower
pursuant to the Loan Agreement (Mortgage).

 

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

 

“Master Lease” shall mean that certain Master Lease Agreement for the Property by and between Mortgage Borrower, as lessor,
and Master Lessee, as lessee, dated as of November 7, 2007, as more
particularly described in Section 5.1.22.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

“Mezzanine Account Agreement” shall mean the Account and Control
Agreement (First Mezzanine), dated as of November 7, 2007, among
Collateral Agent, Mezzanine Borrower and Cash Management Bank.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

“Mezzanine Notes” shall mean, collectively, (a) that
certain Amended and Restated First Mezzanine Note A-1, dated as of March 19,
2008, made by Mezzanine Borrower, as maker, in favor of Mezzanine 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 Mezzanine Borrower, as maker, in favor of Mezzanine Noteholder II, as
payee, in the principal amount of $75,000,000, as the same may be amended,
restated, replaced, supplemented, substituted, severed, or otherwise modified
from time to time.

 

“Mezzanine Release Price” shall mean the product
of (a) the Allocated Loan Amount with respect to the Release Property; and
(b) the applicable Combined Release Price Percentage(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.

 

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

 

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

 

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

 

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

 

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

 

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

 

“New Property Owner” shall have the meaning set forth in Section 8.7.

 

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

 

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

 

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

 

“Non-Disqualification Opinion”  shall mean an opinion of outside tax counsel
reasonably acceptable to the Mortgage Lender or the Rating Agencies to whom
such opinion is addressed that a contemplated action will neither cause any
trust formed as a Real Estate Mortgage Investment Conduit (a “REMIC”)
pursuant to a Securitization to fail to qualify as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code at any
time that 

 

28

 

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.

 

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

 

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

 

“Obligations (Junior Mezzanine)” shall mean the “Obligations
(Second Mezzanine)”, “Obligations (Third Mezzanine)” and “Obligations (Fourth
Mezzanine)” as defined in the  applicable
Junior Mezzanine Loan Agreement, and the “Obligations” of any other Junior
Mezzanine Borrower to its Junior Mezzanine Lender, as defined in the applicable
Junior Mezzanine Loan Agreement.

 

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

 

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

 

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

 

“Omnibus Amendment” shall mean that certain Omnibus
Amendment to Collateral Loan Documents (First Mezzanine), dated as of the
Amendment Effective Date, by and among Mezzanine Borrower, Mezzanine Lender,
and Mortgage Borrower as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

“Permitted Encumbrances” shall mean collectively, (a) the
Liens and security interests created or permitted by the Loan Documents
(Mortgage), (b) all Liens, encumbrances and other matters disclosed in the
Title Policies, (c) Liens, if any, for Impositions imposed by any
Governmental Authority not yet due or delinquent (d) Liens
arising after the 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 

 

30

 

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

 

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

 

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

 

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

 

“Pledge” shall mean that certain Pledge and Security Agreement
(First Mezzanine), dated as of November 7, 2007, from Mezzanine Borrower
to Collateral Agent, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

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

 

“PML” shall mean probable maximum loss.

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

“Proscribed Assignee” shall mean Highland Capital Partners.

 

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

 

“Purchase
and Sale Agreement” shall mean that certain Amended and Restated Purchase
and Sale Agreement, dated as of October 31, 2007, by and among Charleston
Station LLC, Boulder Station, Inc., Palace Station Hotel & Casino, Inc.,
and Sunset Station, Inc., collectively as sellers, FCP Newco, LLC, and the
other parties thereto, as assigned by FCP NewCo, LLC to Mortgage Borrower on or
approximately on the 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 Cap Collateral (First Mezzanine)” shall have the meaning
set forth in Section 9.2.

 

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

 

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

 

33

 

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

 

“Recourse Guaranty (Mezzanine)” shall mean that certain Guaranty
of Recourse Obligations of Mezzanine Borrower, dated as of November 7,
2007, by Guarantors in favor of Mezzanine Lender, as the same may be amended,
supplemented, restated or otherwise modified from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

“Revolving/Term Credit Facility” shall mean that certain Credit
Agreement, dated as of 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 Borrower” shall mean FCP MezzCo Borrower II,
LLC, a Delaware limited liability company.

 

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

 

“Second Mezzanine Loan” shall mean a $175,000,000 mezzanine
loan, comprised of (x) that certain $150,000,000 mezzanine loan, made by
Second Mezzanine Lender to Second Mezzanine Borrower, 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 Mortgage
Borrower.

 

“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 Notes” shall mean 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 Mezzanine
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 Mezzanine 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 the Loan Agreement (Mortgage).

 

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

 

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

 

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

 

35

 

to the terms of this Agreement, the Mezzanine Account Agreement or
otherwise, together with such other powers as are reasonably incidental
thereto.

 

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

 

36

 

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

 

“Special Taxes” shall mean any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, or any liabilities with
respect thereto, including those arising after the 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 Mezzanine Lender, such taxes (including income taxes, franchise taxes and
branch profit taxes) as are imposed on or measured by Mezzanine Lender’s net
income by the United States of America or any Governmental Authority of the
jurisdiction under the laws under which Mezzanine Lender is organized or
maintains a lending office.

 

“SPE Entity” shall mean the Mortgage Borrower, the Mezzanine
Borrower and any Junior Mezzanine Borrower.

 

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

 

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

 

“Strike Price” shall mean
5.77%.

 

37

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Third Mezzanine Loan” shall mean a $150,000,000 mezzanine loan,
comprised of (x) that certain $125,000,000 mezzanine loan, made by Third
Mezzanine Lender to Third Mezzanine 

 

38

 

Borrower and (y) the assumption by Third Mezzanine Borrower
pursuant to the Third Mezzanine Loan Documents of $25,000,000 in principal
amount initially borrowed by Mortgage Borrower.

 

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

 

“Third Mezzanine Notes” shall mean that certain 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 Mezzanine
Noteholder I, 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 Mezzanine Noteholder I, 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 Mezzanine Noteholder II, and 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 Mezzanine Noteholder II, as the same may be amended, restated, replaced,
supplemented, substituted, severed, or otherwise modified from time to time.

 

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

 

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

 

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

 

“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 Mezzanine 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.

 

39

 

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

 

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

 

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

 

II.            GENERAL TERMS

 

2.1           Loan; Disbursement to Mezzanine Borrower.

 

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

 

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

 

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

 

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

 

40

 

2.2           Interest; Loan Payments; Late Payment Charge.

 

2.2.1        Payment of Principal and Interest.

 

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

 

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

 

2.2.2        Method and Place of Payment.

 

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

 

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

 

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

 

2.2.3        Late Payment Charge.  If any principal, interest or any other sums
due under the Mezzanine Loan Documents (other than the outstanding Principal
Amount due and payable on the Maturity Date) is not paid by Mezzanine Borrower
on or prior to the date on which it is due, Mezzanine Borrower shall pay to
Mezzanine Lender upon demand an amount equal to the lesser of three percent
(3%) of such unpaid sum or the Maximum Legal Rate (the “Late Payment Charge”)
in order to defray the expense incurred by Mezzanine Lender in handling and

 

41

 

processing
such delinquent payment and to compensate Mezzanine Lender for the loss of the
use of such delinquent payment.  Any such
amount shall be secured by this Agreement, the Pledge and the other Mezzanine
Loan Documents to the extent permitted by applicable law.

 

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

 

2.3           Prepayments.  No prepayments of the Indebtedness shall be
permitted except as set forth in this Section 2.3 and Section 4
of the Mezzanine Notes.  If Mezzanine Borrower tenders payment of any
part of the Indebtedness other than in accordance with Sections 2.3.1, 2.3.2 or
2.3.4, (a) such payment may be made only on the next occurring Payment
Date together with all unpaid interest thereon as calculated through the end of
the Interest Period during which such Payment Date occurs (even if such period
extends beyond such Payment Date and calculated as if such payment had not been
made on such Payment Date), and (b) Mezzanine Borrower shall pay, in
addition to the Indebtedness, an amount equal to the Prepayment Fee and all
other fees and sums payable hereunder or under the Mezzanine Loan Documents.

 

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

 

2.3.2        Prepayments After Event of Default;
Application of Amounts Paid. 
If, following an Event of Default, Mezzanine Lender shall accelerate the
Indebtedness and Mezzanine Borrower thereafter tenders payment of all or any
part of the Indebtedness, or if all or any portion of the Indebtedness is
recovered by Mezzanine Lender after such Event of Default, (a) such
payment may be made only on the next occurring Payment Date together with all
unpaid interest thereon as calculated through the end of the Interest Period
during which such Payment

 

42

 

Date occurs
(even if such period extends beyond such Payment Date and calculated as if such
payment had not been made on such Payment Date), and all other fees and sums
payable hereunder or under the Mezzanine Loan Documents, including without
limitation, interest that has accrued at the Default Rate, and any Late Payment
Charges), (b) such payment shall be deemed a voluntary prepayment by
Mezzanine Borrower, and (c) Mezzanine Borrower shall pay, in addition to
the Indebtedness, an amount equal to the Prepayment Fee.

 

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

 

2.3.4        Release of Individual Properties.  In the event Mortgage Borrower requests the
release of any Individual Property or Properties from the Lien under the Loan
Documents (Mortgage) or to otherwise convey such Individual Property or
Properties to another Person, subject to satisfaction of each of the conditions
set forth below, Mezzanine Lender shall consent to such release and conveyance
and authorize (i) Mortgage Borrower to effect the release of such
Individual Property or Individual Properties (a “Release” and each
Individual Property subject to a Release, a “Release Property”) from the
Lien of the applicable Security Instrument and related Loan Documents
(Mortgage) (or to the extent so requested by Mezzanine Borrower, assign the
Lien of the applicable Security Instrument to a new lender without
representation, warranty or recourse) and to concurrently therewith convey the
Release Property to a Person other than Mortgage Borrower, Mezzanine Borrower,
or any other SPE Entity (each release and conveyance under this Section 2.3.4
or Section 2.3.5, a “Property Release”), (ii) a
reduction in the notional amounts of the Interest Rate Protection Agreement,
the Interest Rate Cap Agreement (First Mezzanine), and/or the interest rate cap
agreements required pursuant to the Junior Mezzanine Loan Documents, all in
proportion to the reduction of the principal amounts thereof as required under
the Loan Documents (Mortgage), Mezzanine Loan Documents, and Junior Mezzanine
Loan Documents, as applicable, (iii) the Cash Management Bank (Mortgage)
to return to Mortgage Borrower any Excess Account Collateral subject to and in
accordance with Section 2.3.7 of the Loan Agreement (Mortgage)
except to the extent otherwise provided in such Section, (iv) Mortgage
Borrower to comply with Section 2.3.8 of the Loan Agreement
(Mortgage) with regard to adjusting the ongoing reserve requirements
thereunder, and (v) a reduction in the Master Lease Base Rent in an
amount, which shall equal the product of (x) the initial Master Lease Base
Rent multiplied by (y) a fraction, the numerator of which is the Combined
Allocated Loan Amount for the Release Property, and the denominator of which is
the original Combined Principal Amount, and (vi) Mezzanine Borrower to
cause Mortgage Borrower to enter into an amendment to the Master Lease with
Master Lessee (A) to effect such authorized

 

43

 

reduction in the Master
Lease Base Rent, (B) to cause such Release Property to be released from
the Master Lease, (C) to terminate the Master Lease with respect to such
Release Property as of the date that such Release Property is released from the
Lien of the applicable Security Instrument and related Loan Documents
(Mortgage), (D) to amend the legal description of the “Leased Property”
(as defined in the Master Lease) to delete the Release Property, and (E) make
such other amendments consistent with the release of the Release Property from
the Leased Property.:

 

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

 

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

 

(c)               Mortgage Borrower shall submit to
Mortgage Lender (with a copy to Mezzanine Lender), concurrently with the
Property Release Notice (except that Mortgage Borrower may deliver the release
of Liens hereinafter described to Mortgage Lender and Mezzanine Lender after
delivery of the Property Release Notice so long as such delivery is made prior
to the tenth (10th ) Business Day preceding the applicable Release Date), a
release of Liens (and related Loan Documents (Mortgage) for each applicable
Release Property (for execution by Mortgage Lender) in a form appropriate in
the State and otherwise satisfactory to Mortgage Lender in its reasonable
discretion and all other documentation Mezzanine Lender reasonably require to
be delivered by Mortgage Borrower or Mezzanine Borrower in connection with such
Property Release (collectively, “Release Instruments”) for each applicable
Release Property together with an Officer’s Certificate certifying that (i) the
Release Instruments are, or will be when delivered, in compliance with all
Legal Requirements, (ii) the release to be effected will not violate the
terms of this Agreement, (iii) the release to be effected will not impair
or otherwise adversely affect the Liens, security interests and other rights of
Mortgage Lender under the Loan Documents (Mortgage) not being released (or as
to the Individual Properties subject to the Mezzanine Loan Documents not being
released) or the Mezzanine Lender’s Lien on the Collateral; and (iv) the
requirement described in paragraph (d) below is satisfied in connection
with such Property Release (together with calculations and supporting
documentation demonstrating the same in reasonable detail).

 

44

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)               In the event Mezzanine Lender has
approved in writing a right of first refusal or purchase option with respect to
the subject Release Property, the transfer of the Release Property

 

45

 

in connection
with the Property Release shall comply in all respects with the terms and conditions
of any such rights of first refusal or purchase options, as such terms and
conditions have been approved by Mezzanine Lender.

 

2.3.5        Substitution
of Properties.

 

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

 

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

 

(i)            be
subject to the Master Lease;

 

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

 

(iii)          be
free and clear, as evidenced by the environmental report referred to in
paragraph (c) below, of Hazardous Substances requiring  remediation or other action under any
Environmental Law the presence of which violates Environmental Laws (with the
exception of any immaterial remediation, as determined by Mezzanine Lender in
its sole discretion) and be in material compliance with all Environmental Laws;

 

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

 

46

 

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

 

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

 

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

 

(c)               Diligence Process. The
Mezzanine Borrower shall submit to the Mezzanine Lender written notice (a “Substitution
Notice”) setting forth the Business Day no earlier than thirty (30) days
after the date of such Substitution Notice on which Mezzanine Borrower desires
to effect such Substitution (the “Substitution Date”), together with the
following materials (the “Substitution Due Diligence Package”) relating
to the proposed Substitute Property: (i) a description of the proposed
Substitute Property sufficient to obtain a Title Policy for such proposed
Substitute Property, (ii) three years of historical cash flow operating
statements, if available, (iii) true, complete and correct copies of any
Material Subleases affecting the proposed Substitute Property, (iv) a map
and site plan, including an existing Survey of the proposed Substitute Property
dated not more than six (6) months prior to such submission, (v) a
copy of the proposed amendment to the Master Lease and Master Lease SNDA and
the License and Reservation Service Agreement to include the proposed
Substitute Property, (vi) copies of all permits, licenses and approvals
required with respect to operation of the proposed Substitute Property, (vii) a Phase I environmental assessment report, conducted
under the ASTM International Standard Practice
for Environmental Site Assessments: 
Phase I Environmental Site Assessment Process E1527-05,
issued by a recognized environmental consultant, (viii) copies of
all condominium documents and ground leases, if any, (ix) an engineer’s
inspection report, (x) ground lessor, fee mortgagee, condominium
association and tenant (under Material Subleases) estoppel certificates and
tenant (under Material Subleases) Non-Disturbance Agreements, in each case in
the forms attached hereto and including such variations that are either
immaterial or are reasonably acceptable to Mezzanine Lender, as applicable,
together with any consents required with respect to the Contemplated
Transactions, (xi) a commitment from the Title Company with respect to the
issuance of a Title Policy, together with copies of all exceptions referenced
therein and a copy of the recorded memorandum of ground lease if such
Substitute Property will be a Ground Lease Property, (xii) upon the
reasonable request of the Mezzanine Lender, a PML study, (xiii) a FIRREA
appraisal conducted by Cushman & Wakefield (or another Independent
appraiser reasonably acceptable to Mezzanine Lender), (xiv) if such
proposed Substitute Property is not then owned by the Mortgage Borrower or its
Affiliate, a duly executed copy of the purchase and sale agreement for such
proposed Substitute Property and copies of all proposed documentation
transferring title to the proposed Substitute Property to Mortgage Borrower
including any interim transfers to its Affiliates, (xv) a copy of the
flood certification, (xvi) either (A) a letter or other evidence with
respect to the proposed Substitute Property from the appropriate Governmental
Authorities concerning compliance with applicable zoning and building laws, (B) an
ALTA 3.1 zoning endorsement for the Title Policy

 

47

 

or (C) a
zoning report prepared by PZR indicating that the proposed Substitute Property
is in material compliance with applicable zoning and building laws,
(xvii) a copy of the valid permanent certificate of occupancy (if required
by applicable law), (xviii) calculations of the LTV Ratio and LCR both
before and after the proposed Substitution, (xix) evidence reasonably
satisfactory to Mezzanine Lender and its insurance consultant of insurance
policies covering the proposed Substitute Property satisfying all of the
requirements of Article VI, and (xx) UCC, bankruptcy, state and federal
tax lien, litigation and judgment searches conducted by a search firm
reasonably acceptable to the Mezzanine Lender with respect to the title holder
of such proposed Substitute Property on the date immediately prior to
acquisition thereof by Mortgage Borrower, in each of the locations reasonably
specified by the Mezzanine Lender and not revealing any Liens other than
Permitted Encumbrances.  In addition,
Mezzanine Borrower shall permit the Mezzanine Lender at all reasonable times
and upon reasonable prior notice to make an inspection of such proposed Substitute
Property.  Mezzanine Lender shall confirm
Mezzanine Borrower’s compliance with this paragraph (c) with respect to
each proposed Substitute Property within thirty (30) days after Mezzanine
Lender’s receipt of the complete applicable Substitution Due Diligence Package
and Mezzanine Lender’s failure to so confirm or deny Mezzanine Borrower’s
compliance within such thirty (30) day period shall be deemed compliance by
Mezzanine Borrower with this paragraph (c), provided that this sentence appears
in bold capital letters in the Substitution Notice accompanying the
Substitution Due Diligence Package.

 

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

 

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

 

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

 

(iii)          Financial
and Other Tests.

 

(1)           LCR.  After giving effect to such Substitution, as
of the Substitution Date the LCR for all of the Individual Properties then
remaining subject to the Liens of the Security Instruments (i.e., including the
Substitute Property and excluding the Replaced Property), shall not be less
than the greater of (A) the Closing Date LCR and (B) the LCR for the
Individual Properties subject to the Liens of the Security Instruments
immediately prior to the Substitution Date;

 

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

 

48

 

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

 

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

 

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

 

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

 

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

 

49

 

opinion to the effect that the Loan Documents (Mortgage) or amendments
thereto have been duly authorized, executed and delivered by Mortgage Borrower,
Master Lessee and Guarantor and are the valid and binding obligations and
agreements of such party, enforceable in accordance with their terms, in each
case with the same exceptions as made on Closing Date;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(2)           a first priority Assignment of Master Lease, Subleases,
Rents and Security Deposits, from Borrower, as assignor, to Mortgage Lender, as assignee, assigning to

 

50

 

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

 

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

 

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

 

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

 

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

 

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

 

(xiv)        Junior
Mezzanine Loan Deliveries.  The
Junior Mezzanine Lenders shall have received all deliveries required under Section 2.3.5
of the Junior Mezzanine Loan Agreements, including, but not limited to,
insurance certificates naming Junior Mezzanine Lenders with respect to the
Substitute Property, a copy of the owner’s title insurance policy and

 

51

 

related mezzanine endorsement (if available in such State) and copies
of the Substitution Due Diligence Package and all final deliveries to Mortgage
Lender under this Section 2.3.5.

 

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

 

2.3.6  Provisions
Relating to Individual Properties That Go Dark.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

52

 

notice of the revised
Monthly Tax Reserve Amount, Monthly Insurance Reserve Amount and Monthly Ground
Rent Amount.

 

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

 

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

 

(b)               No Noticed Default or Event of
Default shall exist and be continuing on the date Mezzanine Borrower delivers
its notice to Lender or on the date on which the release of the Unimproved
Parcel is to become effective, and on each such date Mezzanine 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)               Mezzanine Borrower shall cause
Mortgage Borrower to submit to Mortgage Lender (with a copy to Mezzanine
Lender), concurrently with its request for release, Release Instruments for the
Unimproved Parcel together with an Officer’s Certificate certifying that (i) the
Release Instruments are in compliance with all Legal Requirements, (ii) the
release and conveyance to be effected will not violate the terms of this
Agreement, (iii) the release to be effected will not impair or otherwise
adversely affect the Liens, security interests and other rights of Mortgage
Lender under the Loan Documents (Mortgage) not being released (or as to the
Property subject to the Loan Documents (Mortgage) not being released) nor
adversely affect Mezzanine Lender’s Lien on the Collateral and (iv) the
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).

 

53

 

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

 

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

 

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

 

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

 

2.4           Regulatory Change; Taxes.

 

2.4.1        Increased Costs.  If as a result of any Regulatory Change or
compliance of Mezzanine Lender therewith, the basis of taxation of payments to
Mezzanine Lender or any company Controlling Mezzanine Lender of the principal
of or interest on the Loan is changed or Mezzanine Lender or the company
Controlling Mezzanine Lender shall be subject to (i) any tax, duty, charge
or withholding of any kind with respect to this Agreement (excluding federal
taxation of the overall net income of Mezzanine Lender or the company
Controlling Mezzanine Lender); or (ii) any reserve, special deposit or
similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities, of Mezzanine Lender or any company
Controlling Mezzanine Lender is imposed, modified or deemed applicable; or (iii) any
other condition affecting loans to borrowers subject to LIBOR-based interest
rates is imposed on Mezzanine Lender or any company Controlling Mezzanine
Lender and Mezzanine Lender determines that, by reason thereof, the cost to
Mezzanine Lender or any company Controlling Mezzanine Lender of making,
maintaining or extending the Loan to Mezzanine Borrower is increased, or any
amount receivable by Mezzanine Lender or any company Controlling Mezzanine
Lender hereunder in respect of any portion of the Loan to Mezzanine Borrower is
reduced, in each case by an amount deemed by Mezzanine Lender in good faith to
be material (such increases in cost and reductions in amounts receivable being
herein called “Increased Costs”), then Mezzanine Lender shall provide
notice thereof to Mezzanine Borrower and Mezzanine Borrower agrees that it will
pay to Mezzanine Lender upon Mezzanine Lender’s written request such additional
amount or amounts as will compensate Mezzanine Lender or any company
Controlling Mezzanine Lender for such Increased Costs to the extent Mezzanine
Lender determines that such Increased Costs are allocable to the Loan.  If Mezzanine Lender

 

54

 

requests
compensation under this Section 2.4.1, Mezzanine Borrower may, by
notice to Mezzanine Lender, require that Mezzanine Lender furnish to Mezzanine
Borrower a statement setting forth the basis for requesting such compensation
and the method for determining the amount thereof.  In the event that Mezzanine Borrower is
required to pay any Increased Costs in accordance with the terms hereof, Mezzanine
Borrower shall have the right to prepay the Principal Amount (together with all
accrued but unpaid interest thereon calculated through the end of the then
current Interest Period) without the imposition of any Prepayment Fee.  Mezzanine Borrower shall have up to ninety
(90) days following the later to occur of (1) Mezzanine Lender furnishing
a statement setting forth the basis for requesting compensation for Increased
Costs if requested by Mezzanine Borrower and (2) receipt from Mezzanine
Lender of notice of the Increased Costs to make such prepayment, provided until
such prepayment is paid in full (including all accrued but unpaid interest
thereon calculated through the end of the then current Interest Period),
Mezzanine Borrower shall pay to Mezzanine Lender upon Mezzanine Lender’s
written request such additional amount or amounts as will compensate Mezzanine
Lender or any company Controlling Mezzanine Lender for Increased Costs incurred
in the interim to the extent Mezzanine Lender determines that such Increased
Costs are allocable to the Loan.

 

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

 

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

 

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

 

55

 

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

 

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

 

2.5           Conditions
Precedent to Closing.  The following
conditions precedent to the obligation of Mezzanine Lender to make the Loan
hereunder were either fulfilled by, or on behalf of, Mezzanine Borrower or
waived by Mezzanine 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 filing UCC financing statements
relating to the Pledge, Mezzanine 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 Mezzanine Borrower contained in this
Agreement and the other Mezzanine Loan Documents, and the Merger
Representations and Warranties, shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and
as of such date, and no Default, Event of Default, Mortgage Default or Mortgage
Event of Default shall have occurred and be continuing; and Mezzanine Borrower
shall be in compliance in all material respects with all terms and conditions
set forth in this Agreement and in each other Mezzanine Loan Document on its
part to be observed or performed.  Notwithstanding
the foregoing, (i) the breach or failure of a Property Specific
Representation shall not constitute the failure to satisfy the condition
precedent set forth in this Section 2.5.1 unless such breach or
failure would result in a “Material Adverse Effect on the Company” (as such
phrase is defined in the Merger Agreement), (ii) in the event of the
breach or failure of a Property Specific Representation that results in a
Portfolio MAE, Mezzanine Lender may require Mezzanine Borrower to effect a Mezzanine
Lender-Initiated Substitution.

 

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

 

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

 

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

 

56

 

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

 

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

 

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

 

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

 

(g)               Title Insurance.

 

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

 

(ii)           Mezzanine
Lender shall have received evidence of Mortgage Borrower’s ownership of the Property in the form
of owner’s title policies insuring Mortgage Borrower’s title to the
Property, which title policies shall be in form and substance, and issued by a
title insurance company (with appropriate reinsurance or coinsurance),
reasonably satisfactory to Mortgage Lender. 
Mezzanine Lender shall also have received a letter from Mortgage
Borrower to the Mezzanine Lender and countersigned by the Title Companies,
directing the Title Company to make certain loss payments under certain of
Mortgage Borrower’s owner’s title insurance policies to Mezzanine Lender as
more particularly set forth therein.

 

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

 

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

 

(i)                Insurance.  Mezzanine Lender shall have received valid
certificates of insurance for the policies of insurance required by the Loan
Agreement (Mortgage) naming Mezzanine Lender as an additional insured (as
applicable) and containing a cross liability/severability 

 

57

 

endorsement,
satisfactory to Mezzanine Lender in its sole discretion, and evidence of the
payment of all insurance premiums currently due and payable for the existing
policy period;

 

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

 

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

 

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

 

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

 

2.5.3        Delivery of Organizational Documents.  On or before the Closing Date, Mezzanine
Borrower shall deliver, or cause to be delivered, to Mezzanine Lender copies,
certified by an Officer’s Certificate, of all organizational documentation
related to Mezzanine Borrower, Sponsor, each SPE Entity, each Guarantor, Master
Lessee Mortgage Borrower and the Junior Mezzanine Borrowers as have been
requested by Mezzanine Lender and/or the formation, structure, existence, good
standing and/or qualification to do business of Mezzanine Borrower, Sponsor,
each SPE Entity, each Guarantor, Master Lessee, Mortgage Borrower and the
Junior Mezzanine Borrowers as Mezzanine Lender may request in its sole
discretion, including, without limitation, good standing certificates, qualifications
to do business in the appropriate jurisdictions, resolutions authorizing the
entering into of the Loan and incumbency certificates as may be requested by
Mezzanine Lender.  Each of the
organizational documents of any SPE Entity shall contain single purpose entity
provisions reasonably approved by Mezzanine Lender prior to the date hereof.

 

2.5.4        Counsel Opinions.

 

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

 

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

 

(c)               Mezzanine Lender
shall have received or Mezzanine Borrower shall have delivered into escrow (for
release to Mezzanine Lender concurrently with the delivery of the 

 

58

 

Pledge
to the Title Company for recording) a true sale opinion with respect to the
Transfer of the entities owning the Property to Mortgage Borrower in form and
substance reasonably satisfactory to the Lender (the “True Sale Opinion”).

 

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

 

(e)               [Reserved]

 

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

 

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

 

2.5.5        Consummation of the Merger.  Mezzanine Borrower shall have delivered to
Mezzanine Lender a true, correct and complete copy of the Merger
Agreement.  The merger transactions
contemplated by the Merger Agreement shall have been consummated in accordance
with the Merger Agreement, and all conditions precedent to such consummation,
as set forth in the Merger Agreement, shall, as of the consummation of the
merger transactions, have been satisfied (and would have been satisfied,
without taking into consideration the application of the last paragraph of Section 6.1
of the Merger Agreement) or (subject to the following clause) waived, provided
that no item requiring the consent of the Parent (as defined in the Merger
Agreement), including pursuant to Section 6.1 of the Merger Agreement,
that is material to the interest of Mezzanine Lender shall have been given and
no condition material to the interests of the Mezzanine Lender shall have been
waived except, in ease such case, with the prior written consent of Mezzanine
Lender (which Mezzanine Lender shall not unreasonably withhold or delay).

 

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

 

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

 

59

 

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

 

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

 

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

 

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

 

2.5.12      Equity Contribution.  Holdco and FP collectively shall have
received as equity contributions an aggregate amount equal to at least 32.5% of
the total consideration payable under the Merger Agreement (a portion of which may be in the form of rollover
equity provided by Frank Fertitta III, Lorenzo Fertitta and certain others) (plus
such additional amount as the Principal Investors and their co-investors shall
elect to contribute in their sole discretion), and (x) Holdco shall have
contributed (or cause to be contributed) as a common equity contribution
proceeds of such equity contribution received to Mortgage Borrower in an amount
not less than $550 million (the “Cash Equity Contribution”) and (y) Holdco
and FP shall have applied, or caused to be applied, all proceeds of such equity
contributions other than the Cash Equity Contribution to finance the
consummation of the Contemplated Transactions.

 

2.5.13      Existing Indebtedness.  After giving effect to the consummation of
the Contemplated Transactions, (a) Master Lessee and its subsidiaries
shall have no outstanding preferred equity or indebtedness, except for (i) indebtedness
incurred pursuant to (A) the 6 1/2% Senior Subordinated Notes due 2014,
the 6 7/8% Senior Subordinated Notes due 2016, the 6% Senior Notes due 2012,
the 6 5/8% Senior Subordinated Notes due 2018 and the 7.75% Senior Notes due
2016 (the “Existing Notes”), in an aggregate principal amount of
approximately $2,300 million, (B) the Revolving/Term Credit Facility, (C) the Mortgage Loan and the Junior
Mezzanine Loans, and (D) the Loan; (ii) preferred equity held by
Holdco in its subsidiaries and preferred equity held by one Borrower Party in
another Borrower Party, so long as such preferred equity does not constitute “disqualified
stock,” is not otherwise entitled to any mandatory dividends or redemptions,
and contains terms that are otherwise reasonably satisfactory to Mezzanine
Lender (provided that Mezzanine
Lender shall approve such terms so long as they are not adverse to the
interests of Mezzanine Lender);
(iii) indebtedness evidenced by a note in the principal amount of $100
million dated February 16, 2007 issued by GV Ranch Station Capital 

 

60

 

Holdings, LLC
and indebtedness evidenced by a series of notes in an aggregate principal
amount of $9.2 million issued by a subsidiary of Master Lessee having a
weighted average interest rate of 7.1% and maturity dates ranging from 2009 to
2026; (iv) a capital lease of the office building in which Master Lessee’s
executive offices are located adjacent to the Red Rock Resort (the “Executive
Office Capital Lease”); (v) indebtedness evidenced by that certain
Credit Agreement dated as of October 4, 2007 providing to Aliante Gaming,
LLC, a Nevada limited liability company, construction loans in the aggregate
amount of $410 million and revolving loans in the aggregate amount of $20
million, and a completion guaranty by Master Lessee in respect thereof (the “Aliante
Financing”) and (vi) such other existing indebtedness and preferred
equity, if any, as shall be agreed by Mezzanine Lender (together with the
Existing Notes, and the indebtedness described in clauses (iii), (iv) and
(v), the “Existing Indebtedness”), and (b) all stock of the Master
Lessee shall be owned by Guarantors free and clear of Liens (other than those
securing the Revolving/Term Credit Facility).

 

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

 

2.5.15      Equity and Real Property Transfer Documents.  Mezzanine Borrower shall have delivered to
Mezzanine Lender true, correct and complete copies of all documentation
pursuant to which the transactions contemplated by the Merger Agreement are
consummated, including, but not limited to, all documents evidencing all stages
of the acquisition of Station Casinos, Inc. by the Guarantors and all
documents evidencing (i) all preliminary transfers of equity interests
that resulted in the Mezzanine Borrower structure set forth on Exhibit K,
(ii) any preliminary transfers of the Property into Affiliates of Mortgage
Borrower and (iii) the acquisition of such Affiliates by and the merger of
such Affiliates into Mortgage Borrower. 
In addition, Mezzanine Borrower shall have delivered to Mezzanine Lender
a copy of the ALTA owner’s title
insurance policy(ies) issued by the Title Company with respect to the Property
and insuring Mortgage Borrower’s fee and/or leasehold title thereto, in form
and substance reasonably acceptable to Mezzanine Lender.

 

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

 

2.5.17      Approvals.  All material governmental and third party
approvals necessary in connection with the Contemplated Transactions (including
all necessary regulatory and gaming approvals) and the continuing operations of
Master Lessee, Mezzanine Borrower and their respective subsidiaries (including
shareholder or member approvals, if any) shall have been obtained on terms
reasonably satisfactory to Mezzanine Lender and shall be in full force and 

 

61

 

effect, and
all applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority that would restrain, prevent or
otherwise impose adverse conditions on the Contemplated Transactions.  There shall not exist any action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or governmental authority that would permit Sponsor under the Merger
Agreement not to consummate the merger transaction.

 

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

 

2.6           [Reserved]

 

III.                                 CASH
MANAGEMENT

 

3.1           Cash Management.

 

3.1.1        Establishment of Accounts.  Mezzanine Borrower hereby acknowledges that,
simultaneously with the execution of this Agreement, pursuant to the Mezzanine
Account Agreement, Mezzanine Borrower has established with Cash Management Bank
(First Mezzanine) a holding account (the “Mezzanine Account”), which has
been established as a non-interest bearing deposit account with
interest-bearing sub-accounts.  The
Mezzanine Account and each sub-account of such account and the funds deposited
therein shall serve as additional security for the Loan.  Pursuant to the Mezzanine Account Agreement,
Mezzanine Borrower shall irrevocably instruct and authorize Cash Management
Bank (First Mezzanine) to disregard any and all orders for withdrawal from the
Collateral Accounts (First Mezzanine) made by, or at the direction of,
Mezzanine Borrower.  Mezzanine Borrower
agrees that, prior to the payment in full of the Indebtedness, the terms and
conditions of the Mezzanine Account Agreement shall not be amended or modified
in any material respect without the prior written consent of Mezzanine Lender
(which consent Mezzanine Lender may grant or withhold in its sole
discretion).  In recognition of Mezzanine
Lender’s security interest in the funds deposited into the Collateral Accounts
(First Mezzanine) the Mezzanine Account shall be named as follows: “FCP Mezzco
Borrower I, LLC Holding Account in favor of German American Capital
Corporation, as Collateral Agent” (Account Number 048818623).  Mezzanine Borrower confirms that it has
established with Cash Management Bank (First Mezzanine) the following sub-accounts
of the Mezzanine Account (each, a “Sub-Account” and, collectively, the “Sub-Accounts”
and together with the Mezzanine Account, the “Collateral Accounts (First
Mezzanine)”), which (i) may be ledger or book entry sub-accounts and need
not be actual sub-accounts, (ii) shall each be linked to the Mezzanine
Account, (iii) shall each be a “deposit account” (as such term is defined in Section 9-102(a)(29) of the UCC)
and (iv) shall each be an Eligible Account to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of
this Agreement:

 

62

 

(a)               A sub-account
for the retention of Account Collateral (First Mezzanine) in respect of Debt
Service (First Mezzanine) on the Loan with the account number 048818631 (the “Mezzanine
Debt Service Reserve Account”).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.1.3        Maintenance of Collateral Accounts.

 

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

 

63

 

an
agreement substantially in the form of the Mezzanine Account Agreement or in
such other form acceptable to Mezzanine Lender in its sole discretion.

 

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

 

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

 

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

 

3.1.6        Monthly Funding.

 

(a)               Mezzanine Borrower hereby
irrevocably authorizes Mezzanine Lender to transfer (and, pursuant to the
Mezzanine Account Agreement shall irrevocably authorize Cash Management Bank
(First Mezzanine) to execute any corresponding instructions of Mezzanine
Lender), and Mezzanine Lender shall transfer, from the Mezzanine Account by
11:00 a.m. New York time on the date on which each payment of funds on
deposit in the First Mezzanine Debt Service Reserve Account under the Loan
Agreement (Mortgage) is made to the Mezzanine Account, or as soon thereafter as
sufficient funds are in the Mezzanine Account to make the applicable transfers,
commencing on the date of the first transfer of funds from the First Mezzanine
Debt Service Reserve Account under the Loan Agreement (Mortgage) to the
Mezzanine Account, funds in an amount equal to the sum of any Protective
Advances which may have been advanced by (and not previously reimbursed to) the
Mezzanine Lender pursuant to the terms of the Mezzanine Loan Documents to cure
any Default or Event of Default, any Mortgage Default or Mortgage Event of
Default, or to protect the Collateral together with any interest payable on
such amounts pursuant to the Mezzanine Loan Documents, plus (x) the unpaid
Debt Service (First Mezzanine) for the next occurring Payment Date, plus (y) an
amount equal to such payments for any prior month(s), to the extent not
previously paid, plus (z) an amount equal to the amount, if any, deducted
from the Mezzanine Account in any preceding month to pay any other amounts then
due under the Mezzanine Loan Documents (other than any Debt Service (First
Mezzanine)).  Funds representing the sum
of Protective Advances, payments for prior months to the extent not previously
paid, and sums deducted from the Mezzanine Account in any preceding month to
pay any other amounts then due under the Mezzanine Loan Documents (other than
Debt Service (First Mezzanine)) shall be transferred by Mezzanine Lender from
the Mezzanine Account to Mezzanine Lender. 
Funds representing unpaid Debt Service (First Mezzanine) for the next
occurring Payment Date shall be transferred by Mezzanine Lender from the
Mezzanine Account to the Mezzanine Debt Service Reserve Account, and on the
next occurring Payment Date, Mezzanine Lender shall apply or direct Cash
Management Bank (First 

 

64

 

Mezzanine) to apply, the funds
on deposit in the Mezzanine Debt Service Reserve Account for the payment of
Debt Service (First Mezzanine). 
Mezzanine Borrower acknowledges that Mezzanine Lender shall not be
required to make such withdrawal and deposit until such time as Mezzanine
Lender is able to calculate the amount of the Debt Service (First Mezzanine)
for the next occurring Payment Date. 
Funds representing any balance in the Mezzanine Account after the
foregoing transfers have been completed shall be transferred by Mezzanine
Lender from the Mezzanine Account to the “Mezzanine Account” under the Second
Mezzanine Loan Agreement within one (1) Business Day after the foregoing
transfers have been completed.

 

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

 

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

 

(d)               Mezzanine Borrower hereby
acknowledges that, pursuant to Section 3.1.7 of the Loan Agreement
(Mortgage), to the extent Mortgage Lender has received a Mezzanine Loan Default
Notice and until such time as Mortgage Lender receives a Mezzanine Loan Default
Revocation Notice, the Mortgage Borrower has irrevocably directed that Excess
Cash Flow and any other payments to be made to Mezzanine Borrower, any Junior
Mezzanine Borrower, Mezzanine Lender, or any Junior Mezzanine Lender are to be
deposited directly into the Mezzanine Account for application as provided in
this Agreement (in lieu of transferring such funds to such accounts of the
Mezzanine Lender, any Junior Mezzanine Lender or Mortgage Borrower as the
Mortgage Borrower may have so directed if the Mortgage Lender had not received
such notice from Mezzanine Lender). 
Mezzanine Lender shall promptly provide Mortgage Lender with a Mezzanine
Loan Default Revocation Notice if an Event of Default which has occurred under
the Mezzanine Loan Documents is no longer continuing and on the date that
Mezzanine Lender provides such Mezzanine Loan Default Revocation Notice to
Mortgage Lender, any balance in the Mezzanine Account which would have been transferable to the “Mezzanine
Account” under the Second Mezzanine Loan Agreement had the subject Mezzanine
Loan Default Notice not been in effect shall be promptly transferred by
Mezzanine 

 

65

 

Lender from the Mezzanine
Account to the “Mezzanine Account” under the Second Mezzanine Loan Agreement.

 

3.1.7        Cash Management Bank (First Mezzanine).

 

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

 

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

 

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

 

(a)           Mezzanine Borrower represents,
warrants and covenants that: (i) as of the Closing Date, Mortgage 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 Mortgage Loan and Mezzanine Borrower shall cause
Mortgage Borrower to deposit all such sums in such Holding Account; and (ii) Mezzanine
Borrower shall cause Mortgage Borrower to comply with, and use commercially
reasonable efforts to enforce Mortgage Lender’s compliance with, all of the
terms and conditions of Section 3.1 of the Loan Agreement (Mortgage),
including, without limitation: (1) the timely funding of all Sub-Accounts
under the Mortgage Loan, including any Sub-Account deficiencies in accordance
with Section 3.1.6(c) of the Loan Agreement (Mortgage); (2) the
distribution of funds to Mezzanine Lender in accordance with the “First
Mezzanine Lender Monthly Debt Service Notice” as described in the Loan
Agreement (Mortgage); and (3) the timely payment of Impositions and Other
Charges, insurance premiums, Ground Rent, Debt Service in respect of the
Mortgage Loan, Debt Service (First Mezzanine), and debt service in respect of
the Junior Mezzanine Loans.

 

(b)               Mezzanine
Borrower represents, warrants and covenants that (i) pursuant to the Loan
Agreement (Mortgage), provided no Mortgage Event of Default has occurred and is

 

66

 

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

 

3.1.9        Account Collateral (First Mezzanine) and
Remedies.

 

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

 

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

 

(c)               Mezzanine
Borrower hereby expressly waives, to the fullest extent permitted by law,
presentment, demand, protest or any notice of any kind in connection with this
Agreement 

 

67

 

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

 

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

 

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

 

3.1.12      Mezzanine Lender’s Liability.

 

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

 

68

 

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

 

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

 

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

 

IV.                                 REPRESENTATIONS
AND WARRANTIES

 

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

 

4.1.1                        Organization. 
Each of Mortgage Borrower and Mezzanine Borrower is a limited liability
company and has been duly organized and is validly existing and in good
standing pursuant to the laws of the State of Delaware with requisite power and
authority to own its properties and to transact the businesses in which it is
now engaged.  Master Lessee is a
corporation and has been duly organized and is validly existing and in good
standing pursuant to the laws of the State of Nevada with requisite power and
authority to own its properties and to transact the businesses in which it is
now engaged.  Holdco is a corporation and
has been duly organized and is validly existing and in good standing pursuant
to the laws of the State of Delaware with requisite power and authority to own
its properties and to transact the businesses in which it is now engaged.  FP is a
limited liability company and has been duly organized and is validly existing
and in good standing pursuant to the laws of the State of Nevada with requisite
power and authority to own its properties and to transact the businesses in
which it is now engaged.  VoteCo is a
limited liability company and has been duly organized and is validly existing
and in good standing pursuant to the laws of the State of Nevada with requisite
power and authority to own its properties and to transact the businesses in
which it is now engaged.  Each of
Mortgage Borrower, Mezzanine Borrower, Guarantors and Master Lessee has duly
qualified to do business and is in good standing in each jurisdiction where it
is required to be so qualified in connection with its properties, businesses
and operations, or, in the case of qualifications in the various States (a) an
application for such qualification has been duly filed 

 

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with the
applicable Governmental Authority and all fees required in order to obtain such
qualification have been paid in full, (b) all conditions to obtaining such
qualification have been satisfied under applicable law and the issuance of such
qualification is a ministerial act of the applicable Governmental Authority, (c) each
of Mortgage Borrower and Mezzanine Borrower has agreed to so qualify in
accordance with a post-closing side letter entered into on the Closing Date,
and (d) no such failure to qualify would be reasonably likely to have a
Material Adverse Effect.  Each of
Mortgage Borrower, Mezzanine Borrower, Master Lessee and Guarantor possesses
all material rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the
businesses in which it is now engaged, and the sole business of Mezzanine
Borrower is the ownership of the Ownership Interests.  The organizational structure of Mortgage
Borrower, Mezzanine Borrower, each Guarantor and Master Lessee is accurately
depicted by the schematic diagrams attached hereto as Exhibit K.  Mezzanine Borrower shall not change its name,
identity, limited liability company form or jurisdiction of organization unless
it shall have given Mezzanine Lender thirty (30) days prior written notice of
any such change and shall have taken all steps reasonably requested by
Mezzanine Lender to grant, perfect, protect and/or preserve the liens and
security interest granted to Mezzanine Lender under the Mezzanine Loan
Documents.

 

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

 

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

 

4.1.4                        Litigation.  Except as set forth on Schedule II
attached hereto, there are no arbitration proceedings, governmental
investigations, actions, suits or proceedings at law or in equity by or before
any Governmental Authority now pending or, to the best of Mezzanine Borrower’s
knowledge, threatened against or affecting Mortgage Borrower, Mezzanine 

 

70

 

Borrower,
Junior Mezzanine Borrowers, any Guarantor, Master Lessee or any Individual
Property (other than claims (A) (i) which are being covered by
insurance, (ii) which are being defended by the relevant insurance company
and (iii) as to which Mortgage Borrower has not received a notice from
such insurance company that the claim exceeds the total amount of insurance
coverage with respect to such claim; (B) which are covered by the self
insurance limit permitted pursuant to the Mortgage Loan Documents and are being
diligently defended by Mortgage Borrower, Guarantors, Master Lessee or their
respective Affiliates; or (C) which relate to employment claims for which
liability in the event any such matter is adversely determined could not
reasonably be expected to exceed $1,000,000 or provided that none of such
unscheduled claims could reasonably be expected to individually or in the
aggregate to have a Material Adverse Effect if adversely determined).  The actions, suits or proceedings identified
on Schedule II, if determined against Mortgage Borrower, Mezzanine
Borrower, Junior Mezzanine Borrowers, any Guarantor, Master Lessee or the
Property, would not have a Material Adverse Effect.

 

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

 

4.1.6                        Title to Property and Assets.

 

Mortgage Borrower has good, marketable and
insurable (i) leasehold title to the Land and the Improvements relating to
the Ground Lease Properties, and enjoys the quiet and peaceful possession of
the Leasehold Estate related thereto, and (ii) fee simple title to the
Land and the Improvements relating to the Fee Properties, in each case free and
clear of all Liens whatsoever except the Permitted Encumbrances.  Mortgage Borrower has good and marketable
title to the remainder of the Property (excluding the Excluded Personal
Property), free and clear of all Liens whatsoever except the Permitted
Encumbrances.  The Security Instruments,
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, perfected first mortgage lien on the
Land and the Improvements or the leasehold estate therein, as applicable,
subject only to Permitted Encumbrances and (ii) perfected security
interests in and to, and perfected collateral assignments of, all personalty
other than the Excluded Personal Property (including the Subleases) or any
leases of equipment from third parties, all in accordance with the terms
thereof, in each case subject only to any applicable Permitted
Encumbrances.  For 

 

71

 

avoidance of doubt, those
portions of the Excluded Personal Property owned by Master Lessee constituting “FF&E”
as defined in the Master Lease, are subject to a Lien in favor of the Mortgage
Borrower, as landlord, under the Master Lease, and such landlord Lien has been
assigned to Mortgage Lender, along with Mortgage Borrower’s other rights as
landlord under the Master Lease, pursuant to the Security Instruments and the
Assignment of Leases (such landlord Lien, as assigned to Lender, the “Assigned
Landlord Lien”).  There are no claims
for payment for work, labor or materials affecting the Property which are or
may become a lien prior to, or of equal priority with, the Liens created by the
Loan Documents (Mortgage) other than the Permitted Encumbrances.  None of the Permitted Encumbrances would
individually or in the aggregate reasonably be expected to result in a Material
Adverse Effect as of the Closing Date and thereafter.  Mezzanine Borrower shall cause Mortgage
Borrower to preserve its right, title and interest in and to the Property for
so long as the Mezzanine Notes remain outstanding and will cause Mortgage
Borrower to warrant and defend same and the validity and priority of the Lien
of the Mortgage Loan Documents from and against any and all claims whatsoever
other than the Permitted Encumbrances. 

 

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

 

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

 

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

 

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

 

4.1.10                  No Plan Assets.

 

(a)                                              Mezzanine Borrower does not maintain an
employee benefit plan as defined by Section 3(3) of ERISA, which is
subject to Title IV of ERISA, and Mezzanine Borrower (i) has no knowledge
of any material liability which has been incurred or is expected to be incurred
by Mezzanine Borrower which is or remains unsatisfied for any taxes or
penalties with respect to any “employee benefit plan,” within the meaning of Section 3(3) of
ERISA, or any “plan,” within the meaning of Section 4975(e)(1) of the
Code or any other benefit plan (other than a 

 

72

 

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

 

(b)                                             Neither the Mortgage Borrower nor the
Mezzanine Borrower is an employee benefit plan, as defined in Section 3(3) of
ERISA, subject to Title I of ERISA, none of the assets of Mortgage Borrower or
Mezzanine Borrower constitutes or will constitute plan assets of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101 and neither
the Mortgage Borrower nor the Mezzanine Borrower is a governmental plan within
the meaning of Section 3(32) of ERISA and neither the Mortgage Borrower
nor the Mezzanine Borrower is subject to state statutes regulating investment
of, and fiduciary obligations with respect to, governmental plans similar to
the provisions of Section 406 of ERISA or Section 4975 of the Code
currently in effect, which prohibit or otherwise restrict the transactions
contemplated by this Agreement.

 

4.1.11                  Compliance.  Subject to Schedule 4.1.11, Mortgage
Borrower, Mezzanine Borrower, the Collateral and the Property and the use
thereof comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes (except
for any non-compliance that individually or in the aggregate would not
reasonably be expected to result in a Material Adverse Effect).  To the best of Mezzanine Borrower’s
knowledge, neither Mortgage Borrower
nor Mezzanine Borrower is in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority.  To the best of Mezzanine Borrower’s
knowledge, there has not been committed by Mortgage Borrower or Mezzanine
Borrower any act or omission affording the federal government or any other
Governmental Authority the right of forfeiture as against the Property or the
Collateral or any part thereof or any monies paid in performance of Mezzanine
Borrower’s obligations under any of the Mezzanine Loan Documents.

 

4.1.12                  Financial Information.  The information set forth in the certificate
of Mortgage Borrower regarding financial information dated 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.  Neither Mortgage Borrower nor Mezzanine
Borrower has any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments that are known to Mezzanine Borrower and could
reasonably be expected to have a Material Adverse Effect.

 

4.1.13                  Condemnation.  Except as set forth on Schedule II, no
Taking is pending or, to the best of Mezzanine Borrower’s knowledge, is
contemplated with respect to all or any portion of 

 

73

 

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

 

4.1.14                  Federal
Reserve Regulations.  None of the
proceeds of the Loan will be used for the purpose of purchasing or carrying any
“margin stock”“ as defined in Regulation U, Regulation X or Regulation T or for
the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry “margin” stock or for any other purpose which
might constitute this transaction a “purpose credit” within the meaning of
Regulation U or Regulation X, which in any such case would cause the Loan, the
Mezzanine Borrower or the Mezzanine Lender to be in violation of Regulation
U.  As of the Closing Date, Mezzanine
Borrower does not own any “margin stock.”

 

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

 

4.1.16                  Not a Foreign Person.  Neither Mortgage Borrower nor Mezzanine Borrower
is a foreign person within the meaning of § 1445(f)(3) of the Code.

 

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

 

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

 

4.1.19                  [Reserved.]

 

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

 

74

 

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).

 

4.1.21                  [Reserved.]

 

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

 

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

 

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

 

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

 

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

 

75

 

or charges
thereon or of any termination or threatened termination of any policy of
insurance or bond.

 

4.1.27                  Boundaries.  Except as set forth in and insured pursuant
to the Title Policies, to the best of Mezzanine Borrower’s knowledge and, where
applicable, in reliance on the Surveys (a) all of the Improvements lie
wholly within the boundaries and building restriction lines of the Real
Property relating to the applicable Individual Property, (b) no
improvements on adjoining properties encroach upon the Real Property, and (c) no
easements or other encumbrances upon the Real Property encroach upon any of the
Improvements, so as to have a Material Adverse Effect.

 

4.1.28                  Subleases.  The Property is not subject to any leases
other than the Master Lease, the Individual Property Subleases, and the other
Subleases set forth on Schedule I attached hereto.  No Person has any possessory interest in the
Property or right to occupy the same except under and pursuant to the
provisions of the Master Lease, the Individual Property Subleases and the other
Subleases.  The current Material
Subleases are in full force and effect and to the best of Mezzanine Borrower’s
knowledge, there are no material defaults thereunder by either party (other
than as expressly disclosed on Schedule I).  No Rent under any Material Sublease has been
paid more than one (1) month in advance of its due date, except as
disclosed on Schedule I.  There
has been no prior sale, transfer or assignment, hypothecation or pledge by
Mortgage Borrower or Master Lessee of the Master Lease, the Individual Property
Subleases or any Sublease or of the Rents received therein, which will be
outstanding following the funding of the Loan, other than those assigned to
Mortgage Lender as of 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 Mortgage Borrower and the granting
and recording of the Security Instruments and the UCC financing statements
required to be filed in connection with the Mortgage Loan have been paid.  All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Mortgage Loan Documents, including, without
limitation, the Security Instruments, have been paid, and, under current Legal
Requirements, the Security Instruments are enforceable against Mortgage
Borrower in accordance with its terms by Mortgage Lender (or any subsequent
holder thereof) subject only to applicable bankruptcy, insolvency and similar
laws affecting rights of creditors generally, and subject as to enforceability,
to general principles of  equity
(regardless of whether enforcement is 
sought  in  a proceeding in equity or at law.

 

4.1.30                  Single Purpose Entity/Separateness.

 

(a)                                              Until the Indebtedness has been paid in full,
Mezzanine Borrower hereby represents, warrants and covenants that each of
Mezzanine Borrower and Mortgage Borrower 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 

 

76

 

assumptions
made in any subsequent non-consolidation opinion delivered in connection with
the Mezzanine Loan Documents (an “Additional Non-Consolidation Opinion”),
including, but not limited to, any exhibits attached thereto, will have been
and shall be true and correct in all material respects.  Mortgage Borrower, Mezzanine 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.  Mortgage
Borrower, Mezzanine Borrower and each other SPE Entity will have complied and
will comply with all of the assumptions made with respect to it in any
Additional Non-Consolidation Opinion. 
Each entity other than Mortgage Borrower with respect to which an
assumption shall be made in any Additional Non-Consolidation Opinion will have
complied and will comply in all material respects with all of the assumptions
made with respect to it in any Additional Non-Consolidation Opinion.

 

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

 

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

 

4.1.31                  [Reserved.]

 

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

 

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

 

4.1.34                  [Reserved.]

 

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

 

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

 

77

 

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

 

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

 

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

 

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

 

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

 

4.1.42                  Taxpayer Identification Number.  Mezzanine Borrower’s Federal taxpayer
identification number is 26-1259332.

 

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4.1.43                  Compliance with Anti-Terrorism, Embargo and
Anti-Money Laundering Laws.  (i) None
of Mezzanine Borrower, any Guarantor or any Person who Controls Mezzanine
Borrower or any Guarantor currently is identified on the OFAC List or otherwise
qualifies as a Prohibited Person, and (ii) none of Mezzanine Borrower or
any Guarantor is in violation of any Legal Requirements relating to anti-money
laundering or anti-terrorism, including, without limitation, Legal Requirements
related to transacting business with Prohibited Persons or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and
the related regulations issued thereunder, including temporary regulations, all
as amended from time to time.  To the
best of Mezzanine Borrower’s knowledge, no Tenant at the Premises currently is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, and
no Tenant at the Premises is owned or Controlled by a Prohibited Person.

 

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

 

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

 

4.2                                 Survival of Representations. 
Mezzanine Borrower agrees that all of the representations and warranties
of Mezzanine Borrower set forth in Section 4.1 and elsewhere in
this Agreement and in the other Mezzanine Loan Documents shall be deemed given
and made as of the Closing Date (other than the representations and warranties
made in Section 2 of the Omnibus Amendment, which shall be deemed given
and made as of the Amendment Effective Date) and survive for so long as any
amount remains owing to Mezzanine Lender under this Agreement or any of the
other Mezzanine Loan Documents by Mezzanine Borrower or Guarantor unless a
longer survival period is expressly stated in a Mezzanine Loan Document with
respect to a specific representation or warranty, in which case, for such
longer period.  All representations,
warranties, covenants and agreements made in this Agreement or in the other
Mezzanine Loan Documents by Mezzanine Borrower shall be deemed to have been relied
upon by Mezzanine Lender notwithstanding any investigation heretofore or
hereafter made by Mezzanine Lender or on its behalf.

 

4.3                                 Mezzanine Borrower’s
Knowledge.  Whenever a representation
or warranty is made “to Mezzanine Borrower’s knowledge,” “to Mezzanine Borrower’s
best knowledge,” “to Master Lessee’s knowledge,” “to Master Lessee’s best
knowledge,” or a term of similar import, such term shall mean the current
actual knowledge of each of Thomas Friel and Matthew Heinhold, in each case after reasonable diligence, and of
Mezzanine Borrower’s or Master 

 

79

 

Lessee’s, as applicable, respective
executive officers (other than Thomas Friel) and directors who have actual
knowledge of the relevant subject matter.

 

V.                                     MEZZANINE BORROWER COVENANTS

 

5.1                                 Affirmative
Covenants.  From the Closing Date and
until payment and performance in full of all obligations of Mezzanine Borrower
under the Mezzanine Loan Documents, Mezzanine Borrower (as to itself, Mortgage
Borrower and the Property) hereby covenants and agrees with Mezzanine Lender
that:

 

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

 

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

 

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

 

5.1.4                        Single Purpose Entity.

 

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

 

(b)                                             Each of Mezzanine Borrower and Mortgage
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
Mezzanine Borrower or Mortgage Borrower will be diverted to any other Person
for anything other than business uses of Mezzanine Borrower or Mortgage Borrower,
as applicable, nor will such funds be commingled with the funds of any other
Affiliate.

 

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

 

(d)                                             To the extent that Mezzanine Borrower or
Mortgage Borrower jointly contracts with any of Mezzanine Borrower, Mortgage
Borrower or either of their Affiliates, as applicable, to do business with
vendors or service providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities, and each such entity
shall bear its fair share of such costs. 
To the extent that either Mezzanine Borrower or Mortgage 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) Mezzanine Borrower or Mortgage
Borrower and any of their respective Affiliates shall be conducted on
substantially the same terms (or on more favorable terms for Mezzanine Borrower
or Mortgage Borrower, as applicable) as would be conducted with third parties.

 

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

 

(f)                                                Each of Mezzanine Borrower and Mortgage
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.

 

81

 

(g)               In addition, each of Mezzanine
Borrower and Mortgage Borrower shall each: (i) maintain books and records
separate from those of any other Person; (ii) maintain its assets in such
a manner that it is not more costly or difficult to segregate, identify or
ascertain such assets; (iii) hold regular meetings of its board of
directors, shareholders, partners or members, as the case may be; (iv) hold
itself out to creditors and the public as a legal entity separate and distinct
from any other entity; (v) prepare separate tax returns (unless part of a
consolidated group) and financial statements (unless part of a consolidated
group), or if part of consolidated group it will be shown as a separate member
of such group or such consolidated tax returns or financial 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 either Mezzanine Borrower or Mortgage
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 either Mezzanine Borrower or Mortgage
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 Mezzanine Borrower and Mortgage Borrower shall be required to (i) file
a bankruptcy or insolvency petition or otherwise institute insolvency
proceedings or to authorize Mezzanine Borrower or Mortgage Borrower to do so or
(ii) file an involuntary bankruptcy petition against any Affiliate,
Manager, or any Affiliate of Manager. 
Furthermore, Mezzanine Borrower’s and Mortgage Borrower’s formation
documents shall expressly state that for so long as the Loan is outstanding,
neither Mezzanine Borrower nor Mortgage Borrower shall be permitted to (i) dissolve,
liquidate, consolidate, merge or sell all or substantially all of Mezzanine
Borrower’s or Mortgage 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, Mezzanine
Borrower shall cause Mortgage Borrower to permit agents, representatives and
employees of Mezzanine Lender and the Rating Agencies to inspect the Property
or any part thereof during normal business hours on Business Days upon
reasonable advance notice.

 

5.1.7        Notice of Default.  Mezzanine Borrower shall promptly advise
Mezzanine Lender (a) of any event or condition of which Mezzanine Borrower
has knowledge that has a Material 

 

82

 

Adverse Effect and (b) of
the occurrence of any Default or Event of Default of which Mezzanine Borrower
has knowledge.

 

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

 

5.1.9        [Reserved.]

 

5.1.10      Insurance.

 

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

 

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

 

5.1.11      Further
Assurances; Separate Notes; Loan Resizing.

 

(a)               Mezzanine Borrower shall execute
and acknowledge (or cause to be executed and acknowledged) and deliver to
Mezzanine Lender all documents, and take all actions, reasonably required by
Mezzanine Lender from time to time to confirm the rights created or now or
hereafter intended to be created under this Agreement and the other Mezzanine
Loan Documents and any security interest created or purported to be created
thereunder, to protect and further the validity, priority and enforceability of
this Agreement and the other Mezzanine Loan Documents, to subject to the
Mezzanine Loan Documents any property of Mezzanine Borrower intended by the
terms of any one or more of the Mezzanine Loan Documents to be encumbered by
the Mezzanine Loan Documents, or otherwise carry out the purposes of the
Mezzanine Loan Documents and the transactions contemplated thereunder.  Mezzanine Borrower agrees that it shall, upon
request and at Mezzanine Lender’s cost (including, without limitation, any
costs related to the modification or replacement of the Interest Rate Cap
Agreement (First Mezzanine) (but not including any breakage costs associated
with or arising under the Interest Rate Cap Agreement (First Mezzanine)),
reasonably cooperate with Mezzanine Lender in connection with any request by
Mezzanine Lender to sever one or more of the Mezzanine Notes into two (2) or
more separate substitute notes in an aggregate principal amount equal to the
Principal Amount and to reapportion the Loan among such separate substitute
notes, including, without limitation, by executing and delivering to Mezzanine
Lender new substitute notes to replace the applicable 

 

83

 

Mezzanine Note or
Mezzanine Notes, amendments to or replacements of existing Mezzanine Loan
Documents to reflect such severance and/or Opinions of Counsel with respect to
such substitute notes, amendments and/or replacements, provided that Mezzanine
Borrower shall bear no costs or expenses in connection therewith (other than
internal administrative costs and expenses of Mezzanine Borrower).  Any such substitute notes may have varying
principal amounts and economic terms, provided, however, that (i) the
maturity date of any such substitute note shall be the same as the scheduled
Maturity Date of the Mezzanine Notes immediately prior to the issuance of such
substitute notes, (ii) the initial weighted average LIBOR Margin for the
term of the substitute notes shall not exceed the LIBOR Margin under the
Mezzanine Note being substituted immediately prior to the issuance of such
substitute notes; and (iii) the economics of the Loan shall not change in
a manner which is adverse to Mezzanine Borrower.  Upon the occurrence and during the
continuance of an Event of Default, Mezzanine Lender may apply payment of all
sums due under such substitute notes in such order and priority as Mezzanine
Lender shall elect in its sole and absolute discretion.  For avoidance of doubt, Mezzanine Borrower
agrees and acknowledges that such application may result in the weighted
average LIBOR Margin for the term of the applicable notes exceeding the initial
weighted average LIBOR Margin under the Mezzanine Note, and such result shall
not in any way restrict Lender’s right, in its discretion, to make such
application.

 

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

 

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

 

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

 

5.1.13      Operation.

 

Mezzanine Borrower
shall cause Mortgage Borrower to, and cause Master Lessee to, (i) promptly
perform and/or observe in all material respects all of the covenants and
agreements required to be performed and observed by it under the Master Lease
and do all things necessary to preserve and to keep unimpaired its material
rights thereunder; (ii) promptly notify Mezzanine Lender of any Master
Lease Default of which it is aware; and (iii) promptly deliver to Lender a
copy of each financial statement, capital expenditures plan, property
improvement plan and any other notice, report and estimate received by it under
the Master Lease; and Mezzanine Borrower shall cause Mortgage Borrower to
enforce in a commercially reasonable manner the performance and observance of
all of the covenants and agreements required to be performed and/or observed by
the Master Lessee under the Master Lease. 
Whenever in this Agreement or in any other Loan Document Mezzanine
Borrower is obligated to cause Mortgage Borrower to 

 

84

 

cause the Master Lessee to take or refrain
from taking a certain action, and whenever this Agreement or any Mezzanine Loan
Document shall set forth an obligation of Master Lessee, then such provisions
shall be construed to mean that Mezzanine Borrower shall cause Mortgage
Borrower to exercise its best efforts to cause Master Lessee to take or refrain
from taking such action, or performing such action, including exercising such
legal rights and remedies as shall be available to Mortgage Borrower under the
Master Lease and applicable law.

 

5.1.14      Business
and Operations.  Mezzanine
Borrower shall and shall cause Mortgage Borrower to continue to engage in the
businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Property and the Collateral.  Mezzanine
Borrower shall and shall cause Mortgage Borrower to qualify to do business and
shall remain in good standing under the laws of all applicable jurisdictions as
and to the extent required for the ownership, maintenance, management and
operation of the Property and the Collateral.

 

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

 

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

 

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

 

85

 

Mortgage Loan and the Loan
as Mezzanine Lender shall reasonably request. 
Mezzanine Lender shall, from time to time, but no more often than once
in any calendar quarter, upon thirty (30) days’ prior written request from
Mezzanine Borrower, execute, acknowledge and deliver to Mezzanine Borrower, a
certificate signed by an officer of Mezzanine Lender, stating that this
Agreement and the other Mezzanine Loan Documents are unmodified and in full force
and effect (or, if there have been modifications, that this Agreement and the
other Mezzanine Loan Documents are in full force and effect as modified and
setting forth such modifications).  The
estoppel certificate from Mezzanine Borrower shall also state either that, to
the best of Mezzanine Borrower’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 Mezzanine Lender
shall state whether Mezzanine Lender has delivered notice of a Default or an
Event of Default.

 

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

 

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

 

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

 

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

 

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

 

86

 

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

 

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

 

5.1.22      Master
Lease.

 

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

 

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

 

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

 

87

 

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

 

(e)           Neither
Mortgage Borrower nor Master Lessee shall terminate the Master Lease or consent
to the termination of the Master Lease without the prior written consent of
Mezzanine Lender.  Except as provided in
the Master Lease with respect to casualties or condemnations, the Master Lease
shall not provide for the release of an Individual Property.  The Master Lease may be amended to provide,
inter alia, for a release of an Individual Property and the reduction of Master
Lease Rent as provided in Section 2.3.4(v) and (vi).

 

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

 

(g)           Neither
the Mortgage Borrower nor the Master Lessee shall, without the prior written
consent of Mezzanine Lender which consent, solely with respect to clauses (ii) and
(iii) of this Section 5.1.22(g), will not be unreasonably
withheld, (i) renew (other than pursuant to renewal rights expressly set
forth in the Master Lease), extend, release any Individual Property from
(except in connection with a Property Release, Substitution or release of an
Unimproved Parcel, in compliance with Sections 2.3.4, 2.3.5 and 2.3.9
hereof) terminate, reduce rents (except as expressly authorized pursuant to Section 2.3.4)
or other sums payable under, accept a surrender of, or shorten the term of, the
Master Lease, (ii) appoint any appraiser, (iii) make any
determination of Fair Market Rental or Fair Market Value (as such terms are
defined in the Master Lease), (iv) waive any provisions of the Master Lease,
provided that subject to clause (i) Mortgage Borrower and Master Lessee
shall have the right to waive provisions of the Master Lease so long as the
same would not have the effect of (1) waiving or reducing the monetary
obligations of Master Lessee under the Master Lease or (2) either
permitting Master Lessee to take an action that Mortgage Borrower or Master
Lessee is prohibited from taking under this Agreement or any other Loan
Document, or preventing Mortgage Borrower and/or Master Lessee from complying
with an obligation on the part of Mortgage Borrower or Master Lessee under this
Agreement or any other Loan Document, (v) amend or modify in any respect
in a manner adverse to Mezzanine Lender or that would decrease Master Lessee’s
obligations or increase Mortgage Borrower’s obligations thereunder, any
provision of the Master Lease contained in Article I (leased property,
term, etc.), Article III (rent), Article IV (termination and
abatement), Article V (Ownership of Leased Property), Section 6.1(b) (Taxes
and Other Charges; Contest for Taxes and Other
Charges, Legal Requirements and Liens), Article VIII (Alterations;
Leasing), Article X (Casualty and Condemnation), Article XI (Accounts
and Reserves), Article XII (defaults and remedies), Article XV (Subordination)
and related definitions in Article II (definitions) or (vi) materially
amend or modify any provision of the 

 

88

 

Master Lease not listed in clause (v) in a manner adverse to
Mezzanine Lender or that would decrease Master Lessee’s obligations or increase
Mortgage Borrower’s obligations thereunder, provided
that nothing in this Section 5.1.22(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)            Mortgage
Lender shall have the right to declare a Master Lease Tenant Default under the
Master Lease and to exercise the rights and remedies of the Mortgage Borrower,
as landlord under the Master Lease (including without limitation, exercising it
rights and remedies with respect to the Assigned Landlord Lien), pursuant to
the assignment of such rights in the Assignment of Leases.

 

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

 

5.2           Negative
Covenants.

 

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

 

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

 

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

 

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

 

89

 

(Mortgage) to which Mortgage
Borrower is a party and the use, ownership, management, leasing, renovation,
financing, development, operation and maintenance of the Property and
activities related thereto.

 

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

 

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

 

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

 

5.2.7        Guarantee Obligations.  Guarantee any obligations of any Person;

 

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

 

5.2.9        Amend Organizational
Documents.  Amend or
modify any of its organizational documents without Mezzanine Lender’s consent,
other than in connection with any Transfer permitted pursuant to Article VIII
or to reflect any change in capital accounts, contributions, distributions,
allocations or other provisions that do not and could not reasonably be
expected to have a Material Adverse Effect and provided that Mezzanine Borrower
remains and Mortgage 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 its assets
other than in connection with the repayment of the Loan, or (iii) file or
solicit the filing of an involuntary bankruptcy petition against Mortgage
Borrower, Mezzanine Borrower, any Junior 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
Mortgage Borrower or Mezzanine Borrower to material liability under ERISA or
qualify it as an “employee benefit plan” (within the meaning of Section 3(3) of
ERISA) to which ERISA applies and Mezzanine Borrower’s assets do not and will
not constitute plan assets within the meaning of 29 C.F.R. Section 2510.3-101;

 

5.2.13      Distributions.  From and after the occurrence and during the
continuance of an Event of Default or an event of default (a “Junior
Mezzanine Event of Default”) under any of the Junior Mezzanine Loan
Documents, make any distributions to or for the benefit of any of its 

 

90

 

partners or members or its
or their Affiliates; provided that so long as an Event of Default shall not
have occurred and be outstanding, distributions from Mezzanine Borrower solely
for the purpose of enabling a Junior Mezzanine Borrower to cure a Junior
Mezzanine Event of Default, and which distributions are in fact sufficient to
completely cure such Junior Mezzanine Event of Default and are used for their
intended purpose, shall be permitted.

 

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

 

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

 

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

 

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

 

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

 

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

 

VI.                                 INSURANCE; CASUALTY; CONDEMNATION;
RESTORATION

 

6.1           Insurance Coverage Requirements.  Mezzanine Borrower will cause Mortgage
Borrower, at its expense, to procure and maintain the insurance policies
required by the Loan Documents (Mortgage). 
Each commercial general liability or umbrella liability policy with 

 

91

 

respect to the
Property shall, to the extent permitted in the Loan Documents (Mortgage), name
Mezzanine Lender as an additional insured and shall, to the extent permitted in
the Loan Documents (Mortgage), contain a cross liability/severability
endorsement in form and substance acceptable to Mezzanine Lender.

 

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

 

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

 

6.1.3        Compliance.  Mezzanine Borrower shall and shall cause
Mortgage Borrower to comply with all Insurance Requirements and shall not bring
or keep or permit to be brought or kept any article upon any of the Properties
or cause or permit any condition to exist thereon which would be prohibited by
any Insurance Requirement, or would invalidate insurance coverage required to
be maintained by Mortgage Borrower on or with respect to any part of the
Property pursuant to Section 6.1 of the Loan Agreement (Mortgage).

 

6.2           Condemnation.  In the event that all or any portion of the
Property shall be damaged or taken through condemnation (which term shall
include any damage or taking by any 

 

92

 

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

 

6.3           Certificates.  Mezzanine Borrower shall deliver (or cause
Mortgage Borrower to deliver) to Mezzanine Lender annually, concurrently with
the renewal of the insurance policies required hereunder, a certificate from
Mezzanine Borrower’s and Mortgage Borrower’s insurance agent stating that the
insurance policies required to be delivered to Mezzanine Lender pursuant to Section 6.1
and Section 2.5.2(g) are maintained with insurers who comply with the
terms of Section 6.1.11 of the Loan Agreement (Mortgage), setting forth a
schedule describing all premiums required to be paid by Mezzanine Borrower or
Mortgage Borrower, as applicable, to maintain the policies of insurance
required under Section 6.1 and Section 2.5.2(g), and stating that
either Mezzanine Borrower or Mortgage Borrower, as applicable, has paid such
premiums.  Certificates of insurance with
respect to all replacement policies shall be delivered to Mezzanine Lender not
less than ten (10) Business Days prior to the expiration date of any of
the insurance policies required to be maintained hereunder which certificates
shall bear notations evidencing payment of applicable premiums.  Mezzanine Borrower shall deliver to Mezzanine
Lender originals (or certified copies) of such replacement insurance policies
on or before the earlier to occur of (i) thirty (30) days after the
effective date thereof (including the insurance certificates delivered pursuant
to Section 2.5.2(g)) and (ii) five (5) Business Days after
Mezzanine Borrower’s receipt thereof.  If
Mezzanine Borrower fails to (i) maintain and deliver to Mezzanine Lender
the certificates of insurance and certified copies or originals required by
this Agreement upon five (5) Business Days’ prior notice to Mezzanine
Borrower, Mezzanine Lender may procure such insurance, and all costs thereof
(and interest thereon at the Default Rate) shall be added to the
Indebtedness.  Mezzanine Lender shall
not, by the fact of approving, disapproving, accepting, preventing, obtaining
or failing to obtain any insurance, incur any liability for or with respect to
the amount of insurance carried, the form or legal sufficiency of 

 

 

93

 

insurance
contracts, solvency of insurance companies, or payment or defense of lawsuits,
and Mezzanine Borrower hereby expressly assumes full responsibility therefor
and all liability, if any, with respect such matters.

 

VII.                             IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER
ITEMS

 

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

 

7.2           No Liens.  Subject to Section 7.3 and Mortgage
Borrower’s right of contest set forth in Section 7.3 of the Loan
Agreement (Mortgage) and to Permitted Encumbrances, Mezzanine Borrower shall
cause Mortgage Borrower to at all times keep, or cause to be kept, the Property
free from all Liens (other than Permitted Encumbrances) and shall pay when due
and payable (or bond over) all claims and demands of mechanics, materialmen,
laborers and others which, if unpaid, might result in or permit the creation of
a Lien on the Property or any portion thereof and shall in any event cause the
prompt, full and unconditional discharge of all Liens imposed on or against the
Property or any portion thereof within forty-five (45) days after receiving
written notice of the filing (whether from Mortgage Lender or Mezzanine Lender,
the lienor or any other Person) thereof. 
Mezzanine Borrower shall cause Mortgage Borrower to do or cause to be
done, at the sole cost of Mortgage Borrower, everything reasonably necessary to
fully preserve the first priority of the Lien of the Security Instruments
against the Property, subject to the Permitted Encumbrances.  Upon the occurrence and during the
continuance of a Mortgage Event of Default with respect to the Obligations
(Mortgage), each of Mortgage Lender and Mezzanine Lender may (but shall not be
obligated to) make any such payment or discharge 

 

94

 

any such Lien (other than Permitted Encumbrances excluding therefrom
any Liens described in clauses (d) and (e) of the definition of “Permitted
Encumbrances” which are the subject of such Mortgage Event of Default), and
Mezzanine Borrower shall reimburse Mezzanine Lender and Mortgage Lender on
demand for all such advances pursuant to Section 19.12 of this
Agreement and the Loan Agreement (Mortgage) (together with interest thereon at
the Default Rate).

 

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

 

95

 

Master
Lessee pursuant to the provisions of the Master Lease in connection with such
contest is delivered to Mezzanine Lender (or, if required under the Loan
Agreement (Mortgage), the Mortgage Lender).

 

VIII.                         TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS

 

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

 

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

 

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

 

96

 

operation of the Property or have a Material
Adverse Effect on the value of the Property taken as a whole.

 

8.4           [Reserved.]

 

8.5           Permitted Equity
Transfers.

 

(a)               A Transfer of an ownership interest in Mezzanine
Borrower or any Junior Mezzanine Borrower that is otherwise prohibited
hereunder shall nevertheless be permitted without Mezzanine Lender’s prior
written consent or a Rating Agency Confirmation if all of the following
conditions are satisfied with respect to such Transfer:  (i) Mezzanine Lender receives fifteen
(15) days prior written notice thereof, (ii) immediately prior to such
Transfer, no Event of Default shall have occurred and be continuing, (iii) none
of the direct ownership interests in Mortgage Borrower is being Transferred, (iv) no
more than forty-nine percent (49%) of the ownership interests in Mezzanine
Borrower or any Junior Mezzanine Borrower is being Transferred (in the
aggregate of all such Transfers), (v) the transferee is not a Disqualified
Transferee, (vi) the Principal Control Persons collectively retain Control
of Mortgage Borrower, Mezzanine Borrower and any Junior Mezzanine Borrower, and
(vii) the Principal Investors collectively continue to own, directly
and/or indirectly, at least 51% of the ownership interests in Mortgage
Borrower, Mezzanine Borrower and any Junior 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
Mezzanine Lender or a Rating Agency Confirmation so long as (x) (except
with respect to Section 8.5(b)(ii) and (iv) below)
Section 8.5(a)(v) above is complied with and (y) with
respect to (1) any Transfer of interests in any Guarantor or Sponsor that
alters the ratio of ownership interests in Master Lessee between that owned by
Colony Capital, LLC and its Affiliates, on the one hand, and that owned by the
Fertitta Brothers and their Affiliates and Family Trusts, on the other hand,
and (2) any Transfer of interests in the Fertitta Brothers and their
Affiliates and Family Trusts to Persons other than Principal Investors,
Mezzanine Lender shall receive prior written notice:

 

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

 

(ii)           a Transfer of
equity interests in any Guarantor, Sponsor or Master Lessee in conjunction with
or after an initial public offering of shares, provided that from and after the
consummation of such initial public offering, no Person or group other than the
Principal Control Persons and Principal Investors (A) shall have acquired
beneficial ownership, directly or indirectly, of equity interests in Master
Lessee representing more than twenty-five percent (25%) of the voting power and
economic interest in Master Lessee where such ownership represents a greater
amount of the voting power or economic interest in Master Lessee than that
which is then owned by the Principal Control Persons and Principal Investors in
aggregate, or (B) shall have obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of Master Lessee;

 

97

 

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

 

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

 

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

 

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

 

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

 

98

 

execution and delivery of all
documentation reasonably requested by Mezzanine Lender, (iv) the delivery
of Opinions of Counsel requested by Mezzanine Lender, including, without
limitation, a Non-Consolidation Opinion with respect to the purchaser and other
entities identified by Mezzanine Lender or requested by the Rating Agencies and
opinions with respect to the valid formation, due authority and good standing
of the purchaser and any additional pledgors and the continued enforceability
of the Mezzanine Loan Documents and any other matters requested by Mezzanine
Lender, (v) the delivery of an endorsement to each of the Title Policies
insuring the lien of the Security Instruments, as assumed, subject only to the
Permitted Encumbrances, in form and substance reasonably acceptable to
Mezzanine Lender; (vi) delivery of a new “UCC 9” title policy in favor of
Mezzanine Lender, its successors and assigns, with such mezzanine endorsements
in favor of Lender as Mezzanine Lender reasonably requires, in form and
substance reasonably acceptable to Mezzanine Lender, and (vii) the payment
of all of Mezzanine Lender’s reasonable out-of-pocket fees, costs and expenses,
including, without limitation, reasonable attorneys’ fees and costs, actually
incurred by Mezzanine Lender in connection with such assumption.

 

8.8                                 Subleases.

 

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

 

8.8.2                        Leasing Conditions.  Except as otherwise provided in this Section 8.8.2,
neither Mezzanine Borrower nor Mortgage Borrower shall, and Mezzanine Borrower
shall cause Mortgage Borrower not to permit Master Lessee to (i) enter into
any Material Sublease (a “New Sublease”) or (ii) modify any
Material Sublease (including, without limitation, accept a surrender of any
portion of the Property subject to a Material Sublease (unless otherwise
required by law), allow a reduction in the term of any Material Sublease or a
reduction in the Rent payable under any Material Sublease, change any renewal
provisions of any Material Sublease, materially increase the obligations of the
landlord or materially decrease the obligations of any Tenant under a Material
Sublease) or terminate any Material Sublease unless the Tenant under such Lease is in default (any such
action referred to in clause (ii) being referred to herein as a “Sublease
Modification”) without the prior written consent of Mezzanine Lender. Any
New Sublease or Sublease Modification that requires Mezzanine Lender’s consent
shall be delivered to Mezzanine Lender for approval not less than five (5) Business
Days prior to the effective date of such New Sublease or Sublease Modification.
 If Mezzanine Lender fails to respond to
a request for Mezzanine Lender’s consent pursuant to this Section 8.8.2
within five (5) Business Days of Mezzanine Lender’s receipt of Mezzanine
Borrower’s request therefor, Mezzanine Borrower may deliver to Mezzanine Lender
a second request in an envelope or under cover of a letter marked “URGENT” and
including a legend in bold typeface that Mezzanine Lender’s failure to grant or
deny the requested consent within ten (10) Business Days of the receipt
thereof will result in the requested consent being deemed to have been
granted.  If Mezzanine Lender fails to
respond to such second request within ten (10) Business Days of its
receipt thereof, Mezzanine Lender’s consent shall be deemed granted.  Notwithstanding the foregoing, but 

 

99

 

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

 

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

 

8.8.4        Sublease Amendments. 
Mezzanine Borrower agrees that neither it nor Mortgage Borrower shall
have the right or power, as against Mezzanine Lender without its consent (which
consent shall not be unreasonably withheld or delayed as provided herein), to
cancel, abridge, amend or otherwise modify any Sublease unless such
modification complies with this Section 8.8.

 

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

 

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

 

100

 

IX.           INTEREST RATE CAP AGREEMENT (FIRST
MEZZANINE)

 

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

 

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

 

9.3                                Covenants.

 

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

 

101

 

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

 

(c)               In
the event of any downgrade, withdrawal or qualification of the rating of the Counterparty
such that it ceases to qualify as an “Approved Counterparty,” unless the
Counterparty shall have posted collateral on terms acceptable to the applicable
Rating Agencies and approved by Mezzanine Lender (which approval shall not be
unreasonably withheld, conditioned or delayed), or in the event
of any default by any Counterparty under the Interest Rate Cap Agreement (First
Mezzanine), Mezzanine Borrower shall
replace the Interest Rate Cap Agreement (First Mezzanine) with a Replacement
Interest Rate Cap Agreement (First Mezzanine) from an Approved Counterparty not
later than ten (10) Business Days following receipt of notice from
Mezzanine Lender, Servicer or any other Person of such downgrade, withdrawal or
qualification. In the event that the Counterparty is downgraded to below A- by
S&P, a Replacement Interest Rate Cap Agreement (First Mezzanine) shall be
required regardless of the posting of collateral.

 

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

 

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

 

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

 

102

 

Interest Rate Cap Agreement (First Mezzanine), (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 Cap Agreement
(First Mezzanine) or any defense by the Counterparty (or any successor or
substitute party to the Interest Rate Cap Agreement (First Mezzanine)) to
payment or (vii) fail to give prompt notice to Mezzanine Lender of any
notice of default given by or to Mezzanine Borrower under or with respect to
the Interest Rate Cap Agreement (First Mezzanine), together with a complete
copy of such notice.

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)               Giving
effect to the aforesaid grant and assignment to Mezzanine Lender, Mezzanine
Lender has, as of the date of this Agreement, and as to Rate Cap Collateral
(First Mezzanine) acquired from time to time after such date, shall have, a
valid, and upon proper filing, perfected and continuing first priority lien
upon and security interest in the Rate Cap

 

103

 

Collateral (First Mezzanine); provided that no representation or
warranty is made with respect to the perfected status of the security interest
of Mezzanine Lender in the proceeds of Rate Cap Collateral (First Mezzanine)
consisting of “cash proceeds” or “non-cash proceeds” as defined in the UCC
except if, and to the extent, the provisions of Section 9-306 of the UCC
shall be complied with.

 

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

 

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

 

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

 

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

 

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

 

104

 

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

 

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

 

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

 

105

 

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

 

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

 

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

 

106

 

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

 

9.9                               Public
Sales Not Possible.  Mezzanine
Borrower acknowledges that the terms of the Interest Rate Cap Agreement (First Mezzanine) may prohibit public
sales, that the Rate Cap Collateral (First Mezzanine) may not be of the type
appropriately sold at public sales, and that such sales may be prohibited by
law.  As a result, Mezzanine Borrower
agrees that private sales of the Rate Cap Collateral (First Mezzanine) 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 Cap Collateral (First Mezzanine) by Mezzanine Lender hereunder
(whether by virtue of the power of sale herein granted, pursuant to judicial
process or otherwise), the receipt by Mezzanine Lender or the officer making
the sale of the proceeds of such sale shall be a sufficient discharge to the
purchaser or purchasers of the Rate Cap Collateral (First Mezzanine) so sold,
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to Mezzanine Lender or
such officer or be answerable in any way for the misapplication or
non-application thereof.

 

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

 

X.            MAINTENANCE OF PROPERTY;
ALTERATIONS

 

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

 

10.2                         Conditions
to Alteration.  Provided that no
Noticed Default or Event of Default shall have occurred and be continuing
hereunder and that Mezzanine 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

 

107

 

exists, Mortgage Borrower and
Master Lessee shall have the right, without Mezzanine Lender’s consent, to
undertake any alteration, improvement, demolition or removal of the Property or
any portion thereof (any such alteration, improvement, demolition or removal,
an “Alteration”) so long as (i) Mezzanine Borrower causes Mortgage
Borrower to provide Mezzanine Lender with not less than ten (10) Business
Days prior written notice of any Material Alteration, and (ii) such
Alteration is undertaken in accordance with the applicable provisions of the
Master Lease, this Agreement and the other Mezzanine Loan Documents and in
compliance with all applicable Legal Requirements, is not prohibited by any
relevant Operating Agreements and shall not, upon completion (giving credit to
rent and other charges attributable to Subleases executed upon such
completion), have a Material Adverse Effect on the value, use or operation of
the Property taken as a whole or otherwise. 
Any Material Alteration shall be conducted under the supervision of an
Architect and, in connection with any Material Alteration, Mezzanine Borrower
shall cause Mortgage Borrower to deliver to Mezzanine Lender concurrently with
the notice of such Material Alteration, for information purposes only and not
for approval by Mezzanine Lender, detailed plans and specifications, cost
estimates therefor as set forth in an Officer’s Certificate, and an estimated
date of completion therefore, which date shall be not later than the date which
is six (6) months prior to the Maturity Date (unless otherwise consented
to in writing by Mezzanine Lender, which consent shall not be unreasonably
withheld, conditioned or delayed), all prepared and approved by such
Architect.  Such plans and specifications
may be revised at any time and from time to time by such Architect provided
that material revisions of such plans and specifications are filed with
Mezzanine Lender, for information purposes only.  All work done in connection with any
Alteration shall be performed with due diligence in a good and workmanlike
manner, all materials used in connection with any Alteration shall not be less
than the standard of quality of the materials currently used at the applicable
Individual Property and all materials used shall be in accordance with all
applicable Legal Requirements and Insurance Requirements.  The cost of any Alteration shall be promptly
and fully paid for, subject to a five percent (5%) retainage, provided that
such retainage shall not be required if such Alteration is being performed by
Master Lessee, an Affiliate of Mortgage Borrower, or an Affiliate of Master
Lessee.  Notwithstanding anything to the
contrary contained in this Section 10.2, Mezzanine Borrower shall cause
Mortgage Borrower to obtain Mezzanine Lender’s prior written approval (which
approval shall not be unreasonably withheld, conditioned or delayed so long as
no Noticed Default or Event of Default shall then exist and so long as
Mezzanine 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 Mezzanine Lender shall give
notice of its disapproval with the reasons therefor within ten (10) Business
Days after Mezzanine Lender’s receipt of the notice of Material Alteration
described in clause (i) of this Section 10.2 above) for any Material
Alteration if (x) an 80% Trigger Approval Period shall then be in effect
or existence, or (y) such proposed Material Alteration is reasonably
likely to result in more than a ten percent (10%) reduction in the pro forma
LCR during the twelve (12) months following the commencement of such proposed
Material Alteration.

 

10.3         Costs of Alteration.  Notwithstanding anything to the contrary
contained in this Article X, no Alteration which when aggregated
with all other Alterations then being undertaken by Mortgage Borrower involves costs estimated in writing by
Master Lessee (which costs shall be reasonably acceptable to Mezzanine Borrower
and Mezzanine Lender) to be incurred in implementing the Alterations that
exceed the Material Alteration Collateralization Threshold,

 

108

 

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

 

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

 

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

 

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

 

109

 

11.2         Financial
Statements.

 

11.2.1      Monthly
Reports.  Commencing in November 2007,
not later than thirty (30) days following the end of each calendar month (or,
with respect to calendar months that end on the last day of a Fiscal Quarter,
concurrently with the delivery of the applicable quarterly reports pursuant to Section 11.2.2),
Mezzanine Borrower shall cause Mortgage Borrower to cause Master Lessee,
pursuant to the Master Lease, to deliver to Mezzanine Lender monthly revenue
reports in respect of the Property for such month, for the corresponding month
of the previous Fiscal Year and for the year to date, and financial statements,
internally prepared on an accrual basis for such month, reporting Portfolio Four-Wall EBITDAR as of the
end of such month, for the corresponding month of the previous Fiscal Year and
for the year to date, and a comparison of the year to date results with (i) the
results for the same period of the previous year and (ii) the Annual
Budget for such period and the Fiscal Year, and a calculation of the LCR, LTV
Ratio, Master Lease Variable Additional
Rent and Master Lease Recurrent Additional Rent for such period.  Such
statements for each month shall: (A) fairly represent the financial
condition and results of operations of Master Lessee and (B) be
accompanied by a Master Lessee Officer’s Certificate certifying to the best of
the signer’s knowledge, that the requirements in clause (A) above have
been satisfied.  Such statements shall
also be accompanied by an Officer’s Certificate certifying to the best of the
signer’s knowledge that as of the date of such Officer’s Certificate, (1) no
Mortgage Event of Default exists under the Loan Agreement (Mortgage), the
Mortgage Notes or any other (Mortgage) Loan Document or, if so, specifying the
nature and status of each such Mortgage Event of Default and the action then
being taken by Mortgage Borrower or proposed to be taken to remedy such
Mortgage Event of Default and (2) no Event of Default exists under this
Agreement, the Mezzanine Notes or any other Mezzanine Loan Document or, if so,
specifying the nature and status of each such Event of Default and the action
then being taken by Mezzanine Borrower or proposed to be taken to remedy such
Event of Default.  Such financial
statements shall contain such other information as shall be reasonably
requested by Mezzanine Lender for purposes of calculations to be made by
Mezzanine Lender pursuant to the terms hereof.  Notwithstanding the foregoing, Mezzanine
Borrower shall cause Mortgage Borrower to deliver promptly to Mezzanine Lender
reports detailing any non recurring charges of Mortgage Borrower or Master
Lessee including, among other things, any charges assessed under any Operating
Agreement.  Subject to Section 11.2.9(b),
revenue reports and Portfolio Four-Wall EBITDAR shall each be prepared on an
aggregate basis for all of the Individual Properties.

 

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

 

110

 

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

 

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

 

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

 

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

 

111

 

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

 

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

 

11.2.7      Annual Budget; Operating Agreement Annual Budgets.

 

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

 

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

 

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

 

11.2.9      Proprietary Information.

 

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

 

112

 

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

 

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

 

XII.                            ENVIRONMENTAL
MATTERS

 

12.1         Representations.  Mezzanine Borrower hereby represents and
warrants, as of the Closing Date, that except as set forth in the environmental
reports and studies delivered to Mezzanine Lender prior to the Closing Date
(the “Environmental Reports”) or as would not reasonably be expected to
have a Material Adverse Effect, (i) neither Mezzanine Borrower nor
Mortgage Borrower has engaged in or, to the Mezzanine Borrower’s knowledge,
permitted any operations or activities upon, or any use or occupancy of the
Property, or any portion thereof, for the purpose of or in any way involving
the handling, manufacture, treatment, storage, use, generation, release,
discharge, refining, dumping or disposal of any Hazardous Materials on, under,
in or about the Property, or transported any Hazardous Materials to, from or
across the Property, except in all cases in compliance with Environmental Laws;
(ii) to Mezzanine Borrower’s knowledge, no tenant, occupant or user of the
Property, or any other Person, has engaged in or permitted any operations or
activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any material way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials on, in or about the Property, or
transported any Hazardous Materials to, from or across the Property, except in
all cases in compliance with Environmental Laws; (iii) to the Mezzanine
Borrower’s knowledge, no Hazardous Materials are presently constructed,
deposited, stored, or otherwise located on, under, in or about the Property
except in compliance with Environmental Laws; (iv) to the best of
Mezzanine Borrower’s knowledge, no Hazardous Materials have migrated from the
Property upon or beneath other properties which would reasonably be expected to
result in material liability for Mortgage Borrower or Mezzanine Borrower; and (v) to
the Mezzanine Borrower’s knowledge, no Hazardous Materials have migrated or
threaten to migrate from other properties upon, about or beneath the Property
which would reasonably be expected to result in material liability for Mortgage
Borrower or Mezzanine Borrower.

 

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12.2         Covenants.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

XIII.                        THE
OPERATING AGREEMENTS

 

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

 

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

 

116

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

117

 

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

 

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

 

13.4         Operating
Agreement Covenants.

 

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

 

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

 

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

 

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

 

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

 

119

 

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

 

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

 

13.4.8      [Reserved.]

 

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

 

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

 

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

 

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

 

120

 

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

 

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

 

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

 

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

 

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

 

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

 

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XIV.        [RESERVED]

 

XV.         ASSIGNMENTS AND PARTICIPATIONS

 

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

 

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

 

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

 

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

 

15.4         Register.  Each Mezzanine Lender (solely for this
purpose, as agent for Mezzanine 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 Mezzanine Lender and each
assignee pursuant to this Article XV and the principal amount of
the Loan owing to each such assignee from time to time (the “Register”)
in the 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 Mezzanine Lender to Mezzanine Borrower
promptly after such change is made, and the Register shall be available for
inspection by Mezzanine Borrower or any assignee pursuant to this Article XV
at any reasonable time and from time to time upon reasonable prior written
notice.

 

15.5         Substitute
Mezzanine Notes.  Upon its receipt of an Assignment and
Acceptance executed by an assignee, together with any Mezzanine Note or
Mezzanine Notes subject to such assignment, Mezzanine Lender shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit M hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register,
and (iii) give prompt written notice thereof to Mezzanine Borrower.  Within five (5) Business Days after its
receipt of such notice, Mezzanine Borrower, at Mezzanine Lender’s expense,
shall execute and deliver to Mezzanine Lender in exchange and substitution for
the surrendered Mezzanine Note or Mezzanine Notes a new Mezzanine Note to the
order of such assignee in an amount equal to the portion of the Loan assigned
to it and a new Mezzanine Note to the order of Mezzanine Lender in an amount
equal to the portion of the Loan retained by it hereunder.  Such new Mezzanine Note or Mezzanine Notes
shall be in an aggregate principal amount equal to the aggregate then
outstanding principal amount of such surrendered Mezzanine Note or Mezzanine
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the Mezzanine Notes (modified,
however, to the extent necessary so as not to impose duplicative or

 

123

 

increased obligations on Mezzanine Borrower
and to delete obligations previously satisfied by Mezzanine Borrower).  Notwithstanding the provisions of this Article XV,
Mezzanine Borrower shall not be responsible or liable for any additional taxes,
reserves, adjustments or other costs and expenses that are related to, or arise
as a result of, any transfer of the Loan or any interest or participation
therein that arise solely and exclusively from the transfer of the Loan or any
interest or participation therein or from the execution of the new Mezzanine
Note contemplated by this Section 15.5, including, without
limitation, any mortgage tax.  Mezzanine
Lender and/or the assignees, as the case may be, shall from time to time
designate one agent through which Mezzanine Borrower shall request all
approvals and consents required or contemplated by this Agreement and the other
Mezzanine Loan Documents and on whose statements Mezzanine Borrower may rely.  Mezzanine Lender hereby initially designates
Mezzanine Noteholder I as such agent.

 

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

 

15.7         Disclosure
of Information.  Any assignee
pursuant to this Article 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 Mezzanine Borrower furnished to such assignee by or on behalf of
Mezzanine Borrower; provided, however, that, with respect to any Asset Specific
Proprietary Information, the terms of Section 11.2.9 shall be complied
with.

 

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

 

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XVI.                [RESERVED]

 

XVII.               DEFAULTS

 

17.1         Event of Default.

 

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

 

(i)            if (A) the Indebtedness is not paid in
full on the Maturity Date, (B) any regularly scheduled monthly payment of
interest due under the Mezzanine Notes is not paid in full on the applicable
Payment Date, (C) any prepayment of principal due under this Agreement or
the Mezzanine Notes is not paid when due, (D) the Prepayment Fee is not
paid when due, (E) any deposit to the Mezzanine Account is not made on the
required deposit date therefor; or (F) except as to any amount included in
(A), (B), (C), (D), and/or (E) of this clause (i) or in clause 

 

(ii), any other amount payable
pursuant to this Agreement, the Mezzanine Notes or any other Mezzanine Loan
Document is not paid in full when due and payable in accordance with the
provisions of the applicable Mezzanine Loan Document, with the failure under
this clause (F) continuing for ten (10) Business Days after Mezzanine
Lender delivers written notice thereof to Mezzanine Borrower;

 

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

 

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

 

125

 

(iv)          if, except as expressly permitted pursuant
to Article VIII or the other provisions hereof, any of the
following shall occur: (a) any Transfer of any direct or indirect legal,
beneficial or equitable interest in all or any portion of the Property, (b) any
Transfer of any direct or indirect interest in Mortgage Borrower, Mezzanine
Borrower, any Junior Mezzanine Borrower, Master Lessee or any Guarantor, (c) any
Lien or encumbrance is granted against all or any portion of the Property or
the Collateral, (d) any pledge, hypothecation, creation of a security
interest in or other encumbrance of any direct or indirect interests in
Borrower, Mortgage Borrower, Junior Mezzanine Borrower, Master Lessee or any
Guarantor or (e) Mortgage 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 Mezzanine Borrower in Section 4.1.24
shall have been false or misleading in any material respect as of the date the
representation or warranty was made which incorrect, false or misleading
statement is not cured within thirty (30) days after receipt by Mezzanine
Borrower of notice from Mezzanine Lender in writing of such breach or a longer
period of time not to exceed thirty (30) additional days if Mezzanine Borrower
has commenced to cure but cannot cure within the initial thirty (30) day period
or (ii) if any other representation or warranty made by Mezzanine Borrower
herein or by Mezzanine Borrower or any Affiliate of Mezzanine Borrower in any
other Mezzanine Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Mezzanine
Lender shall have been false or misleading in any material respect as of the
date the representation or warranty was made; provided,
however, that if such representation or warranty which was false or
misleading in any material respect is, by its nature, curable and is not
reasonably likely to have a Material Adverse Effect, and such representation or
warranty was not, to the best of Mezzanine Borrower’s knowledge, false or
misleading in any material respect when made, then same shall not constitute an
Event of Default unless Mezzanine Borrower has not cured same within thirty
(30) days after receipt by Mezzanine Borrower of notice from Mezzanine Lender
in writing of such breach;

 

(vi)          if Mortgage Borrower, Mezzanine Borrower,
any 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 Mortgage Borrower, Mezzanine Borrower, any Master Lessee Party
or any Guarantor, or Mortgage Borrower, Mezzanine Borrower, any 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, Mortgage Borrower, Mezzanine
Borrower, any Master Lessee Party or any Guarantor, or if any proceeding for
the dissolution or liquidation of Mortgage Borrower, Mezzanine Borrower, any
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 Mortgage Borrower, Mezzanine Borrower, any Master Lessee Party
or any Guarantor upon the same not being discharged, stayed or dismissed within
ninety (90) days;

 

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

 

126

 

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

 

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

 

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

 

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

 

(xiii)         if Mezzanine Borrower shall fail to comply
in any material respect with any covenants set forth in Section 5.1.4,
Section 5.2.9 and 5.2.19;

 

(xiv)        except as provided clause (xiii) above, if
Mezzanine 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 Mezzanine Lender delivers written notice thereof to Mezzanine
Borrower;

 

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

 

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

 

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

 

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

 

(xix)         if
there shall occur any default by Mortgage Borrower, as lessee under any Ground
Lease, in the observance or performance of any term, covenant or condition of
such Ground Lease on the part of Mortgage Borrower to be observed or performed,
and said default is not cured prior to the expiration of any applicable grace
or cure period therein provided, or if any one or more of the events referred
to in a Ground Lease shall occur which would cause such

 

127

 

Ground Lease to terminate without notice or action by the related Fee
Owner under such Ground Lease or if any Leasehold Estate shall be surrendered
or any Ground Lease shall be lawfully terminated or cancelled for any reason or
under any circumstances whatsoever, or if any of the terms, covenants or
conditions of any Ground Lease shall in any manner be modified, changed,
supplemented, altered or amended in contradiction of the provisions of Article XIII
without the prior written consent of Mortgage Lender, which consent shall not
be unreasonably withheld, conditioned or delayed, or if Mortgage Borrower or
Master Lessee shall fail to exercise any option to renew the Ground Lease or
shall fail to or neglect to pursue diligently all actions necessary to exercise
such renewal rights pursuant to the terms of the Ground Lease, provided, that
if a default by Mortgage Borrower under a Ground Lease is a Ground Rent payment
default, the occurrence or failure to cure such default shall not be deemed to be in default
hereunder in the event (x) funds sufficient for a required transfer under Section 3.1.7(iii) of
the Loan Agreement (Mortgage) are
held in the Ground Rent Reserve Account, (y) Mortgage Lender or 

 

Cash Management Bank (Mortgage) fails to
timely make any transfer from such Sub-Account as contemplated by this
Agreement unless due to the negligence or willful misconduct of Mortgage
Borrower and (z) Mezzanine Borrower causes Mortgage Borrower to use best
efforts to cause Mortgage Lender and Cash Management Bank (Mortgage) to make
such payment from such subaccount;

 

(xx)                  Reserved;

 

(xxi)                 Reserved;

 

(xxii)                Reserved;

 

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

 

(xxiv)               Reserved;

 

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

 

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

 

(xxvii)      if
an Individual Property shall Go Dark and Mortgage Borrower shall not have
caused such Individual Property to reopen for business to the public, obtained
a release of such Individual Property or provided a substitute therefor in
accordance with Section 2.3.6 of the Loan Agreement (Mortgage)
within the time period specified for each of the foregoing in such Section; or
if an Individual Property shall Go Dark during any period when any other
Individual Property shall have “Gone Dark”;

 

(xxviii)     if Mezzanine Borrower shall continue to be
in Default under any of the other terms, covenants or conditions of this
Agreement or of any Mezzanine Loan Document not

 

128

 

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 Mezzanine Lender; provided, however,
that if such Default is susceptible of cure but cannot reasonably be cured
within such thirty (30) day period and provided further that Mezzanine Borrower
shall have commenced to cure such Default within such thirty (30) day period
and thereafter diligently proceeds to cure the same, such thirty (30) day
period shall be extended for such time as is reasonably necessary for Mezzanine
Borrower in the exercise of due diligence to cure such Default, such additional
period not to exceed ninety (90) days.

 

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

 

(c)           Upon
the occurrence of a Mortgage Default or a Mortgage Event of Default, Mezzanine
Borrower shall cause Mortgage Borrower to deliver to Mezzanine Lender within
five (5) Business Days after the first to occur of (a) receipt by
Mortgage Borrower of notice of such Mortgage Default or Mortgage Event of
Default from Mortgage Lender or (b) the date Mortgage Borrower obtains
actual knowledge of the occurrence of such Mortgage Default or Mortgage Event
of Default, a detailed description of the actions to be taken by Mortgage
Borrower to cure such Mortgage Default or Mortgage Event of Default and the
dates by which each such action shall occur. 
Such schedule shall be subject to the approval of Mezzanine Lender.  Mezzanine Borrower shall cause Mortgage
Borrower to take all such actions as are necessary to cure such Mortgage
Default or Mortgage Event of Default by the date approved by Mezzanine Lender
and shall deliver to Mezzanine Lender not less frequently than weekly
thereafter written updates concerning the status of Mortgage Borrower’s efforts
to cure such Mortgage Default or Mortgage Event of Default.  Mezzanine Lender shall have the right, but
not the obligation, to pay any sums or to take any action which Mezzanine
Lender deems necessary or advisable to cure

 

129

 

any default or
alleged default under the Loan Documents (Mortgage) (whether or not Mortgage
Borrower is undertaking efforts to cure such default), and such payment or such
action is hereby authorized by Mezzanine Borrower, and any sum so paid and any
expense incurred by Mezzanine Lender in taking any such action shall be
evidenced by this Agreement and secured by this Agreement and the Pledge and
shall be immediately due and payable by Mezzanine Borrower to Mezzanine Lender
with interest at the Default Rate until paid. Mezzanine Borrower shall cause
Mortgage Borrower to permit Mezzanine Lender to enter upon the Property for the
purpose of curing any default or alleged default under the Loan Documents
(Mortgage) or hereunder.  Mezzanine
Borrower hereby transfers and assigns any excess proceeds arising from any
foreclosure or sale under power pursuant to the Loan Documents (Mortgage) or
any instrument evidencing the indebtedness secured thereby, and Mezzanine
Borrower hereby authorizes and directs the holder or holders of the Loan
Documents (Mortgage) to pay such excess proceeds directly to Mezzanine Lender
up to the amount of the Obligations (First Mezzanine).

 

17.2         Remedies.

 

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

 

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

 

130

 

(c)               Upon the
occurrence and during the continuance of an Event of Default, with respect to
the Account Collateral (First Mezzanine), the Mezzanine Lender may:

 

(i)            without notice to Mezzanine Borrower,
except as required by law, and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Account Collateral (First
Mezzanine), against the Obligations (First Mezzanine), operating expenses
and/or capital expenditures for the Property or any part thereof;

 

(ii)           in Mezzanine Lender’s sole discretion, at
any time and from time to time, exercise any and all rights and remedies
available to it under this Agreement, and/or as a secured party under the UCC;

 

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

 

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

 

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

 

17.3         Remedies Cumulative; Waivers.  The
rights, powers and remedies of Mezzanine Lender under this Agreement and the
Pledge shall be cumulative and not exclusive of any other right, power or
remedy which Mezzanine Lender may have against Mezzanine Borrower pursuant to
this Agreement or the other Mezzanine Loan Documents, or existing at law or in
equity or otherwise.  Mezzanine Lender’s
rights, powers and remedies may be pursued singly,

 

131

 

concurrently or otherwise, at such time and
in such order as Mezzanine Lender may determine in Mezzanine Lender’s sole
discretion.  No delay or omission to
exercise any remedy, right or power accruing upon 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 Mezzanine Borrower or any Guarantor shall not be construed to
be a waiver of any subsequent Default or Event of Default by Mezzanine Borrower
or any Guarantor or to impair any remedy, right or power consequent thereon.

 

17.4         Costs of Collection  In the event that after an Event of
Default:  (i) the Mezzanine Notes or
any of the Mezzanine Loan Documents is placed in the hands of an attorney for
collection or enforcement or is collected or enforced through any legal
proceeding; (ii) an attorney is retained to represent Mezzanine Lender in
any bankruptcy, reorganization, receivership, or other proceedings affecting
creditors’ rights and involving a claim under this Agreement the Mezzanine
Notes or any of the Mezzanine Loan Documents; or (iii) an attorney is retained
to protect or enforce the lien or any of the terms of this Agreement, any
Pledge or any of the Mezzanine Loan Documents; then Mezzanine Borrower shall
pay to Mezzanine Lender all reasonable attorney’s fees, costs and expenses
actually incurred in connection therewith, including costs of appeal, together
with interest on any judgment obtained by Mezzanine Lender at the Default Rate
(collectively, “Enforcement Costs”).

 

XVIII.     SPECIAL PROVISIONS

 

18.1         Exculpation.

 

18.1.1      Exculpated Parties.  Except as set forth in this Section 18.1
and the Recourse Guaranty, no personal liability shall be asserted, sought or
obtained by Mezzanine Lender or enforceable against (i) Mezzanine
Borrower, (ii) any Affiliate of Mezzanine Borrower, (iii) any Person
owning, directly or indirectly, any legal or beneficial interest in Mezzanine
Borrower or any Affiliate of Mezzanine Borrower or (iv) any direct or
indirect partner, member, principal, officer, Controlling Person, beneficiary,
trustee, advisor, shareholder, employee, agent, Affiliate or director of any
Persons described in clauses (i) through (iii) above (collectively,
the “Exculpated Parties”) and none of the Exculpated Parties shall have
any personal liability (whether by suit deficiency judgment or otherwise) in respect
of the Obligations (First Mezzanine), this Agreement, the Pledge, the Mezzanine
Notes, the Collateral or any other Mezzanine Loan Document, or the making,
issuance or transfer thereof, all such liability, if any, being expressly
waived by Mezzanine Lender.  The
foregoing limitation shall not in any way limit or affect Mezzanine Lender’s
right to any of the following and Mezzanine Lender shall not be deemed to have
waived any of the following:

 

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

 

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

 

132

 

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

 

(d)               Any right which
Mezzanine Lender may have under Sections 506(a), 506(b), 1111(b) or
any other provisions of the Bankruptcy Code to file a claim for the full amount
of the Indebtedness secured by this Agreement and the Pledge or to require that
all collateral shall continue to secure all of the Indebtedness owing to
Mezzanine Lender in accordance with the Mezzanine Loan Documents; or

 

(e)               The liability of
any given Exculpated Party with respect to any separate written guaranty or
agreement given by any such Exculpated Party in connection with the Loan
(including, without limitation, the Recourse Guaranty).

 

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

 

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

 

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

 

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

 

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

 

(e)               any loss,
damage, cost or expense incurred by or on behalf of Mezzanine Lender by reason
of all or any part of the Property, the Account Collateral (First Mezzanine),
the Rate Cap Collateral (First Mezzanine) or the Collateral being encumbered by
a Lien or Transferred by reason of the acts of Mezzanine Borrower, Mortgage
Borrower or any Affiliate of Mezzanine Borrower or Mortgage Borrower from and
after the date hereof (other than as provided in this Agreement and the Pledge
and any other Mezzanine Document) in violation of the Mezzanine Loan Documents;

 

133

 

(f)                after the
occurrence and during the continuance of an Event of Default, any Rents,
issues, profits and/or income from the Property collected by Mezzanine
Borrower, Mortgage Borrower or any Affiliate of Mezzanine Borrower or Mortgage
Borrower (other than Rent sent to the Holding Account pursuant to the Loan
Agreement (Mortgage) and not paid directly to Mortgage Lender pursuant to any
notice of direction delivered to tenants of the Property) and not applied to
payment of the Obligations (Mortgage) or Obligations (First Mezzanine), as
applicable, or used to pay normal and verifiable operating expenses of the
Property or otherwise are not applied in a manner permitted under the Mezzanine
Loan Documents;

 

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

 

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

 

(i)                any
loss, damage, cost or expense incurred by or on behalf of Mezzanine Lender by
reason of any breach of a representation set forth in Section 4.1.30
or any covenant set forth in Section 5.1.4 or Section 5.2.19;

 

(j)                any loss,
damage, cost or expense incurred by or on behalf of Mezzanine Lender by reason
of the failure of Mezzanine Borrower to deliver to Mezzanine
Lender the net sales proceeds of a Transfer of an Individual Property described
in Section 2.3.4 together with any shortfall necessary to pay in
full the Combined Release Price for such Individual Property, in accordance with the provisions of Section 2.3.4;

 

(k)               all of the
Indebtedness and the Obligations (First Mezzanine) in the event
of: (i) any Borrower Party or any Master Lessee Party filing a voluntary petition under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (ii) any
Borrower Party or any Master Lessee Party, filing an answer consenting to or otherwise acquiescing in or
joining in any involuntary petition filed against it, by any other Person under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or soliciting or causing to be solicited, or colluding with (or any of such
Borrower Party’s, or such 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 Mezzanine
Lender, in the event (and arising out

 

134

 

of such circumstances) that Mezzanine Borrower should raise any
defense, counterclaim and/or allegation in any foreclosure action by Mezzanine
Lender relative to the Collateral, the Account Collateral (First Mezzanine) or
the Rate Cap Collateral (First Mezzanine) or any part thereof which is found by
a court to have been raised by Mezzanine Borrower in bad faith or to be without
basis in fact or law;

 

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

 

(n)               after the
occurrence and during the continuance of an Event of Default, any Receipts from
the Ownership Interests collected by Mezzanine Borrower or any Affiliate of
Mezzanine Borrower (other than Receipts sent to the Mezzanine Account and not
paid directly to Mezzanine Lender) and not paid to Mezzanine Lender or applied
to the payment of the Obligations (First Mezzanine).

 

18.2         Pro
Rata Share.  The obligations of each
Mezzanine Lender hereunder and under any of the other Mezzanine Loan Documents
are several (but not joint).  Subject to
the terms hereof, each Mezzanine Lender shall be obligated to fund on a pari
passu basis only its respective Pro Rata Share of the Loan.  Each Mezzanine Lender hereby agrees that if
either of them shall, whether by voluntary payment (other than a voluntary
prepayment of the Loan made and applied in accordance with the terms of this
Agreement), by realization upon security, through the exercise of any right of
set-off or banker’s lien, by counterclaim or cross action or by the enforcement
of any right under the Mezzanine Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code or
other applicable insolvency law, receive payment or reduction of a proportion
of the aggregate amount of principal, interest, fees and other amounts then due
and owing to that Mezzanine Lender hereunder or under the other Mezzanine Loan
Documents which is greater than its Pro Rata Share, then such Mezzanine Lender
receiving such proportionately greater payment shall (i) notify the other
Mezzanine Lender of the receipt of such payment, and (ii) appropriate
payments or other adjustments shall be made by each Mezzanine Lender to ensure
each Mezzanine Lender receives its respective Pro Rata Share of such aggregate
amount due.

 

XIX.        MISCELLANEOUS

 

19.1         Survival.  This Agreement and all covenants,
indemnifications, agreements, representations and warranties made herein and in
the certificates delivered pursuant hereto shall survive the making by
Mezzanine Lender of the Loan and the execution and delivery to Mezzanine Lender
of the Mezzanine Notes, and shall continue in full force and effect so long as
all or any of the Indebtedness is outstanding and unpaid unless a longer period
is expressly set forth herein or in the other Mezzanine Loan Documents.  Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party.  All
covenants, promises and agreements in this Agreement, by or on behalf of
Mezzanine Borrower, shall inure to the benefit of the successors and assigns of
Mezzanine Lender.  If Mezzanine Borrower
consists of more than one person, the obligations and liabilities of each such
person hereunder and under the other Mezzanine Loan Documents shall be joint
and several.

 

135

 

19.2         Mezzanine
Lender’s Discretion.  Whenever
pursuant to this Agreement, Mezzanine Lender exercises any right given to it to
approve or disapprove, or any arrangement or term is to be satisfactory to
Mezzanine Lender, the decision of Mezzanine Lender to approve or disapprove or
to decide whether arrangements or terms are satisfactory or not satisfactory
shall (except as is otherwise specifically herein provided) be in the sole
discretion of Mezzanine Lender and shall be final and conclusive.

 

19.3         Governing Law.

 

(A)          THIS AGREEMENT WAS
NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY MEZZANINE LENDER AND
ACCEPTED BY MEZZANINE BORROWER IN THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES
OF AMERICA.  TO THE FULLEST EXTENT
PERMITTED BY LAW, MEZZANINE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE MEZZANINE NOTES AND THE OTHER MEZZANINE LOAN DOCUMENTS AND
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

 

(B)           ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST MEZZANINE LENDER OR MEZZANINE BORROWER ARISING OUT
OF OR RELATING TO THIS AGREEMENT MAY AT MEZZANINE LENDER’S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
AND MEZZANINE BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER
HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND MEZZANINE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.  MEZZANINE BORROWER DOES HEREBY DESIGNATE AND
APPOINT:

 

CORPORATION
SERVICE COMPANY

80 STATE
STREET

ALBANY, NEW
YORK  12207-2543

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND
ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
SERVED IN ANY SUCH SUIT,

 

136

 

ACTION OR PROCEEDING IN ANY FEDERAL OR STATE
COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT
AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO
MEZZANINE BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON MEZZANINE BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. 
MEZZANINE BORROWER (I) SHALL GIVE PROMPT NOTICE TO MEZZANINE LENDER
OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT
ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

 

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

 

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

 

19.6         Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Mezzanine Loan Document
shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) certified or registered United States mail,
postage prepaid, return receipt requested, (b) expedited prepaid delivery
service, either commercial or United States Postal Service, with proof of
attempted delivery or (c) telecopier (with answer back acknowledged),
addressed as follows (or at such other address and Person as shall be
designated from time to time by any party hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this
Section):

 

137

 

	
  If to Mezzanine Lender:

  	
   

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

  
	
   

  	
   

  	
  60 Wall Street, 10th floor

  
	
   

  	
   

  	
  New York, NY 10005

  
	
   

  	
   

  	
  Attention: Robert Pettinato and
  General Counsel

  
	
   

  	
   

  	
  Telecopy No.: (212) 797-4489

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and to JPMorgan Chase Bank,
  N.A., on behalf of the holders of the Mezzanine Notes
 270 Park Avenue

  New York, New York 10017

  Attention: Michael Mesard

  Telecopy No.: (212) 834-6592

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Centerline Servicing Inc.

  
	
   

  	
   

  	
  5221 N. O’Connor Boulevard,
  Suite 600

  
	
   

  	
   

  	
  Irving, Texas 75039

  
	
   

  	
   

  	
  Attention: Wesley Wolf, SVP,
  Asset Management

  
	
   

  	
   

  	
  Telecopy No.: (972) 868-5493

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Latham & Watkins LLP

  
	
   

  	
   

  	
  633 West Fifth Street,
  Suite 4000

  
	
   

  	
   

  	
  Los Angeles, California 90071

  
	
   

  	
   

  	
  Attention: Donald I.
  Berger, Esq.

  
	
   

  	
   

  	
  Telecopy No.: (213) 891-8763

  
	
   

  	
   

  	
   

  
	
  If to Mezzanine Borrower:

  	
   

  	
  FCP MEZZCO BORROWER I, LLC

  1505 South Pavilion Center Drive
 Las Vegas,
  Nevada 89135

  Attention: General Counsel

  Telecopy No.: (702) 495-4260

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Milbank,
  Tweed, Hadley & McCloy LLP

  601 S.
  Figueroa Street, 30th Floor

  Los Angeles, California 90017

  Attention:
  Kenneth J. Baronsky

  Telecopy No.: (213) 892-4733

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Colony Capital Acquisitions, LLC

  1999 Avenue of the Stars, Suite 1200

  Los Angeles, California 90067

  Attention: Jonathan H. Grunzweig

  Telecopy No.: (310) 407-7407

  

 

138

 

	
  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.  MEZZANINE BORROWER AND ALL PERSONS CLAIMING
BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, THE PLEDGE, THE
MEZZANINE NOTES OR ANY OTHER MEZZANINE LOAN DOCUMENT, INCLUDING, WITHOUT
LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, THE PLEDGE, THE MEZZANINE NOTES
OR ANY OTHER MEZZANINE LOAN DOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND MEZZANINE BORROWER
HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION MAY BE
FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF
ANY RIGHT TO TRIAL BY JURY.  MEZZANINE
BORROWER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE
MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL
INDUCEMENT FOR THE MAKING OF THE LOAN. 
THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

 

19.8         Headings.  The Article and/or Section headings
and the Table of Contents in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.

 

139

 

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

 

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

 

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

 

19.12       Expenses; Indemnity

 

(a)               Mezzanine Borrower covenants and
agrees to pay or, if Mezzanine Borrower fails to pay, to reimburse, Mezzanine
Lender upon receipt of written notice from Mezzanine Lender for all reasonable
out-of-pocket costs and expenses (including reasonable attorneys’ fees and
disbursements), except as may be otherwise expressly provided elsewhere in this
Agreement or the Mezzanine Loan Documents, incurred by Mezzanine Lender in
connection with (i) the preparation, negotiation, execution and delivery
of the Mezzanine 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 Mezzanine Borrower (excluding any opinions requested by
Mezzanine Lender pursuant to this Agreement in conjunction with such resizing);
(ii) Mezzanine Lender’s ongoing performance of and compliance with all
agreements and conditions contained in this Agreement and the other Mezzanine
Loan Documents on its part to be performed or complied with after the Closing
Date; (iii) the negotiation, preparation, execution, delivery and administration
of any consents, amendments, waivers or other modifications to this Agreement
and the other Mezzanine Loan Documents and any other documents or matters as
required herein or under the other Mezzanine Loan Documents; (iv) securing
Mezzanine Borrower’s compliance with any requests made pursuant to the
provisions of this Agreement; (v) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Mezzanine Lender all required legal opinions, and other similar
expenses incurred in creating and perfecting the Lien in favor of Mezzanine
Lender pursuant to this Agreement and the other Mezzanine Loan

 

140

 

Documents; (vi) enforcing or preserving any rights, in response to
third party claims or the prosecuting or defending of any action or proceeding
or other litigation, in each case against, under or affecting Mezzanine
Borrower, this Agreement, the other Mezzanine Loan Documents, the Collateral or
the Property, or any other security given for the Loan; (vii) enforcing
any obligations of or collecting any payments due from Mezzanine Borrower under
this Agreement, the other Mezzanine Loan Documents or with respect to the
Collateral or the Property or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a work-out or of any insolvency or bankruptcy proceedings and (viii) 

procuring insurance policies pursuant to Section 6.1; provided,
however, that Mezzanine 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 Mezzanine Lender. Any
cost and expenses due and payable to Mezzanine Lender may be paid from any
amounts in the Mezzanine Account.

 

(b)               Subject to the
non-recourse provisions of Section 18.1, Mezzanine Borrower shall
protect, indemnify and save harmless Mezzanine Lender, and all officers,
directors, stockholders, members, partners, employees, 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, the Collateral or the Property or any part of its
interest therein, by reason of the occurrence or existence of any of the
following (to the extent Proceeds payable on account of the following shall be
inadequate; it being understood that in no event will the Indemnified Parties
be required to actually pay or incur any costs or expenses as a condition to
the effectiveness of the foregoing indemnity) prior to (i) the acceptance
by Mezzanine Lender or its designee of a transfer-in-lieu of foreclosure with
respect to the Collateral, or (ii) an Indemnified Party or its designee or
a receiver taking possession or control of the Collateral or (iii) the
foreclosure of the Pledge, except to the extent caused by the actual willful
misconduct or gross negligence of the Indemnified Parties (other than such
willful misconduct or gross negligence imputed to the Indemnified Parties because
of their interest in the Collateral):  (1) ownership
of Mezzanine Borrower’s interest in the Mortgage Borrower, or any interest
therein, or receipt of any Receipts or other sum therefrom, (2) any
accident, injury to or death of any persons or loss of or damage to property
occurring on or about the Property or any Appurtenances thereto, (3) any
design, construction, operation, repair, maintenance, use, non-use or condition
of the Property or Appurtenances thereto, including claims or penalties arising
from violation of any Legal Requirement or Insurance Requirement, as well as
any claim based on any patent or latent defect, whether or not discoverable by
Mezzanine Lender and any claim the insurance as to which is inadequate, (4) any
Default under this Agreement or any of the other Mezzanine Loan Documents or
any Mortgage Default or any failure on the part of Mezzanine Borrower to cause
the Mortgage Borrower to perform or comply with any of the terms of any
Operating Agreement within the applicable notice or grace periods, (5) any
performance of any labor or services or the furnishing of any materials or
other property in respect of the Property or any part thereof, (6) any
negligence or tortious act or omission on the part of Mezzanine Borrower or
Mortgage Borrower or any of their agents, contractors, servants, employees,
sublessees, licensees or invitees, (7) any contest referred to in Section 7.3
hereof, or (8) any obligation or undertaking relating to the performance
or discharge of any of the terms, covenants and conditions of the landlord
contained in the Subleases or the Master Lease. 
Any amounts the Indemnified Parties

 

141

 

are legally entitled to receive
under this Section which are not paid within fifteen (15) Business Days
after written demand therefor by the Indemnified Parties or Mezzanine Lender,
setting forth in reasonable detail the amount of such demand and the basis
therefor, shall bear interest from the date of demand at the Default Rate, and shall,
together with such interest, be part of the Indebtedness and secured by this
Agreement and the Pledge.  In case any
action, suit or proceeding is brought against the Indemnified Parties by reason
of any such occurrence, Mezzanine Borrower shall at Mezzanine Borrower’s
expense resist and defend such action, suit or proceeding or will cause the
same to be resisted and defended by counsel at Mezzanine Borrower’s reasonable expense for the insurer
of the liability or by counsel designated by Mezzanine Borrower (unless
reasonably disapproved by Mezzanine Lender promptly after Mezzanine Lender has
been notified of such counsel); provided, however, that nothing
herein shall compromise the right of Mezzanine Lender (or any Indemnified
Party) to appoint its own counsel at Mezzanine Borrower’s expense for its
defense with respect to any action which in its reasonable opinion presents a
conflict or potential conflict between Mezzanine Lender or such Indemnified
Party and Mezzanine Borrower that would make such separate representation
advisable; provided further that if Mezzanine Lender or such Indemnified Party
shall have appointed separate counsel pursuant to the foregoing, Mezzanine
Borrower shall not be responsible for the expense of additional separate counsel
of any Indemnified Party or Mezzanine Lender unless in the reasonable opinion
of Mezzanine Lender a conflict or potential conflict exists between such
Indemnified Party and Mezzanine Lender. 
So long as Mezzanine Borrower is resisting and defending such action,
suit or proceeding as provided above in a prudent and commercially reasonable
manner, Mezzanine Lender and the Indemnified Parties shall not be entitled to
settle such action, suit or proceeding without Mezzanine Borrower’s consent
which shall not be unreasonably withheld or delayed, and claim the benefit of
this Section 19.12 with respect to such action, suit or proceeding
and Mezzanine Lender agrees that it will not settle any such action, suit or
proceeding without the consent of Mezzanine Borrower; provided, however,
that if Mezzanine Borrower is not diligently defending such action, suit or
proceeding in a prudent and commercially reasonable manner as provided above,
and Mezzanine Lender has provided Mezzanine Borrower with thirty (30) days’
prior written notice, or shorter period if mandated by the requirements of
applicable law, and opportunity to correct such determination, Mezzanine Lender
may settle such action, suit or proceeding and claim the benefit of this Section 19.12
with respect to settlement of such action, suit or proceeding.  Any Indemnified Party will give Mezzanine
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification
hereunder.  The Indemnified Parties shall
not settle or compromise any action, proceeding or claim as to which it is
indemnified under this Section 19.12 without prior notice to and
reasonable consent of Mezzanine Borrower.

 

19.13       Exhibits
and Schedules Incorporated.  The
Exhibits and Schedules annexed hereto are hereby incorporated herein as a part
of this Agreement with the same effect as if set forth in the body hereof.

 

19.14       Offsets,
Counterclaims and Defenses.  Any
assignee of Mezzanine Lender’s interest in and to this Agreement, the Mezzanine
Notes and the other Mezzanine Loan Documents shall take the same free and clear
of all offsets, counterclaims or defenses which are unrelated to such documents
which Mezzanine Borrower may otherwise have against any assignor of such documents,
and no such unrelated counterclaim or defense shall be interposed

 

142

 

or asserted by Mezzanine Borrower in any action or proceeding brought
by any such assignee upon such documents and any such right to interpose or
assert any such unrelated offset, counterclaim or defense in any such action or
proceeding is hereby expressly waived by Mezzanine Borrower.

 

19.15       Liability
of Assignees of Mezzanine Lender.  No
assignee of Mezzanine Lender shall have any personal liability, directly or
indirectly, under or in connection with this Agreement or any other Mezzanine
Loan Document or any amendment or amendments hereto made at any time or times,
heretofore or hereafter, any different than the liability of Mezzanine Lender
hereunder.  In addition, no assignee
shall have at any time or times hereafter any personal liability, directly or
indirectly, under or in connection with or secured by any agreement, lease,
instrument, encumbrance, claim or right affecting or relating to the Property
or to which the Property is now or hereafter subject any different than the
liability of Mezzanine Lender hereunder. 
The limitation of liability provided in this Section 19.15
is (i) in addition to, and not in limitation of, any limitation of
liability applicable to the assignee provided by law or by any other contract,
agreement or instrument, and (ii) shall not apply to any assignee’s gross
negligence or willful misconduct.

 

19.16       No Joint Venture or Partnership; No Third
Party Beneficiaries.

 

(a)               Mezzanine
Borrower and Mezzanine Lender intend that the relationships created hereunder
and under the other Mezzanine Loan Documents be solely that of borrower and
lender.  Nothing herein or therein is
intended to create a joint venture, partnership, tenancy-in-common, or joint
tenancy relationship between Mezzanine Borrower and Mezzanine Lender nor to
grant Mezzanine Lender any interest in the Collateral other than that of
secured party, beneficiary or lender.

 

(b)               This Agreement
and the other Mezzanine Loan Documents are solely for the benefit of Mezzanine
Lender and Mezzanine Borrower and nothing contained in this Agreement or the
other Mezzanine Loan Documents shall be deemed to confer upon anyone other than
Mezzanine Lender and Mezzanine Borrower any right to insist upon or to enforce
the performance or observance of any of the obligations contained herein or
therein.  All conditions to the
obligations of Mezzanine Lender to make the Loan hereunder are imposed solely
and exclusively for the benefit of Mezzanine Lender and no other Person shall
have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that Mezzanine Lender will refuse to make
the Loan in the absence of strict compliance with any or all thereof and no
other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part
by Mezzanine Lender if, in Mezzanine Lender’s sole discretion, Mezzanine Lender
deems it advisable or desirable to do so.

 

19.17       Publicity.  Each party shall endeavor to permit the other
to review the initial press release relating to the Loan in order to provide
the other with a reasonable opportunity to comment thereon.

 

19.18       Waiver
of Marshalling of Assets.  To the
fullest extent permitted by law, Mezzanine Borrower, for itself and its
successors and assigns, waives all rights to a marshalling

 

143

 

of the assets of Mezzanine Borrower, Mezzanine Borrower’s members and
others with interests in Mezzanine Borrower and of the Collateral, and agrees
not to assert any right under any laws pertaining to the marshalling of assets,
the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Mezzanine Lender under the Mezzanine Loan
Documents to a sale of the Collateral for the collection of the Indebtedness
without any prior or different resort for collection or of the right of
Mezzanine Lender to the payment of the Indebtedness out of the net proceeds of
the Collateral in preference to every other claimant whatsoever.

 

19.19       Waiver
of Counterclaim and other Actions. 
Mezzanine Borrower hereby expressly and unconditionally waives, in
connection with any suit, action or proceeding brought by Mezzanine Lender on
this Agreement, the Mezzanine Notes, the Pledge or any Mezzanine Loan Document,
any and every right it may have to (i) interpose any counterclaim therein
(other than a counterclaim which can only be asserted in the suit, action or
proceeding brought by Mezzanine Lender on this Agreement, the Mezzanine Notes,
the Pledge or any Mezzanine Loan Document and cannot be maintained in a
separate action) and (ii) have any such suit, action or proceeding
consolidated with any other or separate suit, action or proceeding.

 

19.20       Conflict;
Construction of Documents; Reliance.

 

(a)           In the event of any
conflict between the provisions of this Agreement and any of the other
Mezzanine Loan Documents, the provisions of this Agreement shall control.  The parties hereto acknowledge that they were
represented by competent counsel in connection with the negotiation, drafting
and execution of the Mezzanine Loan Documents and that such Mezzanine Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. 
Mezzanine Borrower acknowledges that, with respect to the Loan,
Mezzanine Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Mezzanine Lender or any parent,
subsidiary or Affiliate of Mezzanine Lender. 
Mezzanine Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the
Mezzanine Loan Documents or any other agreements or instruments which govern
the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Mezzanine Lender of any equity interest any of them may acquire in
Mezzanine Borrower, and Mezzanine Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Mezzanine Lender’s exercise of any such rights or remedies.  Mezzanine Borrower acknowledges that
Mezzanine Lender engages in the business of real estate financings and other
real estate transactions and investments which may be viewed as adverse to or
competitive with the business of Mezzanine Borrower or its Affiliates.

 

(b)               Notwithstanding
anything to the contrary set forth in this Agreement, any right of Mezzanine
Lender or obligation of Mezzanine Borrower with respect to the Operating
Agreements shall be subject to the rights of Mortgage Lender and obligations of
Mortgage Borrower under the Loan Documents (Mortgage).

 

19.21       Prior
Agreements.  This Agreement and the
other Mezzanine Loan Documents contain the entire agreement of the parties
hereto and thereto in respect of the transactions

 

144

 

contemplated hereby and
thereby, and all prior agreements among or between such parties, whether oral
or written, are superseded by the terms of this Agreement and the other
Mezzanine Loan Documents and unless specifically set forth in a writing
contemporaneous herewith the terms, conditions and provisions of any and all
such prior agreements do not survive execution of this Agreement.

 

19.22       Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which
shall constitute one document.

 

19.23       Direction of Mortgage Borrower with
Respect to the Property.  Mezzanine
Borrower and Mezzanine Lender acknowledge and agree that, as to any clauses or
provisions contained in this Agreement or any of the other Mezzanine Loan
Documents to the effect that (i) Mezzanine Borrower shall cause Mortgage
Borrower to act or to refrain from acting in any manner, or (ii) Mezzanine
Borrower shall cause to occur or not to occur, or otherwise be obligated in any
manner with respect to, any matters pertaining to Mortgage Borrower or the
Property, or (iii) other similar effect, such clause or provisions, in each case,
is intended to mean, and shall be construed as meaning, that Mezzanine Borrower
has undertaken to act and is obligated to act in Mezzanine Borrower’s capacity
as the sole member of Mortgage Borrower (which Mortgage Borrower, in turn, is
the fee owner of the Property) but not directly with respect to Mortgage
Borrower or the Property or in any other manner which would violate any of the
covenants contained in Section 5.1.4 hereof or other similar covenants
contained in Mezzanine Borrower’s Organizational Documents.

 

[NO FURTHER
TEXT ON THIS PAGE]

 

145

 

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

 

	
   

  	
  MEZZANINE BORROWER:

  
	
   

  	
   

  
	
   

  	
  FCP MEZZCO BORROWER I, LLC, a
  Delaware

  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  M. Friel

  
	
   

  	
  Name: Thomas M.
  Friel

  
	
   

  	
  Title: Authorized
  Signatory

  

 

 

[Mezzanine
Lender’s signature appears on following page]

 

Mezzanine
Borrower’s Execution Page

 

 

	
   

  	
  MEZZANINE LENDER:

  
	
   

  	
   

  
	
   

  	
  GERMAN AMERICAN CAPITAL

  CORPORATION, a Maryland corporation, on

  behalf of the holders of the Mezzanine Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ 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
 Mezzanine Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Mesard

  
	
   

  	
  Name: Michael Mesard

  
	
   

  	
  Title: Executive DirectorEXHIBIT 4.3

 

AMENDED AND
RESTATED MEZZANINE LOAN AND SECURITY AGREEMENT

(SECOND MEZZANINE)

 

 

Dated as of March 19, 2008

 

 

Among

 

 

FCP
MEZZCO BORROWER II, LLC

 

as
Mezzanine Borrower

 

 

and

 

 

GERMAN
AMERICAN CAPITAL CORPORATION

 

and

 

JPMORGAN
CHASE BANK, N.A.,

 

on behalf of
the holders of the Mezzanine Notes,

 

 

as
Mezzanine Lender

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  I.

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
   

  	
  10

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  	
  10

  
	
   

  	
  1.2

  	
  Principles of Construction

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  GENERAL
  TERMS

  	
   

  	
  41

  
	
   

  	
  2.1

  	
  Loan; Disbursement to
  Mezzanine Borrower

  	
   

  	
  41

  
	
   

  	
   

  	
  2.1.1

  	
  The Loan

  	
   

  	
  42

  
	
   

  	
   

  	
  2.1.2

  	
  Disbursement
  to Mezzanine Borrower

  	
   

  	
  42

  
	
   

  	
   

  	
  2.1.3

  	
  The Mezzanine Notes, Pledge and Mezzanine Loan Documents

  	
   

  	
  42

  
	
   

  	
   

  	
  2.1.4

  	
  Use of Proceeds

  	
   

  	
  42

  
	
   

  	
  2.2

  	
  Interest; Loan Payments; Late
  Payment Charge

  	
   

  	
  42

  
	
   

  	
   

  	
  2.2.1

  	
  Payment of Principal and Interest

  	
   

  	
  42

  
	
   

  	
   

  	
  2.2.2

  	
  Method and Place of Payment

  	
   

  	
  42

  
	
   

  	
   

  	
  2.2.3

  	
  Late Payment Charge

  	
   

  	
  43

  
	
   

  	
   

  	
  2.2.4

  	
  Usury Savings

  	
   

  	
  43

  
	
   

  	
  2.3

  	
  Prepayments

  	
   

  	
  44

  
	
   

  	
   

  	
  2.3.1

  	
  Mandatory Prepayments

  	
   

  	
  44

  
	
   

  	
   

  	
  2.3.2

  	
  Prepayments After Event of Default; Application of Amounts Paid

  	
   

  	
  44

  
	
   

  	
   

  	
  2.3.3

  	
  Release of Collateral upon Repayment of Loan in Full

  	
   

  	
  44

  
	
   

  	
   

  	
  2.3.4

  	
  Release of
  Individual Properties

  	
   

  	
  44

  
	
   

  	
   

  	
  2.3.5

  	
  Substitution
  of Properties

  	
   

  	
  47

  
	
   

  	
   

  	
  2.3.6

  	
  Provisions
  Relating to Individual Properties That Go Dark

  	
   

  	
  53

  
	
   

  	
   

  	
  2.3.7

  	
  Excess
  Account Collateral

  	
   

  	
  54

  
	
   

  	
   

  	
  2.3.8

  	
  Reserve
  Requirements

  	
   

  	
  54

  
	
   

  	
   

  	
  2.3.9

  	
  Release of
  Unimproved Parcels

  	
   

  	
  54

  
	
   

  	
  2.4

  	
  Regulatory Change; Taxes

  	
   

  	
  56

  
	
   

  	
   

  	
  2.4.1

  	
  Increased Costs

  	
   

  	
  56

  
	
   

  	
   

  	
  2.4.2

  	
  Special Taxes

  	
   

  	
  57

  
	
   

  	
   

  	
  2.4.3

  	
  Other Taxes

  	
   

  	
  57

  
	
   

  	
   

  	
  2.4.4

  	
  Indemnity

  	
   

  	
  57

  
	
   

  	
   

  	
  2.4.5

  	
  Change of Office

  	
   

  	
  57

  
	
   

  	
   

  	
  2.4.6

  	
  Survival

  	
   

  	
  57

  
	
   

  	
  2.5

  	
  Conditions Precedent to
  Closing

  	
   

  	
  57

  
	
   

  	
   

  	
  2.5.1

  	
  Representations and Warranties; Compliance with Conditions

  	
   

  	
  58

  
	
   

  	
   

  	
  2.5.2

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

  	
   

  	
  58

  
	
   

  	
   

  	
  2.5.3

  	
  Delivery of Organizational Documents

  	
   

  	
  60

  
	
   

  	
   

  	
  2.5.4

  	
  Counsel Opinions

  	
   

  	
  60

  
	
   

  	
   

  	
  2.5.5

  	
  Consummation of the Merger

  	
   

  	
  61

  
	
   

  	
   

  	
  2.5.6

  	
  Payments

  	
   

  	
  61

  
	
   

  	
   

  	
  2.5.7

  	
  Transaction Costs

  	
   

  	
  61

  
	
   

  	
   

  	
  2.5.8

  	
  Material Adverse Effect

  	
   

  	
  61

  

 

 

	
   

  	
   

  	
  2.5.9

  	
  Control

  	
   

  	
  62

  
	
   

  	
   

  	
  2.5.10

  	
  Insolvency

  	
   

  	
  62

  
	
   

  	
   

  	
  2.5.11

  	
  Master Lease and Individual Property Subleases

  	
   

  	
  62

  
	
   

  	
   

  	
  2.5.12

  	
  Equity
  Contribution

  	
   

  	
  62

  
	
   

  	
   

  	
  2.5.13

  	
  Existing Indebtedness

  	
   

  	
  62

  
	
   

  	
   

  	
  2.5.14

  	
  Ground Lease and Fee Mortgagee Estoppels

  	
   

  	
  63

  
	
   

  	
   

  	
  2.5.15

  	
  Equity and Real Property Transfer Documents

  	
   

  	
  63

  
	
   

  	
   

  	
  2.5.16

  	
  No Competing
  Financing

  	
   

  	
  63

  
	
   

  	
   

  	
  2.5.17

  	
  Approvals

  	
   

  	
  63

  
	
   

  	
   

  	
  2.5.18

  	
  Searches

  	
   

  	
  64

  
	
   

  	
  2.6

  	
  [Reserved]

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  CASH
  MANAGEMENT

  	
   

  	
  64

  
	
   

  	
  3.1

  	
  Cash Management

  	
   

  	
  64

  
	
   

  	
   

  	
  3.1.1

  	
  Establishment of Accounts

  	
   

  	
  64

  
	
   

  	
   

  	
  3.1.2

  	
  Pledge of Account Collateral (Second Mezzanine)

  	
   

  	
  65

  
	
   

  	
   

  	
  3.1.3

  	
  Maintenance
  of Collateral Accounts

  	
   

  	
  65

  
	
   

  	
   

  	
  3.1.4

  	
  Eligible Accounts

  	
   

  	
  66

  
	
   

  	
   

  	
  3.1.5

  	
  Deposits into Sub-Accounts

  	
   

  	
  66

  
	
   

  	
   

  	
  3.1.6

  	
  Monthly Funding

  	
   

  	
  66

  
	
   

  	
   

  	
  3.1.7

  	
  Cash Management Bank (Second Mezzanine)

  	
   

  	
  68

  
	
   

  	
   

  	
  3.1.8

  	
  Mezzanine
  Borrower’s Account Representations, Warranties and Covenants

  	
   

  	
  69

  
	
   

  	
   

  	
  3.1.9

  	
  Account Collateral (Second Mezzanine) and Remedies

  	
   

  	
  69

  
	
   

  	
   

  	
  3.1.10

  	
  Transfers and Other Liens

  	
   

  	
  70

  
	
   

  	
   

  	
  3.1.11

  	
  Reasonable Care

  	
   

  	
  70

  
	
   

  	
   

  	
  3.1.12

  	
  Mezzanine Lender’s Liability

  	
   

  	
  71

  
	
   

  	
   

  	
  3.1.13

  	
  Continuing Security Interest

  	
   

  	
  71

  
	
   

  	
   

  	
  3.1.14

  	
  Distributions

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  72

  
	
   

  	
  4.1

  	
  Mezzanine Borrower
  Representations

  	
   

  	
  72

  
	
   

  	
   

  	
  4.1.1

  	
  Organization

  	
   

  	
  72

  
	
   

  	
   

  	
  4.1.2

  	
  Proceedings

  	
   

  	
  72

  
	
   

  	
   

  	
  4.1.3

  	
  No Conflicts

  	
   

  	
  73

  
	
   

  	
   

  	
  4.1.4

  	
  Litigation

  	
   

  	
  73

  
	
   

  	
   

  	
  4.1.5

  	
  Agreements

  	
   

  	
  73

  
	
   

  	
   

  	
  4.1.6

  	
  Title to Property and Assets

  	
   

  	
  74

  
	
   

  	
   

  	
  4.1.7

  	
  No Bankruptcy Filing

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.8

  	
  Full and Accurate Disclosure

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.9

  	
  Ownership Interests

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.10

  	
  No Plan Assets

  	
   

  	
  75

  
	
   

  	
   

  	
  4.1.11

  	
  Compliance

  	
   

  	
  76

  
	
   

  	
   

  	
  4.1.12

  	
  Financial Information

  	
   

  	
  76

  
	
   

  	
   

  	
  4.1.13

  	
  Condemnation

  	
   

  	
  76

  
	
   

  	
   

  	
  4.1.14

  	
  Federal Reserve
  Regulations

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.15

  	
  Utilities and Public Access

  	
   

  	
  77

  

 

2

 

	
   

  	
   

  	
  4.1.16

  	
  Not a Foreign Person

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.17

  	
  Setoff, Etc

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.18

  	
  Representations
  and Warranties in the Loan Documents (Mortgage)

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.19

  	
  Representations
  and Warranties in the Senior Mezzanine Loan Documents

  	
   

  	
  77

  
	
   

  	
   

  	
  4.1.20

  	
  Enforceability

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.21

  	
  Reserved

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.22

  	
  Insurance

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.23

  	
  Use of Property

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.24

  	
  Certificate of Occupancy; Licenses

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.25

  	
  Flood Zone

  	
   

  	
  78

  
	
   

  	
   

  	
  4.1.26

  	
  Physical Condition

  	
   

  	
  79

  
	
   

  	
   

  	
  4.1.27

  	
  Boundaries

  	
   

  	
  79

  
	
   

  	
   

  	
  4.1.28

  	
  Subleases

  	
   

  	
  79

  
	
   

  	
   

  	
  4.1.29

  	
  Filing and Recording Taxes

  	
   

  	
  79

  
	
   

  	
   

  	
  4.1.30

  	
  Single Purpose Entity/Separateness

  	
   

  	
  80

  
	
   

  	
   

  	
  4.1.31

  	
  Reserved

  	
   

  	
  80

  
	
   

  	
   

  	
  4.1.32

  	
  Illegal Activity

  	
   

  	
  80

  
	
   

  	
   

  	
  4.1.33

  	
  No Change in Facts or Circumstances; Disclosure

  	
   

  	
  80

  
	
   

  	
   

  	
  4.1.34

  	
  Reserved

  	
   

  	
  80

  
	
   

  	
   

  	
  4.1.35

  	
  Tax Filings

  	
   

  	
  80

  
	
   

  	
   

  	
  4.1.36

  	
  Solvency/Fraudulent Conveyance

  	
   

  	
  81

  
	
   

  	
   

  	
  4.1.37

  	
  Investment Company Act

  	
   

  	
  81

  
	
   

  	
   

  	
  4.1.38

  	
  Interest Rate Cap Agreement (Second Mezzanine)

  	
   

  	
  81

  
	
   

  	
   

  	
  4.1.39

  	
  Labor

  	
   

  	
  81

  
	
   

  	
   

  	
  4.1.40

  	
  Brokers

  	
   

  	
  81

  
	
   

  	
   

  	
  4.1.41

  	
  No Other Debt

  	
   

  	
  82

  
	
   

  	
   

  	
  4.1.42

  	
  Taxpayer Identification Number

  	
   

  	
  82

  
	
   

  	
   

  	
  4.1.43

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

  	
   

  	
  82

  
	
   

  	
   

  	
  4.1.44

  	
  Merger Agreement

  	
   

  	
  82

  
	
   

  	
   

  	
  4.1.45

  	
  Rights of First Refusal or First Offer to Lease or Purchase

  	
   

  	
  82

  
	
   

  	
  4.2

  	
  Survival of Representations

  	
   

  	
  82

  
	
   

  	
  4.3

  	
  Mezzanine Borrower’s
  Knowledge

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  MEZZANINE
  BORROWER COVENANTS

  	
   

  	
  83

  
	
   

  	
  5.1

  	
  Affirmative Covenants

  	
   

  	
  83

  
	
   

  	
   

  	
  5.1.1

  	
  Performance by Mezzanine Borrower

  	
   

  	
  83

  
	
   

  	
   

  	
  5.1.2

  	
  Existence; Compliance with Legal Requirements; Insurance

  	
   

  	
  83

  
	
   

  	
   

  	
  5.1.3

  	
  Litigation

  	
   

  	
  84

  
	
   

  	
   

  	
  5.1.4

  	
  Single Purpose Entity

  	
   

  	
  84

  
	
   

  	
   

  	
  5.1.5

  	
  Consents

  	
   

  	
  85

  
	
   

  	
   

  	
  5.1.6

  	
  Access to Property

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.7

  	
  Notice of Default

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.8

  	
  Cooperate in Legal Proceedings

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.9

  	
  Reserved

  	
   

  	
  86

  

 

3

 

	
   

  	
   

  	
  5.1.10

  	
  Insurance

  	
   

  	
  86

  
	
   

  	
   

  	
  5.1.11

  	
  Further Assurances; Separate Notes; Loan Resizing

  	
   

  	
  87

  
	
   

  	
   

  	
  5.1.12

  	
  Mortgage Taxes

  	
   

  	
  88

  
	
   

  	
   

  	
  5.1.13

  	
  Operation

  	
   

  	
  88

  
	
   

  	
   

  	
  5.1.14

  	
  Business and Operations

  	
   

  	
  88

  
	
   

  	
   

  	
  5.1.15

  	
  Title to the Collateral

  	
   

  	
  88

  
	
   

  	
   

  	
  5.1.16

  	
  Costs of Enforcement

  	
   

  	
  89

  
	
   

  	
   

  	
  5.1.17

  	
  Estoppel Statements

  	
   

  	
  89

  
	
   

  	
   

  	
  5.1.18

  	
  Loan Proceeds

  	
   

  	
  89

  
	
   

  	
   

  	
  5.1.19

  	
  No Joint Assessment

  	
   

  	
  89

  
	
   

  	
   

  	
  5.1.20

  	
  No Further Encumbrances

  	
   

  	
  90

  
	
   

  	
   

  	
  5.1.21

  	
  Loan
  (Mortgage) Covenants

  	
   

  	
  90

  
	
   

  	
   

  	
  5.1.22

  	
  Master Lease

  	
   

  	
  91

  
	
   

  	
   

  	
  5.1.23

  	
  Senior Mezzanine Loan Covenants

  	
   

  	
  93

  
	
   

  	
  5.2

  	
  Negative Covenants

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.1

  	
  Incur Debt

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.2

  	
  Encumbrances

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.3

  	
  Engage in Different Business

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.4

  	
  Make Advances

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.5

  	
  Subdivision

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.6

  	
  Commingle

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.7

  	
  Guarantee Obligations

  	
   

  	
  94

  
	
   

  	
   

  	
  5.2.8

  	
  Transfer Assets

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.9

  	
  Amend Organizational Documents

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.10

  	
  Dissolve

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.11

  	
  Bankruptcy

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.12

  	
  ERISA

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.13

  	
  Distributions

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.14

  	
  Modify Mezzanine Account Agreement

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.15

  	
  Zoning Reclassification

  	
   

  	
  95

  
	
   

  	
   

  	
  5.2.16

  	
  Change of Principal Place of Business

  	
   

  	
  96

  
	
   

  	
   

  	
  5.2.17

  	
  Debt Cancellation

  	
   

  	
  96

  
	
   

  	
   

  	
  5.2.18

  	
  Misapplication of Funds

  	
   

  	
  96

  
	
   

  	
   

  	
  5.2.19

  	
  Single-Purpose Entity

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE;
  CASUALTY; CONDEMNATION; RESTORATION

  	
   

  	
  96

  
	
   

  	
  6.1

  	
  Insurance Coverage
  Requirements

  	
   

  	
  96

  
	
   

  	
   

  	
  6.1.1

  	
  Insurance
  Proceeds

  	
   

  	
  96

  
	
   

  	
   

  	
  6.1.2

  	
  Restoration
  of Property

  	
   

  	
  97

  
	
   

  	
   

  	
  6.1.3

  	
  Compliance

  	
   

  	
  97

  
	
   

  	
  6.2

  	
  Condemnation

  	
   

  	
  97

  
	
   

  	
  6.3

  	
  Certificates

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  IMPOSITIONS,
  OTHER CHARGES, LIENS AND OTHER ITEMS

  	
   

  	
  98

  
	
   

  	
  7.1

  	
  Mortgage Borrower and Senior
  Mezzanine Borrower to Pay Impositions and Other Charges

  	
   

  	
  98

  
	
   

  	
  7.2

  	
  No Liens

  	
   

  	
  99

  

 

4

 

	
   

  	
  7.3

  	
  Contest

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  TRANSFERS,
  INDEBTEDNESS AND SUBORDINATE LIENS

  	
   

  	
  101

  
	
   

  	
  8.1

  	
  General Restriction on
  Transfers

  	
   

  	
  101

  
	
   

  	
  8.2

  	
  Sale of Building Equipment

  	
   

  	
  101

  
	
   

  	
  8.3

  	
  Immaterial Transfers and
  Easements, etc

  	
   

  	
  101

  
	
   

  	
  8.4

  	
  Reserved

  	
   

  	
  102

  
	
   

  	
  8.5

  	
  Permitted Equity Transfers

  	
   

  	
  102

  
	
   

  	
  8.6

  	
  Deliveries to Mezzanine
  Lender

  	
   

  	
  103

  
	
   

  	
  8.7

  	
  Loan Assumption

  	
   

  	
  103

  
	
   

  	
  8.8

  	
  Subleases

  	
   

  	
  104

  
	
   

  	
   

  	
  8.8.1

  	
  Master Lease and Existing Subleases

  	
   

  	
  104

  
	
   

  	
   

  	
  8.8.2

  	
  Leasing Conditions

  	
   

  	
  104

  
	
   

  	
   

  	
  8.8.3

  	
  Delivery of New Sublease or Sublease Modification

  	
   

  	
  105

  
	
   

  	
   

  	
  8.8.4

  	
  Sublease Amendments

  	
   

  	
  105

  
	
   

  	
   

  	
  8.8.5

  	
  Security Deposits

  	
   

  	
  105

  
	
   

  	
   

  	
  8.8.6

  	
  No Default Under Subleases

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  INTEREST
  RATE CAP AGREEMENT (SECOND MEZZANINE)

  	
   

  	
  106

  
	
   

  	
  9.1

  	
  Interest Rate Cap Agreement
  (Second Mezzanine)

  	
   

  	
  106

  
	
   

  	
  9.2

  	
  Pledge and Collateral
  Assignment

  	
   

  	
  106

  
	
   

  	
  9.3

  	
  Covenants

  	
   

  	
  106

  
	
   

  	
  9.4

  	
  Powers of Mezzanine Borrower
  Prior to an Event of Default

  	
   

  	
  108

  
	
   

  	
  9.5

  	
  Representations and
  Warranties

  	
   

  	
  108

  
	
   

  	
  9.6

  	
  Payments

  	
   

  	
  109

  
	
   

  	
  9.7

  	
  Remedies

  	
   

  	
  109

  
	
   

  	
  9.8

  	
  Sales of Rate Cap Collateral
  (Second Mezzanine)

  	
   

  	
  111

  
	
   

  	
  9.9

  	
  Public Sales Not Possible

  	
   

  	
  112

  
	
   

  	
  9.10

  	
  Receipt of Sale Proceeds

  	
   

  	
  112

  
	
   

  	
  9.11

  	
  Replacement Interest Rate Cap
  Agreement (Second Mezzanine)

  	
   

  	
  112

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  MAINTENANCE
  OF PROPERTY; ALTERATIONS

  	
   

  	
  112

  
	
   

  	
  10.1

  	
  Maintenance of Property

  	
   

  	
  112

  
	
   

  	
  10.2

  	
  Conditions to Alteration

  	
   

  	
  112

  
	
   

  	
  10.3

  	
  Costs of Alteration

  	
   

  	
  113

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  BOOKS AND
  RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

  	
   

  	
  114

  
	
   

  	
  11.1

  	
  Books and Records

  	
   

  	
  114

  
	
   

  	
  11.2

  	
  Financial Statements

  	
   

  	
  115

  
	
   

  	
   

  	
  11.2.1

  	
  Monthly Reports

  	
   

  	
  115

  
	
   

  	
   

  	
  11.2.2

  	
  Quarterly Reports

  	
   

  	
  115

  
	
   

  	
   

  	
  11.2.3

  	
  Annual Reports

  	
   

  	
  116

  
	
   

  	
   

  	
  11.2.4

  	
  Disclosure Restrictions.

  	
   

  	
  116

  
	
   

  	
   

  	
  11.2.5

  	
  Capital Expenditures Summaries

  	
   

  	
  117

  
	
   

  	
   

  	
  11.2.6

  	
  Master Lease

  	
   

  	
  117

  
	
   

  	
   

  	
  11.2.7

  	
  Annual Budget; Operating Agreement Annual Budgets

  	
   

  	
  117

  

 

5

 

	
   

  	
   

  	
  11.2.8

  	
  Other
  Information

  	
   

  	
  117

  
	
   

  	
   

  	
  11.2.9

  	
  Proprietary Information

  	
   

  	
  118

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  ENVIRONMENTAL
  MATTERS

  	
   

  	
  118

  
	
   

  	
  12.1

  	
  Representations

  	
   

  	
  118

  
	
   

  	
  12.2

  	
  Covenants

  	
   

  	
  119

  
	
   

  	
   

  	
  12.2.1

  	
  Compliance with Environmental Laws

  	
   

  	
  119

  
	
   

  	
   

  	
  12.2.2

  	
  Notices Regarding Environmental Events

  	
   

  	
  119

  
	
   

  	
   

  	
  12.2.3

  	
  Other Notices

  	
   

  	
  119

  
	
   

  	
  12.3

  	
  Environmental Reports

  	
   

  	
  119

  
	
   

  	
  12.4

  	
  Environmental Indemnification

  	
   

  	
  120

  
	
   

  	
  12.5

  	
  Recourse Nature of Certain
  Indemnifications

  	
   

  	
  121

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  THE
  OPERATING AGREEMENTS

  	
   

  	
  121

  
	
   

  	
  13.1

  	
  Operating Agreement
  Representations, Warranties

  	
   

  	
  121

  
	
   

  	
  13.2

  	
  Cure by Mezzanine Lender

  	
   

  	
  123

  
	
   

  	
  13.3

  	
  Option to Renew or Extend the
  Ground Lease

  	
   

  	
  123

  
	
   

  	
  13.4

  	
  Operating Agreement Covenants

  	
   

  	
  123

  
	
   

  	
   

  	
  13.4.1

  	
  Waiver of Interest In New Ground Lease

  	
   

  	
  123

  
	
   

  	
   

  	
  13.4.2

  	
  No Election to Terminate

  	
   

  	
  123

  
	
   

  	
   

  	
  13.4.3

  	
  Notice Prior to Rejection

  	
   

  	
  124

  
	
   

  	
   

  	
  13.4.4

  	
  Mezzanine Lender Right to Perform

  	
   

  	
  124

  
	
   

  	
   

  	
  13.4.5

  	
  Mezzanine Lender Attorney in Fact

  	
   

  	
  124

  
	
   

  	
   

  	
  13.4.6

  	
  Payment of Sums Due Under Operating Agreements

  	
   

  	
  125

  
	
   

  	
   

  	
  13.4.7

  	
  Performance of Covenants

  	
   

  	
  125

  
	
   

  	
   

  	
  13.4.8

  	
  [Reserved

  	
   

  	
  125

  
	
   

  	
   

  	
  13.4.9

  	
  No Modification or Termination

  	
   

  	
  125

  
	
   

  	
   

  	
  13.4.10

  	
  Notices of Default

  	
   

  	
  125

  
	
   

  	
   

  	
  13.4.11

  	
  Delivery of Information

  	
   

  	
  126

  
	
   

  	
   

  	
  13.4.12

  	
  No Subordination

  	
   

  	
  126

  
	
   

  	
   

  	
  13.4.13

  	
  Further Assurances

  	
   

  	
  126

  
	
   

  	
   

  	
  13.4.14

  	
  Estoppel Certificates

  	
   

  	
  126

  
	
   

  	
   

  	
  13.4.15

  	
  Common Area/Common Elements Insurance

  	
   

  	
  126

  
	
   

  	
  13.5

  	
  Mezzanine Lender Right to
  Participate

  	
   

  	
  126

  
	
   

  	
  13.6

  	
  No Liability

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
  RESERVED

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS

  	
   

  	
  127

  
	
   

  	
  15.1

  	
  Assignment and Acceptance

  	
   

  	
  127

  
	
   

  	
  15.2

  	
  Effect of Assignment and
  Acceptance

  	
   

  	
  127

  
	
   

  	
  15.3

  	
  Content

  	
   

  	
  128

  
	
   

  	
  15.4

  	
  Register

  	
   

  	
  128

  
	
   

  	
  15.5

  	
  Substitute Mezzanine Notes

  	
   

  	
  128

  
	
   

  	
  15.6

  	
  Participations

  	
   

  	
  129

  
	
   

  	
  15.7

  	
  Disclosure of Information

  	
   

  	
  129

  
	
   

  	
  15.8

  	
  Security Interest in Favor of
  Federal Reserve Bank

  	
   

  	
  130

  
								

 

6

 

	
  XVI.

  	
  RESERVED

  	
   

  	
  130

  
	
   

  	
   

  	
   

  	
   

  
	
  XVII.

  	
  DEFAULTS

  	
   

  	
  130

  
	
   

  	
  17.1

  	
  Event of Default

  	
   

  	
  130

  
	
   

  	
  17.2

  	
  Remedies

  	
   

  	
  136

  
	
   

  	
  17.3

  	
  Remedies Cumulative; Waivers

  	
   

  	
  137

  
	
   

  	
  17.4

  	
  Costs of Collection

  	
   

  	
  138

  
	
   

  	
   

  	
   

  	
   

  
	
  XVIII.

  	
  SPECIAL
  PROVISIONS

  	
   

  	
  138

  
	
   

  	
  18.1

  	
  Exculpation

  	
   

  	
  138

  
	
   

  	
   

  	
  18.1.1

  	
  Exculpated Parties

  	
   

  	
  138

  
	
   

  	
   

  	
  18.1.2

  	
  Carveouts From Non-Recourse Limitations

  	
   

  	
  139

  
	
   

  	
  18.2

  	
  Pro Rata Share

  	
   

  	
  141

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIX.

  	
  MISCELLANEOUS

  	
   

  	
  141

  
	
   

  	
  19.1

  	
  Survival

  	
   

  	
  141

  
	
   

  	
  19.2

  	
  Mezzanine Lender’s Discretion

  	
   

  	
  142

  
	
   

  	
  19.3

  	
  Governing Law

  	
   

  	
  143

  
	
   

  	
  19.4

  	
  Modification; Waiver in
  Writing

  	
   

  	
  143

  
	
   

  	
  19.5

  	
  Delay Not a Waiver

  	
   

  	
  143

  
	
   

  	
  19.6

  	
  Notices

  	
   

  	
  146

  
	
   

  	
  19.7

  	
  Trial By Jury

  	
   

  	
  146

  
	
   

  	
  19.8

  	
  Headings

  	
   

  	
  146

  
	
   

  	
  19.9

  	
  Severability

  	
   

  	
  146

  
	
   

  	
  19.10

  	
  Preferences

  	
   

  	
  146

  
	
   

  	
  19.11

  	
  Waiver of Notice

  	
   

  	
  146

  
	
   

  	
  19.12

  	
  Expenses; Indemnity

  	
   

  	
  147

  
	
   

  	
  19.13

  	
  Exhibits and Schedules
  Incorporated

  	
   

  	
  149

  
	
   

  	
  19.14

  	
  Offsets, Counterclaims and
  Defenses

  	
   

  	
  149

  
	
   

  	
  19.15

  	
  Liability of Assignees of
  Mezzanine Lender

  	
   

  	
  149

  
	
   

  	
  19.16

  	
  No Joint Venture or
  Partnership; No Third Party Beneficiaries

  	
   

  	
  150

  
	
   

  	
  19.17

  	
  Publicity

  	
   

  	
  150

  
	
   

  	
  19.18

  	
  Waiver of Marshalling of
  Assets

  	
   

  	
  150

  
	
   

  	
  19.19

  	
  Waiver of Counterclaim and
  other Actions

  	
   

  	
  150

  
	
   

  	
  19.20

  	
  Conflict; Construction of
  Documents; Reliance

  	
   

  	
  151

  
	
   

  	
  19.21

  	
  Prior Agreements

  	
   

  	
  151

  
	
   

  	
  19.22

  	
  Counterparts

  	
   

  	
  151

  
	
   

  	
  19.23

  	
  Direction of Mortgage
  Borrower with Respect to the Property

  	
   

  	
  151

  

 

7

 

EXHIBITS AND
SCHEDULES

 

	
  EXHIBIT A

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT B

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT C

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT D

  	
   

  	
  FORM OF ACKNOWLEDGEMENT

  
	
  EXHIBIT E

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT F

  	
   

  	
  FORM OF MASTER LEASE

  
	
  EXHIBIT G

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT H

  	
   

  	
  FORM OF GROUND LESSOR
  ESTOPPEL CERTIFICATE

  
	
  EXHIBIT I

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT J

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT K

  	
   

  	
  MEZZANINE BORROWER
  ORGANIZATIONAL STRUCTURE

  
	
  EXHIBIT L

  	
   

  	
  INTEREST RATE CAP AGREEMENT
  (SECOND MEZZANINE)

  
	
  EXHIBIT M

  	
   

  	
  FORM OF ASSIGNMENT AND
  ACCEPTANCE AGREEMENT

  
	
  EXHIBIT N

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT O

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT P

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT Q

  	
   

  	
  RATE CAP COUNTERPARTY
  ACKNOWLEDGMENT

  
	
  EXHIBIT R

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT S

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT T

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT U

  	
   

  	
  FORM OF MEMBER POWER

  
	
  EXHIBIT V

  	
   

  	
  PERMITTED SETTLEMENT AMOUNTS

  
	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
   

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

  
	
  SCHEDULE II

  	
   

  	
  LITIGATION SCHEDULE

  
	
  SCHEDULE III

  	
   

  	
  DEFERRED MAINTENANCE AND
  REMEDIATION

  
	
  SCHEDULE IV

  	
   

  	
  UNIMPROVED PARCELS

  
	
  SCHEDULE 4.1.11

  	
   

  	
  COMPLIANCE

  
	
  SCHEDULE VI

  	
   

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

  
	
  SCHEDULE VII

  	
   

  	
  EXISTING MATTERS OF RECORD

  
	
  SCHEDULE VIII

  	
   

  	
  RESERVED

  
	
  SCHEDULE IX

  	
   

  	
  INTERIM SUCCESSOR PRINCIPAL CONTROL PERSONS

  

 

8

 

AMENDED AND RESTATED MEZZANINE LOAN AND
SECURITY AGREEMENT

(SECOND MEZZANINE)

 

THIS AMENDED
AND RESTATED MEZZANINE 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 MEZZCO BORROWER II, LLC, a
Delaware limited liability company (“Mezzanine Borrower”) having an
office at 1505 South Pavilion Center Drive, Las Vegas, Nevada 89135, GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation (“GACC” and
together with its successors and assigns, “Mezzanine Noteholder I”),
having an address at 60 Wall Street, New York, New York 10005, and JPMORGAN
CHASE BANK, N.A., a national banking association, having an address at 270 Park
Avenue, New York, New York 10017 (“JPMC” and together with its
successors and assigns, “Mezzanine Noteholder II”) (Mezzanine Noteholder
I and Mezzanine Noteholder II, individually or collectively as the context
indicates, “Mezzanine Lender”).

 

RECITALS:

 

WHEREAS, Mezzanine Borrower and Mezzanine Lender entered into a
Mezzanine Loan and Security Agreement, dated as of November 7, 2007 (the “Original
Agreement”) pursuant to which Mezzanine Lender made a loan in the original
principal amount of $150,000,000 (the “Original Loan”) to Mezzanine
Borrower;

 

WHEREAS, Mortgage Lender (as hereinafter defined), Senior Mezzanine
Lender (as hereinafter defined), Mezzanine Lender, and Current Junior Mezzanine
Lenders (as hereinafter defined) have determined to decrease the principal
amount of the Loan (Mortgage) (as hereinafter defined) and correspondingly
increase the principal amounts of the Senior Mezzanine Loan (as hereinafter
defined), the Original Loan and the Junior Mezzanine Loans (as hereinafter
defined);

 

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

 

9

 

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

 

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

 

“Affiliate”
shall mean, with respect to any specified Person, any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
control with, or any 

 

10

 

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.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Amendment Effective Date” means March 19, 2008.

 

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

 

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

 

“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.

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

“Certificate”
shall mean the certificate evidencing the Ownership Interests.

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

“Combined Release Price” shall mean the product of
(a) the Combined Allocated Loan Amount for the Release Property and (b) the
applicable Combined Release Price Percentage(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) Mortgage
Borrower’s acquisition of the Property from subsidiaries of Master Lessee and
the various equity transfers and merger related to such acquisition, (iv) the
leasing or subleasing of the Property from Mortgage Borrower to Master Lessee
pursuant to the Master Lease, (v) the execution and delivery of the
Mortgage Loan Documents, the Senior Mezzanine Loan Documents, the Mezzanine
Loan Documents, and Junior Mezzanine Loan Documents, Mortgage Borrower’s,
Senior Mezzanine Borrower’s, Mezzanine Borrower’s and Junior 

 

14

 

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

 

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

 

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

 

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

 

“Current Junior Mezzanine Borrowers” shall mean, collectively,
Third Mezzanine Borrower and Fourth Mezzanine Borrower.

 

“Current Junior Mezzanine Lender” shall mean, collectively,
Third Mezzanine Lender and Fourth Mezzanine Lender.

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Fee
Mortgagee Estoppel Certificate” shall mean an executed estoppel letter from
any mortgagee of, or beneficiary of a deed of trust granted by, a Fee Owner
encumbering the fee 

 

17

 

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

 

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

 

“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 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 Mortgage Borrower.

 

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

 

“First Mezzanine Notes” shall mean that certain Amended and
Restated First Mezzanine Note A-1 in the principal amount of $125,000,000 dated
as of March 19, 2008, from First Mezzanine Borrower to Mezzanine
Noteholder I, and that certain Amended and Restated First Mezzanine Note A-2 in
the principal amount of $75,000,000 dated as of March 19, 2008, from First
Mezzanine Borrower to Mezzanine Noteholder II, as the same may be amended,
restated, replaced, supplemented, substituted, severed, or otherwise modified
from time to time.

 

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

 

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

 

“Fitch” shall mean Fitch Ratings Inc.

 

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

 

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

 

18

 

“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 Mortgage Borrower.

 

 “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 Notes” shall mean 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 Mezzanine Noteholder I, 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 to Mezzanine Noteholder I,  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 Mezzanine Noteholder II, and 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 Mezzanine Noteholder II, as the same
may be amended, restated, replaced, supplemented, substituted, severed, or
otherwise modified from time to time.

 

“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 Mortgage Borrower and
Mortgage Lender with respect to conditions precedent to funding the Loan, the
Mortgage Loan, the Senior Mezzanine Loan and the Junior Mezzanine Loans.

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

“Guarantors” shall mean Holdco, FP and VoteCo.

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

“Impositions” shall mean all taxes (including all ad valorem,
sales (including those imposed on lease rentals), use, single business, gross
receipts, value added, intangible transaction, privilege or license or similar
taxes), governmental assessments (including all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
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) Mezzanine
Borrower, Senior Mezzanine Borrower, or Mortgage Borrower (including all
income, franchise, single business or other taxes imposed on Mezzanine
Borrower, Senior Mezzanine Borrower, or Mortgage Borrower for the privilege of
doing business in the jurisdiction in which the Property is located), (b) the
Property, or any other collateral delivered or pledged to Mortgage Lender,
Senior Mezzanine Lender, or Mezzanine Lender in connection with the Mortgage
Loan, Senior Mezzanine Loan, or Loan, or any part thereof, or any Rents or
Receipts therefrom or any estate, right, title or interest therein, or (c) any
occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Property or the leasing or use of all
or any part thereof.  Nothing contained
in this Agreement shall be construed to require Mezzanine Borrower, Senior
Mezzanine Borrower, or Mortgage Borrower to pay any tax, assessment, levy or
charge imposed on (i) Master Lessee, (ii) any Tenant or (iii) Mortgage
Lender, Senior Mezzanine Lender, or Mezzanine Lender in the nature of a capital
levy, estate, inheritance, succession, income or net revenue tax.

 

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

 

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

 

“Indebtedness” shall mean, at any given time, the Principal
Amount, together with all accrued and unpaid interest thereon and all other
obligations and liabilities due or to become due 

 

21

 

to Mezzanine Lender pursuant hereto, under
the Mezzanine Notes or in accordance with the other Mezzanine Loan Documents
and all other amounts, sums and expenses paid by or payable to Mezzanine Lender
hereunder or pursuant to the Mezzanine Notes or the other Mezzanine Loan
Documents.

 

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

 

“Independent” shall mean, when used with respect to any Person,
a Person who: (i) does not have any direct financial interest or any
material indirect financial interest in any Borrower Party or in any Affiliate
of any Borrower Party, (ii) is not connected with any Borrower Party or
any Affiliate of any Borrower Party as an officer, employee, promoter,
underwriter, trustee, partner, member, manager, 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.

 

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

 

“Independent Director,” “Independent Manager,” or “Independent
Member” shall mean a Person who is not and will not be while serving, and
has not been in the five (5) years preceding the 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 Mezzanine Borrower or its Affiliates (provided that
Mezzanine Borrower may have the same Independent Directors, Independent
Managers or Independent Members as Mortgage Borrower, Senior Mezzanine
Borrower, or any Junior Mezzanine Borrower), (ii) a customer, supplier or
other Person who derives more than 1% of its purchases or revenues from its
activities with Mezzanine Borrower or its Affiliates, (iii) a direct or
indirect legal or beneficial owner in any entity referred to in (i) or (ii) above
or any of its Affiliates, (iv) a member of the immediate family of any
member, manager, officer, director, employee, attorney, customer, supplier or
other Person referred to in (i), (ii) or (iii) above, or (v) a
person Controlling or under the common Control of anyone listed in (i) through
(iv) above.  A Person that otherwise
satisfies the foregoing shall not be disqualified from serving as an
Independent Director or Independent Manager or Independent Member if such
individual is at the time of initial appointment, or at any time while serving
as such, is an Independent Director or Independent Manager or Independent
Member, as applicable, of a Single Purpose Entity affiliated with Mezzanine
Borrower.

 

“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 

 

22

 

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 have the meaning set forth in the
Loan Agreement (Mortgage).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                             Payment Stream.  The
Counterparty under the Interest Rate Cap Agreement (Second Mezzanine) shall be
obligated to make a stream of payments, directly to the Mezzanine 

 

23

 

Account (whether or not an Event of Default
has occurred) from time to time equal to the product of (i) the notional
amount of such Interest Rate Cap Agreement (Second Mezzanine) multiplied by (ii) the
excess, if any, of LIBOR (including any upward rounding under the definition of
LIBOR) over the Strike Price;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

“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 Mortgage Lender for
the applicable period, in which:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

“License and Reservation Service Agreement” shall mean the License
and Reservation Service Agreement regarding the branding rights, reservation
system and primary customer data base, by and between Mortgage Borrower and
Master Lessee, dated as of 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 Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, Junior Mezzanine Borrowers, the Collateral, the Senior Mezzanine
Collateral, the Property, any portion thereof or any interest therein,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and the filing of
mechanic’s, materialmen’s and other similar liens and encumbrances.

 

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

 

“Loan Agreement (Mortgage)” shall mean the Amended and Restated
Loan and Security Agreement, dated as of the Amendment Effective Date, between
FCP PROPCO, LLC, a Delaware limited liability company, as borrower, and GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation and JPMORGAN CHASE BANK,
N.A., a national banking association, collectively as the initial lenders, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

 

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

 

“Loan (Mortgage)” or “Mortgage Loan” shall mean the loan
in the amount of $1,800,000,000 made by Mortgage Lender to Mortgage Borrower pursuant
to the Loan Agreement (Mortgage).

 

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

 

“Master Lease” shall mean that certain Master Lease Agreement for the Property by and between Mortgage Borrower, as lessor,
and Master Lessee, as lessee, dated as of November 7, 2007, as more
particularly described in Section 5.1.22.

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

the Merger Agreement), would allow Sponsor to
terminate its obligations under the Merger Agreement.

 

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

 

“Mezzanine Account Agreement” shall mean the Account and Control
Agreement (Second Mezzanine), dated as of November 7, 2007, among
Collateral Agent, Mezzanine Borrower and Cash Management Bank.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Mezzanine Release Price” shall mean the product
of (a) the Allocated Loan Amount with respect to the Release Property; and
(b) the applicable Combined Release Price 

 

28

 

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.

 

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

 

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

 

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

 

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

 

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

 

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

 

“New Property Owner” shall have the meaning set forth in Section 8.7.

 

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

 

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

 

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

 

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

 

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

 

 “Obligations (First
Mezzanine)” shall mean all indebtedness, obligations and liabilities of
First Mezzanine Borrower to First Mezzanine Lender, under the First Mezzanine
Loan Agreement or any of the other First Mezzanine Loan Documents or in respect
of the First 

 

29

 

Mezzanine Loan or the First Mezzanine Notes,
or other instruments at any time evidencing any of the foregoing, whether
existing on the date of this Agreement or arising or incurred hereafter, direct
or indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise.

 

“Obligations (Junior Mezzanine)” shall mean the “Obligations
(Third Mezzanine)” and “Obligations (Fourth Mezzanine)” as defined in the
applicable Junior Mezzanine Loan Agreement, and the “Obligations” of any other
Junior Mezzanine Borrower to its Junior Mezzanine Lender, as defined in the
applicable Junior Mezzanine Loan Agreement.

 

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

 

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

 

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

 

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

 

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

 

“Omnibus Amendment” shall mean that certain Omnibus
Amendment to Collateral Loan Documents (Second Mezzanine), dated as of the
Amendment Effective Date, by and among Mezzanine Borrower, Mezzanine Lender and
First Mezzanine Borrower, as the same
may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

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

 

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

 

“Other Charges” shall mean, collectively, maintenance charges,
impositions other than Impositions, and any other charges, including, without
limitation, vault charges and license fees 

 

30

 

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.

 

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

 

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

 

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

 

“Permitted Encumbrances” shall mean collectively, (a) the
Liens and security interests created or permitted by the Loan Documents
(Mortgage), (b) all Liens, encumbrances and other matters disclosed in the
Title Policies, (c) Liens, if any, for Impositions imposed by any
Governmental Authority not yet due or delinquent (d) Liens
arising after the 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 

 

31

 

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

 

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

 

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

 

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

 

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

 

“Pledge” shall mean that certain Pledge and Security Agreement
(Second Mezzanine), dated as of November 7, 2007, from Mezzanine Borrower
to Collateral Agent, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

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

 

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

 

“PML” shall mean probable maximum loss.

 

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

 

32

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

“Proscribed Assignee” shall mean Highland Capital Partners.

 

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

 

“Purchase
and Sale Agreement” shall mean that certain Amended and Restated Purchase
and Sale Agreement, dated as of October 31, 2007, by and among Charleston
Station LLC, Boulder Station, Inc., Palace Station Hotel & Casino, Inc.,
and Sunset Station, Inc., collectively as sellers, FCP Newco, LLC, and the
other parties thereto, as assigned by FCP NewCo, LLC to Mortgage Borrower on or
approximately on the 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 Cap Collateral (Second Mezzanine)” shall have the meaning
set forth in Section 9.2.

 

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

 

“Rating Agency Confirmation” shall mean, collectively, a written
affirmation from each of the Rating Agencies that the credit rating of the
Securities given by such Rating Agency immediately prior to the occurrence of
the event with respect to which such Rating Agency Confirmation is sought will
not be qualified, downgraded or withdrawn as a result of the occurrence of such
event, which affirmation may be granted or withheld in such Rating Agency’s
sole and absolute discretion which may be satisfied by a Rating Agency
declining to review the matter in question without adverse impact on the
Securities.  In the event that, at any 

 

34

 

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 Mortgage
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).

 

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

 

“Recourse Guaranty (Mezzanine)” shall mean that certain Guaranty
of Recourse Obligations of Mezzanine Borrower, dated as of November 7,
2007, by Guarantors in favor of Mezzanine Lender, as the same may be amended,
supplemented, restated or otherwise modified from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Replacement Interest Rate Cap Agreement (Second Mezzanine)” shall
mean collectively, one or more interest rate cap agreements from an Approved
Counterparty with terms that are the same in all material respects as the terms
of the Interest Rate Cap Agreement (Second Mezzanine), except that (i) the
same shall be effective as of (A) in connection with a 

 

35

 

replacement following a downgrade, withdrawal or qualification of
Counterparty, the date required in Section 9.3(c) or (B) in
connection with a replacement related to an extension of the Maturity Date, the
date required in Section 5(a)(ii) of the Mezzanine Notes, and (ii) the
notional amount shall be the Principal Amount then outstanding; provided that
to the extent any such interest rate cap agreement does not meet the foregoing
requirements, a Replacement Interest Rate Cap Agreement (Second Mezzanine)
shall be such interest rate cap agreement approved in writing by Mezzanine
Lender.

 

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

 

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

 

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

 

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

 

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

 

“Senior Mezzanine Borrower” shall mean First Mezzanine Borrower.

 

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

 

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

 

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

 

“Senior Mezzanine Lender” shall mean First Mezzanine Lender.

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

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

 

“Single Purpose Entity” shall mean a Person, other than an
individual, which (i) is formed or organized solely for the purpose of
acquiring, owning, holding, developing, using, operating and financing,
directly, or, in the case of Mezzanine Borrower, Senior Mezzanine Borrower, or
any Junior Mezzanine Borrower, indirectly, an ownership interest in the
Property, (ii) does not engage in any business unrelated to the Property
(or in the case of Mezzanine Borrower, Senior Mezzanine Borrower, or any Junior
Mezzanine Borrower, its subsidiary) and the ownership, development, use,
operation and financing thereof, (iii) has not and will not have any
assets other than those related to its interest in the Property (or in the case
of Mezzanine Borrower, Senior Mezzanine Borrower, or any Junior Mezzanine
Borrower, its subsidiary) or the operation, management and financing thereof or
any indebtedness other than the Permitted Debt (as applicable), (iv) maintains
its own separate books and records and its own accounts, in each case which are
separate and apart from the books and records and accounts of any other Person,
(v) holds itself out as being a Person, separate and apart from any other
Person, (vi) does not and will not commingle its funds or assets with
those of any other Person, (vii) conducts its own business in its own
name; (viii) maintains separate financial statements, (ix) pays its
own liabilities out of its own funds, (x) observes all partnership,
corporate or limited liability company formalities, as applicable, (xi) pays
the salaries of its own employees, if any, and maintains a sufficient number of
employees, if any, in light of its contemplated business operations, (xii) does
not guarantee or otherwise obligate itself with respect to the debts of any
other Person or hold out its credit as being available to satisfy the
obligations of any other Person, (xiii) does not acquire obligations or
securities of its partners, members or shareholders, (xiv) allocates fairly and
reasonably shared expenses, including, without limitation, any overhead for
shared office space, if any, (xv) uses separate stationery, invoices, and
checks, (xvi) maintains an arms-length relationship with its Affiliates, (xvii)
does not and will not pledge its assets for the benefit of any other Person
(except as permitted pursuant to the Mortgage Loan, 

 

37

 

the Senior Mezzanine Loan, the Loan or any
Junior Mezzanine Loan, as applicable) or make any loans or advances to any other
Person, (xviii) does and will continue to use commercially reasonable efforts
to correct any known misunderstanding regarding its separate identity, (xix)
maintains adequate capital in light of its contemplated business operations,
and (xx) files its own tax returns, if any, as may be required under applicable
law, to the extent (1) not part of a consolidated group filing a
consolidated return or returns or (2) not treated as a division for tax
purposes of another taxpayer, and pays any taxes so required to be paid under
applicable law, and (xx) has not and will not engage in, seek, or consent to
the dissolution, winding up, liquidation, consolidation or merger and except as
otherwise permitted in this Agreement, has not and will not engage in, seek or
consent to any asset sale, transfer of partnership, membership or shareholder
interests, or amendments of its partnership or operating agreement, certificate
of incorporation, articles of organization or other organizational document.  In addition, if such Person is a partnership,
(1) all general partners of such Person shall be Single Purpose Entities;
and (2) if such Person has more than one general partner, then the
organizational documents shall provide that such Person shall continue (and not
dissolve) for so long as a solvent general partner exists.  In addition, if such Person is a corporation,
then, at all times: (a) such Person shall have at least two (2) Independent
Directors and (b) the board of directors of such Person may not take any
action requiring the unanimous affirmative vote of 100% of the members of the
board of directors unless all of the directors, including the Independent
Directors, shall have participated in such vote.  In addition, if such Person is a limited
liability company, (a) such Person shall have at least two (2) Independent
Managers, Independent Directors or Independent Members, (b) if such Person
is managed by a board of managers or directors, the board of managers or
directors of such Person may not take any action requiring the unanimous
affirmative vote of 100% of the members of the board of managers or directors
unless all of the managers or directors, including the Independent Managers or
Independent Directors, shall have participated in such vote, (c) if such
Person is not managed by a board of managers or directors, the members of such
Person may not take any action requiring the affirmative vote of 100% of the
members of such Person unless all of the members, including the Independent
Members, shall have participated in such vote, (d) each managing member
shall be a Single Purpose Entity and (e) its articles of organization,
certificate of formation and/or operating agreement, as applicable, shall
provide that until all of the Indebtedness and Obligations (Mortgage), Obligations
(Senior Mezzanine), Obligations (Second Mezzanine), or Obligations (Junior
Mezzanine), as applicable, are paid in full such entity will not dissolve.  In addition, the organizational documents of
such Person shall provide that such Person (1) without the unanimous
consent of all of the partners, directors or members, as applicable, shall not
with respect to itself or to any other Person in which it has a direct or
indirect legal or beneficial interest (a) seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or other similar official for the benefit of the creditors of such
Person or all or any portion of such Person’s properties, or (b) petition
or otherwise institute insolvency proceedings or otherwise seek any relief
under any laws relating to the relief from debts or the protection of debtors
generally, (2) has and will maintain its books, records, resolutions and
agreements as official records, (3) has held and will hold its assets in
its own name, (4) has not and will not identify its partners, members or
shareholders, or any affiliates of any of them as a division or part of it, and
(5) except as provided in the Mortgage Loan Documents, Senior Mezzanine
Loan Documents, Mezzanine Loan Documents or Junior Mezzanine Loan Documents, as
applicable, has not and will not enter into or be a party to any transaction
with its partners, members, shareholders, or its Affiliates 

 

38

 

except in the ordinary course of business and
on terms which are intrinsically fair and are no less favorable to it than
would be obtained in a comparable arms-length transaction with a third party.

 

“Special Taxes” shall mean any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, or any liabilities with
respect thereto, including those arising after the 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 Mezzanine Lender, such taxes (including income taxes, franchise taxes and
branch profit taxes) as are imposed on or measured by Mezzanine Lender’s net
income by the United States of America or any Governmental Authority of the
jurisdiction under the laws under which Mezzanine Lender is organized or
maintains a lending office.

 

“SPE Entity” shall mean the Mortgage Borrower, the Senior
Mezzanine Borrower, the Mezzanine Borrower and any Junior Mezzanine Borrower.

 

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

 

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

 

“Strike Price”  shall mean
5.77%.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Third Mezzanine Loan” shall mean a $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 Third Mezzanine Loan Documents of
$25,000,000 in principal amount initially borrowed by Mortgage Borrower.

 

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

 

“Third Mezzanine Notes” shall mean that certain 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 Mezzanine
Noteholder I, 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 Mezzanine Noteholder I, 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 Mezzanine Noteholder II, and 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 Mezzanine Noteholder II, as the same may be amended, restated, replaced,
supplemented, substituted, severed, or otherwise modified from time to time.

 

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

 

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

 

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

 

40

 

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).

 

“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 Mezzanine 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 have the meaning set forth
in the Loan Agreement (Mortgage).

 

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

 

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

 

II.                                     GENERAL
TERMS

 

2.1                                 Loan; Disbursement to Mezzanine Borrower.

 

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

 

41

 

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

 

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

 

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

 

2.2                                 Interest; Loan Payments; Late Payment Charge.

 

2.2.1                        Payment of Principal and Interest.

 

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

 

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

 

2.2.2                        Method and Place of Payment.

 

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

 

42

 

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

 

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

 

2.2.3                        Late Payment Charge.  If any principal, interest or any other sums
due under the Mezzanine Loan Documents (other than the outstanding Principal
Amount due and payable on the Maturity Date) is not paid by Mezzanine Borrower
on or prior to the date on which it is due, Mezzanine Borrower shall pay to
Mezzanine Lender upon demand an amount equal to the lesser of three percent
(3%) of such unpaid sum or the Maximum Legal Rate (the “Late Payment Charge”)
in order to defray the expense incurred by Mezzanine Lender in handling and
processing such delinquent payment and to compensate Mezzanine Lender for the
loss of the use of such delinquent payment. 
Any such amount shall be secured by this Agreement, the Pledge and the
other Mezzanine Loan Documents to the extent permitted by applicable law.

 

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

 

2.3                                 Prepayments.  No prepayments of the Indebtedness shall be
permitted except as set forth in this Section 2.3 and Section 4
of the Mezzanine Notes.  If Mezzanine Borrower tenders payment of any
part of the Indebtedness other than in accordance with Sections 2.3.1, 2.3.2 or
2.3.4, (a) such payment may be made only on the next occurring Payment
Date together with all unpaid interest thereon as calculated through the end of
the Interest Period during which such Payment Date occurs (even if such period
extends beyond such Payment Date and calculated as if such payment had not been
made on such Payment Date), and (b) Mezzanine 

 

43

 

Borrower shall pay, in addition to the
Indebtedness, an amount equal to the Prepayment Fee and all other fees and sums
payable hereunder or under the Mezzanine Loan Documents.

 

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

 

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

 

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

 

2.3.4                        Release
of Individual Properties.  In the
event Mortgage Borrower requests the release of any Individual Property or
Properties from the Lien under the Loan Documents (Mortgage) or to otherwise
convey such Individual Property or Properties to another Person, subject to
satisfaction of each of the conditions set forth below, Mezzanine Lender shall
consent to such release and conveyance and authorize (i) Mortgage Borrower
to effect the release of such Individual Property or Individual Properties (a “Release”
and each Individual Property subject to 

 

44

 

a Release, a “Release
Property”) from the Lien of the applicable Security Instrument and related
Loan Documents (Mortgage) (or to the extent so requested by Mezzanine Borrower,
assign the Lien of the applicable Security Instrument to a new lender without
representation, warranty or recourse) and to concurrently therewith convey the
Release Property to a Person other than Mortgage Borrower, Mezzanine Borrower,
Senior Mezzanine Borrower, or any other SPE Entity (each release and conveyance
under this Section 2.3.4 or Section 2.3.5, a “Property
Release”), (ii) a reduction in the notional amounts of the Interest
Rate Protection Agreement, the Interest Rate Cap Agreement (Second Mezzanine),
and/or the interest rate cap agreements required pursuant to the Junior
Mezzanine Loan Documents, all in proportion to the reduction of the principal
amounts thereof as required under the Loan Documents (Mortgage), Senior
Mezzanine Loan Documents, Mezzanine Loan Documents, and Junior Mezzanine Loan
Documents, as applicable, (iii) the Cash Management Bank (Mortgage) to
return to Mortgage Borrower any Excess Account Collateral subject to and in
accordance with Section 2.3.7 of the Loan Agreement (Mortgage)
except to the extent otherwise provided in such Section, (iv) Mortgage
Borrower to comply with Section 2.3.8 of the Loan Agreement
(Mortgage) with regard to adjusting the ongoing reserve requirements
thereunder, and (v) a reduction in the Master Lease Base Rent in an
amount, which shall equal the product of (x) the initial Master Lease Base
Rent multiplied by (y) a fraction, the numerator of which is the Combined
Allocated Loan Amount for the Release Property, and the denominator of which is
the original Combined Principal Amount, and (vi) Mezzanine Borrower to
cause Mortgage Borrower to enter into an amendment to the Master Lease with
Master Lessee (A) to effect such authorized reduction in the Master Lease
Base Rent, (B) to cause such Release Property to be released from the
Master Lease, (C) to terminate the Master Lease with respect to such
Release Property as of the date that such Release Property is released from the
Lien of the applicable Security Instrument and related Loan Documents
(Mortgage), (D) to amend the legal description of the “Leased Property”
(as defined in the Master Lease) to delete the Release Property, and (E) make
such other amendments consistent with the release of the Release Property from
the Leased Property.:

 

(a)                                              Mezzanine
Borrower delivers a written notice (a “Property Release Notice”) to Mezzanine
Lender of its desire to effect such Property Release no later than thirty (30)
days prior to the date of such desired Property Release, and setting forth the
Business Day (the “Release Date”) on which Mezzanine Borrower desires that
Mortgage Lender release its interest in such Release Property.

 

(b)                                             Each of
the Mortgage Lender, Senior Mezzanine Lender, Mezzanine Lender and each Junior
Mezzanine Lender shall have received all prepayment fees required to be paid to
them under the Loan Documents (Mortgage), Senior Mezzanine Loan Documents,
Mezzanine Loan Documents, and Junior Mezzanine Loan Documents, as applicable,
and the Mezzanine Lender shall have received the full Mezzanine Release Price
and evidence that the Mortgage Lender has received the full Mortgage Release
Price, Senior Mezzanine Lender has received the full Senior Mezzanine Release
Price, and each Junior Mezzanine Lender has received its full applicable Junior
Mezzanine Release Price.  Interest payable
under the Mortgage Notes, Senior Mezzanine Notes, Mezzanine Notes and Junior
Mezzanine Notes shall be calculated through the end of the Interest Period in
which such payment is made on the applicable principal amount (even if such
period extends beyond such Payment Date and calculated as if such payment had
not been made on such Payment Date (i.e. without a deduction for the portion of
the Principal Amount included in the Release Price)).

 

45

 

(c)                                              Mortgage
Borrower shall submit to Mortgage Lender (with a copy to Mezzanine Lender),
concurrently with the Property Release Notice (except that Mortgage Borrower
may deliver the release of Liens hereinafter described to Mortgage Lender and
Mezzanine Lender after delivery of the Property Release Notice so long as such
delivery is made prior to the tenth (10th ) Business Day preceding the
applicable Release Date), a release of Liens (and related Loan Documents
(Mortgage) for each applicable Release Property (for execution by Mortgage
Lender) in a form appropriate in the State and otherwise satisfactory to
Mortgage Lender in its reasonable discretion and all other documentation
Mezzanine Lender reasonably require to be delivered by Mortgage Borrower or Mezzanine
Borrower in connection with such Property Release (collectively, “Release
Instruments”) for each applicable Release Property together with an Officer’s
Certificate certifying that (i) the Release Instruments are, or will be
when delivered, in compliance with all Legal Requirements, (ii) the
release to be effected will not violate the terms of this Agreement, (iii) the
release to be effected will not impair or otherwise adversely affect the Liens,
security interests and other rights of Mortgage Lender under the Loan Documents
(Mortgage) not being released (or as to the Individual Properties subject to
the Mezzanine Loan Documents not being released) or the Mezzanine Lender’s Lien
on the Collateral or the Senior Mezzanine Lender’s Lien on the Senior Mezzanine
Collateral; and (iv) the requirement described in paragraph (d) below
is satisfied in connection with such Property Release (together with
calculations and supporting documentation demonstrating the same in reasonable
detail).

 

(d)                                             With
respect to any Property Release, after giving effect to such Property Release,
the LCR as of the Release Date for all of the Individual Properties then
remaining subject to the Liens of the Security Instruments shall not be less
than the greater of (A) the Closing Date LCR and (B) 65% of the LCR
for the Individual Properties subject to the Liens of the Security Instruments
immediately prior to the Release Date.

 

(e)                                              No
Default or Event of Default shall have occurred and then be continuing on the
date on which Mezzanine Borrower delivers the Property Release Notice and on
the Release Date.

 

(f)                                                The
Release Property is simultaneously transferred to a party other than Mezzanine
Borrower or any other SPE Entity.

 

(g)                                             Mezzanine
Borrower causes Mortgage Borrower to execute and deliver such other
instruments, certificates, opinions of counsel and documentation as Mezzanine
Lender and the Rating Agencies shall reasonably request in order to preserve,
confirm or secure the Liens and security granted to Mortgage Lender by the Loan
Documents (Mortgage), including any amendments, modifications or supplements to
any of the Loan Documents (Mortgage) and partial release endorsements to the
existing Title Policies, as applicable.

 

(h)                                             Mezzanine
Borrower shall pay (or cause Mortgage Borrower to pay) for any and all
reasonable out-of-pocket costs and expenses incurred in connection with any
proposed Property Release, including (with respect to Mezzanine Borrower)
Mezzanine Lender’s reasonable attorneys’ fees and disbursements and (with respect
to Mortgage Borrower) all title insurance premiums for any endorsements to any
existing Title Policies reasonably required by Mortgage Lender in connection
with such proposed release.

 

46

 

(i)                                                 Prior
to the Release Date, Mezzanine Borrower shall deliver to Mezzanine Lender
evidence reasonably satisfactory to Mezzanine Lender that all amounts owing to
any parties in connection with the transaction relating to the proposed
Property Release have been paid in full, or will simultaneously be paid in full
on the Release Date or adequate reserves therefor are established by Mezzanine
Borrower (or, as applicable Mortgage Borrower) in cash with respect to
contingent or other liabilities that may arise out of such transaction and for
which Mortgage Borrower and Mezzanine Borrower are not adequately indemnified
or insured against as reasonably determined by Mezzanine Lender.

 

(j)                                                 As a
condition precedent to a Release but not as a direct covenant of the Mezzanine
Borrower, on the Release Date, Mortgage Borrower, Senior Mezzanine Borrower,
and each Junior Mezzanine Borrower shall have paid to Mortgage Lender, Senior
Mezzanine Lender and each Junior Mezzanine Lender, as applicable, the Mortgage
Release Price, the Senior Mezzanine Release Price, and the applicable Junior
Mezzanine Release Price and any other sums required to be paid under Section 2.3.4
of the Loan Agreement (Mortgage), the Senior Mezzanine Loan Agreement, and each
Junior Mezzanine Loan Agreement, as applicable. 
This Section 2.3.4(j) shall not create a
debtor-creditor relationship between Mezzanine Borrower and any Junior
Mezzanine Lender, Senior Mezzanine Lender or Mortgage Lender.

 

(k)                                              In the
event Mezzanine Lender has approved in writing a right of first refusal or
purchase option with respect to the subject Release Property, the transfer of
the Release Property in connection with the Property Release shall comply in
all respects with the terms and conditions of any such rights of first refusal
or purchase options, as such terms and conditions have been approved by
Mezzanine Lender.

 

2.3.5                        Substitution
of Properties.

 

(a)                                              Generally.  Mezzanine Borrower may cause Mortgage
Borrower, subject to the conditions in this Section 2.3.5,
substitute one or more properties (each a “Substitute Property”) for an
existing Individual Property (each a “Replaced Property”) (each release
and substitution a “Substitution”); provided, however, such right of
Substitution shall be limited to Individual Properties whose aggregate
Allocated Loan Amounts in respect of the Mortgage Loan as set forth in the Loan
Agreement (Mortgage) represent not greater than twenty percent (20%) of the
Loan Amount (as defined in the Loan Agreement (Mortgage)).  From and after the Substitution of a Substitute
Property in accordance herewith, such Substitute Property shall thereafter be
deemed a Property, and shall have the Allocated Loan Amount and Combined
Allocated Loan Amount applicable to the Replaced Property.  Concurrently with the completion of all steps
necessary to effect a Substitution as provided in this Section 2.3.5,
Mezzanine Lender shall permit Mortgage Lender to release such Replaced Property
from the Lien of the applicable Security Instrument and related Loan Documents
(Mortgage) and convey the Replaced Property to a Person other than Mortgage
Borrower or another SPE Entity.  In the
event of a Substitution, the Mortgage Notes shall remain in full force and
effect, and the Lien of the applicable Security Instrument shall be spread to
encumber the Substitute Property (each a “Substitute Property Mortgage
Spreader Agreement”).

 

47

 

(b)                                             Certain
Requirements.  All Substitute
Properties shall comply with this Section 2.3.5.  To qualify as a Substitute Property, a
property must, as of the Substitution Date (in addition to the other criteria
set forth in this Section 2.3.5):

 

(i)                                     be subject to the
Master Lease;

 

(ii)                                  be a property as to
which Mortgage Borrower will hold insurable fee title or a valid and subsisting
leasehold interest free and clear of any Lien or other encumbrance except for
Permitted Encumbrances (excluding those described in clauses (b), (d), (e) and
(i) of the definition of Permitted Encumbrances) and exceptions not
materially impairing the value of such property, and have an appraised value at
least equal to the Appraised Value of the Replaced Property;

 

(iii)                               be free and clear, as
evidenced by the environmental report referred to in paragraph (c) below,
of Hazardous Substances requiring 
remediation or other action under any Environmental Law the presence of
which violates Environmental Laws (with the exception of any immaterial
remediation, as determined by Mezzanine Lender in its sole discretion) and be
in material compliance with all Environmental Laws;

 

(iv)                              be of a similar use and
quality to the other Individual Properties (as reasonably determined by
Mezzanine Lender applying the standards of a prudent commercial mezzanine loan
lender);

 

(v)                                 be in good repair and
condition, as evidenced by the engineering report referred to in clause (c) below;

 

(vi)                              if the Substitute
Property is ground leased (such that Mortgage Borrower will hold a leasehold
interest rather than fee title), the ground lease shall be financeable and
otherwise in form and substance reasonably acceptable to Mezzanine Lender,
including, without limitation, rent payment and other material financial
obligations and providing for the recordation of a memorandum of lease in the
applicable real property records; and

 

(vii)                           be in compliance, in all
material respects, with Legal Requirements and Insurance Requirements, as
evidenced by diligence items required to be provided in paragraph (c) below.

 

(c)                                              Diligence
Process. The Mezzanine Borrower shall submit to the Mezzanine Lender
written notice (a “Substitution Notice”) setting forth the Business Day
no earlier than thirty (30) days after the date of such Substitution Notice on
which Mezzanine Borrower desires to effect such Substitution (the “Substitution
Date”), together with the following materials (the “Substitution Due
Diligence Package”) relating to the proposed Substitute Property: (i) a
description of the proposed Substitute Property sufficient to obtain a Title
Policy for such proposed Substitute Property, (ii) three years of
historical cash flow operating statements, if available, (iii) true,
complete and correct copies of any Material Subleases affecting the proposed
Substitute Property, (iv) a map and site plan, including an existing
Survey of the proposed Substitute Property dated not more than six (6) months
prior to such submission, (v) a copy of the proposed amendment to the
Master Lease and Master Lease SNDA and the License and Reservation Service
Agreement to include the proposed Substitute Property, (vi) copies of all 

 

48

 

permits, licenses and approvals required with respect to operation of
the proposed Substitute Property, (vii) a
Phase I environmental assessment report, conducted under the ASTM International
Standard Practice for Environmental Site
Assessments:  Phase I Environmental Site
Assessment Process E1527-05, issued by a recognized environmental
consultant, (viii) copies of all condominium documents and ground leases,
if any, (ix) an engineer’s inspection report, (x) ground lessor, fee
mortgagee, condominium association and tenant (under Material Subleases)
estoppel certificates and tenant (under Material Subleases) Non-Disturbance
Agreements, in each case in the forms attached hereto and including such
variations that are either immaterial or are reasonably acceptable to Mezzanine
Lender, as applicable, together with any consents required with respect to the
Contemplated Transactions, (xi) a commitment from the Title Company with
respect to the issuance of a Title Policy, together with copies of all
exceptions referenced therein and a copy of the recorded memorandum of ground
lease if such Substitute Property will be a Ground Lease Property,
(xii) upon the reasonable request of the Mezzanine Lender, a PML study,
(xiii) a FIRREA appraisal conducted by Cushman & Wakefield (or
another Independent appraiser reasonably acceptable to Mezzanine Lender),
(xiv) if such proposed Substitute Property is not then owned by the
Mortgage Borrower or its Affiliate, a duly executed copy of the purchase and
sale agreement for such proposed Substitute Property and copies of all proposed
documentation transferring title to the proposed Substitute Property to
Mortgage Borrower including any interim transfers to its Affiliates,
(xv) a copy of the flood certification, (xvi) either (A) a letter or
other evidence with respect to the proposed Substitute Property from the
appropriate Governmental Authorities concerning compliance with applicable
zoning and building laws, (B) an ALTA 3.1 zoning endorsement for the Title
Policy or (C) a zoning report prepared by PZR indicating that the proposed
Substitute Property is in material compliance with applicable zoning and
building laws, (xvii) a copy of the valid permanent certificate of occupancy
(if required by applicable law), (xviii) calculations of the LTV Ratio and
LCR both before and after the proposed Substitution, (xix) evidence
reasonably satisfactory to Mezzanine Lender and its insurance consultant of
insurance policies covering the proposed Substitute Property satisfying all of
the requirements of Article VI, and (xx) UCC, bankruptcy, state and
federal tax lien, litigation and judgment searches conducted by a search firm
reasonably acceptable to the Mezzanine Lender with respect to the title holder
of such proposed Substitute Property on the date immediately prior to
acquisition thereof by Mortgage Borrower, in each of the locations reasonably
specified by the Mezzanine Lender and not revealing any Liens other than
Permitted Encumbrances.  In addition,
Mezzanine Borrower shall permit the Mezzanine Lender at all reasonable times
and upon reasonable prior notice to make an inspection of such proposed
Substitute Property.  Mezzanine Lender
shall confirm Mezzanine Borrower’s compliance with this paragraph (c) with
respect to each proposed Substitute Property within thirty (30) days after
Mezzanine Lender’s receipt of the complete applicable Substitution Due
Diligence Package and Mezzanine Lender’s failure to so confirm or deny
Mezzanine Borrower’s compliance within such thirty (30) day period shall be
deemed compliance by Mezzanine Borrower with this paragraph (c), provided that
this sentence appears in bold capital letters in the Substitution Notice
accompanying the Substitution Due Diligence Package.

 

(d)                                             Additional
Conditions Precedent.  In addition to
the conditions in paragraphs (a), (b) and (c) above, each
Substitution shall be subject to the satisfaction of the following conditions
precedent:

 

49

 

(i)                                     Rating Agency
Confirmation; Rating Agency Requirements. 
For any Substitution made after a Securitization, Mortgage Lender’s
receipt (with a copy to Mezzanine Lender) of a Rating Agency Confirmation and
Mortgage Borrower’s satisfaction of such
other conditions as may be required by the Rating Agencies, including any such
conditions as may relate to any applicable Ground Lease;

 

(ii)                                  Release Conditions.  Mezzanine Borrower’s compliance with the
condition set forth in Section 2.3.4(c), (e), (f), (g) and (k) with
respect to the release of the Replaced Property;

 

(iii)                               Financial
and Other Tests.

 

(1)                                  LCR.  After giving effect to such Substitution, as
of the Substitution Date the LCR for all of the Individual Properties then
remaining subject to the Liens of the Security Instruments (i.e., including the
Substitute Property and excluding the Replaced Property), shall not be less
than the greater of (A) the Closing Date LCR and (B) the LCR for the
Individual Properties subject to the Liens of the Security Instruments
immediately prior to the Substitution Date;

 

(2)                                  LTV
Ratio.  After giving effect to such
Substitution, as of the Substitution Date the LTV Ratio for all of the
Properties then remaining subject to the Liens of the Security Instruments (i.e.
including the Substitute Property and excluding the Replaced Property), shall
not be more than the Closing Date LTV.

 

(3)                                  EBITDAR.  The earnings from hotel and casino operations at the Property before interest
expense/income, taxes, depreciation and amortization, any rental expense on
real property (other than ground rent), distribution expense, direct and
allocated corporate overhead expense, regional office allocation, royalty
charges from affiliates and restructuring expense plus any non-cash charges/less
any non-cash income, including but not limited to losses on sales of assets and
non cash compensation expense (as evidenced by the financial statements and
information provided to Mezzanine Lender by Mezzanine Borrower
pursuant to clause (c) of this Section 2.3.5), during
each of the three 12-month periods prior to the Substitution Date shall not
have materially declined or during the prior 12-month period, evidence a
material downward trend (as reasonably determined by Mezzanine Lender, applying the standards
of a prudent commercial mezzanine loan lender) over such three (3) year
period.

 

(4)                                  Geographic
Diversity.  The proposed Substitution
does not cause (A) more than two Individual Properties to be within a
three (3) mile radius of each other or (B) any two Individual
Properties to be within a three (3) mile radius of each other having
aggregate Combined Allocated Loan Amounts in excess of forty percent (40%) of
the Combined Principal Amount.

 

(iv)                              Lender’s Costs and
Expenses.  Mezzanine Borrower shall
pay for any and all reasonable out-of-pocket costs and expenses of Mezzanine
Lender incurred in connection with any proposed Substitution, including
Mezzanine Lender’s reasonable attorneys’ fees and disbursements.  Senior Mezzanine Borrower shall pay for any
and all reasonable out-of-pocket costs and expenses of Senior Mezzanine Lender
incurred in connection with any proposed 

 

50

 

Substitution, including Senior Mezzanine Lender’s reasonable attorneys
fees and disbursements.  Mortgage
Borrower shall pay for any and all reasonable out-of-pocket costs and expenses
of Mortgage Lender incurred in connection with any proposed Substitution,
including all title insurance premiums for any endorsements to any existing
Title Policies reasonably required by Mortgage Lender in connection with such
proposed Substitution, title premiums, mortgage recording taxes, transfer taxes
and recording fees;

 

(v)                                 Transaction Costs.  Mezzanine Borrower shall deliver to Mezzanine
Lender evidence reasonably satisfactory to Mezzanine Lender that all amounts
owing to any parties in connection with the transactions relating to the
proposed Substitution have been paid in full, or will simultaneously be paid in
full on the Substitution Date or adequate reserves therefor are established by
Mezzanine Borrower (or Mortgage Borrower) in cash with respect to contingent or
other liabilities that may arise out of such transaction and for which
Mezzanine Borrower (or Mortgage Borrower) is not adequately indemnified or
insured against as reasonably determined by Mezzanine Lender;

 

(vi)                              Opinions of Counsel.  Delivery to Mezzanine Lender of the following
favorable original Opinions of Counsel or updates thereto in connection with
the Substitute Property similar in form and substance to the opinions which
were delivered on the Closing Date in connection with the Replaced Property,
reasonably satisfactory to Mezzanine Lender and addressed to the Mezzanine
Lender on behalf of the holders of the Mezzanine Notes: (a) if requested
by the Rating Agencies, a True Lease Opinion and a Non-Consolidation Opinion, (b) a
local counsel enforceability opinion as to matters governed by local law, (c) an
enforceability opinion under New York law, (d) an opinion to the effect
that each of Mortgage Borrower, Master Lessee and Guarantor is duly organized
and validly existing under the laws of the state of its formation and is
qualified or licensed to do business in each jurisdiction where the nature of
its business in which it is engaged makes such qualification or licensing
necessary and (e) an opinion to the effect that the Loan Documents
(Mortgage) or amendments thereto have been duly authorized, executed and
delivered by Mortgage Borrower, Master Lessee and Guarantor and are the valid
and binding obligations and agreements of such party, enforceable in accordance
with their terms, in each case with the same exceptions as made on Closing
Date;

 

(vii)                           No Event of Default.  No Event of Default shall have occurred and
then be continuing on the date on which Mezzanine Borrower delivers the
Substitution Notice and on the Substitution Date;

 

(viii)                        Accuracy of Representations
and Warranties.  The representations
and warranties set forth in the Mezzanine Loan Documents shall be true and
correct as to the Substitute Property on the Substitution Date in all material
respects (subject to any additional items set forth on updated exhibits and
schedules hereto provided by Mezzanine Borrower which do not violate the
provisions of the Mezzanine Loan Documents and are not reasonably likely to
have a Material Adverse Effect with respect to such Substitute Property);

 

(ix)                                Officer’s
Certificate.  Delivery to Mezzanine
Lender of an Officer’s Certificate certifying to the truth and accuracy of the
statements in clauses (vii) and (viii);

 

51

 

(x)                                   Non-Disqualification
Opinion.  Delivery of a
Non-Disqualification Opinion;

 

(xi)                                Organizational
Documents.  If required by the Rating
Agencies, delivery of original updated organizational documents of each of the
Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, Junior
Mezzanine Borrowers, Master Lessee, Guarantors and Sponsor, including, but not
limited to a current certificate of good standing.  If the Substitute Property is located in a
State not previously covered by the Security Instruments, evidence of Mortgage
Borrower’s and Master Lessee’s qualification to do business in the State where
the Substitute Property is located. 
Delivery of appropriate evidence of the authorization of the Mortgage
Borrower, Master Lessee and Guarantors approving the execution, delivery and
performance of the Mortgage Loan Documents or amendments thereto being executed
and delivered in connection with the Substitution, duly adopted by the Mortgage
Borrower, Master Lessee and Guarantors as applicable and accompanied by an
Officer’s Certificate stating that such authorizations have not been altered or
repealed and are in full force and effect, and certifying as to the names of
the Persons authorized to sign on behalf of such parties, together with the
true signatures of each such Person;

 

(xii)                             Insurance Certificates.  Delivery of the insurance certificates with
respect to the Substitute Property required under the Loan Agreement
(Mortgage); and

 

(xiii)                          Loan Documents.  Delivery of originals of the following
Mortgage Loan Documents or amendments thereto:

 

(1)                                  a
Substitute Property Mortgage Spreader Agreement, duly executed and acknowledged
by Mortgage Borrower;

 

(2)                                  a first priority Assignment of Master Lease,
Subleases, Rents and Security Deposits, from Borrower, as assignor, to Mortgage
Lender, as assignee, assigning to Mortgage
Lender all of Mortgage Borrower’s interest in and to the Master
Lease, the Subleases, Rents and Security Deposits as security for the Mortgage
Loan with respect to the
Substitute Property, or a counterpart original of the Assignment of Leases,
modified as necessary, duly executed and acknowledged by Mortgage Borrower (the
“Assignment of Leases Counterpart”);

 

(3)                                  UCC
financing statements (Form UCC-1) (or other forms required in any
jurisdiction), covering all fixtures, Building Equipment and other personal
property (other than the Excluded Personal Property), and all proceeds thereof,
naming Mortgage Borrower as debtor and Mortgage Lender as secured party
(collectively, the “UCC Financing Statements”; together with the
Assignment of Leases Counterpart and the Substitute Property Mortgage Spreader
Agreement, the “Security Documents”);

 

(4)                                  the
Title Policy or endorsements to the Title Policies, as applicable, issued by
the Title Company in an amount equal to 125% of the Allocated Loan Amount for
the Substitute Property (or, if the Title Company issues a tie-in endorsement
between the Title Policy for the Substitute Property and the Title Policies for
the other Individual Properties in form and substance reasonably acceptable to
Mezzanine Lender, in an amount equal to 100% of the Allocated Loan Amount for
the Substitute Property), reflecting the addition of each such 

 

52

 

Substitute
Property and containing such affirmative coverage similar in form and substance
to the affirmative coverage provided in connection with the Replaced Property,
insuring that the Substitute Property Mortgage Spreader Agreement creates a
valid first lien on Borrower’s fee or leasehold title in the Substitute
Property subject to the Permitted Encumbrances, and insuring the perfected
first priority interest of Mortgage Lender pursuant to the Substitute Property
Mortgage Spreader Agreement, together with any title insurance premiums, fees
or charges due in connection therewith, and the Mezzanine Borrower shall cause
Mortgage Borrower to cooperate with the Mortgage Lender and execute such
further instruments and documents and perform such further acts as the
Mezzanine Lender or the Title Company shall reasonably request to carry out the
creation and perfection of the liens and security interests contemplated by the
Security Documents and the release, discharge and removal of any encumbrances
required for the issuance of the Title Policy;

 

(5)                                  an
amendment to the Master Lease and to the Master Lease SNDA incorporating the
Substitute Property and eliminating the Replaced Property;

 

(6)                                  updates
to any Exhibits and Schedules to the Mortgage Loan Documents as applicable
without disclosing matters inconsistent with the requirements of this Section 2.3.5;
and

 

(7)                                  a
Confirmation of Guaranty in customary form duly executed and delivered by Guarantors,
adding the Substitute Property to and affirming their obligations under the
Recourse Guaranty.

 

(xiv)                         Senior Mezzanine Loan
Deliveries.  The Senior Mezzanine
Lender shall have received all deliveries required under Section 2.3.5
of the Senior Mezzanine Loan Agreement, including, but not limited to,
insurance certificates naming Senior Mezzanine Lender with respect to the
Substitute Property, a copy of the owner’s title insurance policy and related
mezzanine endorsement (if available in such State) and copies of the
Substitution Due Diligence Package and all final deliveries to Mortgage Lender
under this Section 2.3.5.

 

(xv)                            Junior Mezzanine Loan
Deliveries.  The Junior Mezzanine
Lenders shall have received all deliveries required under Section 2.3.5
of the Junior Mezzanine Loan Agreements, including, but not limited to,
insurance certificates naming Junior Mezzanine Lenders with respect to the
Substitute Property, a copy of the owner’s title insurance policy and related
mezzanine endorsement (if available in such State) and copies of the
Substitution Due Diligence Package and all final deliveries to Mortgage Lender
under this Section 2.3.5.

 

(xvi)                         Additional Deliveries.  Mezzanine Lender shall have received such
other deliveries reasonably requested by Mezzanine Lender, provided such
requests are customary and are consistent with the deliveries required with
respect to the Individual Properties on the Closing Date.

 

2.3.6                        Provisions
Relating to Individual Properties That Go Dark.

 

(a)                                              Mezzanine
Borrower shall not permit Mortgage Borrower to allow, permit or suffer any
Individual Property to Go Dark.  If an
Individual Property shall Go Dark, it shall be an 

 

53

 

Event of Default hereunder unless, within 30 days of such Individual
Property Going Dark, Mezzanine Borrower shall cause Mortgage Borrower to:

 

(i)                                     cause such
Individual Property to reopen for business to the public; or

 

(ii)                                  cause such Individual
Property to be released from the lien of the applicable Security Instrument in
accordance with Section 2.3.4 hereof; or

 

(iii)                               provide a Substitute
Property, to be subject to the lien of the Security Instrument, in accordance
with Section 2.3.5 hereof to the extent permitted under such
Section, to replace such Individual Property.

 

(b)                                 If
any Individual Property shall Go Dark, Mezzanine Borrower will cause Mortgage
Borrower to promptly send written notice thereof to Mezzanine Lender.  If an Individual Property shall Go Dark, the
Master Lessee shall nonetheless be required to make into the Holding Account
without reduction the full Master Lease Rent payment as and when required under
the Master Lease and the Master Lease Rent Payment Direction Letter with
respect to all Individual Properties.

 

2.3.7                        Excess
Account Collateral.  Upon the
occurrence of any Property Release, provided no 90% Cash Sweep Period exists and no Event of Default has occurred
and is continuing, Mezzanine Lender shall promptly perform an analysis of the
Account Collateral (Second Mezzanine) in order to reasonably determine the
amount of the Account Collateral (Second Mezzanine) (including, but not limited
to, Proceeds) attributable to the Release Property (the “Excess Account
Collateral”), and shall promptly instruct Cash Management Bank to return to
Mezzanine Borrower the Excess Account Collateral, if any, except to the extent
that Mezzanine Lender reasonably determines that a shortfall exists in any
Sub-Account with respect to the Property other than the Release Property.

 

2.3.8                        Reserve
Requirements.  Upon the occurrence of
a Property Release, provided no Event of Default has occurred and is
continuing, Mezzanine Borrower shall cause Mortgage Borrower to promptly
prepare a revised estimate of Impositions and Other Charges, insurance
premiums, Ground Rent and Master Lease Rent with respect to the remaining
Properties in accordance with Sections 16.1, 16.2 and 16.3,
as applicable of the Loan Agreement (Mortgage), and shall promptly provide
Mezzanine Lender and Cash Management Bank (Mortgage) with notice of the revised
Monthly Tax Reserve Amount, Monthly Insurance Reserve Amount and Monthly Ground
Rent Amount.

 

2.3.9                        Release
of Unimproved Parcels.  Subject to
satisfaction of each of the conditions set forth below with respect to any
Unimproved Parcel, at the request of Mezzanine Borrower, Mezzanine Lender shall
consent to the release such Unimproved Parcel from the Lien of the applicable
Security Instrument and related Loan Documents (Mortgage) and concurrent
conveyance of such Unimproved Parcel to a Person other than Mortgage Borrower
or another SPE Entity, without the payment of any Release Price:

 

(a)                                              Mezzanine
Borrower delivers a written notice to Mezzanine Lender (i) identifying the
Unimproved Parcel to be released and the date on which Mezzanine Borrower
desires the release to be effective, which date shall not be less than thirty
(30) days from the date 

 

54

 

of Mezzanine Borrower’s delivery of notice, and (ii) specifying
the intended use of the Unimproved Parcel, which shall not be inconsistent with
the use of the portion of the related Individual Property that shall remain
subject to the Lien of the applicable Security Instrument.  For the avoidance of doubt, the erecting,
maintaining and operating of residential apartment or condominium complexes on
Unimproved Parcels after their release shall not be deemed to be inconsistent
with the use of the related Individual Property.

 

(b)                                             No Noticed
Default or Event of Default shall exist and be continuing on the date Mezzanine
Borrower delivers its notice to Lender or on the date on which the release of
the Unimproved Parcel is to become effective, and on each such date Mezzanine
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)                                              Mezzanine
Borrower shall cause Mortgage Borrower to submit to Mortgage Lender (with a
copy to Mezzanine Lender), concurrently with its request for release, Release
Instruments for the Unimproved Parcel together with an Officer’s Certificate
certifying that (i) the Release Instruments are in compliance with all
Legal Requirements, (ii) the release and conveyance to be effected will
not violate the terms of this Agreement, (iii) the release to be effected
will not impair or otherwise adversely affect the Liens, security interests and
other rights of Mortgage Lender under the Loan Documents (Mortgage) not being
released (or as to the Property subject to the Loan Documents (Mortgage) not
being released) nor adversely affect Mezzanine Lender’s Lien on the Collateral
or the Senior Mezzanine Lender’s Lien on the Senior Mezzanine Collateral 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 Mortgage Borrower or any other
SPE Entity.

 

(g)                                             Mortgage
Borrower executes and delivers such other instruments, certificates, opinions
of counsel and documentation as Mezzanine Lender and the Rating Agencies shall
reasonably request in order to preserve, confirm or secure the Liens and
security granted to Mortgage Lender by the Loan Documents (Mortgage), including
any amendments, modifications or supplements to any of the Loan Documents
(Mortgage) and partial release endorsements to the existing Title Policies.

 

(h)                                             Mezzanine
Borrower shall pay for any and all reasonable out-of-pocket costs and expenses
incurred by Mezzanine Lender, and cause Mortgage Borrower to pay for any and 

 

55

 

all reasonable out-of-pocket costs and expenses incurred by Mortgage
Lender in connection with any proposed release and conveyance of an Unimproved
Parcel, including, with respect to Mezzanine Borrower, Mezzanine Lender’s
reasonable attorneys’ fees and disbursements and with respect to Mortgage
Borrower, all title insurance premiums for any endorsements to any existing
Title Policies reasonably required by Mezzanine Lender in connection with such
proposed release.

 

(i)                                                 Mezzanine
Borrower shall cause a Non-Disqualification Opinion with respect to such
release to be delivered to Mortgage Lender (with a copy to Mezzanine Lender)
and the Rating Agencies.

 

2.4                                 Regulatory Change; Taxes.

 

2.4.1                        Increased Costs.  If as a result of any Regulatory Change or
compliance of Mezzanine Lender therewith, the basis of taxation of payments to
Mezzanine Lender or any company Controlling Mezzanine Lender of the principal
of or interest on the Loan is changed or Mezzanine Lender or the company
Controlling Mezzanine Lender shall be subject to (i) any tax, duty, charge
or withholding of any kind with respect to this Agreement (excluding federal
taxation of the overall net income of Mezzanine Lender or the company
Controlling Mezzanine Lender); or (ii) any reserve, special deposit or
similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities, of Mezzanine Lender or any company
Controlling Mezzanine Lender is imposed, modified or deemed applicable; or (iii) any
other condition affecting loans to borrowers subject to LIBOR-based interest
rates is imposed on Mezzanine Lender or any company Controlling Mezzanine
Lender and Mezzanine Lender determines that, by reason thereof, the cost to
Mezzanine Lender or any company Controlling Mezzanine Lender of making,
maintaining or extending the Loan to Mezzanine Borrower is increased, or any
amount receivable by Mezzanine Lender or any company Controlling Mezzanine
Lender hereunder in respect of any portion of the Loan to Mezzanine Borrower is
reduced, in each case by an amount deemed by Mezzanine Lender in good faith to
be material (such increases in cost and reductions in amounts receivable being
herein called “Increased Costs”), then Mezzanine Lender shall provide
notice thereof to Mezzanine Borrower and Mezzanine Borrower agrees that it will
pay to Mezzanine Lender upon Mezzanine Lender’s written request such additional
amount or amounts as will compensate Mezzanine Lender or any company
Controlling Mezzanine Lender for such Increased Costs to the extent Mezzanine
Lender determines that such Increased Costs are allocable to the Loan.  If Mezzanine Lender requests compensation
under this Section 2.4.1, Mezzanine Borrower may, by notice to
Mezzanine Lender, require that Mezzanine Lender furnish to Mezzanine Borrower a
statement setting forth the basis for requesting such compensation and the
method for determining the amount thereof. 
In the event that Mezzanine Borrower is required to pay any Increased
Costs in accordance with the terms hereof, Mezzanine Borrower shall have the
right to prepay the Principal Amount (together with all accrued but unpaid
interest thereon calculated through the end of the then current Interest
Period) without the imposition of any Prepayment Fee.  Mezzanine Borrower shall have up to ninety
(90) days following the later to occur of (1) Mezzanine Lender furnishing
a statement setting forth the basis for requesting compensation for Increased
Costs if requested by Mezzanine Borrower and (2) receipt from Mezzanine
Lender of notice of the Increased Costs to make such prepayment, provided until
such prepayment is paid in full (including all accrued but unpaid interest
thereon calculated through the end of the then 

 

56

 

current Interest Period), Mezzanine Borrower
shall pay to Mezzanine Lender upon Mezzanine Lender’s written request such
additional amount or amounts as will compensate Mezzanine Lender or any company
Controlling Mezzanine Lender for Increased Costs incurred in the interim to the
extent Mezzanine Lender determines that such Increased Costs are allocable to
the Loan.

 

2.4.2                        Special Taxes.  Mezzanine Borrower shall make all payments hereunder
free and clear of and without deduction for Special Taxes.  If Mezzanine Borrower shall be required by
law to deduct any Special Taxes from or in respect of any sum payable hereunder
or under any other Mezzanine Loan Document to Mezzanine Lender, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.4.2) Mezzanine Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii) Mezzanine
Borrower shall make such deductions, and (iii) Mezzanine Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
Notwithstanding anything to the contrary contained in this Section 2.4,
Mezzanine Borrower shall not be liable for any amounts as a result of
withholding for Special Taxes or additional costs incurred as a result of the
assignment of all or any portion of the Loan by Mezzanine Lender.

 

2.4.3                        Other Taxes.  In addition, Mezzanine Borrower agrees to pay
(or cause Mortgage Borrower to pay) any present or future stamp or documentary
taxes or other excise or property taxes, charges, or similar levies which arise
from any payment made hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other
Mezzanine Loan Documents, or the Loan (hereinafter referred to as “Other
Taxes”).

 

2.4.4                        Indemnity.  Mezzanine Borrower shall indemnify Mezzanine
Lender for the full amount of Special Taxes (unless Mezzanine Borrower shall
not be liable therefore as provided in Section 2.4.2) and Other
Taxes (including any Special Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.4.4) paid by
Mezzanine Lender and any liability (including penalties, interest, and
reasonable out-of-pocket expenses) arising therefrom or with respect thereto,
whether or not such Special Taxes or Other Taxes were correctly or legally
asserted.  This indemnification shall be
made within thirty (30) days after the date Mezzanine Lender makes written
demand therefor.

 

2.4.5                        Change of Office.  To the extent that changing the jurisdiction
of Mezzanine Lender’s applicable office would have the effect of minimizing
Special Taxes, Other Taxes or Increased Costs, Mezzanine Lender shall use
reasonable efforts to make such a change, provided that same would not
otherwise be disadvantageous to Mezzanine Lender.

 

2.4.6                        Survival.  Without prejudice to the survival of any
other agreement of Mezzanine Borrower hereunder, the agreements and obligations
of Mezzanine Borrower contained in this Section 2.4 shall survive
the payment in full of principal and interest hereunder, and the termination of
this Agreement.

 

2.5                                 Conditions
Precedent to Closing.  The following
conditions precedent to the obligation of Mezzanine Lender to make the Loan
hereunder were either fulfilled by, or on behalf of, Mezzanine Borrower or
waived by Mezzanine Lender as of the Closing Date; 

 

57

 

provided, however, that unless a condition
precedent expressly survived the Closing Date pursuant to a separate agreement,
by funding the Loan and filing UCC financing statements relating to the Pledge,
Mezzanine 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 Mezzanine Borrower contained in this
Agreement and the other Mezzanine Loan Documents, and the Merger
Representations and Warranties, shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and
as of such date, and no Default, Event of Default, Mortgage Default, Mortgage
Event of Default, Senior Mezzanine Default or Senior Mezzanine Event of Default
shall have occurred and be continuing; and Mezzanine Borrower shall be in
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other Mezzanine Loan Document on its part to be
observed or performed.  Notwithstanding
the foregoing, (i) the breach or failure of a Property Specific
Representation shall not constitute the failure to satisfy the condition
precedent set forth in this Section 2.5.1 unless such breach or
failure would result in a “Material Adverse Effect on the Company” (as such
phrase is defined in the Merger Agreement), (ii) in the event of the
breach or failure of a Property Specific Representation that results in a
Portfolio MAE, Mezzanine Lender may require Mezzanine Borrower to effect a
Mezzanine Lender-Initiated Substitution.

 

2.5.2                        Delivery of Mezzanine Loan Documents; Title
Policies; Reports; Leases.

 

(a)                                              Mezzanine Loan Documents. 
Mezzanine Lender shall have received an original copy of this Agreement,
the Mezzanine Notes, the Pledge, and all of the other Mezzanine Loan Documents,
in each case, duly executed (and to the extent required, acknowledged) and
delivered on behalf of Mezzanine Borrower and any other parties thereto.

 

(b)                                             Certificates; Perfection of Lien. 
Mezzanine Lender shall have received originals of the Certificates
together with a Member Power endorsed in blank. 
The Pledge and the other Mezzanine Loan Documents shall
constitute valid, perfected, and
enforceable first priority Liens upon the Collateral, in favor of Mezzanine
Lender, subject only to the Permitted Encumbrances (Second Mezzanine).

 

(c)                                              Interest
Rate Cap Agreement (Second Mezzanine). 
Mezzanine Lender shall have received the original Interest Rate Cap
Agreement (Second Mezzanine) which shall be in form and substance satisfactory
to Mezzanine Lender and a counterpart of the Acknowledgment executed and
delivered by the Counterparty;

 

(d)                                             Mezzanine
Account Agreement.  Mezzanine Lender
shall have received the original
of the Mezzanine Account Agreement executed by each of Cash Management Bank and
Mezzanine Borrower;

 

(e)                                              Intercreditor Agreements. 
Mezzanine Lender shall have received the Intercreditor Agreement

 

58

 

(f)                                                UCC Financing Statements. 
Mezzanine Lender shall have received evidence that the UCC financing
statements relating to the Pledge and this Agreement have been delivered to the
Mezzanine Lender for filing in the applicable jurisdictions.

 

(g)                                             Title
Insurance.

 

(i)                                     Mezzanine Lender
shall have received a copy of the Title Policies or a marked-up and signed
commitment having the force and effect of a title policy, marked “paid” by an
authorized representatives of the Title Company) issued by the Title Company
with respect to the Loan (Mortgage) and dated as of the Closing Date, with a
mezzanine loan endorsement in favor of Mezzanine Lender, it successors and
assigns, dated as of the Closing Date and reinsurance and direct access
agreements in form and substance acceptable to Mezzanine Lender. Mezzanine
Lender shall also have received evidence that all premiums in respect of the
Title Policies have been paid; and

 

(ii)                                  Mezzanine Lender
shall have received evidence of
Mortgage Borrower’s ownership of the Property in the form of owner’s
title policies insuring Mortgage Borrower’s title to the Property, which title
policies shall be in form and substance, and issued by a title insurance
company (with appropriate reinsurance or coinsurance), reasonably satisfactory
to Mortgage Lender.  Mezzanine Lender
shall also have received a letter from Mortgage Borrower to the Mezzanine
Lender and countersigned by the Title Companies, directing the Title Company to
make certain loss payments under certain of Mortgage Borrower’s owner’s title
insurance policies to Mezzanine Lender as more particularly set forth therein.

 

(iii)                               Mezzanine Lender shall
have received a “UCC 9” title policy in favor of Mezzanine Lender, its
successors and assigns, dated as of the Closing Date with such mezzanine
endorsements in favor of Lender as Mezzanine Lender reasonably requires, in
form and substance acceptable to Mezzanine Lender.  Mezzanine Lender also shall have received
evidence that all premiums in respect of the “UCC Plus” title policy have been
paid.

 

(h)                                             Survey.  Mezzanine Lender shall have
received a current Survey for the Property, containing the survey certification
required by the Loan Agreement (Mortgage);

 

(i)                                                 Insurance.  Mezzanine Lender shall have
received valid certificates of insurance for the policies of insurance required
by the Loan Agreement (Mortgage) naming Mezzanine Lender as an additional
insured (as applicable) and containing a cross liability/severability
endorsement, satisfactory to Mezzanine Lender in its sole discretion, and
evidence of the payment of all insurance premiums currently due and payable for
the existing policy period;

 

(j)                                                 Environmental Reports. 
Mezzanine Lender shall have received an Environmental Report in respect
of the Property from a firm, and in form and substance, reasonably satisfactory
to Mezzanine Lender;

 

(k)                                              Encumbrances. 
Mezzanine Borrower shall have taken or caused to be taken such actions
in such a manner so that Mezzanine Lender has a valid and perfected first Lien
as of the Closing Date on the Collateral.

 

59

 

(l)                                                 Loan Documents (Mortgage). 
Mezzanine Lender shall have received true and correct copies of all Loan
Documents (Mortgage), each of which shall be reasonably satisfactory to
Mezzanine Lender.

 

(m)                                           Senior Mezzanine Loan Documents.  Mezzanine Lender shall have received true and
correct copies of all Senior Mezzanine Loan Documents, each of which shall be
reasonably satisfactory to Mezzanine Lender.

 

(n)                                             Pledgor Acknowledgments. 
Mezzanine Lender shall have received an original of the acknowledgment
in the form of Exhibit D executed by each of Senior Mezzanine Borrower and
Mezzanine Borrower and dated as of the Closing Date, and Mezzanine Lender shall
have received satisfactory evidence thereof.

 

2.5.3                        Delivery of Organizational Documents.  On or before the Closing Date, Mezzanine
Borrower shall deliver, or cause to be delivered, to Mezzanine Lender copies,
certified by an Officer’s Certificate, of all organizational documentation
related to Mezzanine Borrower, Sponsor, each SPE Entity, each Guarantor, Master
Lessee, Mortgage Borrower, Senior Mezzanine Borrower, and the Junior Mezzanine
Borrowers as have been requested by Mezzanine Lender and/or the formation,
structure, existence, good standing and/or qualification to do business of
Mezzanine Borrower, Sponsor, each SPE Entity, each Guarantor, Master Lessee,
Mortgage Borrower, Senior Mezzanine Borrower, and the Junior Mezzanine
Borrowers as Mezzanine Lender may request in its sole discretion, including,
without limitation, good standing certificates, qualifications to do business
in the appropriate jurisdictions, resolutions authorizing the entering into of
the Loan and incumbency certificates as may be requested by Mezzanine
Lender.  Each of the organizational
documents of any SPE Entity shall contain single purpose entity provisions
reasonably approved by Mezzanine Lender prior to the date hereof.

 

2.5.4                        Counsel Opinions.

 

(a)                                              Mezzanine
Lender shall have received or Mezzanine Borrower shall have delivered into
escrow (for release to Mezzanine Lender concurrently with the delivery of the
Security Instruments to the Title Company for recording) a non-consolidation
opinion in a form reasonably satisfactory to the Mezzanine Lender (the “Non-Consolidation
Opinion”).

 

(b)                                 Mezzanine
Lender shall have received or Mezzanine Borrower shall have delivered into
escrow  (for release to Lender concurrently
with the delivery of the Pledge to the Title Company for recording) a true
lease opinion with respect to the Master Lease in form and substance reasonably
satisfactory to the Mezzanine Lender (the “True Lease Opinion”).

 

(c)                                              Mezzanine Lender shall have received or
Mezzanine Borrower shall have delivered into escrow (for release to Mezzanine
Lender concurrently with the delivery of the Pledge to the Title Company for
recording) a true sale opinion with respect to the Transfer of the entities
owning the Property to Mortgage Borrower in form and substance reasonably
satisfactory to the Lender (the “True Sale Opinion”).

 

(d)                                             Mezzanine Lender shall have received or
Mezzanine Borrower shall have delivered into escrow (for release to Mezzanine
Lender concurrently with the delivery of the Pledge to the Title Company for
recording) a non-contravention opinion with respect to the 

 

60

 

Transfer of the entities owning the Property
to Mortgage Borrower in form and substance reasonably satisfactory to the
Lender (the “Non-Contravention Opinion”).

 

(e)                                              [Reserved]

 

(f)                                                Mezzanine Lender shall have received or
Mezzanine Borrower shall have delivered into escrow (for release to Mezzanine
Lender concurrently with the delivery of the Pledge to the Title Company) (i) the Opinion of Counsel in such form and
substance reasonably satisfactory to the Mezzanine Lender; (ii) a copy of
the “Opinion of Counsel” delivered to Senior Mezzanine Lender pursuant to the
Senior Mezzanine Loan Agreement, and (iii) a copy of the “Opinion of
Counsel” delivered to Mortgage Lender pursuant to the Loan Agreement
(Mortgage).

 

(g)                                             Mezzanine Lender shall have received from Counterparty
the Counterparty Opinion in such form approved by the Mezzanine Lender.

 

2.5.5                        Consummation of the Merger.  Mezzanine Borrower shall have delivered to
Mezzanine Lender a true, correct and complete copy of the Merger
Agreement.  The merger transactions
contemplated by the Merger Agreement shall have been consummated in accordance
with the Merger Agreement, and all conditions precedent to such consummation,
as set forth in the Merger Agreement, shall, as of the consummation of the
merger transactions, have been satisfied (and would have been satisfied,
without taking into consideration the application of the last paragraph of Section 6.1
of the Merger Agreement) or (subject to the following clause) waived, provided
that no item requiring the consent of the Parent (as defined in the Merger
Agreement), including pursuant to Section 6.1 of the Merger Agreement,
that is material to the interest of Mezzanine Lender shall have been given and
no condition material to the interests of the Mezzanine Lender shall have been
waived except, in ease such case, with the prior written consent of Mezzanine
Lender (which Mezzanine Lender shall not unreasonably withhold or delay).

 

2.5.6                        Payments.  All payments, deposits or escrows, if any,
required to be made or established by Mezzanine Borrower under this Agreement,
the Mezzanine Notes and the
other Mezzanine Loan Documents on or before the Closing Date shall have been
paid.

 

2.5.7                        Transaction Costs.  Mezzanine Borrower shall have paid or
reimbursed Mezzanine Lender for all title insurance premiums, recording and
filing fees, costs of Environmental Reports, seismic reports, zoning reports,
searches, flood certifications, appraisals and other reports, the reasonable
fees and costs of Mezzanine Lender’s counsel and all other reasonable third
party out-of-pocket expenses incurred in connection with the origination of the
Loan; and Mezzanine Borrower shall have paid the fees due to Mezzanine Lender
pursuant to the Fee Letter.

 

2.5.8                        Material Adverse Effect.  Subject to the qualification contained in the
preamble to Article IV of the Merger Agreement, other than clause (z) thereof,
since December 31, 2005, there not having occurred a “Material Adverse
Effect on the Company” (as defined in the Merger Agreement).

 

61

 

2.5.9                        Control.  After giving effect to the consummation of
the transactions contemplated by the Merger Agreement, the Principal Investors,
collectively, shall beneficially own and control, with unrestricted voting power,
at least seventy percent (70%) of the voting equity of each Person constituting
a Guarantor pursuant to arrangements consistent with the arrangements
previously disclosed to Mezzanine Lender.

 

2.5.10                  Insolvency.  None of Mezzanine Borrower, Senior Mezzanine
Borrower or Mortgage Borrower or any of their constituent Persons shall be the
subject of any bankruptcy, reorganization, or insolvency proceeding.

 

2.5.11                  Master Lease and Individual Property
Subleases. Mezzanine Lender shall have received a copy of the duly
executed Master Lease and each Individual Property Sublease, each in form consistent with the forms attached hereto (with
respect to the Master Lease) or to the Purchase and Sale Agreement (with
respect to the Individual Property Subleases) and otherwise reasonably
acceptable to Mezzanine Lender and acceptable to the Rating Agencies and
acceptable to the Title Company.

 

2.5.12                  Equity
Contribution.  Holdco and FP
collectively shall have received as equity contributions an aggregate amount
equal to at least 32.5% of the total consideration payable under the Merger
Agreement (a portion of which may be in the
form of rollover equity provided by Frank Fertitta III, Lorenzo Fertitta and
certain others) (plus such additional amount as the Principal Investors
and their co-investors shall elect to contribute in their sole discretion), and
(x) Holdco shall have contributed (or cause to be contributed) as a common
equity contribution proceeds of such equity contribution received to Mortgage
Borrower in an amount not less than $550 million (the “Cash Equity
Contribution”) and (y) Holdco and FP shall have applied, or caused to
be applied, all proceeds of such equity contributions other than the Cash
Equity Contribution to finance the consummation of the Contemplated
Transactions.

 

2.5.13                  Existing Indebtedness.  After giving effect to the consummation of
the Contemplated Transactions, (a) Master Lessee and its subsidiaries
shall have no outstanding preferred equity or indebtedness, except for (i) indebtedness
incurred pursuant to (A) the 6 1/2% Senior Subordinated Notes due 2014,
the 6 7/8% Senior Subordinated Notes due 2016, the 6% Senior Notes due 2012,
the 6 5/8% Senior Subordinated Notes due 2018 and the 7.75% Senior Notes due
2016 (the “Existing Notes”), in an aggregate principal amount of
approximately $2,300 million, (B) the Revolving/Term Credit Facility, (C) the Mortgage Loan, the Senior
Mezzanine Loan and the Junior Mezzanine Loans, and (D) the Loan; (ii) preferred
equity held by Holdco in its subsidiaries and preferred equity held by one
Borrower Party in another Borrower Party, so long as such preferred equity does
not constitute “disqualified stock,” is not otherwise entitled to any mandatory
dividends or redemptions, and contains terms that are otherwise reasonably
satisfactory to Mezzanine Lender
(provided that Mezzanine Lender shall approve such terms so long as they are
not adverse to the interests of Mezzanine Lender); (iii) indebtedness evidenced by a note in the principal
amount of $100 million dated February 16, 2007 issued by GV Ranch Station
Capital Holdings, LLC and indebtedness evidenced by a series of notes in an
aggregate principal amount of $9.2 million issued by a subsidiary of Master
Lessee having a weighted average interest rate of 7.1% and maturity dates
ranging from 2009 to 2026; (iv) a capital lease of the office building in
which Master Lessee’s executive offices are located adjacent to the Red Rock
Resort (the “Executive Office Capital Lease”); (v) indebtedness 

 

62

 

evidenced by that certain Credit Agreement
dated as of October 4, 2007 providing to Aliante Gaming, LLC, a Nevada
limited liability company, construction loans in the aggregate amount of $410
million and revolving loans in the aggregate amount of $20 million, and a
completion guaranty by Master Lessee in respect thereof (the “Aliante
Financing”) and (vi) such other existing indebtedness and preferred
equity, if any, as shall be agreed by Mezzanine Lender (together with the Existing
Notes, and the indebtedness described in clauses (iii), (iv) and (v), the “Existing
Indebtedness”), and (b) all stock of the Master Lessee shall be owned
by Guarantors free and clear of Liens (other than those securing the
Revolving/Term Credit Facility).

 

2.5.14                  Ground Lease and Fee Mortgagee Estoppels.  Landlord shall have received a Ground Lessor
Estoppel Certificate and, if applicable, a Fee Mortgagee Estoppel Certificate,
for each Ground Lease Property.

 

2.5.15                  Equity and Real Property Transfer Documents.  Mezzanine Borrower shall have delivered to
Mezzanine Lender true, correct and complete copies of all documentation
pursuant to which the transactions contemplated by the Merger Agreement are
consummated, including, but not limited to, all documents evidencing all stages
of the acquisition of Station Casinos, Inc. by the Guarantors and all
documents evidencing (i) all preliminary transfers of equity interests
that resulted in the Mezzanine Borrower structure set forth on Exhibit K,
(ii) any preliminary transfers of the Property into Affiliates of Mortgage
Borrower and (iii) the acquisition of such Affiliates by and the merger of
such Affiliates into Mortgage Borrower. 
In addition, Mezzanine Borrower shall have delivered to Mezzanine Lender
a copy of the ALTA owner’s title
insurance policy(ies) issued by the Title Company with respect to the Property
and insuring Mortgage Borrower’s fee and/or leasehold title thereto, in form
and substance reasonably acceptable to Mezzanine Lender.

 

2.5.16                  No
Competing Financing.  Mezzanine Lender shall be reasonably
satisfied that prior to and during the 135-day period after the Closing Date
(or such shorter period necessary to complete the Securitization) there shall
be no competing offering, placement, or arrangement of any debt
securities or bank financing (including refinancings and renewals of debt) by
or on behalf of any Guarantor or any of its subsidiaries (including Mezzanine
Borrower) other than (a) the Revolving/Term
Credit Facility, (b) the
Mezzanine Loan, (c) the Executive Office Capital Lease, (d) the
Aliante Financing, (e) the Land Loan, (f) to the extent permitted to be incurred under the Merger
Agreement, refinancings of existing indebtedness of subsidiaries of Master
Lessee, and (g) to the extent permitted to be incurred under the Merger
Agreement, construction and other single asset financings by subsidiaries of
Master Lessee.

 

2.5.17                  Approvals.  All material governmental and third party
approvals necessary in connection with the Contemplated Transactions (including
all necessary regulatory and gaming approvals) and the continuing operations of
Master Lessee, Mezzanine Borrower and their respective subsidiaries (including
shareholder or member approvals, if any) shall have been obtained on terms reasonably
satisfactory to Mezzanine Lender and shall be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the Contemplated Transactions.  There shall not exist any action, suit,
investigation, litigation or proceeding pending or threatened in any court or
before any arbitrator 

 

63

 

or governmental authority that would permit
Sponsor under the Merger Agreement not to consummate the merger transaction.

 

2.5.18                  Searches.  Mezzanine Lender shall have received current
judgment, bankruptcy, UCC, litigation and tax lien searches showing no material
monetary encumbrances with respect to the Property or material liabilities of
Mezzanine Borrower or the SPE Entities other than as contemplated by the
Mezzanine Loan Documents; provided that, for the avoidance of doubt, the
disclosure, in any such searches or otherwise, or existence of any pending or
threatened action, suit, litigation or proceeding relating to the Contemplated
Transactions which does not constitute at such time a contractual basis for
termination of the Merger Agreement shall not constitute a basis of the failure
or non-satisfaction of this condition.

 

2.6                                 [Reserved]

 

III.                                 CASH
MANAGEMENT

 

3.1                                 Cash Management.

 

3.1.1                        Establishment of Accounts.  Mezzanine Borrower hereby acknowledges that,
simultaneously with the execution of this Agreement, pursuant to the Mezzanine
Account Agreement, Mezzanine Borrower has established with Cash Management Bank
(Second Mezzanine) a holding account (the “Mezzanine Account”), which
has been established as a non-interest bearing deposit account with
interest-bearing sub-accounts.  The
Mezzanine Account and each sub-account of such account and the funds deposited
therein shall serve as additional security for the Loan.  Pursuant to the Mezzanine Account Agreement,
Mezzanine Borrower shall irrevocably instruct and authorize Cash Management
Bank (Second Mezzanine) to disregard any and all orders for withdrawal from the
Collateral Accounts (Second Mezzanine) made by, or at the direction of,
Mezzanine Borrower.  Mezzanine Borrower agrees
that, prior to the payment in full of the Indebtedness, the terms and
conditions of the Mezzanine Account Agreement shall not be amended or modified
in any material respect without the prior written consent of Mezzanine Lender
(which consent Mezzanine Lender may grant or withhold in its sole
discretion).  In recognition of Mezzanine
Lender’s security interest in the funds deposited into the Collateral Accounts
(Second Mezzanine) the Mezzanine Account shall be named as follows: “FCP Mezzco
Borrower II, LLC Holding Account in favor of German American Capital
Corporation, as Collateral Agent” (Account Number 048818640).  Mezzanine Borrower confirms that it has
established with Cash Management Bank (Second Mezzanine) the following
sub-accounts of the Mezzanine Account (each, a “Sub-Account” and,
collectively, the “Sub-Accounts” and together with the Mezzanine
Account, the “Collateral Accounts (Second Mezzanine)”), which (i) may
be ledger or book entry sub-accounts and need not be actual sub-accounts, (ii) shall
each be linked to the Mezzanine Account, (iii) shall each be a “deposit
account” (as such term is defined in Section 9-102(a)(29)
of the UCC) and (iv) shall each be an Eligible Account to which
certain funds shall be allocated and from which disbursements shall be made
pursuant to the terms of this Agreement:

 

(a)                                              A sub-account for the retention of Account
Collateral (Second Mezzanine) in respect of Debt Service (Second Mezzanine) on
the Loan with the account number 048818658 (the “Mezzanine Debt Service Reserve
Account”).

 

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3.1.2                        Pledge of Account Collateral (Second
Mezzanine).  To secure the
full and punctual payment and performance of the Obligations (Second
Mezzanine), Mezzanine Borrower hereby collaterally assigns, grants a security
interest in and pledges to Mezzanine Lender, to the extent not prohibited by
applicable law, a first priority continuing security interest in and to the
following property of Mezzanine Borrower, whether now owned or existing or
hereafter acquired or arising and regardless of where located (all of the same,
collectively, the “Account Collateral (Second Mezzanine)”):

 

(a)                                              any and all Excess Cash Flow from time to
time available in the Holding Account and required, by the terms of the Loan
Agreement (Mortgage) as now in effect or amended with the consent of Mezzanine
Lender, to be deposited by the Mortgage Lender or the Cash Management Bank
(Mortgage) into the Mezzanine Account;

 

(b)                                             the Collateral Accounts (Second Mezzanine)
and all cash, deposits and/or wire transfers from time to time deposited or
held in, credited to or made to Collateral Accounts (Second Mezzanine);

 

(c)                                              all interest and cash from time to time
received, receivable or otherwise payable in respect of, or in exchange for,
any or all of the foregoing or purchased with funds from the Collateral
Accounts (Second Mezzanine); and

 

(d)                                             to the extent not covered by clauses (a), (b) or
(c) above, all proceeds (as defined under the UCC) of any or all of the
foregoing.

 

In addition to the rights and remedies herein set forth, Mezzanine
Lender shall have all of the rights and remedies with respect to the Account
Collateral (Second Mezzanine) available to a secured party at law or in equity,
including, without limitation, the rights of a secured party under the UCC, as
if such rights and remedies were fully set forth herein.

 

This Agreement shall constitute a security agreement for purposes of
the Uniform Commercial Code and other applicable law.

 

3.1.3                        Maintenance
of Collateral Accounts.

 

(a)                                              Mezzanine Borrower agrees that each of the
Collateral Accounts (Second Mezzanine) is and shall be maintained (i) as a
“deposit account” (as such term is defined in Section 9-102(a)(29) of the
UCC), (ii) in such a manner that Mezzanine Lender shall have control
(within the meaning of Section 9-104(a)(2) of the UCC) over the
Mezzanine Account and (iii) such that no Person other than Mezzanine
Lender shall have any right of withdrawal from the Collateral Accounts (Second
Mezzanine) and, except as provided herein, no Account Collateral  (Second Mezzanine) shall be released to the
Mezzanine Borrower or any Affiliate of Mezzanine Borrower from the Collateral
Accounts (Second Mezzanine).  Without
limiting the Mezzanine Borrower’s obligations under the immediately preceding
sentence, Mezzanine Borrower shall only establish and maintain the Mezzanine
Account with a financial institution that has executed an agreement
substantially in the form of the Mezzanine Account Agreement or in such other
form acceptable to Mezzanine Lender in its sole discretion.

 

65

 

3.1.4                        Eligible Accounts.  The Collateral Accounts (Second Mezzanine)
shall be Eligible Accounts.  The
Collateral Accounts (Second Mezzanine) shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other banking authority or Governmental Authority, as
may now or hereafter be in effect. 
Income and interest accruing on the Collateral Accounts  (Second Mezzanine) or any investments held in
such accounts shall be periodically added to the principal amount of such
account and shall be held, disbursed and applied in accordance with the
provisions of this Agreement and the Mezzanine Account Agreement.  Mezzanine Borrower shall be the beneficial
owner of the Collateral Accounts (Second Mezzanine) for federal income tax
purposes and shall report all income on the Collateral Accounts (Second
Mezzanine).

 

3.1.5                        Deposits into Sub-Accounts.  On the Closing Date, Mezzanine Borrower has
deposited the following amounts into the Sub-Accounts:

 

(i)                                     $0.00 into the Mezzanine Debt Service
Reserve Account;

 

3.1.6                        Monthly Funding.

 

(a)                                              Mezzanine
Borrower hereby irrevocably authorizes Mezzanine Lender to transfer (and,
pursuant to the Mezzanine Account Agreement shall irrevocably authorize Cash
Management Bank (Second Mezzanine) to execute any corresponding instructions of
Mezzanine Lender), and Mezzanine Lender shall transfer, from the Mezzanine
Account by 11:00 a.m. New York time on the date on which each payment of
funds on deposit in the Second Mezzanine Debt Service Reserve Account under the
Loan Agreement (Mortgage) is made to the Mezzanine Account, or as soon
thereafter as sufficient funds are in the Mezzanine Account to make the
applicable transfers, commencing on the date of the first transfer of funds
from the Second Mezzanine Debt Service Reserve Account under the Loan Agreement
(Mortgage) to the Mezzanine Account, funds in an amount equal to the sum of any
Protective Advances which may have been advanced by (and not previously
reimbursed to) the Mezzanine Lender pursuant to the terms of the Mezzanine Loan
Documents to cure any Default or Event of Default, any Mortgage Default or
Mortgage Event of Default, or any Senior Mezzanine
Default or Senior Mezzanine Event of Default or to protect the
Collateral or the Senior Mezzanine Collateral together with any interest
payable on such amounts pursuant to the Mezzanine Loan Documents, plus (x) the
unpaid Debt Service (Second Mezzanine) for the next occurring Payment Date,
plus (y) an amount equal to such payments for any prior month(s), to the
extent not previously paid, plus (z) an amount equal to the amount, if
any, deducted from the Mezzanine Account in any preceding month to pay any
other amounts then due under the Mezzanine Loan Documents (other than any Debt
Service (Second Mezzanine)).  Funds
representing the sum of Protective Advances, payments for prior months to the
extent not previously paid, and sums deducted from the Mezzanine Account in any
preceding month to pay any other amounts then due under the Mezzanine Loan
Documents (other than Debt Service (Second Mezzanine)) shall be transferred by
Mezzanine Lender from the Mezzanine Account to Mezzanine Lender.  Funds representing unpaid Debt Service
(Second Mezzanine) for the next occurring Payment Date shall be transferred by
Mezzanine Lender from the Mezzanine Account to the Mezzanine Debt Service
Reserve Account, and on the next occurring Payment Date, Mezzanine Lender shall
apply or direct Cash Management Bank (Second Mezzanine) to apply, the funds on
deposit in the Mezzanine Debt Service Reserve Account for the payment of Debt
Service (Second Mezzanine).  

 

66

 

Mezzanine Borrower acknowledges that Mezzanine Lender shall not be
required to make such withdrawal and deposit until such time as Mezzanine
Lender is able to calculate the amount of the Debt Service (Second Mezzanine)
for the next occurring Payment Date. 
Funds representing any balance in the Mezzanine Account after the
foregoing transfers have been completed shall be transferred by Mezzanine
Lender from the Mezzanine Account to the “Mezzanine Account” under the Third
Mezzanine Loan Agreement within one (1) Business Day after the foregoing
transfers have been completed.

 

(b)                                             If for any
reason there will be insufficient amounts in the Mezzanine Debt Service Reserve
Account on any Payment Date to pay the Debt Service (Second Mezzanine) due on
such Payment Date, Mezzanine Borrower shall immediately deposit into the
Mezzanine Account an amount equal to the shortfall of available funds in the
Mezzanine Debt Service Reserve Account. 
Any failure by Mezzanine Borrower to deposit the full amount required by
the preceding sentence shall constitute an Event of Default hereunder.  If Mezzanine Lender shall reasonably
determine that there will be insufficient amounts in the Mezzanine Account to
pay any Protective Advances as and when the same are due and payable, Mezzanine
Lender shall provide written notice of same to Mezzanine Borrower setting forth
the basis for such determination.  Within
ten (10) Business Days of receipt of said notice, Mezzanine Borrower shall
deposit into the Mezzanine Account an amount equal to the shortfall of
available funds in the Mezzanine Account. 
Any failure by Mezzanine Borrower to deposit the full amount required by
the preceding sentence within said ten (10) Business Day period shall
constitute an Event of Default hereunder.

 

(c)                                              Mezzanine
Lender (so long as Mezzanine Lender is not the same entity as Mortgage Lender)
agrees to deliver to Mortgage Lender a monthly notice letter (the Second
Mezzanine Lender Monthly Debt Service Notice as described in the Loan Agreement
(Mortgage)) at least five (5) Business Days prior to each Payment Date
setting forth the Debt Service (Second Mezzanine) payable by Mezzanine Borrower
on the first Payment Date occurring after the date such notice is delivered.

 

(d)                                             Mezzanine
Borrower hereby acknowledges that, pursuant to Section 3.1.7 of the Loan
Agreement (Mortgage), to the extent Mortgage Lender has received a Mezzanine
Loan Default Notice and until such time as Mortgage Lender receives a Mezzanine
Loan Default Revocation Notice, the Mortgage Borrower has irrevocably directed
that Excess Cash Flow and any other payments to be made to Mezzanine Borrower,
any Junior Mezzanine Borrower, Mezzanine Lender, or any Junior Mezzanine Lender
are to be deposited directly into the Mezzanine Account for application as
provided in this Agreement (in lieu of transferring such funds to such accounts
of the Mezzanine Lender, any Junior Mezzanine Lender or Mortgage Borrower as
the Mortgage Borrower may have so directed if the Mortgage Lender had not
received such notice from Mezzanine Lender). 
Mezzanine Lender shall promptly provide Mortgage Lender with a Mezzanine
Loan Default Revocation Notice if an Event of Default which has occurred under
the Mezzanine Loan Documents is no longer continuing and on the date that
Mezzanine Lender provides such Mezzanine Loan Default Revocation Notice to
Mortgage Lender, any balance in the Mezzanine Account which would have been transferable to the “Mezzanine
Account” under the Third Mezzanine Loan Agreement had the subject Mezzanine
Loan Default Notice not been in effect shall be promptly transferred by
Mezzanine 

 

67

 

Lender from the Mezzanine Account to the “Mezzanine Account” under the
Third Mezzanine Loan Agreement.

 

3.1.7                        Cash Management Bank (Second Mezzanine).

 

(a)                                              Mezzanine Lender shall have the right at
Mezzanine Borrower’s sole cost and expense to replace the Cash Management Bank
(Second Mezzanine) with a financial institution reasonably satisfactory to
Mezzanine Borrower in the event that (i) the Cash Management Bank (Second
Mezzanine) fails, in any material respect, to comply with the Mezzanine Account
Agreement or (ii) the Cash Management Bank (Second Mezzanine) is no longer
an Approved Bank.  Upon the occurrence
and during the continuance of an Event of Default, Mezzanine Lender shall have
the right at Mezzanine Borrower’s sole cost and expense to replace Cash
Management Bank (Second Mezzanine) at any time, without notice to Mezzanine
Borrower.  Mezzanine Borrower shall
cooperate with Mezzanine Lender in connection with the appointment of any
replacement Cash Management Bank (Second Mezzanine) and the execution by the
Cash Management Bank (Second Mezzanine) and the Mezzanine Borrower of a
Mezzanine Account Agreement and delivery of same to Mezzanine Lender (with a
copy to the Mortgage Lender).

 

(b)                                             So long as no Event of Default shall have
occurred and be continuing, Mezzanine Borrower shall have the right at its sole
cost and expense to replace the Cash Management Bank (Second Mezzanine) with a
financial institution that is an Approved Bank provided that such financial
institution and Mezzanine Borrower shall execute and deliver to Mezzanine
Lender (with a copy to Mortgage Lender) a Mezzanine Account Agreement
substantially similar to the Mezzanine Account Agreement executed as of the
Closing Date, or in such other form reasonably required by Mezzanine Lender or
required by the Rating Agencies, with such changes therein as shall be
reasonably acceptable to Mezzanine Lender.

 

68

 

3.1.8                        Mezzanine
Borrower’s Account Representations, Warranties and Covenants.

 

(a)                                  Mezzanine
Borrower represents, warrants and covenants that: (i) as of the Closing
Date, Mortgage 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 Mortgage Loan and Mezzanine
Borrower shall cause Mortgage Borrower to deposit all such sums in such Holding
Account; and (ii) Mezzanine Borrower shall cause Mortgage Borrower to
comply with, and use commercially reasonable efforts to enforce Mortgage Lender’s
compliance with, all of the terms and conditions of Section 3.1 of the
Loan Agreement (Mortgage), including, without limitation: (1) the timely
funding of all Sub-Accounts under the Mortgage Loan, including any Sub-Account
deficiencies in accordance with Section 3.1.6(c) of the Loan
Agreement (Mortgage); (2) the distribution of funds to Mezzanine Lender in
accordance with the “Second Mezzanine Lender Monthly Debt Service Notice” as
described in the Loan Agreement (Mortgage); and (3) the timely payment of
Impositions and Other Charges, insurance premiums, Ground Rent, Debt Service in
respect of the Mortgage Loan, Debt Service (Second Mezzanine), debt service in
respect of the Senior Mezzanine Loan, and debt service in respect of the Junior
Mezzanine Loans.

 

(b)                                             Mezzanine Borrower represents, warrants and
covenants that (i) pursuant to the Loan Agreement (Mortgage), provided no
Mortgage Event of Default has occurred and is continuing, Mortgage Lender has
agreed to make or direct the Cash Management Bank (Mortgage) to transfer all
funds on deposit in the Second Mezzanine Debt Service Reserve Account under the
Loan Agreement (Mortgage) to the Mezzanine Account which transfer constitutes a
distribution from Mortgage Borrower to Mezzanine Borrower, (ii) Mezzanine
Borrower shall pay or cause to be paid all Receipts, Cash and Cash Equivalents
or other items of operating income not covered by the preceding subsection (a) within
one Business Day after receipt thereof by Mezzanine Borrower or its Affiliates
directly into the Mezzanine Account and, until so deposited, any such amounts
held by Mezzanine Borrower or its Affiliates shall be deemed to be Account
Collateral (Second Mezzanine) and shall be held in trust by it for the benefit,
and as the property, of Mezzanine Lender and shall not be commingled with any
other funds or property of Mezzanine Borrower or its Affiliates, (iii) there
are no accounts other than the Collateral Accounts (Second Mezzanine)
maintained by Mezzanine Borrower or any other Person with respect to the
Collateral or the collection of Receipts, (iv) so long as the Loan shall
be outstanding, neither Mezzanine Borrower nor any other Person shall open any
other operating accounts with respect to the Collateral or the collection of
Receipts, except for the Collateral Accounts (Second Mezzanine), and (v) it
will cause the Mortgage Borrower to cause Master Lessee to deposit all amounts
payable by Master Lessee to Mortgage Borrower pursuant to the Master Lease
directly into the Holding Account.

 

3.1.9                        Account
Collateral (Second Mezzanine) and Remedies.

 

(a)                                              Upon the occurrence and during the
continuance of an Event of Default, without additional notice from Mezzanine
Lender to Mezzanine Borrower, (i) Mezzanine Lender may, in addition to and
not in limitation of Mezzanine Lender’s other rights, make any and all
withdrawals from, and transfers between and among, the Collateral Accounts
(Second Mezzanine) as Mezzanine Lender shall determine in its sole and absolute
discretion to pay any 

 

69

 

Obligations (Second Mezzanine), operating
expenses and/or capital expenditures for the Property in such
order and priority as Mezzanine Lender shall determine in its sole and absolute
discretion; and (ii) all payments
to the Mezzanine Lender pursuant to Section 3.1.6 shall immediately
cease.

 

(b)                                             Upon the occurrence and during the
continuance of an Event of Default, Mezzanine Borrower hereby irrevocably
constitutes and appoints Mezzanine Lender as Mezzanine Borrower’s true and
lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge and deliver any instruments and to exercise and enforce every
right, power, remedy, option and privilege of Mezzanine Borrower with respect
to the Account Collateral (Second Mezzanine), and do in the name, place and
stead of Mezzanine Borrower, all such acts, things and deeds for and on behalf
of and in the name of Mezzanine Borrower, which Mezzanine Borrower could or
might do or which Mezzanine Lender may deem necessary or desirable to more
fully vest in Mezzanine Lender the rights and remedies provided for herein and
to accomplish the purposes of this Agreement. 
The foregoing powers of attorney are irrevocable and coupled with an
interest.  Upon the occurrence and during
the continuance of an Event of Default, Mezzanine Lender may perform or cause
performance of any such agreement, and any reasonable out-of-pocket expenses of
Mezzanine Lender incurred in connection therewith shall be paid by Mezzanine
Borrower as provided in Section 5.1.12.

 

(c)                                              Mezzanine Borrower hereby expressly waives,
to the fullest extent permitted by law, presentment, demand, protest or any
notice of any kind in connection with this Agreement or the Account Collateral
(Second Mezzanine).  Mezzanine Borrower
acknowledges and agrees that ten (10) days’ prior written notice of the
time and place of any public sale of the Account Collateral (Second Mezzanine)
or any other intended disposition thereof shall be reasonable and sufficient
notice to Mezzanine Borrower within the meaning of the UCC.

 

3.1.10                  Transfers and Other Liens.  Mezzanine Borrower agrees that it will not (i) sell
or otherwise dispose of any of the Account Collateral (Second Mezzanine) or (ii) create
or permit to exist any Lien upon or with respect to all or any of the Account
Collateral (Second Mezzanine), except for the Lien granted to Mezzanine Lender
under this Agreement.

 

3.1.11                  Reasonable Care.  Beyond the exercise of reasonable care in the
custody thereof, Mezzanine Lender shall have no duty as to any Account
Collateral (Second Mezzanine) in its possession or control as agent therefor or
bailee thereof or any income thereon or the preservation of rights against any
person or otherwise with respect thereto. 
Mezzanine Lender shall be deemed to have exercised reasonable care in
the custody of the Account Collateral (Second Mezzanine) in its possession if
the Account Collateral (Second Mezzanine) is accorded treatment substantially
equal to that which Mezzanine Lender accords its own property, it being
understood that Mezzanine Lender shall not be liable or responsible for any
loss or damage to any of the Account Collateral (Second Mezzanine), or for any
diminution in value thereof, by reason of the act or omission of Mezzanine
Lender, its Affiliates, agents, employees or bailees, except to the extent that
such loss or damage results from the Mezzanine Lender’s gross negligence or
willful misconduct.  In no event shall
Mezzanine Lender be liable either directly or indirectly for losses or delays
resulting from any event which may be the basis of an Excusable Delay, computer
malfunctions, interruption of communication facilities, labor difficulties or
other causes beyond Mezzanine Lender’s reasonable control or for indirect,
special or 

 

70

 

consequential damages except to the extent of
Mezzanine Lender’s gross negligence or willful misconduct.  Notwithstanding the foregoing, Mezzanine
Borrower acknowledges and agrees that (i) Mezzanine Lender does not have
custody of the Account Collateral (Second Mezzanine), (ii) Cash Management
Bank (Second Mezzanine) has custody of the Account Collateral (Second
Mezzanine), (iii) the initial Cash Management Bank (Second Mezzanine) was
chosen by Mezzanine Borrower and (iv) Mezzanine Lender has no obligation
or duty to supervise Cash Management Bank (Second Mezzanine) or to see to the
safe custody of the Account Collateral (Second Mezzanine).

 

3.1.12                  Mezzanine Lender’s Liability.

 

(a)                                              Mezzanine Lender shall be responsible for the
performance only of such duties with respect to the Account Collateral (Second
Mezzanine) as are specifically set forth in this Section 3.1 or
elsewhere in the Mezzanine Loan Documents, and no other duty shall be implied
from any provision hereof.  Mezzanine
Lender shall not be under any obligation or duty to perform any act with
respect to the Account Collateral (Second Mezzanine) which would cause it to
incur any expense or liability or to institute or defend any suit in respect
hereof, or to advance any of its own monies. 
Mezzanine Borrower shall indemnify and hold Mezzanine Lender, its
employees and officers harmless from and against any loss, cost or damage
(including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by Mezzanine Lender in connection with the transactions contemplated
hereby with respect to the Account Collateral (Second Mezzanine) except as such
may be caused by the gross negligence or willful misconduct of Mezzanine
Lender, its employees, officers or agents.

 

(b)                                             Mezzanine Lender shall be protected in acting
upon any notice, resolution, request, consent, order, certificate, report,
opinion, bond or other paper, document or signature believed by it in good
faith to be genuine, and, in so acting, it may be assumed that any person
purporting to give any of the foregoing in connection with the provisions
hereof has been duly authorized to do so. 
Mezzanine Lender may consult with counsel, and the opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken or suffered by it hereunder and in good faith in accordance
therewith.

 

3.1.13                  Continuing Security Interest(a)                           .  This Agreement shall create a continuing
security interest in the Account Collateral (Second Mezzanine) and shall remain
in full force and effect until payment in full of the Indebtedness.  Upon payment in full of the Indebtedness,
this security interest shall automatically terminate without further notice
from any party and Mezzanine Borrower shall be entitled to the return, upon its
request, of such of the Account Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof and Mezzanine Lender shall
execute such instruments and documents as may be reasonably requested by
Mezzanine Borrower to evidence such termination and the release of the Account
Collateral (Second Mezzanine).

 

3.1.14                  Distributions.  Notwithstanding anything to the contrary
contained herein, there shall be no restriction or limitation on Mezzanine
Borrower’s ability to make distributions to its members or its or their
Affiliates other than as set forth in Section 5.2.13.

 

71

 

IV.                                 REPRESENTATIONS
AND WARRANTIES

 

4.1                                 Mezzanine Borrower
Representations.  Except as Actually
Known by the Mezzanine Lender to the Contrary, Mezzanine Borrower represents
and warrants as of the Closing Date that:

 

4.1.1                        Organization. 
Each of Mortgage Borrower, Senior Mezzanine Borrower, and Mezzanine
Borrower is a limited liability company and has been duly organized and is
validly existing and in good standing pursuant to the laws of the State of
Delaware with requisite power and authority to own its properties and to
transact the businesses in which it is now engaged.  Master Lessee is a corporation and has been
duly organized and is validly existing and in good standing pursuant to the
laws of the State of Nevada with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged.  Holdco is a corporation and has been duly
organized and is validly existing and in good standing pursuant to the laws of
the State of Delaware with requisite power and authority to own its properties
and to transact the businesses in which it is now engaged.  FP is a
limited liability company and has been duly organized and is validly existing
and in good standing pursuant to the laws of the State of Nevada with requisite
power and authority to own its properties and to transact the businesses in
which it is now engaged.  VoteCo is a
limited liability company and has been duly organized and is validly existing
and in good standing pursuant to the laws of the State of Nevada with requisite
power and authority to own its properties and to transact the businesses in
which it is now engaged.  Each of
Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, Guarantors
and Master Lessee has duly qualified to do business and is in good standing in
each jurisdiction where it is required to be so qualified in connection with
its properties, businesses and operations, or, in the case of qualifications in
the various States (a) an application for such qualification has been duly
filed with the applicable Governmental Authority and all fees required in order
to obtain such qualification have been paid in full, (b) all conditions to
obtaining such qualification have been satisfied under applicable law and the
issuance of such qualification is a ministerial act of the applicable
Governmental Authority, (c) each of Mortgage Borrower, Senior Mezzanine
Borrower, and Mezzanine Borrower has agreed to so qualify in accordance with a
post-closing side letter entered into on the Closing Date, and (d) no such
failure to qualify would be reasonably likely to have a Material Adverse
Effect.  Each of Mortgage Borrower,
Senior Mezzanine Borrower, Mezzanine Borrower, Master Lessee and Guarantor
possesses all material rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged, and the sole business of
Mezzanine Borrower is the ownership of the Ownership Interests.  The organizational structure of Mortgage
Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, each Guarantor and
Master Lessee is accurately depicted by the schematic diagrams attached hereto
as Exhibit K.  Mezzanine
Borrower shall not change its name, identity, limited liability company form or
jurisdiction of organization unless it shall have given Mezzanine Lender thirty
(30) days prior written notice of any such change and shall have taken all
steps reasonably requested by Mezzanine Lender to grant, perfect, protect and/or
preserve the liens and security interest granted to Mezzanine Lender under the
Mezzanine Loan Documents.

 

4.1.2                        Proceedings.  Each of Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, Guarantors and Master
Lessee has full 

 

72

 

power to and has taken all necessary action
to authorize the execution, delivery and performance of the Mezzanine Loan
Documents to which it is a party.

 

4.1.3                        No Conflicts.  The execution, delivery and performance of
this Agreement, the other Mezzanine Loan Documents, the Senior Mezzanine Loan
Documents, and the Loan Documents (Mortgage) by Mortgage Borrower, Senior
Mezzanine Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, Guarantors
and Master Lessee, as applicable, will not conflict with or result in a
material breach of any of the terms or provisions of, or constitute a material
default under, or result in the creation or imposition of any Lien (other than
pursuant to the Mezzanine Loan Documents, the Senior Mezzanine Loan Documents,
and Loan Documents (Mortgage)) upon any of the property or assets of any such
Person pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, partnership agreement or other agreement or instrument to which any
such Person is a party or by which any of such Person’s property or assets is
subject (unless consents from all applicable parties thereto have been
obtained), except for any conflict that would not individually or in the
aggregate reasonably be expected to result in a Material Adverse Effect, nor
will such action result in any violation of the provisions of any statute or
any order, rule or regulation of any Governmental Authority, and any
material consent, approval, authorization, order, registration or qualification
of or with any Governmental Authority required for the execution, delivery and
performance by Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, Junior Mezzanine Borrowers, Guarantors and Master Lessee of this
Agreement, the other Mezzanine Loan Documents, and the Loan Documents
(Mortgage) except for any violation that would not individually or in the
aggregate reasonably be expected to result in a Material Adverse Effect, or any
other Mezzanine Loan Documents has been obtained and is in full force and
effect.

 

4.1.4                        Litigation.  Except as set forth on Schedule II
attached hereto, there are no arbitration proceedings, governmental
investigations, actions, suits or proceedings at law or in equity by or before
any Governmental Authority now pending or, to the best of Mezzanine Borrower’s
knowledge, threatened against or affecting Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, any Guarantor, Master
Lessee or any Individual Property (other than claims (A) (i) which
are being covered by insurance, (ii) which are being defended by the
relevant insurance company and (iii) as to which Mortgage Borrower has not
received a notice from such insurance company that the claim exceeds the total
amount of insurance coverage with respect to such claim; (B) which are
covered by the self insurance limit permitted pursuant to the Mortgage Loan
Documents and are being diligently defended by Mortgage Borrower, Guarantors, Master
Lessee or their respective Affiliates; or (C) which relate to employment
claims for which liability in the event any such matter is adversely determined
could not reasonably be expected to exceed $1,000,000 or provided that none of
such unscheduled claims could reasonably be expected to individually or in the
aggregate to have a Material Adverse Effect if adversely determined).  The actions, suits or proceedings identified
on Schedule II, if determined against Mortgage Borrower, Senior
Mezzanine Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, any
Guarantor, Master Lessee or the Property, would not have a Material Adverse
Effect.

 

4.1.5                        Agreements.  The Operating Agreements constitute all of
the agreements to which Mortgage Borrower or any of its Affiliates are party or
are bound which are material to the ownership and operation of any Individual
Property.  Mezzanine Borrower is not a
party to any 

 

73

 

agreement or instrument or subject to any restriction
which is reasonably likely to materially and adversely affect Mezzanine
Borrower or Mezzanine Borrower’s business, properties or assets, operations or
condition, financial or otherwise. 
Mezzanine Borrower is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any material agreement or instrument to which it is a
party or by which Mezzanine Borrower or the Collateral is bound.  Mezzanine Borrower has no material financial
obligation (contingent or otherwise) under any indenture, mortgage, deed of
trust, loan agreement or other similar agreement or instrument to which
Mezzanine Borrower is a party or by which Mezzanine Borrower or the Collateral
is otherwise bound, other than (a) obligations constituting the Permitted
Debt of Mezzanine Borrower which are incurred in the ordinary course of the
ownership and operation of the Collateral and (b) obligations under the
Mezzanine Loan Documents.

 

4.1.6                        Title to Property and Assets.

 

Mortgage
Borrower has good, marketable and insurable (i) leasehold title to the
Land and the Improvements relating to the Ground Lease Properties, and enjoys
the quiet and peaceful possession of the Leasehold Estate related thereto, and (ii) fee
simple title to the Land and the Improvements relating to the Fee Properties,
in each case free and clear of all Liens whatsoever except the Permitted
Encumbrances.  Mortgage Borrower has good
and marketable title to the remainder of the Property (excluding the Excluded
Personal Property), free and clear of all Liens whatsoever except the Permitted
Encumbrances.  The Security Instruments,
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, perfected first mortgage lien on the
Land and the Improvements or the leasehold estate therein, as applicable,
subject only to Permitted Encumbrances and (ii) perfected security interests
in and to, and perfected collateral assignments of, all personalty other than
the Excluded Personal Property (including the Subleases) or any leases of
equipment from third parties, all in accordance with the terms thereof, in each
case subject only to any applicable Permitted Encumbrances.  For avoidance of doubt, those portions of the
Excluded Personal Property owned by Master Lessee constituting “FF&E” as
defined in the Master Lease, are subject to a Lien in favor of the Mortgage
Borrower, as landlord, under the Master Lease, and such landlord Lien has been
assigned to Mortgage Lender, along with Mortgage Borrower’s other rights as
landlord under the Master Lease, pursuant to the Security Instruments and the
Assignment of Leases (such landlord Lien, as assigned to Lender, the “Assigned
Landlord Lien”).  There are no claims
for payment for work, labor or materials affecting the Property which are or
may become a lien prior to, or of equal priority with, the Liens created by the
Loan Documents (Mortgage) other than the Permitted Encumbrances.  None of the Permitted Encumbrances would
individually or in the aggregate reasonably be expected to result in a Material
Adverse Effect as of the Closing Date and thereafter.  Mezzanine Borrower shall cause Mortgage
Borrower to preserve its right, title and interest in and to the Property for
so long as the Mezzanine Notes remain outstanding and will cause Mortgage
Borrower to warrant and defend same and the validity and priority of the Lien
of the Mortgage Loan Documents from and against any and all claims whatsoever
other than the Permitted Encumbrances. 
Mezzanine Borrower shall cause Senior Mezzanine Borrower to preserve its
right, title and interest in and to the Senior Mezzanine Collateral for so long
as the Mezzanine Notes remain outstanding and will cause Senior Mezzanine
Borrower to warrant and 

 

74

 

defend same and the validity and priority of the Lien of the Senior
Mezzanine Loan Documents from and against any and all claims whatsoever other
than Permitted Encumbrances.

 

Senior
Mezzanine Borrower owns all of the Senior Mezzanine Collateral, including
without limitation, the Senior Mezzanine Ownership Interests, subject to no
rights of others, including any liens or other encumbrances except for
Permitted Encumbrances (Senior Mezzanine).

 

Mezzanine
Borrower owns all of the Collateral, including without limitation, the
Ownership Interests, subject to no rights of others, including any liens or
other encumbrances, except for the Permitted Encumbrances (Second Mezzanine).

 

4.1.7                        No Bankruptcy Filing.  None of Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, any Guarantor or
Master Lessee is contemplating either the filing of a petition by it under any
state or federal bankruptcy or insolvency laws or the liquidation of all or a
major portion of such entity’s assets or property, and Mezzanine Borrower has
no knowledge of any Person contemplating the filing of any such petition
against it, Mortgage Borrower, Senior Mezzanine Borrower, any Junior Mezzanine
Borrower, any Guarantor or Master Lessee.

 

4.1.8                        Full and Accurate Disclosure.  To the best of Mezzanine Borrower’s knowledge
no statement of material fact made by Mezzanine Borrower in this Agreement or
in any of the other Mezzanine Loan Documents contains any untrue statement of a
material fact or omits to state any material fact necessary to make such
statements contained herein or therein not materially misleading as of the date
made which in any such case could reasonably be expected to have a Material
Adverse Effect.  There is no fact
presently known to Mezzanine Borrower which has not been disclosed which could
reasonably be expected to have a Material Adverse Effect.

 

4.1.9                        Ownership Interests.  The Ownership Interests constitute all of the
property currently owned by Mezzanine Borrower.

 

4.1.10                  No Plan Assets.

 

(a)                                              Mezzanine Borrower does not maintain an
employee benefit plan as defined by Section 3(3) of ERISA, which is
subject to Title IV of ERISA, and Mezzanine Borrower (i) has no knowledge
of any material liability which has been incurred or is expected to be incurred
by Mezzanine Borrower which is or remains unsatisfied for any taxes or
penalties with respect to any “employee benefit plan,” within the meaning of Section 3(3) of
ERISA, or any “plan,” within the meaning of Section 4975(e)(1) of the
Code or any other benefit plan (other than a multiemployer plan) maintained,
contributed to, or required to be contributed to by Mezzanine Borrower or by
any entity that is under common control with Mezzanine Borrower within the
meaning of ERISA Section 4001(a)(14) (a “Plan”) or any plan that
would be a Plan but for the fact that it is a multiemployer plan within the meaning
of ERISA Section 3(37); and (ii) has made and shall continue to make
when due all required contributions to all such Plans, if any.  Each such Plan has been and will be
administered in compliance with its terms and the applicable provisions of
ERISA, the Code, and any other applicable federal or state law other 

 

75

 

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)                                             None of Mortgage Borrower, Senior Mezzanine
Borrower, or the Mezzanine Borrower is an employee benefit plan, as defined in Section 3(3) of
ERISA, subject to Title I of ERISA, none of the assets of Mortgage Borrower,
Senior Mezzanine Borrower, or Mezzanine Borrower constitutes or will constitute
plan assets of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101
and none of Mortgage Borrower, Senior Mezzanine Borrower, or the Mezzanine
Borrower is a governmental plan within the meaning of Section 3(32) of
ERISA and none of Mortgage Borrower, Senior Mezzanine Borrower, or the
Mezzanine Borrower is subject to state statutes regulating investment of, and fiduciary
obligations with respect to, governmental plans similar to the provisions of Section 406
of ERISA or Section 4975 of the Code currently in effect, which prohibit
or otherwise restrict the transactions contemplated by this Agreement.

 

4.1.11                  Compliance.  Subject to Schedule 4.1.11, Mortgage
Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, the Collateral, the
Senior Mezzanine Collateral and the Property and the use thereof comply in all
material respects with all applicable Legal Requirements, including, without
limitation, building and zoning ordinances and codes (except for any
non-compliance that individually or in the aggregate would not reasonably be
expected to result in a Material Adverse Effect).  To the best of Mezzanine Borrower’s knowledge,
none of Mortgage Borrower, Senior
Mezzanine Borrower, or Mezzanine Borrower is in default or in violation
of any order, writ, injunction, decree or demand of any Governmental
Authority.  To the best of Mezzanine
Borrower’s knowledge, there has not been committed by Mortgage Borrower, Senior
Mezzanine Borrower, or Mezzanine Borrower any act or omission affording the
federal government or any other Governmental Authority the right of forfeiture
as against the Property, the Senior Mezzanine Collateral or the Collateral or
any part thereof or any monies paid in performance of Mezzanine Borrower’s
obligations under any of the Mezzanine Loan Documents.

 

4.1.12                  Financial Information.  The information set forth in the certificate
of Mortgage Borrower regarding financial information dated 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.  None
of Mortgage Borrower, Senior Mezzanine Borrower, or Mezzanine Borrower
has any material contingent liabilities, liabilities for taxes, unusual forward
or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments that are known to Mezzanine Borrower and could
reasonably be expected to have a Material Adverse Effect.

 

4.1.13                  Condemnation.  Except as set forth on Schedule II, no
Taking is pending or, to the best of Mezzanine Borrower’s knowledge, is
contemplated with respect to all or any portion of the Property.  No Taking is pending or, to the best of
Mezzanine Borrower’s knowledge, is contemplated for the relocation of roadways
providing access to the Property.  None
of the Taking matters listed on Schedule II is reasonably likely to
result in (a) a material reduction in 

 

76

 

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
Mezzanine Borrower or the Mezzanine Lender to be in violation of Regulation
U.  As of the Closing Date, Mezzanine
Borrower does not own any “margin stock.”

 

4.1.15                  Utilities and Public Access.  Each Individual Property has rights of access
to one or more public ways, either directly or through a recorded easement set
forth in and insured under the Title Policies. 
Each Individual Property is served by water, sewer, sanitary sewer and
storm drain facilities adequate to service the Property for its intended uses
(except to the extent any such failure individually or in the aggregate would
not reasonably be expected to result in a Material Adverse Effect).  All utilities necessary to the existing use
of the Property are located either in the public right-of-way abutting the
Property or in recorded easements serving the Property and such easements are
set forth in and insured by the Title Policies.

 

4.1.16                  Not a Foreign Person.  None of Mortgage Borrower, Senior Mezzanine
Borrower or Mezzanine Borrower is a foreign person within the meaning of §
1445(f)(3) of the Code.

 

4.1.17                  Setoff, Etc.  The Collateral and the rights of Mezzanine
Lender with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses, other than Mortgage Lender’s right to restrict
distributions from Mortgage Borrower to Senior Mezzanine Borrower under the
terms and conditions set forth in the Loan Agreement (Mortgage) and Senior
Mezzanine Lender’s right to restrict distributions from Senior Mezzanine
Borrower to Mezzanine Borrower under the terms of the Senior Mezzanine Loan
Agreement.  The Senior Mezzanine
Collateral and the rights of the Senior Mezzanine Lender with respect to the
Senior Mezzanine Collateral are not subject to any setoff, claims, withholdings
or other defenses, other than Mortgage Lender’s right to restrict distributions
from Mortgage Borrower to Senior Mezzanine Borrower under the terms and
conditions set forth in the Loan Agreement (Mortgage).

 

4.1.18                  Representations
and Warranties in the Loan Documents (Mortgage).  Each of the representations and warranties
contained in the Loan Documents (Mortgage) (which are hereby incorporated by
reference as if fully set forth herein) were true and correct in all material
respects, as of the Closing Date and there is no Mortgage Default or Mortgage
Event of Default thereunder.

 

4.1.19                  Representations
and Warranties in the Senior Mezzanine Loan Documents.  Each of the representations and warranties
contained in the Senior Mezzanine Loan Documents (which are hereby incorporated
by reference as if fully set forth herein) were true and correct in all 

 

77

 

material respects, as of the Closing Date and
there is no Senior Mezzanine Default or Senior Mezzanine Event of Default
thereunder.

 

4.1.20                  Enforceability.  The Mezzanine Loan Documents to which each of
Mortgage Borrower, Mezzanine Borrower, Junior Mezzanine Borrowers, Senior
Mezzanine Borrower, Guarantors and Master Lessee is a party have been duly
executed and delivered by, or on behalf of, Mortgage Borrower, Mezzanine
Borrower, Junior Mezzanine Borrowers, Senior Mezzanine Borrower, Guarantors and
Master Lessee, as applicable, and constitute legal, valid and binding
obligations of such Persons, as applicable, enforceable against such Persons,
as applicable, in accordance with their respective terms, subject only to
applicable bankruptcy, insolvency and similar laws affecting rights of
creditors generally, and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).

 

4.1.21                  Reserved.

 

4.1.22                  Insurance.  Mezzanine Borrower has obtained and has
delivered or caused Mortgage Borrower to obtain and deliver to Mezzanine Lender
certified copies or originals of all insurance policies required under this
Agreement, reflecting the insurance coverages, amounts and other requirements
set forth in this Agreement.  Mezzanine
Borrower has not, and to the best of Mezzanine Borrower’s knowledge no Person
has, done by act or omission anything which would impair the coverage of any
such policy.

 

4.1.23                  Use of Property.  Each Individual Property is used exclusively
for casino and hotel operations and other appurtenant and related uses.

 

4.1.24                  Certificate of Occupancy; Licenses.  All material certifications, permits,
licenses and approvals, including without limitation, certificates of
completion and occupancy permits required of Mortgage Borrower for the legal
use, occupancy and operation of each Individual Property for its current use as
a hotel and casino (collectively, the “Licenses”), have been obtained
and are in full force and effect (except to the extent any such failure would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect).  Mezzanine
Borrower shall cause Mortgage Borrower to keep and maintain all Licenses
necessary for the operation of each Individual Property in accordance with its
current use as a hotel and casino.  The
use being made of each Individual Property is in conformity with the
certificate of occupancy issued for such Individual Property (except to the
extent any such failure would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect).

 

4.1.25                  Flood Zone.  None of the Improvements on the Property are
located in an area as identified by the Federal Emergency Management Agency as
an area having special flood hazards except as identified on the flood
certifications delivered to Lender prior to the date hereof, and Mezzanine
Borrower has caused Mortgage Borrower to obtain the insurance required under Article VI
of the Loan Agreement (Mortgage) with respect to any Improvements located in
any such special flood hazards.

 

78

 

4.1.26                  Physical Condition.  To the best of Mezzanine Borrower’s
knowledge, the Property, including, without limitation, all buildings,
Improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair
in all material respects; to the best of Mezzanine Borrower’s knowledge, there
exists no structural or other material defects or damages in or to the
Property, whether latent or otherwise, and Mortgage Borrower has not received
any written notice from any insurance company or bonding company of any defects
or inadequacies in the Property, or any part thereof, which would adversely
affect the insurability of the same or cause the imposition of extraordinary
premiums or charges thereon or of any termination or threatened termination of
any policy of insurance or bond.

 

4.1.27                  Boundaries.  Except as set forth in and insured pursuant
to the Title Policies, to the best of Mezzanine Borrower’s knowledge and, where
applicable, in reliance on the Surveys (a) all of the Improvements lie
wholly within the boundaries and building restriction lines of the Real
Property relating to the applicable Individual Property, (b) no
improvements on adjoining properties encroach upon the Real Property, and (c) no
easements or other encumbrances upon the Real Property encroach upon any of the
Improvements, so as to have a Material Adverse Effect.

 

4.1.28                  Subleases.  The Property is not subject to any leases
other than the Master Lease, the Individual Property Subleases, and the other
Subleases set forth on Schedule I attached hereto.  No Person has any possessory interest in the
Property or right to occupy the same except under and pursuant to the
provisions of the Master Lease, the Individual Property Subleases and the other
Subleases.  The current Material
Subleases are in full force and effect and to the best of Mezzanine Borrower’s
knowledge, there are no material defaults thereunder by either party (other
than as expressly disclosed on Schedule I).  No Rent under any Material Sublease has been paid
more than one (1) month in advance of its due date, except as disclosed on
Schedule I.  There has been no
prior sale, transfer or assignment, hypothecation or pledge by Mortgage
Borrower or Master Lessee of the Master Lease, the Individual Property Subleases
or any Sublease or of the Rents received therein, which will be outstanding
following the funding of the Loan, other than those assigned to Mortgage Lender
as of 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 Mortgage Borrower and the
granting and recording of the Security Instruments and the UCC financing
statements required to be filed in connection with the Mortgage Loan have been
paid.  All mortgage, mortgage recording,
stamp, intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Mortgage Loan Documents, including, without
limitation, the Security Instruments, have been paid, and, under current Legal
Requirements, the Security Instruments are enforceable against Mortgage
Borrower in accordance with its terms by Mortgage Lender (or any subsequent
holder thereof) subject only to applicable bankruptcy, insolvency and similar
laws affecting rights of 

 

79

 

creditors generally, and subject as to
enforceability, to general principles of 
equity (regardless of whether enforcement is  sought 
in  a proceeding in equity or at
law.

 

4.1.30                  Single
Purpose Entity/Separateness.

 

(a)                                              Until the Indebtedness has been paid in full,
Mezzanine Borrower hereby represents, warrants and covenants that each of
Mezzanine Borrower, Senior Mezzanine Borrower and Mortgage Borrower is, shall
be, and shall continue to be, a Single Purpose Entity.

 

(b)                                             All of the assumptions made in the
Non-Consolidation Opinion, including, but not limited to, any exhibits attached
thereto, are true and correct in all material respects and any assumptions made
in any subsequent non-consolidation opinion delivered in connection with the
Mezzanine Loan Documents (an “Additional Non-Consolidation Opinion”),
including, but not limited to, any exhibits attached thereto, will have been
and shall be true and correct in all material respects.  Mortgage Borrower, Senior Mezzanine Borrower,
Mezzanine Borrower and 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.  Mortgage Borrower, Senior Mezzanine Borrower,
Mezzanine Borrower and each other SPE Entity will have complied and will comply
with all of the assumptions made with respect to it in any Additional Non-Consolidation
Opinion.  Each entity other than Mortgage
Borrower with respect to which an assumption shall be made in any Additional
Non-Consolidation Opinion will have complied and will comply in all material
respects with all of the assumptions made with respect to it in any Additional
Non-Consolidation Opinion.

 

(c)                                              All of the assumptions made in the True Lease
Opinion, including, but not limited to, any exhibits attached thereto, are true
and correct in all material respects.

 

(d)                                             All of the assumptions made in the True Sale
Opinion, including, but not limited to, any exhibits attached thereto, are true
and correct in all material respects.

 

4.1.31                  Reserved.

 

4.1.32                  Illegal Activity.  No portion of the Property has been or will
be purchased with proceeds of any illegal activity.

 

4.1.33                  No Change in Facts or Circumstances;
Disclosure.  All material
information submitted by Mezzanine Borrower to Mezzanine Lender in writing in
connection with the Loan or in satisfaction of the terms hereof and all
material statements of fact made by any Mezzanine Borrower in this Agreement or
in any other Mezzanine Loan Document, are to the best of Mezzanine Borrower’s
knowledge, accurate and correct in all material respects except as would not
have a Material Adverse Effect.

 

4.1.34                  Reserved.

 

4.1.35                  Tax
Filings.  Mezzanine Borrower has
filed (or has obtained effective extensions for filing) all federal, state and
local tax returns required to be filed and has paid or made adequate provision
for the payment of all federal, state and local taxes, charges and assessments
payable by Mezzanine Borrower.

 

80

 

4.1.36                  Solvency/Fraudulent Conveyance.  Mezzanine Borrower has not entered into the
transaction contemplated by this Agreement or any Mezzanine Loan Document with
the actual intent to hinder, delay, or defraud any creditor.  Mezzanine Borrower’s assets do not and,
immediately following the making of the Loan will not, constitute unreasonably
small capital to carry out its business as conducted or as proposed to be
conducted.  Mezzanine Borrower does not
intend to, and does not believe that it will, incur Debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Debt and liabilities as they mature (taking into account the timing
and amounts of cash to be received by Mezzanine Borrower and the amounts to be
payable on or in respect of obligations of Mezzanine Borrower).

 

4.1.37                  Investment Company Act.  Mezzanine Borrower is not (a) an
investment company or a company Controlled by an investment company, within the
meaning of the Investment Company Act of 1940, as amended, or (b) subject
to any other federal or state law or regulation which purports to restrict or
regulate its ability to borrow money.

 

4.1.38                  Interest Rate Cap Agreement (Second
Mezzanine).  A complete and
correct copy of the Interest Rate Cap Agreement (Second Mezzanine) is attached hereto as Exhibit L.  The Interest Rate Cap Agreement (Second Mezzanine) is in full force
and effect and enforceable against Mezzanine Borrower in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws generally
affecting the enforcement of creditors’ rights and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

4.1.39                  Labor.  Except as set forth on Schedule II, no
organized work stoppage or labor strike is pending or threatened by
employees and other laborers at the Property. 
Except as set forth in Schedule II or to the extent any such
failure would not reasonably be expected to result in a Material Adverse
Effect, none of Mortgage Borrower or Master Lessee, (i) is involved in or,
to the best knowledge of Mezzanine Borrower, threatened with any labor dispute,
grievance or litigation relating to labor matters involving any employees and
other laborers at the Property, including, without limitation, violation of any
federal, state or local labor, safety or employment laws (domestic or foreign)
and/or charges of unfair labor practices or discrimination complaints, (ii) to
the best knowledge of Mezzanine Borrower, has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act or the Railway
Labor Act or (iii) is a party to, or bound by, any collective bargaining
agreement or union contract with respect to employees and other laborers at the
Property and no such agreement or contract is currently being negotiated by the
Mortgage Borrower or Master Lessee.

 

4.1.40                  Brokers.  Neither Mezzanine Borrower nor Mezzanine
Lender has dealt with any broker or finder with respect to the transactions
contemplated by the Mezzanine Loan Documents, and neither party has done any
acts, had any negotiations or conversations, or made any agreements or promises
which will in any way create or give rise to any obligation or liability for the
payment by either party of any brokerage fee, charge, commission or other
compensation to any Person with respect to the transactions contemplated by the
Mezzanine Loan Documents.  Mezzanine
Borrower and Mezzanine Lender shall each indemnify and hold harmless the other
from and against any loss, liability, cost or expense, including any judgments,
attorneys’ fees, or costs of appeal, incurred by the other party and arising
out of or relating to any breach or default by the indemnifying party of its
representations, warranties and/or agreements 

 

81

 

set forth in this Section 4.1.40.  The provisions of this Section 4.1.40
shall survive the expiration and termination of this Agreement and the payment
of the Indebtedness.

 

4.1.41                  No Other Debt.  Mezzanine Borrower has not borrowed or
received debt financing that has not been heretofore repaid in full, other than
the Permitted Debt of Mezzanine Borrower.

 

4.1.42                  Taxpayer Identification Number.  Mezzanine Borrower’s Federal taxpayer
identification number is 26-1259293.

 

4.1.43                  Compliance with Anti-Terrorism, Embargo and
Anti-Money Laundering Laws.  (i) None
of Mezzanine Borrower, any Guarantor or any Person who Controls Mezzanine
Borrower or any Guarantor currently is identified on the OFAC List or otherwise
qualifies as a Prohibited Person, and (ii) none of Mezzanine Borrower or
any Guarantor is in violation of any Legal Requirements relating to anti-money
laundering or anti-terrorism, including, without limitation, Legal Requirements
related to transacting business with Prohibited Persons or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and
the related regulations issued thereunder, including temporary regulations, all
as amended from time to time.  To the
best of Mezzanine Borrower’s knowledge, no Tenant at the Premises currently is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, and
no Tenant at the Premises is owned or Controlled by a Prohibited Person.

 

4.1.44                  Merger Agreement.  Mezzanine Borrower has caused Mortgage
Borrower to deliver to Mezzanine Lender true complete and correct copies of the
Merger Agreement and all deliveries made by any party thereto or any of their
respective Affiliates as Mezzanine Lender shall have requested, to the extent
that such deliveries are within the possession or control of Mezzanine Borrower
or Mortgage Borrower or any of the Guarantors.

 

4.1.45                  Rights of First Refusal or First Offer to
Lease or Purchase.  No Person,
whether pursuant to an Operating Agreement or otherwise has a right of first
refusal, right of first offer or other right or option pursuant to such
Operating Agreement or otherwise to lease or purchase or to restrict or impose
requirements upon the lease or purchase of all or any part of any Individual
Property, except as set forth on Schedule VI.  None of the matters set forth on Schedule
VI has been or will be triggered by any of the Contemplated Transactions
and Mortgage Borrower and its Affiliates are not in default of any of the
provisions referenced in Schedule VI. 
None of the matters set forth on Schedule VI has or will have a
Material Adverse Effect.

 

4.2                                 Survival of Representations. 
Mezzanine Borrower agrees that all of the representations and warranties
of Mezzanine Borrower set forth in Section 4.1 and elsewhere in
this Agreement and in the other Mezzanine Loan Documents shall be deemed given
and made as of the Closing Date (other than the representations and warranties
made in Section 2 of the Omnibus Amendment, which shall be deemed given
and made as of the Amendment Effective Date) and survive for so long as any
amount remains owing to Mezzanine Lender under this Agreement or any of the
other Mezzanine Loan Documents by Mezzanine Borrower or Guarantor unless a
longer survival period is expressly stated in a Mezzanine Loan Document with
respect to a specific representation or warranty, in which case, for such
longer period.  All 

 

82

 

representations, warranties,
covenants and agreements made in this Agreement or in the other Mezzanine Loan
Documents by Mezzanine Borrower shall be deemed to have been relied upon by
Mezzanine Lender notwithstanding any investigation heretofore or hereafter made
by Mezzanine Lender or on its behalf.

 

4.3                                 Mezzanine Borrower’s
Knowledge.  Whenever a representation
or warranty is made “to Mezzanine Borrower’s knowledge,” “to Mezzanine Borrower’s
best knowledge,” “to Master Lessee’s knowledge,” “to Master Lessee’s best
knowledge,” or a term of similar import, such term shall mean the current
actual knowledge of each of Thomas Friel and Matthew Heinhold, in each case after reasonable diligence, and of
Mezzanine Borrower’s or Master Lessee’s, as applicable, respective executive
officers (other than Thomas Friel) and directors who have actual knowledge of
the relevant subject matter.

 

V.                                     MEZZANINE
BORROWER COVENANTS

 

5.1                                 Affirmative Covenants.  From the Closing Date and until payment and
performance in full of all obligations of Mezzanine Borrower under the
Mezzanine Loan Documents, Mezzanine Borrower (as to itself, Senior Mezzanine
Borrower, Mortgage Borrower and the Property) hereby covenants and agrees with
Mezzanine Lender that:

 

5.1.1                        Performance by Mezzanine Borrower.  Mezzanine Borrower shall in a timely manner
observe, perform and fulfill in all material respects each and every covenant,
term and provision of each Mezzanine Loan Document executed and delivered by,
or applicable to, Mezzanine Borrower, and shall not enter into or otherwise
suffer or permit any amendment, waiver, supplement, termination or other
modification of any Mezzanine Loan Document executed and delivered by, or
applicable to, Mezzanine Borrower, as applicable, without the prior written
consent of Mezzanine Lender.

 

5.1.2                        Existence; Compliance with Legal
Requirements; Insurance. 
Subject to Section 7.3 and Mortgage Borrower’s right of contest
pursuant to Section 7.3 of the Loan Agreement (Mortgage), Mezzanine
Borrower shall at all times comply and cause the Senior Mezzanine Borrower, the
Mortgage Borrower and the Property to be in compliance in all material respects
with all Legal Requirements applicable to the Mezzanine Borrower, Senior
Mezzanine Borrower, Mortgage Borrower, and the Property and the uses permitted
upon the Property.  Mezzanine Borrower
shall cause Senior Mezzanine Borrower and Mortgage Borrower to do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its existence, rights, licenses, permits and franchises necessary to
comply with all material Legal Requirements applicable to it and the
Property.  There shall never be committed
by Mezzanine Borrower, and Mezzanine Borrower shall not permit Senior Mezzanine
Borrower or Mortgage Borrower or knowingly permit any other Person in occupancy
of or involved with the operation or use of the Property to commit, any act or
omission affording the federal government or any state or local government the
right of forfeiture as against the Property or any part thereof or any monies
paid in performance of Mezzanine Borrower’s obligations under any of the
Mezzanine Loan Documents.  Mezzanine
Borrower hereby covenants and agrees not to commit, knowingly permit or suffer
to exist any act or omission affording such right of forfeiture.  Mezzanine Borrower shall and shall cause
Mortgage Borrower to at all times maintain, preserve and protect all franchises
and trade names where the failure to so preserve and protect would be
reasonably 

 

83

 

likely to have a Material Adverse Effect, and
preserve all the remainder of its property used in and necessary for the
conduct of its business and shall and shall cause Senior Mezzanine Borrower and
Mortgage Borrower to keep the Property in good working order and repair
(reasonable wear and tear excepted, and subject to Excusable Delays, casualty
and Taking, as to the latter two of which Section 6.2 shall apply),
and from time to time make, or cause to be made, all reasonably necessary
repairs, renewals, replacements, betterments and improvements thereto as more
fully set forth in the Security Instruments. 
Mezzanine Borrower shall and shall cause Mortgage Borrower to keep the
Property insured at all times to such extent and against such risks, and
maintain liability and such other insurance, as is more fully set forth in this
Agreement and the Loan Agreement (Mortgage).

 

5.1.3                        Litigation.  Mezzanine Borrower shall give prompt written
notice to Mezzanine Lender of any litigation or governmental proceedings
pending or threatened in writing against Mezzanine Borrower, Senior Mezzanine
Borrower, Mortgage Borrower, the Collateral, the Senior Mezzanine Collateral or
the Property which, if determined adversely to Mezzanine Borrower, Mortgage
Borrower, the Collateral, the Senior Mezzanine Collateral or the Property would
reasonably be expected to have a Material Adverse Effect.

 

5.1.4                        Single Purpose Entity.

 

(a)                                              Each of Mezzanine Borrower, Senior Mezzanine
Borrower and Mortgage Borrower has been since the date of its formation and
shall remain a Single Purpose Entity.

 

(b)                                             Each of Mezzanine Borrower, Senior Mezzanine
Borrower and Mortgage 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 Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage Borrower will be
diverted to any other Person for anything other than business uses of Mezzanine
Borrower, Senior Mezzanine Borrower or Mortgage Borrower, as applicable, nor
will such funds be commingled with the funds of any other Affiliate.

 

(c)                                              To the extent that Mezzanine Borrower, Senior
Mezzanine Borrower or Mortgage Borrower shares the same officers or other
employees as any of Mezzanine Borrower, Senior Mezzanine Borrower, Mortgage
Borrower or their Affiliates, the salaries of and the expenses related to
providing benefits to such officers and other employees shall be fairly
allocated among such entities, and each such entity shall bear its fair share
of the salary and benefit costs associated with all such common officers and
employees.

 

(d)                                             To the extent that Mezzanine Borrower, Senior
Mezzanine Borrower or Mortgage Borrower jointly contracts with any of Mezzanine
Borrower, Senior Mezzanine Borrower or Mortgage Borrower or any of their
Affiliates, as applicable, to do business with vendors or service providers or
to share overhead expenses, the costs incurred in so doing shall be allocated
fairly among such entities, and each such entity shall bear its fair share of
such costs.  To the extent that any of
Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage 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 

 

84

 

provided, and each such entity shall bear its
fair share of such costs.  All material
transactions between (or among) Mezzanine Borrower, Senior Mezzanine Borrower
or Mortgage Borrower and any of their respective Affiliates shall be conducted
on substantially the same terms (or on more favorable terms for Mezzanine
Borrower, Senior Mezzanine Borrower or Mortgage Borrower, as applicable) as
would be conducted with third parties.

 

(e)                                              To the extent that Mezzanine Borrower, Senior
Mezzanine Borrower or Mortgage Borrower or any of their Affiliates have offices
in the same location, there shall be a fair and appropriate allocation of
overhead costs among them, and each such entity shall bear its fair share of such
expenses.

 

(f)                                                Each of Mezzanine Borrower, Senior Mezzanine
Borrower and Mortgage 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, each of Mezzanine Borrower,
Senior Mezzanine Borrower and Mortgage Borrower shall each: (i) maintain
books and records separate from those of any other Person; (ii) maintain
its assets in such a manner that it is not more costly or difficult to
segregate, identify or ascertain such assets; (iii) hold regular meetings
of its board of directors, shareholders, partners or members, as the case may
be; (iv) hold itself out to creditors and the public as a legal entity
separate and distinct from any other entity; (v) prepare separate tax
returns (unless part of a consolidated group) and financial statements (unless
part of a consolidated group), or if part of consolidated group it will be
shown as a separate member of such group or such consolidated tax returns or
financial 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 any of Mezzanine Borrower, Senior Mezzanine Borrower and Mortgage
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 any of Mezzanine Borrower, Senior Mezzanine Borrower and Mortgage
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 

 

85

 

Independent Members, shall have participated
in such vote.  An affirmative vote of
100% of the directors, managers or members, as applicable, of Mezzanine
Borrower, Senior
Mezzanine Borrower or Mortgage Borrower shall be required to (i) file
a bankruptcy or insolvency petition or otherwise institute insolvency
proceedings or to authorize Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage Borrower to do so or (ii) file
an involuntary bankruptcy petition against any Affiliate, Manager, or any
Affiliate of Manager.  Furthermore, each
of Mezzanine Borrower’s, Senior
Mezzanine Borrower’s and Mortgage Borrower’s formation documents shall
expressly state that for so long as the Loan is outstanding, none of Mezzanine
Borrower, Senior Mezzanine Borrower
or Mortgage Borrower shall be permitted to (i) dissolve, liquidate,
consolidate, merge or sell all or substantially all of Mezzanine Borrower’s, Senior Mezzanine Borrower’s or Mortgage
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, Mezzanine
Borrower shall cause Mortgage Borrower to permit agents, representatives and
employees of Mezzanine Lender and the Rating Agencies to inspect the Property
or any part thereof during normal business hours on Business Days upon
reasonable advance notice.

 

5.1.7                        Notice of Default.  Mezzanine Borrower shall promptly advise
Mezzanine Lender (a) of any event or condition of which Mezzanine Borrower
has knowledge that has a Material Adverse Effect and (b) of the occurrence
of any Default or Event of Default of which Mezzanine Borrower has knowledge.

 

5.1.8                        Cooperate in Legal Proceedings.  Mezzanine Borrower shall and shall cause
Mortgage Borrower to, cooperate fully with Mezzanine Lender with respect to any
proceedings before any court, board or other Governmental Authority which would
reasonably be expected to affect in any material adverse way the rights of
Mezzanine Lender hereunder or under any of the other Mezzanine Loan Documents
and, in connection therewith, permit Mezzanine Lender, at its election, to
participate in any such proceedings which may have a Material Adverse Effect.

 

5.1.9                        Reserved.

 

5.1.10                  Insurance.

 

(a)                                  Mezzanine Borrower shall cause Senior
Mezzanine Borrower and Mortgage Borrower to cooperate with Mortgage Lender in
obtaining for Mortgage Lender the benefits of any Proceeds lawfully or equitably
payable in connection with the Property and distributing any excess Proceeds to
Mezzanine Lender as otherwise provided in this Agreement.

 

(b)                                 Mezzanine Borrower shall comply and shall
cause Senior Mezzanine Borrower and Mortgage Borrower to comply with all
applicable Insurance Requirements and shall not permit Mortgage Borrower or
Senior Mezzanine Borrower to bring or keep or permit to be brought or kept any
article upon any of the Property or cause or permit any condition to exist
thereon which would be prohibited by any Insurance Requirement, or would
invalidate insurance coverage required hereunder or under the Loan Agreement
(Mortgage) to be maintained by 

 

86

 

Mortgage Borrower on or with respect to any part of the Property
pursuant to this Agreement or the Loan Agreement (Mortgage).

 

5.1.11                  Further Assurances; Separate Notes; Loan
Resizing.

 

(a)                                              Mezzanine Borrower shall execute and
acknowledge (or cause to be executed and acknowledged) and deliver to Mezzanine
Lender all documents, and take all actions, reasonably required by Mezzanine
Lender from time to time to confirm the rights created or now or hereafter
intended to be created under this Agreement and the other Mezzanine Loan
Documents and any security interest created or purported to be created
thereunder, to protect and further the validity, priority and enforceability of
this Agreement and the other Mezzanine Loan Documents, to subject to the
Mezzanine Loan Documents any property of Mezzanine Borrower intended by the
terms of any one or more of the Mezzanine Loan Documents to be encumbered by
the Mezzanine Loan Documents, or otherwise carry out the purposes of the
Mezzanine Loan Documents and the transactions contemplated thereunder.  Mezzanine Borrower agrees that it shall, upon
request and at Mezzanine Lender’s cost (including, without limitation, any
costs related to the modification or replacement of the Interest Rate Cap
Agreement (Second Mezzanine) (but not including any breakage costs associated
with or arising under the Interest Rate Cap Agreement (Second Mezzanine)),  reasonably cooperate with Mezzanine Lender
in connection with any request by Mezzanine Lender to sever one or more of the
Mezzanine Notes into two (2) or more separate substitute notes in an
aggregate principal amount equal to the Principal Amount and to reapportion the
Loan among such separate substitute notes, including, without limitation, by
executing and delivering to Mezzanine Lender new substitute notes to replace the
applicable Mezzanine Note or Mezzanine Notes, amendments to or replacements of
existing Mezzanine Loan Documents to reflect such severance and/or Opinions of
Counsel with respect to such substitute notes, amendments and/or replacements,
provided that Mezzanine Borrower shall bear no costs or expenses in connection
therewith (other than internal administrative costs and expenses of Mezzanine
Borrower).  Any such substitute notes may
have varying principal amounts and economic terms, provided, however, that (i) the
maturity date of any such substitute note shall be the same as the scheduled
Maturity Date of the Mezzanine Notes immediately prior to the issuance of such
substitute notes, (ii) the initial weighted average LIBOR Margin for the
term of the substitute notes shall not exceed the LIBOR Margin under the
Mezzanine Note being substituted immediately prior to the issuance of such
substitute notes; and (iii) the economics of the Loan shall not change in
a manner which is adverse to Mezzanine Borrower.  Upon the occurrence and during the
continuance of an Event of Default, Mezzanine Lender may apply payment of all
sums due under such substitute notes in such order and priority as Mezzanine
Lender shall elect in its sole and absolute discretion.  For avoidance of doubt, Mezzanine Borrower
agrees and acknowledges that such application may result in the weighted
average LIBOR Margin for the term of the applicable notes exceeding the initial
weighted average LIBOR Margin under the Mezzanine Note, and such result shall
not in any way restrict Lender’s right, in its discretion, to make such
application.

 

(b)                                             Mezzanine Borrower further agrees to
cooperate with Mortgage Lender, Senior Mezzanine Lender, and Mezzanine Lender
in the resizing of the Mortgage Loan, the Senior Mezzanine Loan, the Loan, and
any Junior Mezzanine Loan, all as provided in and in accordance with Section 5.1.11(b) of
the Loan Agreement (Mortgage).

 

87

 

(c)                                              Any
amounts recovered from Collateral, or
any part thereof, after an Event of Default may be applied by Mezzanine
Lender toward the payment of any interest and/or principal of the Loan and/or
any other amounts due under the Loan Documents in such order, priority, or
proportions as Mezzanine Lender in its sole discretion shall determine.

 

5.1.12                  Mortgage Taxes.  Mezzanine Borrower shall cause Mortgage
Borrower to pay all taxes, charges, filing, registration and recording fees,
excises and levies payable with respect to the Mortgage Notes or the Liens created
or secured by the Mortgage Loan Documents, other than income, franchise and
doing business taxes imposed on Mortgage Lender.

 

5.1.13                  Operation.

 

                                                                                                Mezzanine Borrower shall cause Mortgage
Borrower to, and cause Master Lessee to, (i) promptly perform and/or
observe in all material respects all of the covenants and agreements required
to be performed and observed by it under the Master Lease and do all things
necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Mezzanine Lender of any Master Lease Default of which it is aware; and (iii) promptly
deliver to Lender a copy of each financial statement, capital expenditures
plan, property improvement plan and any other notice, report and estimate
received by it under the Master Lease; and Mezzanine Borrower shall cause
Mortgage Borrower to enforce in a commercially reasonable manner the
performance and observance of all of the covenants and agreements required to
be performed and/or observed by the Master Lessee under the Master Lease.  Whenever in this Agreement or in any other
Loan Document Mezzanine Borrower is obligated to cause Mortgage Borrower to
cause the Master Lessee to take or refrain from taking a certain action, and
whenever this Agreement or any Mezzanine Loan Document shall set forth an
obligation of Master Lessee, then such provisions shall be construed to mean
that Mezzanine Borrower shall cause Mortgage Borrower to exercise its best
efforts to cause Master Lessee to take or refrain from taking such action, or
performing such action, including exercising such legal rights and remedies as
shall be available to Mortgage Borrower under the Master Lease and applicable
law.

 

5.1.14                  Business and Operations.  Mezzanine Borrower shall and shall cause
Senior Mezzanine Borrower and Mortgage Borrower to continue to engage in the
businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Property, the Senior Mezzanine Collateral and the Collateral.  Mezzanine Borrower shall and shall cause
Senior Mezzanine Borrower and Mortgage Borrower to qualify to do business and
shall remain in good standing under the laws of all applicable jurisdictions as
and to the extent required for the ownership, maintenance, management and
operation of the Property, the Senior Mezzanine Collateral and the Collateral.

 

5.1.15                  Title to the Collateral.  Mezzanine Borrower shall warrant and defend (a) its
title to the Collateral and every part thereof, subject only to Permitted
Encumbrances (Second Mezzanine) and (b) the validity and priority of the
Liens of this Agreement and the Pledge on the Collateral, in each case against
the claims of all Persons whomsoever. 
Mezzanine Borrower shall reimburse Mezzanine Lender for any losses,
costs, damages or expenses (including reasonable attorneys’ fees and court
costs) incurred by Mezzanine Lender if an interest in the Collateral, other
than Permitted Encumbrance (Second Mezzanine), is claimed by another Person.

 

88

 

5.1.16                  Costs of Enforcement.  In the event (a) that this Agreement or
the Pledge is foreclosed upon in whole or in part or that by reason of
Mezzanine Borrower’s default hereunder this Agreement or the Pledge is put into
the hands of an attorney for collection, suit, action or foreclosure, (b) of
the foreclosure of any security agreement prior to or subsequent to this
Agreement in which proceeding Mezzanine Lender is made a party, or (c) of
the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of Mezzanine Borrower or any of its constituent Persons or an
assignment by Mezzanine Borrower or any of its constituent Persons for the
benefit of its creditors, Mezzanine Borrower, its successors or assigns, shall
be chargeable with and agrees to pay all reasonable out-of-pocket costs of
collection and defense, including reasonable attorneys’ fees and costs,
incurred by Mezzanine Lender or Mezzanine Borrower in connection therewith and
in connection with any appellate proceeding or post-judgment action involved
therein, together with all required service or use taxes.

 

5.1.17                  Estoppel Statements.  Mezzanine Borrower shall, from time to time
but no more often than once in any calendar quarter so long as no Event of
Default shall exist, upon thirty (30) days’ prior written request from
Mezzanine Lender and shall cause Senior Mezzanine Borrower and Mortgage
Borrower to  execute, acknowledge and
deliver to the Mezzanine Lender, an Officer’s Certificate, stating that this
Agreement and the other Mezzanine Loan Documents (or as applicable, the Senior
Mezzanine Loan Documents or the Loan Documents (Mortgage)) are unmodified and
in full force and effect (or, if there have been modifications, that this Agreement
and the other Mezzanine Loan Documents or as applicable the Senior Mezzanine
Loan Documents or the Loan Documents (Mortgage) are in full force and effect as
modified and setting forth such modifications), stating the amount of accrued
and unpaid interest and the outstanding principal amount of the Mezzanine Notes
(or as applicable Senior Mezzanine Notes or Mortgage Notes) and containing such
other information with respect to the Mezzanine Borrower, Senior Mezzanine
Borrower, Mortgage Borrower, the Property, the Mortgage Loan, the Senior
Mezzanine Loan, and the Loan as Mezzanine Lender shall reasonably request.  Mezzanine Lender shall, from time to time,
but no more often than once in any calendar quarter, upon thirty (30) days’
prior written request from Mezzanine Borrower, execute, acknowledge and deliver
to Mezzanine Borrower, a certificate signed by an officer of Mezzanine Lender,
stating that this Agreement and the other Mezzanine Loan Documents are
unmodified and in full force and effect (or, if there have been modifications,
that this Agreement and the other Mezzanine Loan Documents are in full force
and effect as modified and setting forth such modifications).  The estoppel certificate from Mezzanine Borrower
shall also state either that, to the best of Mezzanine Borrower’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 Mezzanine Lender shall state whether Mezzanine Lender has
delivered notice of a Default or an Event of Default.

 

5.1.18                  Loan Proceeds.  Mezzanine Borrower shall use the proceeds of
the Loan received by it on the Closing Date only for the purposes set forth in Section 2.1.4.

 

5.1.19                  No Joint Assessment.  Mezzanine Borrower shall not and shall not
permit Mortgage Borrower to suffer, permit or initiate the joint assessment of
the Property, (a) with any other real property constituting a tax lot
separate from the Property and (b) which constitutes real property with
any portion of the Property which may be deemed to constitute personal
property, 

 

89

 

or any other procedure whereby the lien of
any taxes which may be levied against such personal property shall be assessed
or levied or charged to such real property portion of the Property.

 

5.1.20                  No Further Encumbrances.  Subject to Section 7.3 of the Loan
Agreement (Mortgage) and Section 7.3 hereof, Mezzanine Borrower shall do,
or cause to be done, all things necessary to keep and protect the Property, the
Senior Mezzanine Collateral, and the Collateral and all portions thereof
unencumbered from any Liens, easements or agreements granting rights in the
Collateral, the Senior Mezzanine Collateral or the Property or restricting the
use or development of the Property, except for (a) with respect to the
Property, Permitted Encumbrances, (b) with respect to the Senior Mezzanine
Collateral, Permitted Encumbrances (Senior Mezzanine), and (c) with
respect to the Collateral, Permitted Encumbrances (Second Mezzanine).

 

5.1.21                  Loan
(Mortgage) Covenants.  Mezzanine
Borrower shall cause Mortgage Borrower, to fully keep, perform and comply with
(or cause to be kept, performed and complied with) each of the covenants, terms
and provisions set forth in the Loan Agreement (Mortgage) and the Security
Instruments, which are hereby incorporated by reference as if fully set forth
herein, notwithstanding any waiver or future amendment of such covenants, terms
and provisions by Mortgage Lender. 
Mezzanine Borrower acknowledges that the obligation to comply with such
covenants, terms and provisions is separate from, and may be enforced
independently from, the obligations of the Mortgage Borrower under the Loan
Documents (Mortgage).

 

(a)                                              Without
Mezzanine Lender’s prior written consent, Mezzanine Borrower shall not, and
shall cause Mortgage Borrower not to, (i) amend or modify (by agreement on
the part of the Mortgage Borrower or Mezzanine Borrower) or (ii) affirmatively
permit the modification or amendment of (by operation of law or otherwise) the
Loan Documents (Mortgage) in effect as of the Closing Date.

 

(b)                                             In the
event the Loan (Mortgage) shall at any time be repaid, and the Liens securing
the Loan (Mortgage) at any time be released in full, then unless and until the
Mezzanine Note shall have been repaid in full and all obligations of Mezzanine
Borrower to Mezzanine Lender hereunder and under the other Mezzanine Loan
Documents shall have been satisfied, then Mezzanine Borrower shall nevertheless
comply or cause the Mortgage Borrower to comply with each of the terms and
provisions of the Loan Documents (Mortgage) (other than payment of principal,
interest and premium and the obligation to maintain the Interest Rate Swap
Agreement (if any)) and the Loan Documents (Mortgage) shall nevertheless be
deemed to remain in full force and effect as between Mezzanine Borrower and
Mezzanine Lender with Mezzanine Lender being deemed in such context to possess
exclusively all of the rights and remedies of the Mortgage Lender thereunder
including without limitation, all rights of consent and approval, rights to
receive and control the disposition of casualty insurance proceeds and
condemnation awards, and the right to collect rents and make waterfall distributions
(but expressly excluding any rights and remedies relating to payment of the
indebtedness under the Loan Documents (Mortgage) and evidenced by the Mortgage
Notes) and Mezzanine Borrower shall nevertheless comply or cause the Mortgage
Borrower to comply with each of the terms and provisions of the Loan Documents
(Mortgage) (and any amendment or modification consented to in writing by
Mezzanine Lender) (other than the payment of principal, interest and premium
and the obligation to maintain the Interest Rate Swap Agreement if any)).  Mezzanine Borrower shall, and shall 

 

90

 

cause Mortgage Borrower to, execute any and all documents reasonably
requested by Mezzanine Lender for the implementation or furtherance of the
foregoing provided that the same shall be at Mezzanine Lender’s sole cost and
expense.  Mezzanine Borrower shall
deliver to Mezzanine Lender copies of any and all modifications to the Loan
Documents (Mortgage) within five (5) Business Days after execution
thereof.

 

(c)                                              Mezzanine
Borrower covenants and agrees to cause Mortgage Borrower to deliver any and all
financial information delivered or required to be delivered to Mortgage Lender
pursuant to the terms of the Loan Documents (Mortgage) to be delivered
simultaneously to Mezzanine Lender.

 

5.1.22                  Master Lease.

 

(a)                                  Each
Individual Property shall at all times be leased directly and exclusively by
the Mortgage Borrower to the Master Lessee under the Master Lease (and not to
any other Person under the Master Lease or any replacement Master Lease).  Master Lessee shall be permitted to enter
into Subleases subject to and in accordance with Section 8.8.2.

 

(b)                                 The
Master Lease shall have an initial term of fifteen (15) years with renewal
rights.

 

(c)                                  The
Master Lease shall require Master Lessee to make payments of Master Lease
Rent.  Pursuant to the Master Lease and
the Master Lease Rent Payment Direction Letter all Master Lease Scheduled Rent
shall at all times during the term of the Loan be made directly to the Holding
Account, and none of the foregoing payments of Master Lease Rent shall be
deemed made until such payment has been deposited into the Holding Account.

 

(d)                                 The
Master Lease shall require the Master Lessee to prepare the expenses and revenue
in accordance with Article XI and to submit copies to Mezzanine
Lender for its reference, not for its approval.

 

(e)                                  Neither
Mortgage Borrower nor Master Lessee shall terminate the Master Lease or consent
to the termination of the Master Lease without the prior written consent of
Mezzanine Lender.  Except as provided in
the Master Lease with respect to casualties or condemnations, the Master Lease
shall not provide for the release of an Individual Property.  The Master Lease may be amended to provide,
inter alia, for a release of an Individual Property and the reduction of Master
Lease Rent as provided in Section 2.3.4(v) and (vi).

 

(f)                                    Except
for the Assignment of Leases and the Permitted Encumbrances, neither the
Mortgage Borrower nor the Master Lessee shall Transfer or sublease, or allow to
be Transferred, its interest in the Master Lease or any interest therein
without the prior written consent of the Mezzanine Lender.  The Mezzanine Borrower shall not permit
Mortgage Borrower to permit (except as expressly permitted under the Master
Lease) and shall not consent to (except as expressly required under the Master
Lease) any assignment by the Master Lessee of its interest in the Master Lease
or its rights and interests thereunder except to Master Lessee’s successor by
merger or acquisition of all or substantially all of Master Lessee’s
assets.  Notwithstanding the foregoing,
Master Lessee shall pledge to Mortgage Borrower its interest in the “FF&E”
as defined in the Master Lease, subject to the Assigned Landlord Lien.

 

91

 

(g)                                 Neither
the Mortgage Borrower nor the Master Lessee shall, without the prior written
consent of Mezzanine Lender which consent, solely with respect to clauses (ii) and
(iii) of this Section 5.1.22(g), will not be unreasonably
withheld, (i) renew (other than pursuant to renewal rights expressly set
forth in the Master Lease), extend, release any Individual Property from
(except in connection with a Property Release, Substitution or release of an
Unimproved Parcel, in compliance with Sections 2.3.4, 2.3.5 and 2.3.9
hereof) terminate, reduce rents (except as expressly authorized pursuant to Section 2.3.4)
or other sums payable under, accept a surrender of, or shorten the term of, the
Master Lease, (ii) appoint any appraiser, (iii) make any
determination of Fair Market Rental or Fair Market Value (as such terms are
defined in the Master Lease), (iv) waive any provisions of the Master
Lease, provided that subject to clause (i) Mortgage Borrower and Master
Lessee shall have the right to waive provisions of the Master Lease so long as
the same would not have the effect of (1) waiving or reducing the monetary
obligations of Master Lessee under the Master Lease or (2) either
permitting Master Lessee to take an action that Mortgage Borrower or Master
Lessee is prohibited from taking under this Agreement or any other Loan
Document, or preventing Mortgage Borrower and/or Master Lessee from complying
with an obligation on the part of Mortgage Borrower or Master Lessee under this
Agreement or any other Loan Document, (v) amend or modify in any respect
in a manner adverse to Mezzanine Lender or that would decrease Master Lessee’s
obligations or increase Mortgage Borrower’s obligations thereunder, any
provision of the Master Lease contained in Article I (leased property, term,
etc.), Article III (rent), Article IV (termination and abatement), Article V
(Ownership of Leased Property), Section 6.1(b) (Taxes and  Other
Charges; Contest for Taxes and Other Charges, Legal Requirements and Liens),  Article VIII (Alterations; Leasing), Article X
(Casualty and Condemnation), Article XI (Accounts and Reserves), Article XII
(defaults and remedies), Article XV (Subordination) and related
definitions in Article II (definitions) or (vi) materially amend or
modify any provision of the Master Lease not listed in clause (v) in a
manner adverse to Mezzanine Lender or that would decrease Master Lessee’s
obligations or increase Mortgage Borrower’s obligations thereunder, provided that nothing in this Section 5.1.22(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)                                     Mortgage
Lender shall have the right to declare a Master Lease Tenant Default under the
Master Lease and to exercise the rights and remedies of the Mortgage Borrower,
as landlord under the Master Lease (including without limitation, exercising it
rights and remedies with respect to the Assigned Landlord Lien), pursuant to
the assignment of such rights in the Assignment of Leases.

 

(j)                                     The form of the Master Lease is attached hereto as Exhibit F.  Mezzanine Lender hereby approves of the form
of the Master Lease.  Notwithstanding
the foregoing, or anything else in Mezzanine Loan Documents to the contrary,
except as expressly set forth in this Agreement-if any conflict, contradiction
or inconsistency exists between the Master Lease and this Agreement, the terms
and provisions of this Agreement shall, as among the parties hereto, control
and govern.

 

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5.1.23                  Senior Mezzanine Loan Covenants.  Mezzanine Borrower shall cause Senior
Mezzanine Borrower to fully keep, perform and comply with (or cause to be kept,
performed and complied with) each of the covenants, terms and provisions set
forth in the Senior Mezzanine Loan Agreement and the Pledge (Senior Mezzanine),
which are hereby incorporated by reference as if fully set forth herein,
notwithstanding any waiver or future amendment of such covenants, terms and
provisions by Senior Mezzanine Lender. 
Mezzanine Borrower acknowledges that the obligation to comply with such
covenants, terms and provisions is separate from, and may be enforced
independently from, the obligations of the Senior Mezzanine Borrower under the
Senior Mezzanine Loan Documents.

 

(a)                                  Without
Mezzanine Lender’s prior written consent, Mezzanine Borrower shall not, and
shall cause Senior Mezzanine Borrower not to, (i) amend or modify (by
agreement on the part of the Senior Mezzanine Borrower or Mezzanine Borrower)
or (ii) affirmatively permit the modification or amendment of (by
operation of law or otherwise) the Senior Mezzanine Loan Documents in effect as
of the Closing Date.

 

(b)                                 In
the event the Senior Mezzanine Loan shall at any time be repaid, and the Liens
securing the Senior Mezzanine Loan at any time be released in full, then unless
and until the Mezzanine Note shall have been repaid in full and all obligations
of Mezzanine Borrower to Mezzanine Lender hereunder and under the other
Mezzanine Loan Documents shall have been satisfied, then Mezzanine Borrower
shall nevertheless comply or cause the Senior Mezzanine Borrower to comply with
each of the terms and provisions of the Senior Mezzanine Loan Documents (other
than payment of Principal, interest and premium and the obligation to maintain
the Interest Rate Cap Agreement (if any)) and the Senior Mezzanine Loan
Documents shall nevertheless be deemed to remain in full force and effect as
between Mezzanine Borrower and Mezzanine Lender with Mezzanine Lender being
deemed in such context to possess exclusively all of the rights and remedies of
the Senior Mezzanine Lender thereunder including without limitation, all rights
of consent and approval, rights to receive and control the disposition of
casualty insurance proceeds and condemnation awards, and the right to collect
rents and make waterfall distributions (but expressly excluding any rights and
remedies relating to payment of the indebtedness under the Senior Mezzanine
Loan Documents and evidenced by the Senior Mezzanine Notes) and Mezzanine
Borrower shall nevertheless comply or cause the Senior Mezzanine Borrower to
comply with each of the terms and provisions of the Senior Mezzanine Loan
Documents (or any amendment or modification consented to in writing by
Mezzanine Lender)(other than the payment of principal, interest and premium and
the obligation to maintain the Interest Rate Cap Agreement if any)).  Mezzanine Borrower shall, and shall cause
Senior Mezzanine Borrower to, execute any and all documents reasonably
requested by Mezzanine Lender for the implementation or furtherance of the
foregoing provided that the same shall be at Mezzanine Lender’s sole cost and
expense.  Mezzanine Borrower shall
deliver to Mezzanine Lender copies of any and all modifications to the Senior
Mezzanine Loan Documents within five (5) Business Days after execution
thereof.

 

(c)                                  Mezzanine
Borrower covenants and agrees to cause Senior Mezzanine Borrower to deliver any
and all financial information delivered or required to be delivered to Senior
Mezzanine Lender pursuant to the terms of the Senior Mezzanine Loan Documents
to be delivered simultaneously to Mezzanine Lender.

 

93

 

5.2                                 Negative Covenants.

 

From the Closing Date until payment and performance in full of all
obligations of Mezzanine Borrower under the Mezzanine Loan Documents or the
earlier release of the Lien of this Agreement or the Pledge in accordance with
the terms of this Agreement and the other Mezzanine Loan Documents, Mezzanine
Borrower covenants and agrees with Mezzanine Lender that it will not do, or
cause, permit, or suffer Mortgage Borrower or Senior Mezzanine Borrower to do,
directly or indirectly, any of the following:

 

5.2.1                        Incur Debt.  Incur, create or assume any Debt other than
Permitted Debt of Mezzanine Borrower, Mortgage Borrower, and Senior Mezzanine
Borrower, (as applicable) or Transfer or lease all or any part of the Property,
Senior Mezzanine Collateral, or Collateral or any interest therein, except as
permitted in the Mezzanine Loan Documents (for the avoidance of doubt,
Mezzanine Borrower shall not have any obligations under or with respect to the
Junior Mezzanine Loans);

 

5.2.2                        Encumbrances.  Other than in connection with the Mezzanine
Loan, Senior Mezzanine Loan, and the Junior Mezzanine Loans, incur, create or
assume or permit the incurrence, creation or assumption of any Debt secured by
an interest in Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, or Junior Mezzanine Borrower;

 

5.2.3                        Engage in Different Business.  With respect to (i) Mezzanine Borrower,
engage, directly or indirectly, in any business other than that of entering
into this Agreement and the other Mezzanine Loan Documents to which Mezzanine
Borrower is a party and the use, ownership, management, and financing of the
Ownership Interests and activities related thereto; (ii) with respect to
Senior Mezzanine Borrower, engage, directly or indirectly, in any business
other than that of entering into the Senior Mezzanine Loan Agreement and the
other Senior Mezzanine Loan Documents to which Senior Mezzanine Borrower is a
party and the use, ownership, management and financing of the Senior Mezzanine
Ownership Interests and activities related thereto; and (iii) with respect
to Mortgage Borrower, engage, directly or indirectly, in any business other
than that of entering into the Loan Agreement (Mortgage) and the other Loan Documents
(Mortgage) to which Mortgage Borrower is a party and the use, ownership,
management, leasing, renovation, financing, development, operation and
maintenance of the Property and activities related thereto.

 

5.2.4                        Make Advances.  Make advances or make loans to any Person, or
hold any investments, except as expressly permitted pursuant to the terms of
this Agreement or any other Mezzanine Loan Document;

 

5.2.5                        Subdivision.  Permit Mortgage Borrower to subdivide any
Individual Property other than with respect to Unimproved Parcels in accordance
with the terms of this Agreement or otherwise with the prior consent of
Mezzanine Lender which consent shall not be unreasonably withheld, conditioned
or delayed.

 

5.2.6                        Commingle.  Commingle its assets with the assets of any
of its Affiliates;

 

5.2.7                        Guarantee Obligations.  Guarantee any obligations of any Person;

 

94

 

5.2.8                        Transfer Assets.  Transfer any asset other than in the ordinary
course of business or Transfer any interest in the Property, the Senior
Mezzanine Collateral or Collateral except in each case (including in connection
with a Release or Substitution) as may be permitted hereby or in the other
Mezzanine Loan Documents;

 

5.2.9                        Amend Organizational Documents.  Amend or modify any of its organizational
documents without Mezzanine Lender’s consent, other than in connection with any
Transfer permitted pursuant to Article VIII or to reflect any
change in capital accounts, contributions, distributions, allocations or other
provisions that do not and could not reasonably be expected to have a Material
Adverse Effect and provided that Mezzanine Borrower remains and each of
Mortgage Borrower and Senior Mezzanine 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 its assets
other than in connection with the repayment of the Loan, or (iii) file or
solicit the filing of an involuntary bankruptcy petition against Mortgage Borrower,
Senior Mezzanine Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, a
Master Lessee Party, 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
Mortgage Borrower, Senior Mezzanine Borrower, or Mezzanine Borrower to material
liability under ERISA or qualify it as an “employee benefit plan”
(within the meaning of Section 3(3) of ERISA) to which ERISA applies
and Mezzanine Borrower’s assets do not and will not constitute plan assets
within the meaning of 29 C.F.R. Section 2510.3-101;

 

5.2.13                  Distributions.  From and after the occurrence and during the
continuance of an Event of Default or an event of default (a “Junior
Mezzanine Event of Default”) under any of the Junior Mezzanine Loan
Documents, make any distributions to or for the benefit of any of its partners
or members or its or their Affiliates; provided that so long as an Event of
Default shall not have occurred and be outstanding, distributions from
Mezzanine Borrower solely for the purpose of enabling a Junior Mezzanine
Borrower to cure a Junior Mezzanine Event of Default, and which distributions
are in fact sufficient to completely cure such Junior Mezzanine Event of
Default and are used for their intended purpose, shall be permitted.

 

5.2.14                  Modify Mezzanine Account Agreement.  Without the prior consent of Mezzanine
Lender, which shall not be unreasonably withheld, delayed or conditioned,
execute any modification to the Mezzanine Account Agreement;

 

5.2.15                  Zoning Reclassification.  Without the prior written consent of
Mezzanine Lender (which in the case of clause (a) shall not be
unreasonably withheld), directly or through the Mortgage Borrower, (a) initiate
or consent to any zoning reclassification of any portion of the Property, (b) seek
any variance under any existing zoning ordinance that could result in the use
of the Property becoming a non-conforming use under any zoning ordinance or any
other 

 

95

 

applicable land use law, rule or
regulation, or (c) allow any portion of the Property to be used in any
manner that could result in the use of the Property becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation;

 

5.2.16                  Change of Principal Place of Business.  Change Mezzanine Borrower’s principal place
of business and chief executive office set forth on the first page of this
Agreement without first giving Mezzanine Lender thirty (30) days’ prior written
notice (but in any event, within the period required pursuant to the UCC) and
there shall have been taken such action, reasonably satisfactory to Mezzanine
Lender, as may be necessary to maintain fully the effect, perfection and
priority of the security interest of Mezzanine Lender hereunder in the Account
Collateral (Second Mezzanine) and the Rate Cap Collateral (Second Mezzanine) at
all times;

 

5.2.17                  Debt Cancellation.  Cancel or otherwise forgive or release any
material claim or debt owed to it, directly or indirectly, by any Person,
except for adequate consideration or in the ordinary course of its business and
except for termination of a Sublease as permitted by Section 8.8 of the
Loan Agreement (Mortgage);

 

5.2.18                  Misapplication of Funds.  Permit Mortgage Borrower to distribute any
revenue from the Property or any Proceeds in violation of the provisions of the
Loan Agreement (Mortgage), permit Senior Mezzanine Borrower to distribute any
Receipts from the Senior Mezzanine Ownership Interests in violation of the
provisions of the Senior Mezzanine Loan Agreement, distribute any Receipts from
the Ownership Interests in violation of the provisions of this Agreement, fail
to remit amounts to the Mezzanine Account, as applicable, as required by Section 3.1,
permit Mortgage Borrower to misappropriate any security deposit or portion
thereof or apply the proceeds of the Loan in violation of Section 2.1.4;
or

 

5.2.19                  Single-Purpose Entity.  Fail to be a Single Purpose Entity or take or
suffer any action or inaction the result of which would be to cause it or Senior Mezzanine Borrower or Mortgage
Borrower to cease to be a Single Purpose Entity.

 

VI.                                 INSURANCE;
CASUALTY; CONDEMNATION; RESTORATION

 

6.1                                 Insurance
Coverage Requirements.  Mezzanine
Borrower will cause Mortgage Borrower, at its expense, to procure and maintain
the insurance policies required by the Loan Documents (Mortgage).  Each commercial general liability or umbrella
liability policy with respect to the Property shall, to the extent permitted in
the Loan Documents (Mortgage), name Mezzanine Lender as an additional insured
and shall, to the extent permitted in the Loan Documents (Mortgage), contain a
cross liability/severability endorsement in form and substance acceptable to
Mezzanine Lender.

 

6.1.1                        Insurance
Proceeds.  In the event of any loss
or damage to the Property, Mezzanine Borrower shall give prompt written notice
to the insurance carrier and Mezzanine Lender. 
Mezzanine Lender acknowledges that Mortgage Borrower’s rights to any
insurance proceeds are subject to the terms of the Loan Agreement
(Mortgage).  Mezzanine Borrower may not
and shall not permit Mortgage Borrower to settle, adjust or compromise any
claim under such insurance policies without the prior written consent of
Mezzanine Lender which shall not be unreasonably withheld, delayed or denied;
provided, further, that Mortgage Borrower may make 

 

96

 

proof of loss and
adjust and compromise any claim under casualty insurance policies which is of
an amount less than the amount set forth on Exhibit V for the applicable
Individual Property so long as no Event of Default has occurred and is
continuing.  Any proceeds of such claim
which are not used to reconstruct or repair the Property or applied to Mortgage
Borrower’s costs in connection therewith, or applied to the balance of the loan
evidenced by the Loan Documents (Mortgage), shall be deposited into the
accounts established pursuant to the Loan Agreement (Mortgage) to the extent
required thereby, or if such deposit is not required thereunder, then such
proceeds shall be paid to Mezzanine Lender and applied to the payment of the
Obligations (Second Mezzanine) whether or not then due.

 

6.1.2                        Restoration
of Property .  In the event that
Mortgage Borrower is permitted pursuant to the terms of the Loan Agreement
(Mortgage) to reconstruct, restore or repair the Property following a casualty
to any portion of the Property, Mezzanine Borrower shall cause Mortgage
Borrower to promptly and diligently repair and restore the Property in the
manner and within the time periods required by the Loan Agreement (Mortgage),
the Operating Agreements and any other agreements affecting the Property.  In the event that Mortgage Borrower is
permitted pursuant to terms of the Loan Agreement (Mortgage) to elect to not
reconstruct, restore or repair the Property following a casualty to any portion
of the Property, Mezzanine Borrower shall not permit Mortgage Borrower to elect
not to reconstruct, restore or repair the Property without the prior written
consent of Mezzanine Lender, provided that the prior written consent of
Mezzanine Lender shall not be required during the period when the Mortgage
Borrower shall be complying with the last sentence of Section 6.2.4(a) of
the Loan Agreement (Mortgage) or  where the full
Mezzanine Release Price with respect to such Property has been paid to
Mezzanine Lender and the conditions to the release of such Property as set
forth in Section  2.3.4 have been satisfied.

 

6.1.3                        Compliance
.  Mezzanine Borrower shall and shall
cause Mortgage Borrower to comply with all Insurance Requirements and shall not
bring or keep or permit to be brought or kept any article upon any of the
Properties or cause or permit any condition to exist thereon which would be
prohibited by any Insurance Requirement, or would invalidate insurance coverage
required to be maintained by Mortgage Borrower on or with respect to any part
of the Property pursuant to Section 6.1 of the Loan Agreement (Mortgage).

 

6.2                                 Condemnation.  In the event that all or any portion of the
Property shall be damaged or taken through condemnation (which term shall
include any damage or taking by any governmental authority, quasi governmental
authority, any party having the power of condemnation, or any transfer by
private sale in lieu thereof), or any such condemnation shall be threatened,
Mezzanine Borrower shall give prompt written notice to Mezzanine Lender.  Mezzanine Lender acknowledges that Mortgage
Borrower’s rights to any condemnation award is subject to the terms of the Loan
Agreement (Mortgage).  Notwithstanding
the foregoing, Mezzanine Borrower may not and shall not permit Mortgage
Borrower to settle or compromise any claim, action or proceeding relating to
such damage or condemnation without the prior written consent of Mezzanine
Lender, which shall not be unreasonably withheld, delayed or denied; provided,
further, that Mortgage Borrower may settle, adjust and compromise any such claim,
action or proceeding which is of an amount less than the amount set forth on Exhibit V
for the applicable Individual Property so long as no Default or Event of
Default has occurred and is continuing. 
Any Excess Proceeds shall be paid to Mezzanine Lender and applied to the
payment 

 

97

 

of the Obligations
(Second Mezzanine) whether or not then due pursuant to Section 2.3.1(b).  In the event that Mortgage Borrower is
permitted pursuant to the terms of the Loan Agreement (Mortgage) to
reconstruct, restore or repair the Property following a condemnation of any
portion of the Property, Mezzanine Borrower shall cause Mortgage Borrower to
promptly and diligently repair and restore the Property in the manner and within
the time periods required by the Loan Agreement (Mortgage), the Operating
Agreements and any other agreements affecting the Property.  In the event that Mortgage Borrower is
permitted pursuant to the terms of the Loan Agreement (Mortgage) to elect not to
reconstruct, restore or repair the Property following a condemnation of any
portion of the Property, Mezzanine Borrower shall not permit Mortgage Borrower
to elect not to reconstruct, restore or repair the Property without the prior
written consent of Mezzanine Lender.

 

6.3                                 Certificates.  Mezzanine Borrower shall deliver (or cause
Mortgage Borrower to deliver) to Mezzanine Lender annually, concurrently with
the renewal of the insurance policies required hereunder, a certificate from
Mezzanine Borrower’s and Mortgage Borrower’s insurance agent stating that the
insurance policies required to be delivered to Mezzanine Lender pursuant to Section 6.1
and Section 2.5.2(g) are maintained with insurers who comply with the
terms of Section 6.1.11 of the Loan Agreement (Mortgage), setting forth a
schedule describing all premiums required to be paid by Mezzanine Borrower or
Mortgage Borrower, as applicable, to maintain the policies of insurance
required under Section 6.1 and Section 2.5.2(g), and stating that
either Mezzanine Borrower or Mortgage Borrower, as applicable, has paid such
premiums.  Certificates of insurance with
respect to all replacement policies shall be delivered to Mezzanine Lender not
less than ten (10) Business Days prior to the expiration date of any of
the insurance policies required to be maintained hereunder which certificates
shall bear notations evidencing payment of applicable premiums.  Mezzanine Borrower shall deliver to Mezzanine
Lender originals (or certified copies) of such replacement insurance policies
on or before the earlier to occur of (i) thirty (30) days after the
effective date thereof (including the insurance certificates delivered pursuant
to Section 2.5.2(g)) and (ii) five (5) Business Days after
Mezzanine Borrower’s receipt thereof.  If
Mezzanine Borrower fails to (i) maintain and deliver to Mezzanine Lender
the certificates of insurance and certified copies or originals required by
this Agreement upon five (5) Business Days’ prior notice to Mezzanine
Borrower, Mezzanine Lender may procure such insurance, and all costs thereof
(and interest thereon at the Default Rate) shall be added to the
Indebtedness.  Mezzanine Lender shall
not, by the fact of approving, disapproving, accepting, preventing, obtaining
or failing to obtain any insurance, incur any liability for or with respect to
the amount of insurance carried, the form or legal sufficiency of insurance
contracts, solvency of insurance companies, or payment or defense of lawsuits,
and Mezzanine Borrower hereby expressly assumes full responsibility therefor
and all liability, if any, with respect such matters.

 

VII.                             IMPOSITIONS,
OTHER CHARGES, LIENS AND OTHER ITEMS

 

7.1                                 Mortgage Borrower
and Senior Mezzanine Borrower to Pay Impositions and Other Charges.  Mezzanine Borrower shall cause Mortgage
Borrower to pay (or cause to be paid) all Impositions now or hereafter levied
or assessed or imposed against the Property or any part thereof prior to the
imposition of any interest, charges or expenses for the non-payment thereof and
to pay all Other Charges on or before the date they are due.  Mezzanine Borrower shall cause Senior
Mezzanine Borrower to pay (or cause to be paid) all Impositions now or
hereafter levied 

 

98

 

or assessed or imposed against the Senior
Mezzanine Collateral or any part thereof prior to the imposition of any
interest, charges or expenses for the non-payment thereof.  Mezzanine Borrower shall pay all Impositions
now or hereafter levied or assessed or imposed against the Collateral or any
part thereof prior to the imposition of any interest, charges or expenses for
the non-payment thereof.  Mezzanine
Borrower shall deliver or cause to be delivered to Mezzanine Lender annually,
no later than thirty (30) calendar days after the first day of each fiscal year
of Mezzanine Borrower, and shall update as new information is received, a
schedule describing all Impositions, payable or estimated to be payable during
such fiscal year attributable to or affecting the Property, the Collateral, the
Senior Mezzanine Collateral, Mezzanine Borrower, Senior Mezzanine Borrower, or
Mortgage Borrower.  Subject to Mortgage
Borrower’s right of contest set forth in Section 7.3 of the Loan
Agreement (Mortgage), as set forth in the next two sentences and provided that
there are sufficient funds available in the Tax Reserve Account under the Loan
Agreement (Mortgage), Mortgage Lender, on behalf of Mortgage Borrower, shall
pay all Impositions and Other Charges which are attributable to or affect the Property
or Mortgage Borrower, prior to the date such Impositions or Other Charges shall
become delinquent or late charges may be imposed thereon, directly to the
applicable taxing authority with respect thereto.  Mortgage Lender shall, or Mortgage Lender shall
direct the Cash Management Bank to, pay to the taxing authority such amounts to
the extent funds in the Tax Reserve Account are sufficient to pay such
Impositions.  Nothing contained in this
Agreement, the Senior Mezzanine Loan Agreement, the Loan Agreement (Mortgage)
or any Security Instrument shall be construed to require Mezzanine Borrower,
the Senior Mezzanine Borrower or Mortgage Borrower to pay any tax, assessment,
levy or charge imposed on Mortgage Lender, the Senior Mezzanine Lender or Mezzanine
Lender in the nature of a franchise, capital levy, estate, inheritance,
succession, income or net revenue tax.

 

7.2                                 No Liens.  Subject to Section 7.3 and Mortgage
Borrower’s right of contest set forth in Section 7.3 of the Loan
Agreement (Mortgage) and to Permitted Encumbrances, Mezzanine Borrower shall
cause Mortgage Borrower to at all times keep, or cause to be kept, the Property
free from all Liens (other than Permitted Encumbrances) and shall pay when due
and payable (or bond over) all claims and demands of mechanics, materialmen,
laborers and others which, if unpaid, might result in or permit the creation of
a Lien on the Property or any portion thereof and shall in any event cause the
prompt, full and unconditional discharge of all Liens imposed on or against the
Property or any portion thereof within forty-five (45) days after receiving
written notice of the filing (whether from Mortgage Lender or Mezzanine Lender,
the lienor or any other Person) thereof. 
Mezzanine Borrower shall cause Mortgage Borrower to do or cause to be
done, at the sole cost of Mortgage Borrower, everything reasonably necessary to
fully preserve the first priority of the Lien of the Security Instruments
against the Property, subject to the Permitted Encumbrances.  Upon the occurrence and during the
continuance of a Mortgage Event of Default with respect to the Obligations
(Mortgage), each of Mortgage Lender and Mezzanine Lender may (but shall not be
obligated to) make any such payment or discharge any such Lien (other than Permitted
Encumbrances excluding therefrom any Liens described in clauses (d) and (e) of
the definition of “Permitted Encumbrances” which are the subject of such
Mortgage Event of Default), and Mezzanine Borrower shall reimburse Mezzanine
Lender and Mortgage Lender on demand for all such advances pursuant to Section 19.12
of this Agreement and the Loan Agreement (Mortgage) (together with interest
thereon at the Default Rate).

 

99

 

7.3                                 Contest.  Nothing contained herein shall be deemed to
require Mezzanine Borrower to pay, or cause to be paid, any Imposition or to
satisfy any Lien, or to comply with any Legal Requirement or Insurance
Requirement, so long as Mezzanine Borrower is (or has caused Mortgage Borrower
to be) in good faith, and by proper legal proceedings, where appropriate,
diligently contesting the validity, amount or application thereof, provided
that in each case, at the time of the commencement of any such action or
proceeding, and during the pendency of such action or proceeding (i) no
Event of Default shall exist and be continuing hereunder, (ii) Mezzanine
Borrower shall keep Mezzanine Lender informed of the status of such contest at
reasonable intervals, (iii) if Mezzanine Borrower is not providing (or has
not caused Mortgage Borrower to provide) security as provided in clause (vi) below,
adequate reserves with respect thereto are maintained on Mezzanine Borrower’s
(or Mortgage Borrower’s as applicable) books in accordance with GAAP (or, in
the case of Mortgage Borrower, such reserves are maintained in the Tax Reserve
Account or Insurance Reserve Account, as applicable, or in the Proceeds Reserve
Account pursuant to Article VI of the Loan Agreement (Mortgage), as
applicable), (iv) either such contest operates to suspend collection or
enforcement as the case may be, of the contested Imposition, Lien or Legal
Requirement and such contest is maintained and prosecuted continuously and with
diligence or the Imposition or Lien is bonded, (v) in the case of any Insurance
Requirement, the failure to comply therewith shall not impair the validity of
any insurance required to be maintained under this Agreement or the right to
full payment of any claims thereunder, and (vi) in the case of Impositions
and Liens which are not bonded in excess of Two Million Dollars ($2,000,000)
individually, or Ten Million Dollars ($10,000,000) in the aggregate, during
such contest, Mezzanine Borrower shall (or shall cause Mortgage Borrower to)
deposit with or deliver to Mezzanine Lender (or, if required under the Loan
Agreement (Mortgage), Mortgage Lender) either Cash and Cash Equivalents or a
Letter or Letters of Credit in an amount equal to 110% of (A) the amount
of the obligations being contested plus (B) any additional interest, charge,
or penalty arising from such contest. 
Notwithstanding the foregoing, the creation of any such reserves or the
furnishing of any bond or other security, Mezzanine Borrower shall (or shall
cause Mortgage Borrower to) promptly comply with any contested Legal
Requirement or Insurance Requirement or shall pay any contested Imposition or
Lien, and compliance therewith or payment thereof shall not be deferred, if, at
any time the Property, the Collateral, the Senior Mezzanine Collateral or any
portion thereof shall be, in Mezzanine Lender’s reasonable judgment, in
imminent danger of being forfeited or lost or Mezzanine Lender is likely to be
subject to criminal damages as a result thereof.  If such action or proceeding is terminated or
discontinued adversely to Mezzanine Borrower, Senior Mezzanine Borrower or
Mortgage Borrower, as applicable (a) provided no Event of Default has
occurred and is continuing hereunder, Mezzanine Lender shall (or, as
applicable, Mortgage Lender may) disburse to the Person entitled to such sums,
the security provided therefore under this Section 7.3 and (b) Mezzanine
Borrower shall deliver to Mezzanine Lender reasonable evidence of compliance
with such contested Imposition, Lien, Legal Requirements or Insurance
Requirements, as the case may be. Notwithstanding the foregoing, any contest
conducted by the Master Lessee in accordance with the Master Lease will be
deemed to satisfy the requirements of this Section 7.3 provided
that any security deposited by Master Lessee pursuant to the provisions of the
Master Lease in connection with such contest is delivered to Mezzanine Lender
(or, if required under the Loan Agreement (Mortgage), the Mortgage Lender).

 

100

 

VIII.                         TRANSFERS,
INDEBTEDNESS AND SUBORDINATE LIENS

 

8.1                                 General Restriction
on Transfers.  Unless such action is
permitted by the provisions of this Article VIII, Mezzanine
Borrower shall not, and shall not permit Mortgage Borrower or any other Person
holding any direct or indirect ownership interest in Mortgage Borrower, Senior
Mezzanine Borrower, Mezzanine Borrower, any Junior Mezzanine Borrower, any
Guarantor, Master Lessee or the Property to, except with the prior written
consent of Mezzanine Lender and, if a Securitization has occurred, delivery of
a Rating Agency Confirmation, (i) Transfer all or any part of the
Property, or (ii) except for (A) the security interests granted in
connection with the Loan, Senior Mezzanine Loan or Junior Mezzanine Loans, 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 Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower or
any Junior 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 Mortgage Borrower on portions of the
Excluded Personal Property, subject to the Assigned Landlord Lien, or (ii) the
Mortgage Borrower, Master Lessee or any Tenant under any Individual Property
Sublease or Sublease permitted under Section 8.8.2 from entering
into any Permitted Encumbrance.

 

8.2                                 Sale of Building
Equipment.  Mezzanine Borrower may
cause Mortgage Borrower to Transfer or dispose of Building Equipment which is
being replaced or which is no longer necessary in connection with the operation
of an Individual Property free from the Lien of the applicable Security
Instrument provided that such Transfer or disposal will not have a Material
Adverse Effect on the value of such Individual Property, will not materially
impair the utility of such Individual Property, and will not result in a
reduction or abatement of, or right of offset against, the Rents payable under
the Master Lease or any Sublease, in either case as a result thereof, and
provided further that any new Building Equipment acquired by Mortgage Borrower
(and not so disposed of) shall be subject to the Lien of the applicable
Security Instrument.

 

8.3                                 Immaterial
Transfers and Easements, etc.                        Mezzanine
Borrower may cause Mortgage Borrower, without the consent of Mezzanine Lender
to, (i) make immaterial Transfers of portions of the Property to
Governmental Authorities for dedication or public use (subject to 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.

 

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8.4                                 Reserved.

 

8.5                                 Permitted Equity
Transfers.

 

(a)                                              A
Transfer of an ownership interest in Mezzanine Borrower or any Junior Mezzanine
Borrower that is otherwise prohibited hereunder shall nevertheless be permitted
without Mezzanine Lender’s prior written consent or a Rating Agency
Confirmation if all of the following conditions are satisfied with respect to
such Transfer:  (i) Mezzanine Lender
receives fifteen (15) days prior written notice thereof, (ii) immediately
prior to such Transfer, no Event of Default shall have occurred and be
continuing, (iii) none of the direct ownership interests in either of
Mortgage Borrower or Senior Mezzanine Borrower is being Transferred, (iv) no
more than forty-nine percent (49%) of the ownership interests in Mezzanine Borrower
or any Junior Mezzanine Borrower is being Transferred (in the aggregate of all
such Transfers), (v) the transferee is not a Disqualified Transferee, (vi) the
Principal Control Persons collectively retain Control of Mortgage Borrower,
Senior Mezzanine Borrower, Mezzanine Borrower and any Junior Mezzanine
Borrower, and (vii) the Principal Investors collectively continue to own,
directly and/or indirectly, at least 51% of the ownership interests in Mortgage
Borrower, Senior Mezzanine Borrower, Mezzanine Borrower and any Junior
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 Mezzanine Lender or a Rating Agency Confirmation so long as (x) (except
with respect to Section 8.5(b)(ii) and (iv) below)
Section 8.5(a)(v) above is complied with and (y) with
respect to (1) any Transfer of interests in any Guarantor or Sponsor that
alters the ratio of ownership interests in Master Lessee between that owned by
Colony Capital, LLC and its Affiliates, on the one hand, and that owned by the
Fertitta Brothers and their Affiliates and Family Trusts, on the other hand,
and (2) any Transfer of interests in the Fertitta Brothers and their
Affiliates and Family Trusts to Persons other than Principal Investors,
Mezzanine Lender shall receive prior written notice:

 

(i)                                     a Transfer of (A) interests
in any Guarantor or Sponsor between or among its existing owners and any Principal
Investors, and (B) any interests in the parent entities of such owners;

 

(ii)                                  a Transfer of equity
interests in any Guarantor, Sponsor or Master Lessee in conjunction with or
after an initial public offering of shares, provided that from and after the
consummation of such initial public offering, no Person or group other than the
Principal Control Persons and Principal Investors (A) shall have acquired
beneficial ownership, directly or indirectly, of equity interests in Master
Lessee representing more than twenty-five percent (25%) of the voting power and
economic interest in Master Lessee where such ownership represents a greater
amount of the voting power or economic interest in Master Lessee than that
which is then owned by the Principal Control Persons and Principal Investors in
aggregate, or (B) shall have obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of Master Lessee;

 

(iii)                               Transfers of direct or
indirect interests in the Guarantors (including, without limitation, any
combination of one or more Guarantors or a Guarantor with Sponsor), 

 

102

 

and the pledge or grant of security interests, as permitted under the
terms of the organizational documents for each of the Guarantors; and

 

(iv)                              the pledge,
hypothecation, encumbrance or granting of a security interest in or lien on the
direct interest in Master Lessee to an Approved Bank as security for the
Revolving/Term Credit Facility (the “Revolving/Term Credit Facility Lien”),
provided that the Revolving/Term Credit Facility Lien shall not be foreclosed
upon unless (A) the ownership of such direct interest in Master Lessee
following such foreclosure shall be held by an Approved Bank or a Qualified
Transferee and comply with all Gaming Laws and (B) such foreclosure shall
not create or cause a Default or Event of Default hereunder (provided that the
occurrence of such foreclosure, so long as clause (A) is complied with,
shall not of itself constitute a Default or Event of Default).  For purposes solely of this Section 8.5(b)(iv),
the term “Qualified Transferee” shall have the meaning set forth in Section 1.1
except that the “$2 Billion” figure in clause (b) of the definition in Section 1.1
is replaced with “$1 Billion.”

 

Notwithstanding
the foregoing, Mezzanine Borrower shall not, and shall not permit or suffer any
person to, pledge, hypothecate, encumber or grant a security interest in or
lien on any direct or, except as set forth in this Section 8.5,
indirect interest in Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, any Junior Mezzanine Borrower or any SPE Entities, any Guarantor or
Sponsor.

 

8.6                                 Deliveries to
Mezzanine Lender.  Not less than
thirty (30) days prior to (or, in the case of the transactions described in Section 8.5,
promptly following) the closing of any transaction that requires consent of
Mezzanine Lender under the provisions of Sections 8.1, 8.3 and 8.5,
Mezzanine Borrower shall deliver or cause Mortgage Borrower to deliver to
Mezzanine Lender an Officer’s Certificate describing the proposed transaction
and stating that such transaction is permitted by this Article VIII,
together with any appraisal or other documents upon which such Officer’s
Certificate is based.  In addition,
Mezzanine Borrower shall provide or cause Mortgage Borrower to provide
Mezzanine Lender with copies of executed deeds or other similar closing
documents within ten (10) Business Days after such closing.

 

8.7                                 Loan Assumption.  Provided no Event of Default is then
continuing, Mezzanine Borrower shall have the right, with the prior written
consent of Mezzanine Lender, to cause Mortgage Borrower to sell, assign, convey
or transfer (but not mortgage, hypothecate or otherwise encumber or grant a
security interest in) legal or equitable title to all (but not less than all)
of the Property only if after giving effect to the proposed transaction the
Property will be owned by an entity (the “New Property Owner”) which is
a Single Purpose Entity wholly owned by a Qualified Transferee; the direct
owner of such New Property Owner shall be a Single Purpose Entity and shall
assume the First Mezzanine Loan and pledge all the equity interests in the New
Property Owner to First Mezzanine Lender pursuant to an assumption agreement in
form and substance acceptable to Mezzanine Lender, and such new First Mezzanine
Borrower will be owned by a Single Purpose Entity which shall have executed and
delivered to Mezzanine Lender an assumption agreement in form and substance
acceptable to Mezzanine Lender to assume the Mezzanine Loan and pledge all the
equity interests in such new First Mezzanine Borrower to Mezzanine Lender.  Any such assumption of the Mezzanine 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 

 

103

 

owners of such purchaser, (ii) the
delivery of evidence that the purchaser is a Single Purpose Entity and is not a
Disqualified Transferee, (iii) the execution and delivery of all
documentation reasonably requested by Mezzanine Lender, (iv) the delivery
of Opinions of Counsel requested by Mezzanine Lender, including, without
limitation, a Non-Consolidation Opinion with respect to the purchaser and other
entities identified by Mezzanine Lender or requested by the Rating Agencies and
opinions with respect to the valid formation, due authority and good standing
of the purchaser and any additional pledgors and the continued enforceability
of the Mezzanine Loan Documents and any other matters requested by Mezzanine
Lender, (v) the delivery of an endorsement to each of the Title Policies
insuring the lien of the Security Instruments, as assumed, subject only to the
Permitted Encumbrances, in form and substance reasonably acceptable to
Mezzanine Lender; (vi) delivery of a new “UCC 9” title policy in favor of
Mezzanine Lender, its successors and assigns, with such mezzanine endorsements
in favor of Lender as Mezzanine Lender reasonably requires, in form and
substance reasonably acceptable to Mezzanine Lender, and (vii) the payment
of all of Mezzanine Lender’s reasonable out-of-pocket fees, costs and expenses,
including, without limitation, reasonable attorneys’ fees and costs, actually
incurred by Mezzanine Lender in connection with such assumption.

 

8.8                                 Subleases.

 

8.8.1                        Master Lease and Existing Subleases.  Mezzanine Borrower represents, warrants, and
covenants that each Individual Property shall be leased by Mortgage Borrower to
Master Lessee pursuant to the Master Lease, and substantially occupied by a
wholly-owned subsidiary of Master Lessee under an Individual Property Sublease,
and with respect to the retail components of the Individual Properties,
occupied in part by other Tenants under the applicable Subleases.

 

8.8.2                        Leasing Conditions.  Except as otherwise provided in this Section 8.8.2,
none of Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage Borrower
shall, and Mezzanine Borrower shall cause Mortgage Borrower not to permit
Master Lessee to (i) enter into any Material Sublease (a “New Sublease”)
or (ii) modify any Material Sublease (including, without limitation,
accept a surrender of any portion of the Property subject to a Material
Sublease (unless otherwise required by law), allow a reduction in the term of
any Material Sublease or a reduction in the Rent payable under any Material
Sublease, change any renewal provisions of any Material Sublease, materially
increase the obligations of the landlord or materially decrease the obligations
of any Tenant under a Material Sublease) or terminate any Material Sublease unless the Tenant under such Lease is
in default (any such action referred to in clause (ii) being referred to
herein as a “Sublease Modification”) without the prior written consent
of Mezzanine Lender. Any New Sublease or Sublease Modification that requires
Mezzanine Lender’s consent shall be delivered to Mezzanine Lender for approval
not less than five (5) Business Days prior to the effective date of such
New Sublease or Sublease Modification. 
If Mezzanine Lender fails to respond to a request for Mezzanine Lender’s
consent pursuant to this Section 8.8.2 within five (5) Business
Days of Mezzanine Lender’s receipt of Mezzanine Borrower’s request therefor,
Mezzanine Borrower may deliver to Mezzanine Lender a second request in an
envelope or under cover of a letter marked “URGENT” and including a legend in
bold typeface that Mezzanine Lender’s failure to grant or deny the requested
consent within ten (10) Business Days of the receipt thereof will result
in the requested consent being deemed to have been granted.  If Mezzanine Lender fails to respond to such
second request within ten (10) Business Days of its

 

104

 

receipt thereof, Mezzanine Lender’s consent shall be deemed
granted.  Notwithstanding the foregoing,
but subject to terms of Sections 8.8.7 and 8.8.8 of the
Loan Agreement (Mortgage), provided no Event of Default shall have occurred and
be continuing, Mezzanine Borrower may cause Mortgage Borrower to permit Master
Lessee to enter into a New Sublease or Sublease Modification in accordance with
the Subleasing Standards.

 

8.8.3                        Delivery of New Sublease or Sublease
Modification.  Upon the
execution of any New Sublease or Sublease Modification, as applicable,
Mezzanine Borrower shall cause Mortgage Borrower to deliver to Mezzanine Lender
an executed copy of the Sublease.

 

8.8.4                        Sublease Amendments.  Mezzanine Borrower agrees that none of
Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage Borrower shall have
the right or power, as against Mezzanine Lender without its consent (which
consent shall not be unreasonably withheld or delayed as provided herein), to
cancel, abridge, amend or otherwise modify any Sublease unless such
modification complies with this Section 8.8.

 

8.8.5                        Security Deposits.  All security or other deposits of Tenants of
the Property shall be treated as trust funds and shall not be commingled with
any other funds of Mortgage Borrower, Master Lessee or Tenant under an
Individual Property Sublease, as appropriate, and such deposits shall be
deposited, upon receipt of the same in a separate trust account maintained by
Mortgage Borrower, Master Lessee or Tenant under an Individual Property
Sublease, as appropriate, expressly for such purpose.  Within ten (10) Business Days after
written request by Mezzanine Lender, Mezzanine Borrower shall cause Mortgage
Borrower to furnish to Mezzanine Lender reasonably satisfactory evidence of
compliance with this Section 8.8.5, together with a statement of
all lease securities deposited by the Tenants and the location and account
number of the account in which such security deposits are held.

 

8.8.6                        No Default Under Subleases.  Mezzanine Borrower shall and shall cause
Mortgage Borrower or Master Lessee to (i) promptly perform and observe all
of the material terms, covenants and conditions required to be performed and
observed by Mortgage Borrower under the Subleases, if the failure to perform or
observe the same would have a Material Adverse Effect; (ii) exercise,
within ten (10) Business Days after a written request by Mezzanine Lender,
any right to request from the Tenant under any Material Sublease a certificate
with respect to the status thereof and (iii) not collect any of the Rents
under any Sublease, more than one (1) month in advance (except that
Mortgage Borrower may collect such security deposits and last month’s Rents as are
permitted by Legal Requirements and are commercially reasonable in the
prevailing market and collect other charges in accordance with the terms of
each Sublease).

 

105

 

IX.                                INTEREST
RATE CAP AGREEMENT (SECOND MEZZANINE)

 

9.1                                 Interest Rate Cap
Agreement (Second Mezzanine).  Prior
to or contemporaneously with the Amendment Effective Date, Mezzanine Borrower
shall enter into an amendment to the Interest Rate Cap Agreement (Second
Mezzanine) satisfactory in form and substance to Mezzanine Lender.  The notional amount of the Interest Rate Cap
Agreement (Second Mezzanine), as so amended, shall be at least equal to the
Principal Amount.  The Interest Rate Cap
Agreement (Second Mezzanine) shall (i) at all times be in a form and
substance reasonably acceptable to Mezzanine Lender, (ii) at all times be
with an Approved Counterparty, (iii) direct such Approved Counterparty to
deposit directly into the Mezzanine Account any payments due to Borrower under
such Interest Rate Cap Agreement (Second Mezzanine) so long as any portion of
the Loan is outstanding, provided that the Loan shall be deemed to be
outstanding if the Properties are transferred by judicial or non-judicial
foreclosure or deed-in-lieu thereof, and (iv) have a strike rate no
greater than the Strike Price.

 

9.2                                 Pledge and
Collateral Assignment.  As security
for the full and punctual payment and performance of the Obligations (Second
Mezzanine) when due (whether upon stated maturity, by acceleration, early termination
or otherwise), Mezzanine Borrower, as pledgor, hereby pledges, assigns,
hypothecates, transfers and delivers to Mezzanine Lender as collateral and
hereby grants to Mezzanine Lender a continuing first priority lien on and
security interest in, to and under all of the following whether now owned or
hereafter acquired and whether now existing or hereafter arising (the “Rate
Cap Collateral (Second Mezzanine)”): all of the right, title and interest
of Mezzanine Borrower in and to (i) the Interest Rate Cap Agreement
(Second Mezzanine); (ii) all payments, distributions, disbursements or
proceeds due, owing, payable or required to be delivered to Mezzanine Borrower
in respect of the Interest Rate Cap Agreement (Second Mezzanine) or arising out
of the Interest Rate Cap Agreement (Second Mezzanine), whether as contractual
obligations, damages or otherwise; and (iii) all of Mezzanine Borrower’s
claims, rights, powers, privileges, authority, options, security interests,
liens and remedies, if any, under or arising out of the Interest Rate Cap
Agreement (Second Mezzanine), in each case including all accessions and
additions to, substitutions for and replacements, products and proceeds of any
or all of the foregoing.

 

9.3                                 Covenants.

 

(a)                                              Mezzanine Borrower shall comply with all of
its obligations under the terms and provisions of the Interest Rate Cap
Agreement (Second Mezzanine).  All
amounts paid by the Counterparty under the Interest Rate Cap Agreement (Second
Mezzanine) to Mezzanine Borrower or Mezzanine Lender shall be deposited
immediately into the Mezzanine Account pursuant to Section 3.1.  Subject to terms hereof, provided no Event of
Default has occurred and is continuing, Mezzanine Borrower shall be entitled to
exercise all rights, powers and privileges of Mezzanine Borrower under, and to
control the prosecution of all claims with respect to, the Interest Rate Cap
Agreement (Second Mezzanine) and the other Rate Cap Collateral (Second
Mezzanine).  Mezzanine Borrower shall
take all actions reasonably requested by Mezzanine Lender to enforce Mezzanine
Borrower’s rights under the Interest Rate Cap Agreement (Second Mezzanine) in
the event of a default by the Counterparty thereunder and shall not waive,
amend or otherwise modify any of its rights thereunder.

 

106

 

(b)                                             Mezzanine Borrower shall defend Mezzanine
Lender’s right, title and interest in and to the Rate Cap Collateral (Second
Mezzanine) pledged by Mezzanine Borrower pursuant hereto or in which it has
granted a security interest pursuant hereto against the claims and demands of
all other Persons.

 

(c)                                              In the event of any downgrade, withdrawal or
qualification of the rating of the Counterparty such that it ceases to qualify
as an “Approved Counterparty,” unless the Counterparty shall have posted
collateral on terms acceptable to the applicable Rating Agencies and approved
by Mezzanine Lender (which approval shall not be unreasonably withheld,
conditioned or delayed), or in the event of any default by any Counterparty
under the Interest Rate Cap Agreement (Second Mezzanine), Mezzanine Borrower shall replace the
Interest Rate Cap Agreement (Second Mezzanine) with a Replacement Interest Rate
Cap Agreement (Second Mezzanine) from an Approved Counterparty not later than
ten (10) Business Days following receipt of notice from Mezzanine Lender,
Servicer or any other Person of such downgrade, withdrawal or qualification. In
the event that the Counterparty is downgraded below A- by S&P, a
Replacement Interest Rate Cap Agreement (Second Mezzanine) shall be required
regardless of the posting of collateral.

 

(d)                                             In the event that Mezzanine Borrower fails to
purchase and deliver to Mezzanine Lender the Interest Rate Cap Agreement
(Second Mezzanine) as and when required hereunder, Mezzanine Lender may upon
written notice to Mezzanine Borrower purchase the Interest Rate Cap Agreement
(Second Mezzanine) and the actual cost incurred by Mezzanine Lender in
purchasing the Interest Rate Cap Agreement (Second Mezzanine) shall upon written
demand be paid by Mezzanine Borrower to Mezzanine Lender with interest thereon
at the Default Rate from the date such cost was incurred by Mezzanine Lender
and demand made until such cost is paid by Mezzanine Borrower to Mezzanine
Lender.

 

(e)                                              Mezzanine Borrower shall not sell, assign, or
otherwise dispose of, or mortgage, pledge or grant a security interest in, any
of the Rate Cap Collateral (Second Mezzanine) or any interest therein, and any
sale, assignment, mortgage, pledge or security interest whatsoever made in
violation of this covenant shall be a nullity and of no force and effect, and
upon demand of Mezzanine Lender, shall forthwith be cancelled or satisfied by
an appropriate instrument in writing.

 

(f)                                                Mezzanine Borrower shall not (i) without
the prior written consent of Mezzanine Lender modify, amend or supplement the
terms of the Interest Rate Cap Agreement (Second Mezzanine), (ii) without
the prior written consent of Mezzanine Lender, except in accordance with the
terms of the Interest Rate Cap Agreement (Second Mezzanine), cause the
termination of the Interest Rate Cap Agreement (Second Mezzanine) prior to its
stated maturity date, (iii) without the prior written consent of Mezzanine
Lender, except as aforesaid, waive or release any obligation of the
Counterparty (or any successor or substitute party to the Interest Rate Cap
Agreement (Second Mezzanine)) under the Interest Rate Cap Agreement (Second
Mezzanine), (iv) without the prior written consent of Mezzanine Lender,
consent or agree to any act or omission to act on the part of the Counterparty
(or any successor or substitute party to the Interest Rate Cap Agreement
(Second Mezzanine)) which, without such consent or agreement, would constitute
a default under the Interest Rate Cap Agreement (Second Mezzanine), (v) fail
to exercise promptly and diligently each and every material right which it may
have under the

 

107

 

Interest Rate Cap Agreement (Second
Mezzanine), (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 Cap Agreement (Second Mezzanine) or any defense by the
Counterparty (or any successor or substitute party to the Interest Rate Cap
Agreement (Second Mezzanine)) to payment or (vii) fail to give prompt
notice to Mezzanine Lender of any notice of default given by or to Mezzanine
Borrower under or with respect to the Interest Rate Cap Agreement (Second
Mezzanine), together with a complete copy of such notice.

 

(g)                                             In connection with an Interest Rate Cap
Agreement (Second Mezzanine), Mezzanine Borrower shall obtain and deliver to
Mezzanine Lender an Opinion of Counsel from counsel (which counsel may be
in-house counsel for the Counterparty) for the Counterparty upon which
Mezzanine Lender and its successors and assigns may rely (the “Counterparty
Opinion”), under New York law and, if the Counterparty is a non-U.S. entity,
the applicable foreign law, in a form approved by the Mezzanine Lender.

 

9.4                                 Powers of Mezzanine
Borrower Prior to an Event of Default. 
Subject to the provisions of Section 9.3(a), provided no
Event of Default has occurred and is continuing, Mezzanine Borrower shall be
entitled to exercise all rights, powers and privileges of Mezzanine Borrower
under, and to control the prosecution of all claims with respect to, the
Interest Rate Cap Agreement (Second
Mezzanine) and the other Rate Cap Collateral (Second Mezzanine).

 

9.5                                 Representations and
Warranties.  Mezzanine Borrower
hereby covenants with, and represents and warrants to, Mezzanine Lender, as of
the Closing Date, as follows:

 

(a)                                              The Interest Rate Cap Agreement (Second
Mezzanine) constitutes the legal, valid and binding obligation of Mezzanine
Borrower, enforceable against Mezzanine Borrower in accordance with its terms,
subject only to applicable bankruptcy, insolvency and similar laws generally
affecting the enforcement of creditors’ rights and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

(b)                                             The Rate Cap Collateral (Second Mezzanine) is
free and clear of all claims or security interests of every nature whatsoever,
except such as are created pursuant to this Agreement and the other Mezzanine
Loan Documents, and Mezzanine Borrower has the right to pledge and grant a
security interest in the same as herein provided without the consent of any
other Person other than any such consent that has been obtained and is in full
force and effect.

 

(c)                                              The Rate Cap Collateral (Second Mezzanine)
has been duly and validly pledged hereunder. 
All consents and approvals required to be obtained by Mezzanine Borrower
for the consummation of the transactions contemplated by the Interest Rate Cap
Agreement (Second Mezzanine) and this Article IX have been
obtained.

 

(d)                                             Giving effect to the aforesaid grant and
assignment to Mezzanine Lender, Mezzanine Lender has, as of the date of this
Agreement, and as to Rate Cap Collateral (Second Mezzanine) acquired from time
to time after such date, shall have, a valid, and upon proper filing, perfected
and continuing first priority lien upon and security interest in the Rate Cap 

 

108

 

Collateral (Second Mezzanine); provided that
no representation or warranty is made with respect to the perfected status of
the security interest of Mezzanine Lender in the proceeds of Rate Cap Collateral
(Second Mezzanine) consisting of “cash proceeds” or “non-cash proceeds” as
defined in the UCC except if, and to the extent, the provisions of Section 9-306
of the UCC shall be complied with.

 

(e)                                              Except for financing statements filed or to
be filed in favor of Mezzanine Lender as secured party, there are no financing
statements under the UCC covering any or all of the Rate Cap Collateral (Second
Mezzanine) and Mezzanine Borrower shall not, without the prior written consent
of Mezzanine Lender, until payment in full of all of the Obligations (Second
Mezzanine), execute and file in any public office, any enforceable financing
statement or statements covering any or all of the Rate Cap Collateral (Second
Mezzanine), except financing statements filed or to be filed in favor of
Mezzanine Lender as secured party.

 

9.6                                 Payments.  If Mezzanine Borrower at any time shall be
entitled to receive any payments with respect to the Interest Rate Cap
Agreement (Second Mezzanine),
such amounts shall, immediately upon becoming payable to Mezzanine Borrower, be
deposited by Counterparty into the Mezzanine Account.

 

9.7                                 Remedies.  Subject to the provisions of the Interest
Rate Cap Agreement (Second Mezzanine),
if an Event of Default shall occur and then be continuing:

 

(a)                                              Mezzanine Lender, without obligation to
resort to any other security, right or remedy granted under any other agreement
or instrument, shall have the right to, in addition to all rights, powers and
remedies of a secured party pursuant to the UCC (all of which Mezzanine Lender
may exercise), at any time and from time to time, sell, resell, assign and
deliver, in its sole discretion, any or all of the Rate Cap Collateral (Second
Mezzanine) (in one or more parcels and at the same or different times) and all
right, title and interest, claim and demand therein and right of redemption
thereof, at public or private sale, for cash, upon credit or for future
delivery, and in connection therewith Mezzanine Lender may grant options and
may impose reasonable conditions such as requiring any purchaser to represent
that any “securities” constituting any part of the Rate Cap Collateral (Second
Mezzanine) are being purchased for investment only, Mezzanine Borrower hereby
waiving and releasing any and all equity or right of redemption to the fullest
extent permitted by the UCC or applicable law. 
If all or any of the Rate Cap Collateral (Second Mezzanine) is sold by
Mezzanine Lender upon credit or for future delivery, Mezzanine Lender shall not
be liable for the failure of the purchaser to purchase or pay for the same and,
in the event of any such failure, Mezzanine Lender may resell such Rate Cap
Collateral (Second Mezzanine).  It is
expressly agreed that Mezzanine Lender may exercise its rights with respect to
less than all of the Rate Cap Collateral (Second Mezzanine), leaving
unexercised its rights with respect to the remainder of the Rate Cap Collateral
(Second Mezzanine), provided, however, that such partial exercise shall in no
way restrict or jeopardize Mezzanine Lender’s right to exercise its rights with
respect to all or any other portion of the Rate Cap Collateral (Second
Mezzanine) at a later time or times.

 

(b)                                             Mezzanine Lender may exercise, either by
itself or by its nominee or designee, in the name of Mezzanine Borrower, all of
Mezzanine Lender’s rights, powers and remedies in respect of the Rate Cap
Collateral (Second Mezzanine), hereunder and under law.

 

109

 

(c)               Mezzanine Borrower hereby irrevocably, in the
name of Mezzanine Borrower or otherwise, authorizes and empowers Mezzanine
Lender and assigns and transfers unto Mezzanine Lender, and constitutes and
appoints Mezzanine Lender its true and lawful attorney-in-fact, and as its
agent, irrevocably, with full power of substitution for Mezzanine Borrower and
in the name of Mezzanine Borrower, (i) to exercise and enforce every
right, power, remedy, authority, option and privilege of Mezzanine Borrower
under the Interest Rate Cap Agreement (Second Mezzanine), including any power
to subordinate or modify the Interest Rate Cap Agreement (Second Mezzanine)
(but not, unless an Event of Default exists and is continuing, the right to
terminate or cancel the Interest Rate Cap Agreement (Second Mezzanine)), or to
give any notices, or to take any action resulting in such subordination,
termination, cancellation or modification and (ii) in order to more fully
vest in Mezzanine Lender the rights and remedies provided for herein, to
exercise all of the rights, remedies and powers granted to Mezzanine Lender in
this Agreement, and Mezzanine Borrower further authorizes and empowers
Mezzanine Lender, as Mezzanine Borrower’s attorney-in-fact, and as its agent,
irrevocably, with full power of substitution for Mezzanine Borrower and in the
name of Mezzanine Borrower, to give any authorization, to furnish any
information, to make any demands, to execute any instruments and to take any
and all other action on behalf of and in the name of Mezzanine Borrower which
in the opinion of Mezzanine Lender may be necessary or appropriate to be given,
furnished, made, exercised or taken under the Interest Rate Cap Agreement
(Second Mezzanine), in order to comply therewith, to perform the conditions thereof
or to prevent or remedy any default by Mezzanine Borrower thereunder or to
enforce any of the rights of Mezzanine Borrower thereunder.  These powers-of-attorney are irrevocable and
coupled with an interest, and any similar or dissimilar powers heretofore given
by Mezzanine Borrower in respect of the Rate Cap Collateral (Second Mezzanine)
to any other Person are hereby revoked.

 

(d)               Mezzanine Lender may, without notice to, or
assent by, Mezzanine Borrower or any other Person (to the extent permitted by
law), but without affecting any of the Obligations (Second Mezzanine), in the
name of Mezzanine Borrower or in the name of Mezzanine Lender, notify the
Counterparty, or if applicable, any other counterparty to the Interest Rate Cap
Agreement (Second Mezzanine), to make payment and performance directly to
Mezzanine Lender; extend the time of payment and performance of, compromise or
settle for cash, credit or otherwise, and upon any terms and conditions, any
obligations owing to Mezzanine Borrower, or claims of Mezzanine Borrower, under
the Interest Rate Cap Agreement (Second Mezzanine); file any claims, commence,
maintain or discontinue any actions, suits or other proceedings deemed by
Mezzanine Lender necessary or advisable for the purpose of collecting upon or
enforcing the Interest Rate Cap Agreement (Second Mezzanine); and execute any
instrument and do all other things deemed necessary and proper by Mezzanine
Lender to protect and preserve and realize upon the Rate Cap Collateral (Second
Mezzanine) and the other rights contemplated hereby.

 

(e)               Pursuant to the powers-of-attorney provided
for above, Mezzanine Lender may take any action and exercise and execute any
instrument which it may deem necessary or advisable to accomplish the purposes
hereof; provided, however, that Mezzanine Lender shall not be permitted to take
any action pursuant to said power-of-attorney that would conflict with any
limitation on Mezzanine Lender’s rights with respect to the Rate Cap Collateral
(Second Mezzanine).  Without limiting the
generality of the foregoing, Mezzanine Lender, after the occurrence of an Event
of Default, shall have the right and power to receive, endorse and collect all
checks and other orders for the payment of money made payable to Mezzanine
Borrower

 

110

 

representing: 
(i) any payment of obligations owed pursuant to the Interest Rate
Cap Agreement (Second Mezzanine), (ii) interest accruing on any of the
Rate Cap Collateral (Second Mezzanine) or (iii) any other payment or
distribution payable in respect of the Rate Cap Collateral (Second Mezzanine)
or any part thereof, and for and in the name, place and stead of Mezzanine
Borrower, to execute endorsements, assignments or other instruments of
conveyance or transfer in respect of any property which is or may become a part
of the Rate Cap Collateral (Second Mezzanine) hereunder.

 

(f)                Without limiting any other provision of this
Agreement or any of Mezzanine Borrower’s rights hereunder, and without waiving
or releasing Mezzanine Borrower from any obligation or default hereunder,
Mezzanine Lender shall have the right, but not the obligation, to perform any
act or take any appropriate action, as it, in its reasonable judgment, may deem
necessary to protect Mezzanine Lender’s security interest in the Rate Cap
Collateral (Second Mezzanine) created pursuant to this Agreement, to cure such
Event of Default or to cause any term, covenant, condition or obligation
required under this Agreement or the Interest Rate Cap Agreement (Second
Mezzanine) to be performed or observed by Mezzanine Borrower to be promptly
performed or observed on behalf of Mezzanine Borrower.  All amounts advanced by, or on behalf of,
Mezzanine Lender in exercising its rights under this Section 9.7(f) (including,
but not limited to, reasonable legal expenses and disbursements incurred in
connection therewith), together with interest thereon at the Default Rate from
the date of each such advance, shall be payable by Mezzanine Borrower to
Mezzanine Lender upon demand and shall be secured by this Agreement.

 

9.8           Sales of Rate Cap Collateral (Second
Mezzanine).  No demand, advertisement
or notice, all of which are, to the fullest extent permitted by law, hereby
expressly waived by Mezzanine Borrower, shall be required in connection with
any sale or other disposition of all or any part of the Rate Cap Collateral
(Second Mezzanine) following and during the continuance of an Event of Default,
except that Mezzanine Lender shall give Mezzanine Borrower at least thirty (30)
Business Days’ prior written notice of the time and place of any public sale or
of the time when and the place where any private sale or other disposition is
to be made, which notice Mezzanine Borrower hereby agrees is reasonable, all
other demands, advertisements and notices being hereby waived.  To the extent permitted by law, Mezzanine
Lender shall not be obligated to make any sale of the Rate Cap Collateral
(Second Mezzanine) if it shall determine not to do so, regardless of the fact
that notice of sale may have been given, and Mezzanine Lender may without
notice or publication adjourn any public or private sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned.  Upon each private sale of the
Rate Cap Collateral (Second Mezzanine) of a type customarily sold in a
recognized market and upon each public sale, unless prohibited by any
applicable statute which cannot be waived, Mezzanine Lender (or its nominee or
designee) may purchase any or all of the Rate Cap Collateral (Second Mezzanine)
being sold, free and discharged from any trusts, claims, equity or right of
redemption of Mezzanine Borrower, all of which are hereby waived and released
to the extent permitted by law, and may make payment therefor by credit against
any of the Obligations (Second Mezzanine) in lieu of cash or any other
obligations.  In the case of all sales of
the Rate Cap Collateral (Second Mezzanine), public or private, Mezzanine
Borrower shall pay all reasonable out-of-pocket costs and expenses of every
kind for sale or delivery, including brokers’ and attorneys’ fees and
disbursements and any tax imposed thereon. 
However, the proceeds of sale of Rate Cap Collateral (Second Mezzanine)
shall be available to

 

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cover such costs and expenses, and, after
deducting such costs and expenses from the proceeds of sale, Mezzanine Lender
shall apply any residue to the payment of the Obligations (Second Mezzanine).

 

9.9           Public Sales Not Possible.  Mezzanine Borrower acknowledges that the
terms of the Interest Rate Cap Agreement (Second Mezzanine) may prohibit public sales, that the Rate Cap
Collateral (Second Mezzanine) may not be of the type appropriately sold at
public sales, and that such sales may be prohibited by law.  As a result, Mezzanine Borrower agrees that
private sales of the Rate Cap Collateral (Second Mezzanine) shall not be deemed
to have been made in a commercially unreasonable manner by mere virtue of
having been made privately.

 

9.10         Receipt of Sale Proceeds.  Upon any sale of the Rate Cap Collateral
(Second Mezzanine) by Mezzanine Lender hereunder (whether by virtue of the
power of sale herein granted, pursuant to judicial process or otherwise), the
receipt by Mezzanine Lender or the officer making the sale of the proceeds of
such sale shall be a sufficient discharge to the purchaser or purchasers of the
Rate Cap Collateral (Second Mezzanine) so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to Mezzanine Lender or such officer or be answerable
in any way for the misapplication or non-application thereof.

 

9.11         Replacement Interest Rate Cap Agreement (Second Mezzanine).  If, in connection with Mezzanine Borrower’s
exercise of any extension option pursuant to Section 5 of the Mezzanine Notes, Mezzanine Borrower
delivers a Replacement Interest Rate Cap Agreement (Second Mezzanine), all the
provisions of this Article IX applicable to the Interest Rate Cap
Agreement (Second Mezzanine)
delivered on the Closing Date (as amended by the amendment to the Interest Rate
Cap Agreement (Second Mezzanine) delivered as of the Amendment Effective Date)
shall be applicable to the Replacement Interest Rate Cap Agreement (Second
Mezzanine).

 

X.            MAINTENANCE
OF PROPERTY; ALTERATIONS

 

10.1         Maintenance of Property.  Mezzanine Borrower shall cause Mortgage
Borrower to keep and maintain, or cause to be kept and maintained, the Property
and every part thereof in good condition and repair, subject to ordinary wear
and tear, and, subject to Excusable Delays and the provisions of this Agreement
with respect to damage or destruction caused by casualty events or Takings,
shall not permit or commit any waste of any portion of the Property in any
material respect.  Mezzanine Borrower
shall not permit Mortgage Borrower to 
remove or demolish any Improvement on the Property except as the same
may be necessary in connection with an Alteration or a restoration in
connection with a Taking or casualty, or as otherwise permitted herein, in each
case in accordance with the terms and conditions hereof.  Without limiting the foregoing, within one (1) year
of the Closing Date, Mezzanine Borrower shall cause Mortgage Borrower, or shall
cause Mortgage Borrower to cause Master Lessee, to complete the items of
deferred maintenance and environmental remediation identified on Schedule
III attached hereto.

 

10.2         Conditions to Alteration.  Provided that no Noticed Default or Event of
Default shall have occurred and be continuing hereunder and that Mezzanine
Borrower shall then have

 

112

 

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, Mortgage Borrower and
Master Lessee shall have the right, without Mezzanine Lender’s consent, to
undertake any alteration, improvement, demolition or removal of the Property or
any portion thereof (any such alteration, improvement, demolition or removal,
an “Alteration”) so long as (i) Mezzanine Borrower causes Mortgage
Borrower to provide Mezzanine Lender with not less than ten (10) Business
Days prior written notice of any Material Alteration, and (ii) such
Alteration is undertaken in accordance with the applicable provisions of the
Master Lease, this Agreement and the other Mezzanine Loan Documents and in
compliance with all applicable Legal Requirements, is not prohibited by any
relevant Operating Agreements and shall not, upon completion (giving credit to
rent and other charges attributable to Subleases executed upon such
completion), have a Material Adverse Effect on the value, use or operation of
the Property taken as a whole or otherwise. 
Any Material Alteration shall be conducted under the supervision of an
Architect and, in connection with any Material Alteration, Mezzanine Borrower
shall cause Mortgage Borrower to deliver to Mezzanine Lender concurrently with
the notice of such Material Alteration, for information purposes only and not
for approval by Mezzanine Lender, detailed plans and specifications, cost
estimates therefor as set forth in an Officer’s Certificate, and an estimated
date of completion therefore, which date shall be not later than the date which
is six (6) months prior to the Maturity Date (unless otherwise consented
to in writing by Mezzanine Lender, which consent shall not be unreasonably
withheld, conditioned or delayed), all prepared and approved by such
Architect.  Such plans and specifications
may be revised at any time and from time to time by such Architect provided
that material revisions of such plans and specifications are filed with
Mezzanine Lender, for information purposes only.  All work done in connection with any
Alteration shall be performed with due diligence in a good and workmanlike
manner, all materials used in connection with any Alteration shall not be less
than the standard of quality of the materials currently used at the applicable
Individual Property and all materials used shall be in accordance with all
applicable Legal Requirements and Insurance Requirements.  The cost of any Alteration shall be promptly
and fully paid for, subject to a five percent (5%) retainage, provided that
such retainage shall not be required if such Alteration is being performed by
Master Lessee, an Affiliate of Mortgage Borrower, or an Affiliate of Master
Lessee.  Notwithstanding anything to the
contrary contained in this Section 10.2, Mezzanine Borrower shall cause
Mortgage Borrower to obtain Mezzanine Lender’s prior written approval (which
approval shall not be unreasonably withheld, conditioned or delayed so long as
no Noticed Default or Event of Default shall then exist and so long as Mezzanine
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 Mezzanine
Lender shall give notice of its disapproval with the reasons therefor within
ten (10) Business Days after Mezzanine Lender’s receipt of the notice of
Material Alteration described in clause (i) of this Section 10.2
above) for any Material Alteration if (x) an 80% Trigger Approval Period
shall then be in effect or existence, or (y) such proposed Material
Alteration is reasonably likely to result in more than a ten percent (10%)
reduction in the pro forma LCR during the twelve (12) months following the
commencement of such proposed Material Alteration.

 

10.3         Costs of Alteration.  Notwithstanding anything to the contrary
contained in this Article X, no Alteration which when aggregated
with all other Alterations then being undertaken by Mortgage Borrower involves costs estimated in writing by
Master Lessee (which costs shall

 

113

 

be reasonably acceptable to Mezzanine
Borrower and Mezzanine Lender) to be incurred in implementing the Alterations that
exceed the Material Alteration Collateralization Threshold, shall be performed
by or on behalf of Mortgage Borrower unless Mezzanine Borrower shall have
caused Mortgage Borrower to deliver to Mortgage Lender Cash and Cash
Equivalents and/or a Letter of Credit as security in an amount not less than
the estimated cost of the Alterations minus the Material Alteration
Collateralization Threshold  (as set
forth in the written estimate referred to above).  Mezzanine Borrower shall cause Mortgage
Borrower to deliver to Mortgage Lender any security deposited by the Master Lessee for any Alteration under the
Master Lease.  Costs which are
subject to retainage (which in no event shall be less than 5% in the aggregate
with respect to each trade contract) shall be treated as due and payable and
unpaid from the date they would be due and payable but for their
characterization as subject to retainage. 
In the event that any Material Alteration or Alteration shall be made in
conjunction with any restoration with respect to which Mortgage Borrower shall
be entitled to withdraw Proceeds pursuant to Section 6.2 of the
Loan Agreement (Mortgage), the amount of the Cash and Cash Equivalents and/or
Letter of Credit to be furnished pursuant hereto need not exceed the aggregate cost
of such restoration and such Material Alteration or Alteration (as estimated by
the Architect), less the sum of the amount of any Proceeds which Mortgage
Borrower may be entitled to withdraw pursuant to such Section 6.2
and which are held by Mortgage Lender in accordance with such Section 6.2.  Payment or reimbursement of Mortgage Borrower’s
expenses incurred with respect to any Material Alteration or any such
Alteration shall be accomplished upon the terms and conditions specified in
such Section 6.2.

 

Any Cash and
Cash Equivalents and/or Letter of Credit deposited pursuant hereto shall be
returned to Mortgage Borrower (or if a Letter of Credit originally shall have
been deposited, returned to Mortgage Borrower upon the substitution of a Letter
of Credit in a lesser amount) as Mortgage Borrower shall provide written
evidence, in form reasonably satisfactory to Mortgage Lender of (a) the
payment of the costs of such Alteration in such amount, free and clear of Liens
(i.e., assuming that the first costs paid are those in excess of the Material
Alteration Collateralization Threshold) or (b) a reduction in the written
estimate of the cost to complete the Material Alteration or the Alterations
(including any retainages) approved by the Architect and reasonably approved by
Mortgage Lender, free and clear of Liens, other than Permitted Encumbrances.

 

XI.           BOOKS
AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

 

11.1         Books and Records.  Mezzanine Borrower shall cause Mortgage
Borrower to keep and maintain on a fiscal year basis proper books and records
separate from any other Person, in which accurate and complete entries shall be
made of all dealings or transactions of or in relation to the Mortgage Notes,
the Property and the business and affairs of Mortgage Borrower relating to the
Property which shall reflect all items of income and expense in connection with
the operation of the Property and in connection with any services, equipment or
furnishings provided in connection with the operation of the Property, in
accordance with GAAP.  Mezzanine Lender
and its authorized representatives shall have the right at reasonable times and
upon reasonable notice to examine the books and records of Mortgage Borrower,
Senior Mezzanine Borrower and Mezzanine Borrower and to make such copies or
extracts thereof as Mezzanine Lender may reasonably require.

 

114

 

11.2         Financial
Statements.

 

11.2.1      Monthly
Reports.  Commencing in November 2007,
not later than thirty (30) days following the end of each calendar month (or,
with respect to calendar months that end on the last day of a Fiscal Quarter,
concurrently with the delivery of the applicable quarterly reports pursuant to Section 11.2.2),
Mezzanine Borrower shall cause Mortgage Borrower to cause Master Lessee,
pursuant to the Master Lease, to deliver to Mezzanine Lender monthly revenue
reports in respect of the Property for such month, for the corresponding month
of the previous Fiscal Year and for the year to date, and financial statements,
internally prepared on an accrual basis for such month, reporting Portfolio Four-Wall EBITDAR as of the
end of such month, for the corresponding month of the previous Fiscal Year and
for the year to date, and a comparison of the year to date results with (i) the
results for the same period of the previous year and (ii) the Annual
Budget for such period and the Fiscal Year, and a calculation of the LCR, LTV
Ratio, Master Lease Variable Additional
Rent and Master Lease Recurrent Additional Rent for such period.  Such
statements for each month shall: (A) fairly represent the financial
condition and results of operations of Master Lessee and (B) be
accompanied by a Master Lessee Officer’s Certificate certifying to the best of
the signer’s knowledge, that the requirements in clause (A) above have
been satisfied.  Such statements shall
also be accompanied by an Officer’s Certificate certifying to the best of the
signer’s knowledge that as of the date of such Officer’s Certificate, (1) no
Mortgage Event of Default exists under the Loan Agreement (Mortgage), the
Mortgage Notes or any other (Mortgage) Loan Document or, if so, specifying the
nature and status of each such Mortgage Event of Default and the action then
being taken by Mortgage Borrower or proposed to be taken to remedy such
Mortgage Event of Default, (2) no Senior Mezzanine Event of Default exists
under the Senior Mezzanine Loan Agreement, the Senior Mezzanine Notes or any
other Senior Mezzanine Loan Document or, if so, specifying the nature and
status of each such Senior Mezzanine Event of Default and the action then being
taken by Senior Mezzanine Borrower or proposed to be taken to remedy such
Senior Mezzanine Event of Default, and (3) no Event of Default exists
under this Agreement, the Mezzanine Notes or any other Mezzanine Loan Document
or, if so, specifying the nature and status of each such Event of Default and
the action then being taken by Mezzanine Borrower or proposed to be taken to
remedy such Event of Default.  Such
financial statements shall contain such other information as shall be
reasonably requested by Mezzanine Lender for purposes of calculations to be
made by Mezzanine Lender pursuant to the terms hereof.  Notwithstanding the foregoing, Mezzanine
Borrower shall cause Mortgage Borrower to deliver promptly to Mezzanine Lender
reports detailing any non recurring charges of Mortgage Borrower or Master
Lessee including, among other things, any charges assessed under any Operating
Agreement.  Subject to Section 11.2.9(b),
revenue reports and Portfolio Four-Wall EBITDAR shall each be prepared on an
aggregate basis for all of the Individual Properties.

 

11.2.2      Quarterly Reports.  Commencing not later than forty-five (45)
days following the end of each Fiscal Quarter (commencing with the Fiscal
Quarter ending in December 31, 2007), Mezzanine Borrower shall cause
Mortgage Borrower to cause Master Lessee, pursuant to the Master Lease, to
deliver to Mezzanine Lender quarterly revenue reports in respect of the
Property and unaudited financial statements, internally prepared on an accrual
basis, reporting Portfolio Four-Wall
EBITDAR as of the end of such Fiscal Quarter and for the corresponding
Fiscal Quarter of the previous year, including a statement of net income (in
respect of the Property) for the year to date and a statement of revenues and
expenses for such Fiscal Quarter,

 

115

 

and a comparison of the year to date results
with (i) the results for the same period of the previous year and (ii) the
Annual Budget for such period and the Fiscal Year, and a calculation of the
LCR, LTV Ratio,
Master Lease Variable Additional Rent and Master Lease Recurrent Additional
Rent for such period.  Such statements for each Fiscal Quarter shall: (A) fairly
represent the financial condition and results of operations of Master Lessee
and (B) be accompanied by a Master Lessee Officer’s Certificate certifying
to the best of the signer’s knowledge, that the requirements in clause (A) above
have been satisfied.  Such statements
shall also be accompanied by an Officer’s Certificate certifying to the best of
the signer’s knowledge that as of the date of such Officer’s Certificate, (1) no
Mortgage Event of Default exists under the Loan Agreement (Mortgage), the
Mortgage Notes or any other Loan Document (Mortgage), or, if so, specifying the
nature and status of each such Mortgage Event of Default and the action then
being taken by Mortgage Borrower or proposed to be taken to remedy such
Mortgage Event of Default, (2) no Senior Mezzanine Event of Default exists
under the Senior Mezzanine Loan Agreement, the Senior Mezzanine Notes or any
other Senior Mezzanine Loan Document or, if so, specifying the nature and
status of each such Senior Mezzanine Event of Default and the action then being
taken by Senior Mezzanine Borrower or proposed to be taken to remedy such
Senior Mezzanine Event of Default, (3) no Event of Default exists under
this Agreement, the Mezzanine Notes or any other Mezzanine Loan Document or, if
so, specifying the nature and status of each such Event of Default and the
action then being taken by Mezzanine Borrower or proposed to be taken to remedy
such Event of Default and (4) that as of the date of each Officer’s
Certificate, no litigation exists involving Mortgage Borrower, Master Lessee or
the Property in which the amount involved is $5,000,000 (in the aggregate) or
more or in which all or substantially all of the potential liability is not
covered by insurance, or, if so, specifying such litigation and the actions
being taken in relation thereto.  Such
financial statements shall contain such other information as shall be
reasonably requested by Mezzanine Lender for purposes of calculations to be
made by Mezzanine Lender pursuant to the terms hereof.

 

11.2.3      Annual Reports.  Not later than one-hundred twenty (120) days
after the end of each Fiscal Year of Mortgage Borrower’s operations (commencing
with the Fiscal Year ending in December 31, 2007), Mezzanine Borrower
shall cause Mortgage Borrower to cause Master Lessee, pursuant to the Master
Lease, to deliver to Mezzanine Lender annual revenue reports in respect of the
Property, audited financial statements for Master Lessee certified by an
Independent Accountant in accordance with GAAP which shall contain unaudited
schedules as follows: a statement of Master Lessee’s net income for the Fiscal
Year and for the fourth Fiscal Quarter thereof and a statement of Master Lessee’s
revenues and expenses for such year, and stating in comparative form the
figures for the previous fiscal year, and a calculation of the LCR, LTV Ratio, Master Lease Variable Additional Rent and
Master Lease Recurrent Additional Rent for such period.  Such annual financial statements shall: (A) fairly represent the financial
condition and results of operations of Master Lessee and (B) be
accompanied by a Master Lessee Officer’s Certificate in the form
required pursuant to Section 11.2.1 and a schedule which reflects the amount by which actual operating
expenses were greater than or less than operating expenses anticipated in the
applicable Annual Budget.

 

11.2.4      Disclosure Restrictions.  Notwithstanding anything to the contrary
contained in this Article XI, unless such information is otherwise disclosed publicly by Mezzanine
Borrower, Senior Mezzanine Borrower, or Mortgage Borrower, Mezzanine
Borrower shall not be required to deliver or cause to be delivered financial
information hereunder to Mezzanine Lender to the

 

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limited extent and only during any such
period that any applicable federal or state securities laws or regulations promulgated thereunder
(a) expressly prohibit such delivery or (b) permit such delivery to be made to Mezzanine Lender only
when also disclosed publicly.

 

11.2.5      Capital Expenditures Summaries.  Mezzanine Borrower shall cause Mortgage
Borrower, or shall cause Mortgage Borrower to cause Master Lessee to, within
ninety (90) days after the end of each calendar year during the term of the Mezzanine Notes, deliver to Mezzanine
Lender an annual summary of any and all capital expenditures made at the
Property during the prior twelve (12) month period.

 

11.2.6      Master Lease.  Without duplication of any other provision of
this Agreement or any other Mezzanine Loan Documents, Mezzanine Borrower shall
cause Mortgage Borrower to deliver to Mezzanine Lender, within ten (10) Business
Days of the receipt thereof by Mortgage Borrower, a copy of all reports
prepared by Master Lessee pursuant to the Master Lease, including, without limitation,
the Annual Budget and any inspection reports.

 

11.2.7      Annual Budget; Operating Agreement Annual
Budgets.

 

(a)           Mezzanine Borrower
shall cause Mortgage Borrower, or shall cause Mortgage Borrower to cause Master
Lessee to deliver to Mezzanine Lender the Annual Budget for Mezzanine Lender’s
review, but not approval, prior to the expiration of each Fiscal Year.  Any proposed modifications to such Annual
Budget shall be delivered to Mezzanine Lender for its review, but not approval.  Notwithstanding the foregoing, while an 80%
Trigger Approval Period shall exist, Mezzanine Lender shall have the right to
approve all aspects of the Annual Budget relating to expenditures for FF&E,
which approval shall not be unreasonably withheld, delayed or conditioned.

 

(b)           Mezzanine Borrower
shall cause Mortgage Borrower, or shall cause Mortgage Borrower to cause Master
Lessee to deliver to Mezzanine Lender the annual budget and any modifications
thereto under any Operating Agreement for Mezzanine Lender’s review, but not
approval, prior to Mortgage Borrower’s or Master Lessee’s approval of any such
annual budget or modification. 
Notwithstanding the foregoing, upon the occurrence and during the
continuation of an Event of Default and if there is a Master Lease Tenant Default,
Mezzanine Lender shall have the right to exercise any right of approval that
Mezzanine Borrower, on behalf of Mortgage Borrower, may have to approve the
annual budgets and any amendments thereto under any Operating Agreements
subject to any constraints in the Operating Agreement in question, in its sole
and absolute discretion.

 

11.2.8      Other
Information.  Mezzanine Borrower
shall cause Mortgage Borrower and Senior Mezzanine Borrower to, promptly after
written request by Mezzanine Lender, furnish or cause to be furnished to
Mezzanine Lender, in such manner and in such detail as may be reasonably
requested by Mezzanine Lender, such reasonable additional information as may be
reasonably requested with respect to the Property, Mortgage Borrower, Mezzanine
Borrower, Senior Mezzanine Borrower, Master Lessee or any Guarantor.

 

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11.2.9      Proprietary Information.

 

(a)               The Mezzanine Lender shall keep
confidential all revenue reports and any other proprietary information
delivered to Mezzanine Lender pursuant to this Agreement, (provided any such
other proprietary information is clearly marked by Mezzanine Borrower, Senior
Mezzanine Borrower, or Mortgage Borrower as confidential) (collectively, “Proprietary
Information”), including specifically, but not limited to, any financial
information provided pursuant to this Article XI.  Notwithstanding the foregoing, Mezzanine
Lender shall be permitted to freely deliver Proprietary Information to Rating
Agencies, and Servicer, to prospective participants and purchasers of the Loan
and interests therein other than the Proscribed Assignee, and to its and their
respective agents and representatives provided that Mezzanine Lender shall
inform such parties of the confidential nature of such information.

 

(b)               Notwithstanding anything to the contrary
contained herein, Mezzanine Borrower shall not identify any specific property
to which any Proprietary Information relates (“Asset-Specific Proprietary
Information”) (and shall not be required to permit inspection of
Property-specific information contained in its or Mortgage Borrower’s books and
records) unless requested by holders or prospective holders of (a) the
Loan or any interest therein or (b) the unrated or lower-rated securities backed
by the Mortgage Loan (collectively, “Requesting Parties”).  Mezzanine Lender shall be permitted to
deliver Asset-Specific Proprietary Information to Requesting Parties that
request such information (and such Requesting Parties shall be permitted to inspect
Property-specific information contained in its or Mortgage Borrower’s books and
records), provided that each such Person (i) executes a commercially
reasonable confidentiality agreement with respect to such information for the
benefit of Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower and
Master Lessee and (ii) is not the Proscribed Assignee.

 

XII.         ENVIRONMENTAL
MATTERS

 

12.1         Representations.  Mezzanine Borrower hereby represents and
warrants, as of the Closing Date, that except as set forth in the environmental
reports and studies delivered to Mezzanine Lender prior to the Closing Date
(the “Environmental Reports”) or as would not reasonably be expected to
have a Material Adverse Effect, (i) none of Mezzanine Borrower, Senior
Mezzanine Borrower or Mortgage Borrower has engaged in or, to the Mezzanine
Borrower’s knowledge, permitted any operations or activities upon, or any use
or occupancy of the Property, or any portion thereof, for the purpose of or in
any way involving the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of any Hazardous
Materials on, under, in or about the Property, or transported any Hazardous
Materials to, from or across the Property, except in all cases in compliance
with Environmental Laws; (ii) to Mezzanine Borrower’s knowledge, no
tenant, occupant or user of the Property, or any other Person, has engaged in
or permitted any operations or activities upon, or any use or occupancy of the
Property, or any portion thereof, for the purpose of or in any material way
involving the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of any Hazardous Materials
on, in or about the Property, or transported any Hazardous Materials to, from
or across the Property, except in all cases in compliance with Environmental
Laws; (iii) to the Mezzanine Borrower’s knowledge, no Hazardous Materials
are presently constructed, deposited, stored, or otherwise located on, under,
in or about the Property except in compliance with Environmental Laws; (iv) to
the best of Mezzanine Borrower’s knowledge, no Hazardous Materials have
migrated from the Property

 

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upon or beneath other properties which would
reasonably be expected to result in material liability for Mortgage Borrower,
Senior Mezzanine Borrower or Mezzanine Borrower; and (v) to the Mezzanine
Borrower’s knowledge, no Hazardous Materials have migrated or threaten to migrate
from other properties upon, about or beneath the Property which would
reasonably be expected to result in material liability for Mortgage Borrower,
Senior Mezzanine Borrower or Mezzanine Borrower.

 

12.2         Covenants.

 

12.2.1      Compliance with Environmental Laws.  Subject to Section 7.3 and Mortgage
Borrower’s right to contest under Section 7.3 of the Loan Agreement
(Mortgage), Mezzanine Borrower covenants and agrees with Mezzanine Lender that
it shall, and shall cause the Mortgage Borrower and the Property to, comply
with all Environmental Laws, except for any
such non-compliance that would not reasonably be expected to have a Material
Adverse Effect.  If the Pledge is
foreclosed, Mezzanine Borrower shall cause Mortgage Borrower to deliver the
Property in compliance with all applicable Environmental Laws.

 

12.2.2      Notices Regarding Environmental Events.  If at any time prior to the
repayment in full of the Obligations (Second Mezzanine), a Governmental
Authority having jurisdiction over the Property requires, in writing, remedial
action to correct the presence of Hazardous Materials in, around, or under the
Property (an “Environmental Event”), Mezzanine Borrower shall or shall
cause Mortgage Borrower to deliver prompt notice of the occurrence of such
Environmental Event to Mezzanine Lender. 
Within thirty (30) days after Mezzanine Borrower or Mortgage Borrower
has knowledge of the occurrence of an Environmental Event, Mezzanine Borrower
shall or shall cause Mortgage Borrower to deliver to Mezzanine Lender an Officer’s
Certificate (an “Environmental Certificate”) explaining the
Environmental Event in reasonable detail and setting forth the proposed
remedial action, if any.

 

12.2.3      Other Notices.  Mezzanine Borrower shall or shall
cause Senior Mezzanine Borrower and Mortgage Borrower to promptly provide
Mezzanine Lender with copies of all written notices which allege or identify
any actual or potential violation or noncompliance received by or prepared by
or for Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage Borrower in
connection with any Environmental Law. 
For purposes of this paragraph, the term “notice” shall mean any
summons, citation, directive, order, claim, pleading, letter, application,
filing, report, findings, declarations or other written materials pertinent to
compliance of the Property, Mortgage Borrower, Senior Mezzanine Borrower
or  Mezzanine Borrower with such
Environmental Laws.

 

12.3         Environmental Reports.  Upon the occurrence and during the
continuance of an Environmental Event with respect to the Property or any Event
of Default, Mezzanine Lender shall have the right to have its consultants
perform an environmental audit of the Property. 
Such audit shall be conducted by an environmental consultant chosen by
Mezzanine Lender and may include a visual survey, a non-privileged record
review, an area reconnaissance assessing the presence of hazardous or toxic
waste or substances, PCBs or storage tanks at the Property, an asbestos survey
of the Property, which may include random sampling of the Improvements and air
quality testing, and such further site assessments as Mezzanine Lender may
reasonably require due to the results obtained from the foregoing, provided that if such audit shall be

 

119

 

undertaken with respect to an
Environmental Event, such audit shall be limited to a scope reasonably
necessary to assess the subject matter of the Environmental Event.  Subject to
applicable Gaming Laws, Mezzanine Borrower grants (and shall cause Mortgage
Borrower to grant to) Mezzanine Lender, its agents, consultants and contractors
the right to enter the Property as reasonable or appropriate for the
circumstances, during normal business hours on Business Days upon reasonable
advance written notice, for the purposes of performing such studies and the
reasonable cost of such studies shall be due and payable by Mezzanine Borrower
to Mezzanine Lender upon demand and shall be secured by the Lien of this
Agreement and the Pledge.  Mezzanine
Lender shall not unreasonably interfere with, and Mezzanine Lender shall direct
the environmental consultant to use its commercially reasonable efforts not to
hinder, Mortgage Borrower’s, Master Lessee’s or any Tenant’s or other occupant’s
operations upon the Property when conducting such audit, sampling or
inspections.  By undertaking any of the
measures identified in and pursuant to this Section 12.3, Mezzanine
Lender shall not be deemed to be exercising any control over the operations of
Mortgage Borrower, Mezzanine Borrower or Senior Mezzanine Borrower or the
handling of any environmental matter or hazardous wastes or substances of
Mortgage Borrower, Senior Mezzanine Borrower or Mezzanine Borrower for purposes
of incurring or being subject to liability therefor.

 

12.4         Environmental Indemnification.  Mezzanine Borrower, at its sole cost and
expense, shall protect, indemnify, save, defend (at trial and at appellate
levels and with attorneys, consultants and experts selected by Mezzanine
Borrower and reasonably acceptable to Indemnified Parties), and hold harmless
the Indemnified Parties from and against any and all liability, loss, lien,
damage, obligations, settlement payments, penalties, assessments, citations,
directives, litigation, actions, demands, defenses, proceedings, causes of
action, costs, disbursements, or expenses of any kind or of any nature
whatsoever (including, without limitation, but subject to the provisions
hereof, reasonable attorneys’, consultants’ and experts’ fees and disbursements
reasonably incurred in investigating, defending against, settling or
prosecuting any claim, litigation or proceeding) and any and all claims, suits
and judgments which may at any time be imposed upon, incurred by or asserted or
awarded against any Indemnified Party or any Individual Property, as a result
of or with respect to or arising from or out of:  (a) any Environmental Claim relating to
or arising from the Property; (b) the violation of any Environmental Law
in connection with the Property; (c) any actual or threatened release,
spill, or the presence of any Hazardous Materials affecting the Property; (d) the
presence at, in, on or under, or the release, escape, seepage, leakage,
discharge or migration at or from, the Property of any Hazardous Materials,
whether or not such condition was known or unknown to Mezzanine Borrower; (e) the
actual or threatened presence, release, seepage, leakage, discharge or
migration of Hazardous Materials at any other location if the Hazardous
Materials were generated, treated, stored, transported or disposed of by or on
behalf of the Mortgage Borrower or Mezzanine Borrower; (f) the failure of
Mezzanine Borrower to comply fully with the terms and conditions of this Article XII;
or (g) the enforcement of this Article XII, including, without limitation,
(i) the reasonable costs of assessment, containment and/or removal of any
and all Hazardous Materials from all or any portion of any Individual Property,
any adjacent areas, (ii) the costs of any actions taken in response to an
actual or threatened release, escape, seepage, leakage, discharge, migration or
presence of any Hazardous Materials on, in, under or affecting all or any
portion of any Individual Property, any adjacent areas, or any other areas to
prevent or minimize such actual or threatened release, escape, seepage,
leakage, discharge, migration or presence of any Hazardous Materials so that it
does not migrate or otherwise cause or threaten

 

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danger to present or future public health, safety,
welfare or the environment, and (iii) costs incurred to comply with the
Environmental Laws in connection with all or any portion of any Individual
Property, any adjacent areas, or any other areas for violations; provided that,
in each case, Mezzanine Borrower shall be relieved of its obligation under this
subsection if any of the matters referred to in clauses (a) through (g) above
did not occur (but need not have been discovered) prior to (1) the
foreclosure of the Pledge or (2) the delivery by Mezzanine Borrower to
Mezzanine Lender or its designee of a transfer-in-lieu of foreclosure with
respect to the Ownership Interests.  If
any such action or other proceeding shall be brought against Mezzanine Lender,
upon written notice from Mezzanine Borrower to Mezzanine Lender (given
reasonably promptly following Mezzanine Lender’s notice to Mezzanine Borrower
of such action or proceeding), Mezzanine Borrower shall be entitled to assume
the defense thereof, at Mezzanine Borrower’s expense, with counsel reasonably
acceptable to Mezzanine Lender; provided, however, Mezzanine Lender may, at its
own expense, retain separate counsel to participate in such defense, but such
participation shall not be deemed to give Mezzanine Lender a right to control
such defense, which right Mezzanine Borrower expressly retains.  Notwithstanding the foregoing, each
Indemnified Party shall have the right to employ separate counsel at Mezzanine
Borrower’s expense if, in the reasonable opinion of legal counsel, a conflict
or potential conflict exists between the Indemnified Party and Mezzanine
Borrower that would make such separate representation advisable.  Mezzanine Borrower shall have no obligation
under this Section 12.4 to indemnify an Indemnified Party for any
liability, loss, lien, damage, obligations, settlement payments, penalties,
assessments, citations, directives, litigation, actions, demands, defenses,
proceedings, causes of action, costs, disbursements, or expenses of any kind or
of any nature whatsoever (including, without limitation, but subject to the
provisions hereof, reasonable attorneys’, consultants’ and experts’ fees and
disbursements reasonably incurred in investigating, defending against, settling
or prosecuting any claim, litigation or proceeding) and any and all claims,
suits and judgments  resulting from
any Indemnified Party’s gross negligence or willful misconduct.

 

12.5         Recourse Nature of Certain Indemnifications.  Notwithstanding anything to the contrary
provided in this Agreement or in any other Mezzanine Loan Document, the
indemnification provided in Section 12.4 shall be fully recourse to
Mezzanine Borrower and shall be independent of, and shall survive, the
discharge of the Indebtedness, the release of the Liens created by this
Agreement and the Pledge, and/or the conveyance of title to the Collateral to
Mezzanine Lender or any purchaser or designee in connection with a foreclosure
of the Collateral pursuant to the Pledge or this Agreement, or transfer in lieu
of foreclosure.

 

XIII.        THE
OPERATING AGREEMENTS

 

13.1         Operating Agreement
Representations, Warranties. 
Mezzanine Borrower hereby represents and warrants as 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:

 

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(a)                                  the Operating Agreements to which Mortgage
Borrower or any Borrower Party or Master Lessee is a party or is bound are, or
will be as of the Closing Date, in full force and effect, and have not been
amended, restated, modified, supplemented, replaced or assigned except as
indicated on the applicable schedule attached hereto or the Security
Instruments and Mezzanine Borrower has not caused Mortgage Borrower to waive,
cancel or surrender any of its rights thereunder;

 

(b)                                 none of the Contemplated Transactions in any
case: (1) requires the consent or approval of or notice to any party to
any Operating Agreement, other than consents obtained prior to the date hereof
and notices delivered prior to or on the date hereof or (2) will
constitute a default under any Operating Agreement that would have a Material
Adverse Effect;

 

(c)                                  none of the Operating Agreements requires the
continued use of any Individual Property (i) under any designated trade
name or (ii) for any single designated required use (other than use
categories such as hotel and casino operations or similarly broad categories
that would not have a Material Adverse Effect);

 

(d)                                 all sums, charges, fees, costs, expenses,
rent, additional rent, common charges, common area maintenance charges and
other charges or assessments reserved in or payable under the Operating
Agreements, including without limitation, all sums, charges, fees, assessments,
costs, and expenses in connection with any taxes, site preparation and
construction, non-shareholder contributions, and common area and other property
management activities, are current (except for any of the same which are being
contested in accordance with Section 7.3), and no Lien (other than
the Existing Matters of Record) with respect thereto has attached on any
Individual Property (or threat thereof been made in writing) for failure to pay
any of the foregoing;

 

(e)                                  Mortgage Borrower has not delivered or
received any notices of default under any of the Operating Agreements and is
not in default under any material terms of any of the Operating Agreements,
except as to the extent that such default would not reasonably be
expected to result in a  Material Adverse
Effect;

 

(f)                                    To the best of Mezzanine Borrower’s
knowledge, no Fee Owner or other party to any Operating Agreement is in default
under any of the terms of any of the Operating Agreements and there are no
circumstances which, with the passage of time or the giving of notice, or both,
would constitute a default under any terms of any of the Operating Agreements
by any such Fee Owner or other party that would have a Material Adverse
Effect;

 

(g)                                 Mezzanine Borrower has caused Mortgage
Borrower to deliver to Mezzanine Lender a true, accurate and complete copy of
each of the Operating Agreements;

 

(h)                                 All construction obligations of Mortgage
Borrower under all Operating Agreements have been satisfied in all material
respects; and

 

(i)                                     To the best of Mezzanine Borrower’s
knowledge, all easements granted pursuant to any Operating Agreement which were
to have survived the site preparation and completion of construction, remain in
full force and effect and have not been released, terminated, extinguished

 

122

 

or discharged by agreement or otherwise, except to the extent
it would not be expected to result in a Material Adverse Effect.

 

13.2                           Cure by Mezzanine Lender.  In the event of a default by Mortgage
Borrower in the performance of any of its obligations under any Operating
Agreement beyond any applicable notice and cure periods therein, including,
without limitation, any default in the payment of any sums payable thereunder,
then, in each and every such case, Mezzanine Lender may, at its option, cause
the default or defaults to be remedied and otherwise exercise any and all
rights of Mortgage Borrower thereunder in the name of and on behalf of Mortgage
Borrower.  Mezzanine Borrower shall cause
Mortgage Borrower, on demand, reimburse Mezzanine Lender for all advances made
and reasonable out-of-pocket expenses incurred by Mezzanine Lender in curing
any such default (including, without limitation, reasonable attorneys’ fees and
disbursements), together with interest thereon computed at the Default Rate
from the date that such advance is made to and including the date the same is
paid to Mezzanine Lender.

 

13.3                           Option to Renew or Extend
the Ground Lease.  Mezzanine Borrower
shall cause Mortgage Borrower to give Mezzanine Lender written notice of its
intention to exercise each and every option, if any, to renew or extend the
term of any of the Ground Leases, at least thirty (30) days prior to the
expiration of the time to exercise such option under the terms thereof.  If required by Mezzanine Lender, Mezzanine
Borrower shall cause Mortgage Borrower to duly exercise any renewal or
extension option with respect to any of the Ground Leases if Mezzanine Lender
reasonably determines that the exercise of such option is necessary to protect
Mezzanine Lender’s security for the Loan. 
If Mezzanine Borrower intends to cause Mortgage Borrower to renew or
extend the term of any of the Ground Leases, it shall deliver to cause to be
delivered to Mezzanine Lender, with the notice of such decision, a copy of the
notice of renewal or extension delivered to the applicable Fee Owner, together with
the terms and conditions of such renewal or extension.  If Mezzanine Borrower does not cause Mortgage
Borrower to renew or extend the term of a Ground Lease, Mezzanine Lender may,
at its option if Mezzanine Lender reasonably determines that the exercise of
such option is necessary to protect Mezzanine Lender’s security for the Loan,
exercise the option to renew or extend in the name of and on behalf of Mortgage
Borrower.  Mezzanine Borrower, on behalf
of Mortgage Borrower, hereby irrevocably appoints Mezzanine Lender as its
attorney-in-fact, coupled with an interest, to execute and deliver, for and in
the name of Mortgage Borrower, all instruments and agreements necessary under
the Ground Leases or otherwise to cause any renewal or extension of the Ground
Leases in accordance with this Section 13.3.

 

13.4                           Operating Agreement Covenants.

 

13.4.1                  Waiver of Interest In New Ground Lease.  In the event any of the Ground Leases shall
be terminated by reason of a default thereunder by Mortgage Borrower and
Mezzanine Lender shall require that the related Fee Owner enter into a new
ground lease, Mezzanine Borrower, on behalf of Mortgage Borrower, hereby waives
any right, title and interest in and to such new ground lease or the leasehold
estate created thereby, waiving all rights of redemption now or hereafter
operable under any law.

 

13.4.2                  No Election to Terminate.  Mezzanine Borrower shall not permit Mortgage
Borrower to elect to treat any of the Operating Agreements as terminated,
canceled or

 

123

 

surrendered pursuant to the applicable
provisions of the Bankruptcy Code (including, without limitation, Section 365(h)(1) thereof)
without Mezzanine Lender’s prior written consent in the event a bankruptcy of a
Fee Owner or any other party to an Operating Agreement.  In addition, to the extent not prohibited by
applicable law, Mezzanine Borrower shall cause Mortgage Borrower, in the event
of a bankruptcy of Fee Owner or any other party to an Operating Agreement, to
reaffirm and ratify the legality, validity, binding effect and enforceability
of such Operating Agreement and shall remain in possession of the Property, the
Leasehold Estate and the other rights granted pursuant to the Operating
Agreements, notwithstanding any rejection thereof by Fee Owner, any other party
to any Operating Agreement, or any trustee, custodian or receiver.

 

13.4.3                  Notice Prior to Rejection.  Mezzanine Borrower shall cause Mortgage
Borrower to give Mezzanine Lender not less than thirty (30) days prior written
notice of the date on which Mortgage Borrower shall apply to any court or other
Governmental Authority for authority and permission to reject an Operating
Agreement in the event that there shall be filed by or against Mortgage
Borrower any petition, action or proceeding under the Bankruptcy Code or under
any other similar federal or state law now or hereafter in effect and if
Mortgage Borrower determines to reject an Operating Agreement.  Mezzanine Lender shall have the right, but
not the obligation, to serve upon Mezzanine Borrower within such thirty (30)
day period a notice stating that Mezzanine Lender demands that Mezzanine
Borrower cause Mortgage Borrower to assume such Operating Agreement and assign
same to Mortgage Lender subject to and in accordance with the Loan Agreement
(Mortgage) and the Bankruptcy Code.  If
Mezzanine Lender serves upon Mezzanine Borrower the notice described above,
Mezzanine Borrower shall not permit Mortgage Borrower to seek to reject such
Operating Agreement and shall comply with the demand provided for in the
preceding sentence within fifteen (15) days after the notice shall have been
given by Mezzanine Lender.

 

13.4.4                  Mezzanine Lender Right to Perform.  During the continuance of an Event of
Default, Mezzanine Lender shall have the right, but not the obligation, (i) to
perform and comply with all obligations of Mortgage Borrower under the
Operating Agreements without relying on any grace period provided therein, (ii) to
do and take, without any obligation to do so, such actions as Mezzanine Lender
deems necessary or desirable to prevent or cure any default by Mortgage
Borrower under the Operating Agreements, including, without limitation, any
act, deed, matter or thing whatsoever that Mortgage Borrower may do in order to
cure a default under the Operating Agreements and (iii) subject to the
terms of the Operating Agreements, to enter in and upon the Property or any
part thereof to such extent and as often as Mezzanine Lender deems necessary or
desirable in order to prevent or cure any default of Mortgage Borrower under
the Operating Agreements.  Mezzanine
Borrower shall within five (5) Business Days after written request is made
therefor by Mezzanine Lender, to execute and deliver to Mezzanine Lender or to
any party designated by Mezzanine Lender (including Mortgage Lender), such
further instruments, agreements, powers, assignments, conveyances or the like
as may be reasonably necessary to complete or perfect the interest, rights or
powers of Mezzanine Lender pursuant to this Section or as may otherwise be
required by Mezzanine Lender.

 

13.4.5                  Mezzanine Lender Attorney in Fact.  In the event of any arbitration under or
pursuant to any Operating Agreement in which Mezzanine Lender elects to
participate, Mezzanine Borrower (acting on behalf of Mortgage Borrower) hereby
irrevocably appoints

 

124

 

Mezzanine Lender as its true and lawful
attorney-in-fact (which appointment shall be deemed coupled with an interest)
to exercise, during the continuance of an Event of Default, all right, title
and interest of Mezzanine Borrower in connection with such arbitration,
including, without limitation, the right to appoint arbitrators and to conduct
arbitration proceedings on behalf of Mezzanine Borrower and Mezzanine
Lender.  All reasonable out-of-pocket
costs and expenses incurred by Mezzanine Lender in connection with such
arbitration and the settlement thereof shall be borne solely by Mezzanine
Borrower, including, without limitation, reasonable attorneys’ fees and
disbursements.  Nothing contained in this
Section shall obligate Mezzanine Lender to participate in any such
arbitration.

 

13.4.6                  Payment of Sums Due Under Operating
Agreements.  Subject to Section 7.3,
Mezzanine Borrower shall cause Mortgage Borrower to pay all rent, additional rent, common charges, common area maintenance
charges and other charges or assessments reserved in or payable under the
Operating Agreements on or prior to the due date thereof.

 

13.4.7                  Performance of Covenants.  Mezzanine Borrower shall cause Mortgage
Borrower promptly to perform and observe in all material respects all of the
terms, covenants and conditions required to be performed and observed by
Mortgage Borrower under the Operating Agreements, the breach of which could
permit any party to an Operating Agreement validly to terminate such Operating
Agreement (including, without limitation, all payment obligations) except in
the case of a Material Sublease where such termination would not have a
Material Adverse Effect, shall do all things commercially reasonable to
preserve and to keep unimpaired its rights under the Operating Agreements,
shall not waive, excuse or discharge any of the material obligations of Fee
Owner or any other party to the Operating Agreements without Mezzanine Lender’s
prior written consent in each instance, and shall diligently and continuously
enforce the material obligations of the Fee Owner and the other parties to the
Operating Agreements except in any such case where same would not have a
Material Adverse Effect.

 

13.4.8                  [Reserved.]

 

13.4.9                  No Modification or Termination.  (a)  Mezzanine
Borrower shall not permit Mortgage Borrower, except as permitted hereunder or
with the prior written consent of Mezzanine Lender, not to be unreasonably
withheld, (i)to  institute any action or proceeding to subdivide or
partition any Individual Property other than with respect to Unimproved Parcels
in accordance with the terms of this Agreement, or (ii) materially modify
or amend or vote for or consent to any material modification of or amendment to
any Operating Agreement.

 

(b)                                 Mezzanine
Borrower shall not permit Mortgage Borrower to vote for, agree to or acquiesce
in any cancellation, termination or surrender of any Operating Agreement
without the prior written consent of Mezzanine Lender.  Any agreement to which Mortgage Borrower or
its Affiliates is a party whereby any of the Operating Agreements is terminated
or the Property is withdrawn therefrom in violation of the immediately
preceding sentence shall constitute a Transfer prohibited under this Agreement.

 

13.4.10            Notices of Default.  Mezzanine Borrower shall cause Mortgage
Borrower to deliver to Mezzanine Lender copies of any written notice of default
by any party under the Operating Agreements, or of any written notice from Fee
Owner or any other party to any of the

 

125

 

Operating Agreements of its intention to
terminate such Operating Agreement or to re-enter and take possession of any
portion of the Property, immediately upon delivery or receipt of such notice,
as the case may be.

 

13.4.11            Delivery of Information.  Mezzanine Borrower shall cause Mortgage
Borrower promptly to furnish to Mezzanine Lender copies of such information and
evidence as Mezzanine Lender may reasonably request concerning Mortgage
Borrower’s due observance, performance and compliance with the terms, covenants
and conditions of the Operating Agreements.

 

13.4.12            No Subordination.  Mezzanine Borrower shall not permit Mortgage
Borrower to consent to the subordination of the Operating Agreements to any
mortgage or other lease of the fee interest in any portion of the Property,
other than the Security Instruments and as permitted hereunder pursuant to Section 8.8.10
of the Loan Agreement (Mortgage).

 

13.4.13            Further Assurances.  Mezzanine Borrower shall cause Mortgage
Borrower, at its sole cost and expense, to execute and deliver to Mezzanine
Lender, within five (5) Business Days after request, such documents,
instruments or agreements as may be reasonably required to permit Mezzanine
Lender to cure any default under the Operating Agreements.

 

13.4.14            Estoppel
Certificates.  In addition to
and without limitation of any obligations of Mezzanine Borrower under Section 2.3.9
and under any post-closing side letter delivered on the Closing Date, Mezzanine
Borrower shall use commercially reasonable efforts to obtain and deliver to
Mezzanine Lender within thirty (30) days after written demand by Mezzanine
Lender, an estoppel certificate in the applicable form attached hereto from
each Fee Owner and other parties to the Operating Agreements designated by
Mezzanine Lender setting forth, among other things, (i) the name of the
parties thereunder, (ii) that the Operating Agreement is in full force and
effect and has not been modified or, if it has been modified, the date of each
modification (together with copies of each such modification), (iii) the
date to which all rent, additional
rent, common charges, common area maintenance charges and other charges or
assessments reserved in or payable under the Operating Agreements have
been paid thereunder, (iv) whether there are any alleged defaults of the
lessee under the Operating Agreements and, if there are, setting forth the
nature thereof in reasonable detail, (v) if any party under the Operating
Agreements shall be in default, the default, and (vi) such other matters
as Mezzanine Lender shall reasonably request.

 

13.4.15            Common Area/Common Elements Insurance.  Mezzanine Borrower shall cause Mortgage
Borrower to use commercially reasonable efforts to cause the parties to the
Operating Agreements to maintain the insurance required to be maintained by
such parties thereunder and to deliver any insurance proceeds payable to
Mortgage Borrower under such Operating Agreements to be delivered to Mezzanine
Lender.  Without limitation of Mezzanine
Borrower’s obligations under Section 6.1, in the event any party to
any Operating Agreement fails to maintain any insurance coverage required in
any Operating Agreement and the failure would reasonably be expected to have a
Material Adverse Effect, Mezzanine Borrower shall obtain or cause Mortgage
Borrower to obtain such insurance coverage to satisfy such requirement.

 

13.5                           Mezzanine Lender Right to
Participate.  Mezzanine Lender shall
have the right, but not the obligation, to proceed in respect of any claim,
suit, action or proceeding relating to the rejection of the Operating
Agreements by Fee Owner or any other party to any Operating

 

126

 

Agreement as a result of a bankruptcy of Fee
Owner or any other party to any Operating Agreement, including, without
limitation, the right to file and prosecute any and all proofs of claims,
complaints, notices and other documents in any case in respect of Fee Owner or
any other party to any Operating Agreement under and pursuant to the Bankruptcy
Code.

 

13.6                           No Liability.  Mezzanine Lender shall have no liability or
obligation under the Operating Agreements by reason of its acceptance of the
Pledge, this Agreement and the other Mezzanine Loan Documents.

 

XIV.                        RESERVED

 

XV.                            ASSIGNMENTS
AND PARTICIPATIONS

 

15.1                           Assignment and Acceptance.  Each Mezzanine Lender may assign to one or
more Persons, other than any Proscribed Assignee, all or a portion of its
rights and obligations under this Agreement and the other Mezzanine Loan
Documents (including, without limitation, all or a portion of one or more of
the Mezzanine Notes); provided that the parties to each such assignment shall
execute and deliver to Mezzanine Lender, for its acceptance and recording in
the Register (as hereinafter defined), an Assignment and Acceptance and deliver
to Mezzanine Borrower a copy of same.  In
addition, each Mezzanine Lender may participate to one or more Persons, other
than any Proscribed Assignee, all or any portion of its rights and obligations
under this Agreement and the other Mezzanine Loan Documents (including without
limitation, all or a portion of one or more of the Mezzanine Notes) utilizing
such documentation to evidence such participation and the parties’ respective
rights thereunder as such Mezzanine Lender, in its sole discretion, shall
elect.

 

15.2                           Effect of Assignment and
Acceptance.  Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance, (i) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Mezzanine Lender, as the case may be, hereunder and such
assignee shall be deemed to have assumed such rights and obligations, and (ii) Mezzanine
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement and the other
Mezzanine Loan Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of a Mezzanine Lender’s rights and
obligations under this Agreement and the other Mezzanine Loan Documents, such
Mezzanine Lender shall cease to be a party hereto) accruing from and after the
effective date of the Assignment and Acceptance, except with respect to (A) any
payments made by Mezzanine Borrower to such Mezzanine Lender pursuant to the
terms of the Mezzanine Loan Documents after the effective date of the
Assignment and Acceptance and (B) any letter of credit, cash deposit or
other deposits or security (other than the Lien of this Agreement and the
Pledge and the other Mezzanine Loan Documents) delivered to or for the benefit
of or deposited with GACC or JPMC, on behalf of the holders of the Mezzanine
Notes, as Mezzanine Lender, for which GACC or JPMC, as applicable, on behalf of
the holders of the Mezzanine Notes, shall remain responsible for the proper
disposition thereof until such items are delivered to a party who is

 

127

 

qualified as an Approved Bank and agrees to
hold the same in accordance with the terms and provisions of the agreement
pursuant to which such items were deposited.

 

15.3                           Content.  By executing and delivering an Assignment and
Acceptance, Mezzanine Lender and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows:  (i) other than as provided in such
Assignment and Acceptance, Mezzanine Lender makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other
Mezzanine Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, this Agreement or any other Mezzanine Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (ii) Mezzanine
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Mezzanine Borrower or the performance or
observance by Mezzanine Borrower of any of its obligations under any Mezzanine
Loan Documents or any other instrument or document furnished pursuant thereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon Mezzanine Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Mezzanine Loan
Documents; (v) such assignee appoints and authorizes Mezzanine Lender to
take such action as agent on its behalf and to exercise such powers and
discretion under the Mezzanine Loan Documents as are delegated to Mezzanine
Lender by the terms hereof together with such powers and discretion as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform, in accordance with their terms, all of the obligations which by the
terms of this Agreement and the other Mezzanine Loan Documents are required to
be performed by Mezzanine Lender.

 

15.4                           Register.  Each Mezzanine Lender (solely for this
purpose, as agent for Mezzanine 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 Mezzanine Lender and each
assignee pursuant to this Article XV and the principal amount of
the Loan owing to each such assignee from time to time (the “Register”)
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 Mezzanine Lender to
Mezzanine Borrower promptly after such change is made, and the Register shall
be available for inspection by Mezzanine Borrower or any assignee pursuant to
this Article XV at any reasonable time and from time to time upon
reasonable prior written notice.

 

15.5                           Substitute Mezzanine Notes.  Upon its receipt of an Assignment and
Acceptance executed by an assignee, together with any Mezzanine Note or
Mezzanine Notes subject to such assignment, Mezzanine Lender shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit M hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register,
and (iii) give prompt written notice

 

128

 

thereof to Mezzanine Borrower.  Within five (5) Business Days after its
receipt of such notice, Mezzanine Borrower, at Mezzanine Lender’s expense,
shall execute and deliver to Mezzanine Lender in exchange and substitution for
the surrendered Mezzanine Note or Mezzanine Notes a new Mezzanine Note to the
order of such assignee in an amount equal to the portion of the Loan assigned
to it and a new Mezzanine Note to the order of Mezzanine Lender in an amount
equal to the portion of the Loan retained by it hereunder.  Such new Mezzanine Note or Mezzanine Notes
shall be in an aggregate principal amount equal to the aggregate then
outstanding principal amount of such surrendered Mezzanine Note or Mezzanine
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the Mezzanine Notes (modified,
however, to the extent necessary so as not to impose duplicative or increased
obligations on Mezzanine Borrower and to delete obligations previously
satisfied by Mezzanine Borrower). 
Notwithstanding the provisions of this Article XV, Mezzanine
Borrower shall not be responsible or liable for any additional taxes, reserves,
adjustments or other costs and expenses that are related to, or arise as a
result of, any transfer of the Loan or any interest or participation therein
that arise solely and exclusively from the transfer of the Loan or any interest
or participation therein or from the execution of the new Mezzanine Note
contemplated by this Section 15.5, including, without limitation,
any mortgage tax.  Mezzanine Lender
and/or the assignees, as the case may be, shall from time to time designate one
agent through which Mezzanine Borrower shall request all approvals and consents
required or contemplated by this Agreement and the other Mezzanine Loan
Documents and on whose statements Mezzanine Borrower may rely.  Mezzanine Lender hereby initially designates
Mezzanine Noteholder I as such agent.

 

15.6                           Participations.  Each assignee pursuant to this Article XV
may sell participations to one or more Persons (other than Mezzanine Borrower
or any of its Affiliates) in or to all or a portion of its rights and
obligations under this Agreement and the other Mezzanine Loan Documents
(including, without limitation, all or a portion of the Mezzanine Note held by
it); provided, however, that (i) such assignee’s obligations under this
Agreement and the other Mezzanine Loan Documents shall remain unchanged, (ii) such
assignee shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such assignee shall remain the
holder of any such Mezzanine Note for all purposes of this Agreement and the
other Mezzanine Loan Documents, and (iv) Mezzanine Borrower, Mezzanine
Lender and the assignees pursuant to this Article 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 Mezzanine Loan
Documents.  In the event that more than
one (1) party comprises Mezzanine Lender, Mezzanine Lender shall designate
one party to act on the behalf of all parties comprising Mezzanine Lender in
providing approvals and all other necessary consents under the Mezzanine Loan
Documents and on whose statements Mezzanine Borrower may rely.

 

15.7                           Disclosure of Information.  Any assignee pursuant to this Article 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 Mezzanine Borrower or
Senior Mezzanine Borrower furnished to such assignee by or on behalf of
Mezzanine Borrower or Senior Mezzanine Borrower; provided, however, that, with
respect to any Asset Specific Proprietary Information, the terms of Section 11.2.9
shall be complied with.

 

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15.8                           Security Interest in
Favor of Federal Reserve Bank. 
Notwithstanding any other provision set forth in this Agreement or any
other Mezzanine Loan Document, any assignee pursuant to this Article XV
may at any time create a security interest in all or any portion of its rights
under this Agreement or the other Mezzanine Loan Documents (including, without
limitation, the amounts owing to it and the Mezzanine Note or Mezzanine Notes
held by it) in favor of any Federal Reserve Bank in accordance with Regulation
A of the Board of Governors of the Federal Reserve System.

 

XVI.                                                RESERVED

 

XVII.                                            DEFAULTS

 

17.1                           Event
of Default.

 

(a)                                  Each
of the following events shall constitute an event of default hereunder (an “Event
of Default”):

 

(i)                                     if (A) the Indebtedness is not paid in
full on the Maturity Date, (B) any regularly scheduled monthly payment of
interest due under the Mezzanine Notes is not paid in full on the applicable
Payment Date, (C) any prepayment of principal due under this Agreement or
the Mezzanine Notes is not paid when due, (D) the Prepayment Fee is not
paid when due, (E) any deposit to the Mezzanine Account is not made on the
required deposit date therefor; or (F) except as to any amount included in
(A), (B), (C), (D), and/or (E) of this clause (i) or in clause (ii),
any other amount payable pursuant to this Agreement, the Mezzanine Notes or any
other Mezzanine Loan Document is not paid in full when due and payable in
accordance with the provisions of the applicable Mezzanine Loan Document, with
the failure under this clause (F) continuing for ten (10) Business
Days after Mezzanine Lender delivers written notice thereof to Mezzanine
Borrower;

 

(ii)                                  subject to Section 7.3 and
Mortgage Borrower’s right to contest as set forth in Section 7.3 of
the Loan Agreement (Mortgage), if any of the Impositions or Other Charges are
not paid prior to the imposition of any interest, penalty, charge or expense
for the non-payment thereof, provided, that Mezzanine Borrower shall not
be deemed to be in default hereunder in the event (x) funds sufficient for
a required payment of such Imposition or Other Charge under Section 3.1.7(i) of
the Loan Agreement (Mortgage) are
held in the Tax Reserve Account, (y) Mortgage Lender or Cash
Management Bank (Mortgage) fails to timely make payment from such Sub-Account
as contemplated by the Loan Agreement (Mortgage) unless due to the negligence
or willful misconduct of Mezzanine Borrower and (z) Mezzanine Borrower
causes Mortgage Borrower to use best efforts to cause Mortgage Lender and Cash
Management Bank (Mortgage) to make such payment from such Sub-Account;

 

(iii)                               if (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) Mezzanine
Borrower fails to deliver to Mezzanine Lender evidence of the insurance
required by Section 6.1 at the times required in such Section with
such failure continuing for five (5) Business Days after the Mezzanine
Lender delivers written notice thereof to Mezzanine Borrower, provided, that Mezzanine Borrower
shall not be deemed to be in default hereunder in the event (x) funds

 

130

 

sufficient for a required payment under Section 3.1.7(ii) of
the Loan Agreement (Mortgage) of the premiums required to keep the insurance
policies in full force and effect are held in the Insurance Reserve Account, (y) Mortgage
Lender or Cash Management Bank fails to timely make payment from such
Sub-Account as contemplated by the Loan Agreement (Mortgage) unless due to the
negligence or willful misconduct of Mezzanine Borrower and (z) Mezzanine
Borrower causes Mortgage Borrower to use best efforts to cause Mortgage Lender
and Cash Management Bank (Mortgage) to make such payment from such Sub-Account;

 

(iv)                              if, except as expressly permitted pursuant to Article VIII
or the other provisions hereof, any of the following shall occur: (a) any
Transfer of any direct or indirect legal, beneficial or equitable interest in
all or any portion of the Property, (b) any Transfer of any direct or
indirect interest in Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower, any Junior Mezzanine Borrower, Master Lessee or any Guarantor, (c) any
Lien or encumbrance is granted against all or any portion of the Property or
the Collateral, (d) any pledge, hypothecation, creation of a security
interest in or other encumbrance of any direct or indirect interests in
Borrower, Mortgage Borrower, Senior Mezzanine Borrower, Junior Mezzanine
Borrower, Master Lessee or any Guarantor, or (e) Mortgage 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 Mezzanine Borrower in Section 4.1.24
shall have been false or misleading in any material respect as of the date the
representation or warranty was made which incorrect, false or misleading
statement is not cured within thirty (30) days after receipt by Mezzanine
Borrower of notice from Mezzanine Lender in writing of such breach or a longer
period of time not to exceed thirty (30) additional days if Mezzanine Borrower
has commenced to cure but cannot cure within the initial thirty (30) day period
or (ii) if any other representation or warranty made by Mezzanine Borrower
herein or by Mezzanine Borrower or any Affiliate of Mezzanine Borrower in any
other Mezzanine Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Mezzanine
Lender shall have been false or misleading in any material respect as of the
date the representation or warranty was made; provided,
however, that if such representation or warranty which was false or
misleading in any material respect is, by its nature, curable and is not
reasonably likely to have a Material Adverse Effect, and such representation or
warranty was not, to the best of Mezzanine Borrower’s knowledge, false or
misleading in any material respect when made, then same shall not constitute an
Event of Default unless Mezzanine Borrower has not cured same within thirty
(30) days after receipt by Mezzanine Borrower of notice from Mezzanine Lender
in writing of such breach;

 

(vi)                              if Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower,  any 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 Mortgage
Borrower, Senior Mezzanine Borrower, Mezzanine Borrower,  any Master Lessee Party, or any Guarantor, or
Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower, any 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, Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower,
any Master Lessee 

 

131

 

Party or any Guarantor, or if any proceeding
for the dissolution or liquidation of Mortgage Borrower, Senior Mezzanine
Borrower, Mezzanine Borrower,  any 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 Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine
Borrower,  any Master Lessee Party or any
Guarantor upon the same not being discharged, stayed or dismissed within ninety
(90) days;

 

(viii)                        if Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower,
Master Lessee or any Guarantor, as applicable, attempts to assign its rights
under this Agreement or any of the other Mezzanine Loan Documents, the Mortgage
Loan Documents, the Senior Mezzanine Loan Documents or any interest herein or
therein in contravention of the Mezzanine Loan Documents, the Mortgage Loan
Documents or the Senior Mezzanine Loan Documents, as applicable;

 

(ix)                                if any of the assumptions contained in the True Sale Opinion is untrue
in any material respect;

 

(x)                                   if any of the assumptions contained in the
Non-Consolidation Opinion, in any Additional Non-Consolidation Opinion or in
any other non-consolidation opinion delivered to Mezzanine Lender in connection
with the Loan, or in any other non-consolidation opinion delivered subsequent
to the closing of the Loan, is untrue in any material respect;

 

(xi)                                if any of the assumptions contained in the True Lease Opinion is untrue
in any material respect;

 

(xii)                             if Mezzanine Borrower, having notified Mezzanine Lender of its election
to extend the Maturity Date as set forth in Section 5 of the
Mezzanine Notes, fails to deliver the Replacement Interest Rate Cap Agreement
(Second Mezzanine) to Mezzanine Lender not later than one (1) Business Day
prior to the first day of the extended term of the Loan and Mezzanine Borrower
has not prepaid the Loan pursuant to the terms of the Mezzanine Notes prior to
such first day of the extended term;

 

(xiii)                          if Mezzanine Borrower shall fail to comply in any material respect with
any covenants set forth in Section 5.1.4, Section 5.2.9
and 5.2.19;

 

(xiv)                         except as provided clause (xiii) above, if Mezzanine 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 Mezzanine
Lender delivers written notice thereof to Mezzanine Borrower;

 

(xv)                            Mezzanine Borrower shall fail to deposit any sums required to be
deposited in the Mezzanine Account when due;

 

(xvi)                         if this Agreement or any other Mezzanine Loan Document or any Lien
granted hereunder or thereunder, in whole or in part, shall terminate or shall
cease to be effective or shall cease to be a legally valid, binding and
enforceable obligation of Mezzanine Borrower or any Guarantor, or any Lien
securing the Indebtedness shall, in whole or in part, cease to be a perfected
first priority Lien, subject to the Permitted Encumbrances (Second Mezzanine)
(except

 

132

 

in any of the foregoing cases in accordance
with the terms hereof or under any other Mezzanine Loan Document or by reason
of any affirmative act of Mezzanine Lender);

 

(xvii)                      except as expressly permitted pursuant to the Mortgage Loan Documents,
if Mortgage Borrower grants any easement, covenant or restriction (other than
the Permitted Encumbrances) over the Property;

 

(xviii)                   the occurrence of a Mortgage Event of Default;

 

(xix)                           if there shall occur any
default by Mortgage Borrower, as lessee under any Ground Lease, in the
observance or performance of any term, covenant or condition of such Ground
Lease on the part of Mortgage Borrower to be observed or performed, and said
default is not cured prior to the expiration of any applicable grace or cure
period therein provided, or if any one or more of the events referred to in a
Ground Lease shall occur which would cause such Ground Lease to terminate
without notice or action by the related Fee Owner under such Ground Lease or if
any Leasehold Estate shall be surrendered or any Ground Lease shall be lawfully
terminated or cancelled for any reason or under any circumstances whatsoever,
or if any of the terms, covenants or conditions of any Ground Lease shall in
any manner be modified, changed, supplemented, altered or amended in
contradiction of the provisions of Article XIII without the prior written
consent of Mortgage Lender, which consent shall not be unreasonably withheld,
conditioned or delayed, or if Mortgage Borrower or Master Lessee shall fail to
exercise any option to renew the Ground Lease or shall fail to or neglect to
pursue diligently all actions necessary to exercise such renewal rights
pursuant to the terms of the Ground Lease, provided, that if a default by
Mortgage Borrower under a Ground Lease is a Ground Rent payment default, the
occurrence or failure to cure such default shall not be deemed to be in default hereunder in the event (x) funds
sufficient for a required transfer under Section 3.1.7(iii) of
the Loan Agreement (Mortgage) are
held in the Ground Rent Reserve Account, (y) Mortgage Lender or
Cash Management Bank (Mortgage) fails to timely make any transfer from such
Sub-Account as contemplated by this Agreement unless due to the negligence or
willful misconduct of Mortgage Borrower and (z) Mezzanine Borrower causes
Mortgage Borrower to use best efforts to cause Mortgage Lender and Cash
Management Bank (Mortgage) to make such payment from such subaccount;

 

(xx)                                                      the
occurrence of a Senior Mezzanine Event of Default;

 

(xxi)                                                   Reserved;

 

(xxii)                                                Reserved;

 

(xxiii)                     if, without the prior written
consent of Mortgage Lender, any of the material terms or provisions of any
Operating Agreement are modified or amended (in a manner prohibited by Article XIII);

 

(xxiv)                                            Reserved;

 

(xxv)                       if the Master Lease shall be
materially modified without the prior written consent of Mezzanine Lender,
except as expressly permitted hereunder or any other Mezzanine Loan Document;

 

133

 

(xxvi)                    if Mortgage Borrower shall be in
default in any material obligation on the part of Mortgage Borrower beyond any
applicable notice periods and cure periods pursuant to the terms of the Master
Lease;

 

(xxvii)                 if an Individual Property shall Go
Dark and Mortgage Borrower shall not have caused such Individual Property to
reopen for business to the public, obtained a release of such Individual
Property or provided a substitute therefor in accordance with Section 2.3.6
of the Loan Agreement (Mortgage) within the time period specified for each of
the foregoing in such Section; or if an Individual Property shall Go Dark
during any period when any other Individual Property shall have “Gone Dark”;

 

(xxviii)              if
Mezzanine Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement or of any Mezzanine Loan
Document not specified in subsections (i) to (xxvii) above (including,
without limitation, in Default under Section 8.8.2 or 13.4.9), for thirty (30) days after notice from
Mezzanine Lender; provided, however, that if such Default is
susceptible of cure but cannot reasonably be cured within such thirty (30) day
period and provided further that Mezzanine Borrower shall have commenced to
cure such Default within such thirty (30) day period and thereafter diligently
proceeds to cure the same, such thirty (30) day period shall be extended for
such time as is reasonably necessary for Mezzanine Borrower in the exercise of
due diligence to cure such Default, such additional period not to exceed ninety
(90) days.

 

(b)                                 Unless waived in writing by Mezzanine Lender,
upon the occurrence and during the continuance of an Event of Default (other
than an Event of Default described in subsections (a)(vi), (vii) or (viii) above
in respect of Mezzanine Borrower) Mezzanine Lender may, without notice or
demand, in addition to any other rights or remedies available to it pursuant to
this Agreement and the other Mezzanine Loan Documents or at law or in equity,
take such action that Mezzanine Lender deems advisable to protect and enforce
its rights against Mezzanine Borrower and in the Collateral, including, without
limitation, (i) declaring immediately due and payable the entire Principal
Amount together with interest thereon and all other sums due by Mezzanine
Borrower under the Mezzanine Loan Documents, (ii) collecting interest on
the Principal Amount at the Default Rate whether or not Mezzanine Lender elects
to accelerate the Mezzanine Notes and (iii) enforcing or availing itself
of any or all rights or remedies set forth in the Mezzanine Loan Documents
against Mezzanine Borrower and the Collateral, including, without limitation,
all rights or remedies available at law or in equity; and upon any Event of
Default described in subsections (a)(vi), (a)(vii) or (a)(viii) above
in respect of Mezzanine Borrower, the Indebtedness and all other obligations of
Mezzanine Borrower hereunder and under the other Mezzanine Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Mezzanine Borrower hereby expressly waives any such notice or demand,
anything contained herein or in any other Mezzanine Loan Document to the
contrary notwithstanding.  The foregoing
provisions shall not be construed as a waiver by Mezzanine Lender of its right
to pursue any other remedies available to it under this Agreement, the Pledge
or any other Mezzanine Loan Document. 
Any payment hereunder may be enforced and recovered in whole or in part
at such time by one or more of the remedies provided to Mezzanine Lender in the
Mezzanine Loan Documents.

 

134

 

(c)                                  Upon
the occurrence of a Mortgage Default or a Mortgage Event of Default, Mezzanine
Borrower shall cause Mortgage Borrower to deliver to Mezzanine Lender within
five (5) Business Days after the first to occur of (a) receipt by
Mortgage Borrower of notice of such Mortgage Default or Mortgage Event of
Default from Mortgage Lender or (b) the date Mortgage Borrower obtains
actual knowledge of the occurrence of such Mortgage Default or Mortgage Event
of Default, a detailed description of the actions to be taken by Mortgage
Borrower to cure such Mortgage Default or Mortgage Event of Default and the
dates by which each such action shall occur. 
Such schedule shall be subject to the approval of Mezzanine Lender.  Mezzanine Borrower shall cause Mortgage
Borrower to take all such actions as are necessary to cure such Mortgage
Default or Mortgage Event of Default by the date approved by Mezzanine Lender
and shall deliver to Mezzanine Lender not less frequently than weekly
thereafter written updates concerning the status of Mortgage Borrower’s efforts
to cure such Mortgage Default or Mortgage Event of Default.  Mezzanine Lender shall have the right, but
not the obligation, to pay any sums or to take any action which Mezzanine
Lender deems necessary or advisable to cure any default or alleged default
under the Loan Documents (Mortgage) (whether or not Mortgage Borrower is
undertaking efforts to cure such default), and such payment or such action is
hereby authorized by Mezzanine Borrower, and any sum so paid and any expense
incurred by Mezzanine Lender in taking any such action shall be evidenced by
this Agreement and secured by this Agreement and the Pledge and shall be
immediately due and payable by Mezzanine Borrower to Mezzanine Lender with
interest at the Default Rate until paid. Mezzanine Borrower shall cause
Mortgage Borrower to permit Mezzanine Lender to enter upon the Property for the
purpose of curing any default or alleged default under the Loan Documents
(Mortgage) or hereunder.  Mezzanine
Borrower hereby transfers and assigns any excess proceeds arising from any
foreclosure or sale under power pursuant to the Loan Documents (Mortgage) or
any instrument evidencing the indebtedness secured thereby, and Mezzanine
Borrower hereby authorizes and directs the holder or holders of the Loan
Documents (Mortgage) to pay such excess proceeds directly to Mezzanine Lender
up to the amount of the Obligations (Second Mezzanine).

 

(d)                                 Upon the occurrence of a Senior Mezzanine
Default or a Senior Mezzanine Event of Default, Mezzanine Borrower shall cause
Senior Mezzanine Borrower to deliver to Mezzanine Lender within five (5) Business
Days after the first to occur of (a) receipt by Senior Mezzanine Borrower
of notice of such Senior Mezzanine Default or Senior Mezzanine Event of Default
from Senior Mezzanine Lender or (b) the date Senior Mezzanine Borrower
obtains actual knowledge of the occurrence of such Senior Mezzanine Default or
Senior Mezzanine Event of Default, a detailed description of the actions to be
taken by Senior Mezzanine Borrower to cure such Senior Mezzanine Default or
Senior Mezzanine Event of Default and the dates by which each such action shall
occur.  Such schedule shall be subject to
the approval of Mezzanine Lender. 
Mezzanine Borrower shall cause Senior Mezzanine Borrower to take all
such actions as are necessary to cure such Senior Mezzanine Default or Senior
Mezzanine Event of Default by the date approved by Mezzanine Lender and shall
deliver to Mezzanine Lender not less frequently than weekly thereafter written
updates concerning the status of Senior Mezzanine Borrower’s efforts to cure
such Senior Mezzanine Default of Senior Mezzanine Event of Default.  Mezzanine Lender shall have the right, but
not the obligation, to pay any sums or to take any action which Mezzanine
Lender deems necessary or advisable to cure any default or alleged default
under the Senior Mezzanine Loan Documents (whether or not Senior Mezzanine
Borrower is undertaking efforts to cure such default), and such payment or such
action is hereby 

 

135

 

authorized by Mezzanine Borrower, and any sum
so paid and any expense incurred by Mezzanine Lender in taking any such action
shall be evidenced by this Agreement and secured by this Agreement and the
Pledge and shall be immediately due and payable by Mezzanine Borrower to
Mezzanine Lender with interest at the Default Rate until paid.  Mezzanine Borrower hereby transfers and
assigns any excess proceeds arising from any foreclosure or sale under power
pursuant to the Senior Mezzanine Loan Documents or any instrument evidencing
the indebtedness secured thereby, and Mezzanine Borrower hereby authorizes and
directs the holder or holders of the Senior Mezzanine Loan Documents to pay
such excess proceeds directly to Mezzanine Lender up to the amount of the
Obligations (Second Mezzanine).

 

17.2                           Remedies.

 

(a)                                              Unless
waived in writing by Mezzanine Lender, upon the occurrence and during the
continuance of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Mezzanine Lender against
Mezzanine Borrower under this Agreement or any of the other Mezzanine Loan
Documents executed and delivered by, or applicable to, Mezzanine Borrower or at
law or in equity may be exercised by Mezzanine Lender at any time and from time
to time, whether or not all or any of the Indebtedness shall be declared due
and payable, and whether or not Mezzanine Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Mezzanine Loan Documents with respect to the
Collateral.  Any such actions taken by
Mezzanine Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Mezzanine Lender may determine in its sole discretion, to the
fullest extent permitted by law, without impairing or otherwise affecting the
other rights and remedies of Mezzanine Lender permitted by law, equity or
contract or as set forth herein or in the other Mezzanine Loan Documents.  Without limiting the generality of the foregoing,
Mezzanine Borrower agrees that if an Event of Default is continuing (i) Mezzanine
Lender shall not be subject to any one action or election of remedies law or rule and
(ii) all liens and other rights, remedies or privileges provided to
Mezzanine Lender shall remain in full force and effect until Mezzanine Lender
has exhausted all of its remedies against the Collateral and this Agreement and
the Pledge have been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Indebtedness or the Indebtedness has been paid in full.

 

(b)                                             Upon the
occurrence of any Event of Default, Mezzanine Lender may, but without any
obligation to do so and without notice to or demand on Mezzanine Borrower and
without releasing Mezzanine Borrower from any obligation hereunder, take any
action to cure such Event of Default. 
Mezzanine Lender may appear in, defend, or bring any action or
proceeding to protect its interests in the Collateral or to foreclose its
security interest under this Agreement and the Pledge or under any of the other
Mezzanine Loan Documents or collect the Indebtedness.

 

(c)                                              Upon the occurrence and during the
continuance of an Event of Default, with respect to the Account Collateral
(Second Mezzanine), the Mezzanine Lender may:

 

(i)                                     without notice to Mezzanine Borrower,
except as required by law, and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Account 

 

136

 

Collateral (Second Mezzanine), against the Obligations
(Second Mezzanine), operating expenses and/or capital expenditures for the
Property or any part thereof;

 

(ii)                                  in Mezzanine Lender’s sole discretion, at
any time and from time to time, exercise any and all rights and remedies
available to it under this Agreement, and/or as a secured party under the UCC;

 

(iii)                               demand, collect, take possession of or receipt for, settle, compromise,
adjust, sue for, foreclose or realize upon the Account Collateral (Second
Mezzanine), (or any portion thereof) as Mezzanine Lender may determine in its
sole discretion; and

 

(iv)                              take all other actions provided in, or contemplated by, this Agreement.

 

(d)                                             With respect to Mezzanine Borrower, the
Account Collateral (Second Mezzanine), the Rate Cap Collateral (Second Mezzanine) and the Collateral, nothing
contained herein or in any other Mezzanine Loan Document shall be construed as
requiring Mezzanine Lender to resort to the Collateral for the satisfaction of
any of the Indebtedness, and Mezzanine Lender may seek satisfaction out of the
Collateral or any part thereof, or exercise its rights under this Agreement,
the Pledge or the other Mezzanine Loan Documents, in its absolute discretion in
respect of the Indebtedness.  In
addition, Mezzanine Lender shall have the right from time to time to partially
foreclose or exercise remedies under this Agreement, the Pledge and the other
Mezzanine Loan Documents, in any manner and for any amounts secured by this
Agreement, the Pledge or the other applicable Mezzanine Loan Documents then due
and payable as determined by Mezzanine Lender in its sole discretion including,
without limitation, the following circumstances: (i) in the event
Mezzanine Borrower defaults beyond any applicable grace period in the payment
of one or more scheduled payments of principal or interest, Mezzanine Lender
may foreclose under this Agreement, the Pledge and the applicable Mezzanine
Loan Documents to recover such delinquent payments, or (ii) in the event
Mezzanine Lender elects to accelerate less than the entire outstanding
principal balance of the Loan, Mezzanine Lender may foreclose under this
Agreement, the Pledge and the other applicable Mezzanine Loan Documents to
recover so much of the principal balance of the Loan as Mezzanine Lender may
accelerate and such other sums secured by this Agreement, the Pledge and the
other applicable Mezzanine Loan Documents as Mezzanine Lender may elect.  Notwithstanding one or more partial
foreclosures, the Collateral shall remain subject to this Agreement, the Pledge
and the applicable Mezzanine Loan Documents to secure payment of sums secured
by this Agreement, the Pledge and the applicable Mezzanine Loan Documents and
not previously recovered.

 

17.3                           Remedies Cumulative; Waivers.  The rights, powers and remedies
of Mezzanine Lender under this Agreement and the Pledge shall be cumulative and
not exclusive of any other right, power or remedy which Mezzanine Lender may
have against Mezzanine Borrower pursuant to this Agreement or the other
Mezzanine Loan Documents, or existing at law or in equity or otherwise.  Mezzanine Lender’s rights, powers and
remedies may be pursued singly, concurrently or otherwise, at such time and in
such order as Mezzanine Lender may determine in Mezzanine Lender’s sole
discretion.  No delay or omission to
exercise any remedy, right or power accruing upon 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 

 

137

 

or Event of Default with respect
to Mezzanine Borrower or any Guarantor shall not be construed to be a waiver of
any subsequent Default or Event of Default by Mezzanine Borrower or any
Guarantor or to impair any remedy, right or power consequent thereon.

 

17.4                           Costs of Collection.  In the event that after an Event of
Default:  (i) the Mezzanine Notes or
any of the Mezzanine Loan Documents is placed in the hands of an attorney for
collection or enforcement or is collected or enforced through any legal
proceeding; (ii) an attorney is retained to represent Mezzanine Lender in
any bankruptcy, reorganization, receivership, or other proceedings affecting
creditors’ rights and involving a claim under this Agreement the Mezzanine
Notes or any of the Mezzanine Loan Documents; or (iii) an attorney is
retained to protect or enforce the lien or any of the terms of this Agreement,
any Pledge or any of the Mezzanine Loan Documents; then Mezzanine Borrower
shall pay to Mezzanine Lender all reasonable attorney’s fees, costs and
expenses actually incurred in connection therewith, including costs of appeal,
together with interest on any judgment obtained by Mezzanine Lender at the
Default Rate (collectively, “Enforcement Costs”).

 

XVIII.                SPECIAL
PROVISIONS

 

18.1                           Exculpation.

 

18.1.1                  Exculpated Parties.  Except as set forth in this Section 18.1
and the Recourse Guaranty, no personal liability shall be asserted, sought or
obtained by Mezzanine Lender or enforceable against (i) Mezzanine
Borrower, (ii) any Affiliate of Mezzanine Borrower, (iii) any Person
owning, directly or indirectly, any legal or beneficial interest in Mezzanine
Borrower or any Affiliate of Mezzanine Borrower or (iv) any direct or
indirect partner, member, principal, officer, Controlling Person, beneficiary,
trustee, advisor, shareholder, employee, agent, Affiliate or director of any
Persons described in clauses (i) through (iii) above (collectively,
the “Exculpated Parties”) and none of the Exculpated Parties shall have
any personal liability (whether by suit deficiency judgment or otherwise) in
respect of the Obligations (Second Mezzanine), this Agreement, the Pledge, the
Mezzanine Notes, the Collateral or any other Mezzanine Loan Document, or the
making, issuance or transfer thereof, all such liability, if any, being
expressly waived by Mezzanine Lender. 
The foregoing limitation shall not in any way limit or affect Mezzanine
Lender’s right to any of the following and Mezzanine Lender shall not be deemed
to have waived any of the following:

 

(a)                                              Foreclosure of the lien of this Agreement and
the Pledge in accordance with the terms and provisions set forth herein and in
the Pledge;

 

(b)                                             Action against any other security at any time
given to secure the payment of the Mezzanine Notes and the other Obligations
(Second Mezzanine);

 

(c)                                              Exercise of any other remedy set forth in
this Agreement or in any other Mezzanine Loan Document which is not
inconsistent with the terms of this Section 18.1;

 

(d)                                             Any right which Mezzanine Lender may have
under Sections 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Indebtedness secured by this Agreement and the Pledge or to require that all
collateral shall 

 

138

 

continue to secure all of the Indebtedness
owing to Mezzanine Lender in accordance with the Mezzanine Loan Documents; or

 

(e)                                              The liability of any given Exculpated Party
with respect to any separate written guaranty or agreement given by any such
Exculpated Party in connection with the Loan (including, without limitation,
the Recourse Guaranty).

 

18.1.2                  Carveouts From Non-Recourse Limitations.  Notwithstanding the foregoing or anything in
this Agreement or any of the Mezzanine Loan Documents to the contrary, there
shall at no time be any limitation on Mezzanine Borrower’s or any Guarantor’s
liability for the payment, in accordance with the terms of this Agreement, the
Mezzanine Notes, the Pledge and the other Mezzanine Loan Documents, to
Mezzanine Lender of:

 

(a)                                              any loss, damage, cost or expense incurred by
or on behalf of Mezzanine Lender by reason of the fraudulent acts of Mezzanine
Borrower, Senior Mezzanine Borrower, Mortgage Borrower or any Affiliate of
Mezzanine Borrower, Senior Mezzanine Borrower, or Mortgage Borrower;

 

(b)                                             Proceeds which Mezzanine Borrower, Senior
Mezzanine Borrower, Mortgage Borrower or any Affiliate of Mezzanine Borrower,
Senior Mezzanine Borrower or Mortgage Borrower has received and to which
Mezzanine Lender, Senior Mezzanine Lender, or Mortgage Lender (as applicable)
is entitled pursuant to the terms of this Agreement, the Loan Agreement
(Mortgage), the Senior Mezzanine Loan Agreement or any of the Mezzanine Loan
Documents, Senior Mezzanine Loan Documents or Loan Documents (Mortgage) to the
extent the same have not been (i) applied toward payment of the
Indebtedness or the Mortgage Loan or Senior Mezzanine Loan (as applicable), or (ii) used
for the repair or replacement of the Property, all in accordance with the
provisions of this Agreement;

 

(c)                                              all loss, damage, cost or expense as incurred
by Mezzanine Lender and arising from any intentional misrepresentation of
Mezzanine Borrower, Senior Mezzanine Borrower, Mortgage Borrower or any
Affiliate of Mezzanine Borrower, Senior Mezzanine Borrower or Mortgage
Borrower;

 

(d)                                             any misappropriation of Rents or security
deposits or other funds relating to the Properties or Receipts relating to
Ownership Interests or Senior Mezzanine Ownership Interests by Master Lessee,
Mortgage Borrower, Senior Mezzanine Borrower, Mezzanine Borrower or any of
their respective Affiliates;

 

(e)                                              any loss, damage, cost or expense incurred by
or on behalf of Mezzanine Lender by reason of all or any part of the Property,
the Account Collateral (Second Mezzanine), the Rate Cap Collateral (Second
Mezzanine), the Collateral or the Senior Mezzanine Collateral being encumbered
by a Lien or Transferred by reason of the acts of Mezzanine Borrower, Mortgage
Borrower, Senior Mezzanine Borrower, or any Affiliate of Mezzanine Borrower,
Senior Mezzanine Borrower, or Mortgage Borrower from and after the date hereof
(other than as provided in this Agreement and the Pledge and any other
Mezzanine Document) in violation of the Mezzanine Loan Documents;

 

139

 

(f)                                                after the occurrence and during the
continuance of an Event of Default, any Rents, issues, profits and/or income
from the Property collected by Mezzanine Borrower, Senior Mezzanine Borrower,
Mortgage Borrower or any Affiliate of Mezzanine Borrower, Senior Mezzanine
Borrower, or Mortgage Borrower (other than Rent sent to the Holding Account
pursuant to the Loan Agreement (Mortgage) and not paid directly to Mortgage
Lender pursuant to any notice of direction delivered to tenants of the
Property) and not applied to payment of the Obligations (Mortgage), Obligations
(Senior Mezzanine) or Obligations (Second Mezzanine), as applicable, or used to
pay normal and verifiable operating expenses of the Property or otherwise are
not applied in a manner permitted under the Mezzanine Loan Documents;

 

(g)                                             any loss, damage, cost or expense incurred by
or on behalf of Mezzanine Lender by reason of any physical damage to the
Property from intentional waste or other willful destruction (other than in
connection with a permitted alteration) committed by Mortgage Borrower, Senior
Mezzanine Borrower, Mezzanine Borrower or any of their respective Affiliates;

 

(h)                                             any loss, damage, cost or expense incurred by
or on behalf of Mezzanine Lender by reason of the failure of Mezzanine Borrower
to comply with any of the provisions of Article XII;

 

(i)                                                 any
loss, damage, cost or expense incurred by or on behalf of Mezzanine Lender by
reason of any breach of a representation set forth in Section 4.1.30
or any covenant set forth in Section 5.1.4 or Section 5.2.19;

 

(j)                                                 any loss, damage, cost or expense incurred by
or on behalf of Mezzanine Lender by reason of the failure of Mezzanine Borrower
to deliver to Mezzanine Lender the net sales proceeds of a Transfer of
an Individual Property described in Section 2.3.4 together with any
shortfall necessary to pay in full the Combined Release Price for such
Individual Property, in accordance with
the provisions of Section 2.3.4;

 

(k)                                              all of the Indebtedness and the Obligations
(Second Mezzanine) in the event of: (i) any Borrower Party or any
Master Lessee Party filing a
voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (ii) any Borrower Party or any Master Lessee
Party filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary
petition filed against it, by any other Person under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law, or soliciting or causing
to be solicited, or colluding with (or any of such Borrower Party’s or such
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 

 

140

 

imposed upon, incurred by or awarded against
Mezzanine Lender, in the event (and arising out of such circumstances) that
Mezzanine Borrower should raise any defense, counterclaim and/or allegation in
any foreclosure action by Mezzanine Lender relative to the Collateral, the
Account Collateral (Second Mezzanine) or the Rate Cap Collateral (Second
Mezzanine) or any part thereof which is found by a court to have been raised by
Mezzanine Borrower in bad faith or to be without basis in fact or law;

 

(m)                                           reasonable attorney’s fees and expenses
actually incurred by Mezzanine Lender in connection with any successful suit
filed on account of any of the foregoing clauses (a) through (l) or
clause (n) below; or

 

(n)                                             after the occurrence and during the continuance
of an Event of Default, any Receipts from the Ownership Interests collected by
Mezzanine Borrower or any Affiliate of Mezzanine Borrower (other than Receipts
sent to the Mezzanine Account and not paid directly to Mezzanine Lender) and
not paid to Mezzanine Lender or applied to the payment of the Obligations
(Second Mezzanine).

 

18.2                           Pro Rata Share.  The obligations of each Mezzanine Lender
hereunder and under any of the other Mezzanine Loan Documents are several (but
not joint).  Subject to the terms hereof,
each Mezzanine Lender shall be obligated to fund on a pari passu basis only its
respective Pro Rata Share of the Loan. 
Each Mezzanine Lender hereby agrees that if either of them shall,
whether by voluntary payment (other than a voluntary prepayment of the Loan
made and applied in accordance with the terms of this Agreement), by
realization upon security, through the exercise of any right of set-off or
banker’s lien, by counterclaim or cross action or by the enforcement of any
right under the Mezzanine Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code or
other applicable insolvency law, receive payment or reduction of a proportion
of the aggregate amount of principal, interest, fees and other amounts then due
and owing to that Mezzanine Lender hereunder or under the other Mezzanine Loan
Documents which is greater than its Pro Rata Share, then such Mezzanine Lender
receiving such proportionately greater payment shall (i) notify the other
Mezzanine Lender of the receipt of such payment, and (ii) appropriate
payments or other adjustments shall be made by each Mezzanine Lender to ensure
each Mezzanine Lender receives its respective Pro Rata Share of such aggregate
amount due.

 

XIX.                       MISCELLANEOUS

 

19.1                           Survival.  This Agreement and all covenants,
indemnifications, agreements, representations and warranties made herein and in
the certificates delivered pursuant hereto shall survive the making by
Mezzanine Lender of the Loan and the execution and delivery to Mezzanine Lender
of the Mezzanine Notes, and shall continue in full force and effect so long as
all or any of the Indebtedness is outstanding and unpaid unless a longer period
is expressly set forth herein or in the other Mezzanine Loan Documents.  Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party.  All covenants,
promises and agreements in this Agreement, by or on behalf of Mezzanine Borrower,
shall inure to the benefit of the successors and assigns of Mezzanine
Lender.  If Mezzanine Borrower consists
of more than one person, the obligations and liabilities 

 

141

 

of each such person hereunder and under the
other Mezzanine Loan Documents shall be joint and several.

 

19.2                           Mezzanine Lender’s
Discretion.  Whenever pursuant to
this Agreement, Mezzanine Lender exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to Mezzanine
Lender, the decision of Mezzanine Lender to approve or disapprove or to decide
whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Mezzanine Lender and shall be final and conclusive.

 

19.3                           Governing Law.

 

(A)                              THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE
BY MEZZANINE LENDER AND ACCEPTED BY MEZZANINE BORROWER IN THE STATE OF NEW
YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE
LAW OF THE UNITED STATES OF AMERICA.  TO
THE FULLEST EXTENT PERMITTED BY LAW, MEZZANINE BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE MEZZANINE NOTES AND THE OTHER
MEZZANINE LOAN DOCUMENTS AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

(B)                                ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST MEZZANINE LENDER OR
MEZZANINE BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT
MEZZANINE LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE
CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW AND MEZZANINE BORROWER WAIVES ANY OBJECTIONS
WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND MEZZANINE BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING.  MEZZANINE BORROWER
DOES HEREBY DESIGNATE AND APPOINT:

 

142

 

                                                                                                                                                CORPORATION
SERVICE COMPANY

                                                                                                                                                80
STATE STREET

                                                                                                                                                ALBANY,
NEW YORK  12207-2543

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND
ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN
NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID
ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO MEZZANINE
BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON MEZZANINE BORROWER IN ANY SUCH SUIT, ACTION
OR PROCEEDING IN THE STATE OF NEW YORK. 
MEZZANINE BORROWER (I) SHALL GIVE PROMPT NOTICE TO MEZZANINE LENDER
OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT
ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

 

19.4                           Modification; Waiver in
Writing.  No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of the Mezzanine Notes, or of any other Mezzanine Loan Document, or consent
to any departure therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. 
Except as otherwise expressly provided herein, no notice to or demand on
Mezzanine Borrower shall entitle Mezzanine Borrower to any other or future
notice or demand in the same, similar or other circumstances.

 

19.5                           Delay Not a Waiver.  Neither any failure nor any delay on the part
of Mezzanine Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or under the Mezzanine Notes or under any other Mezzanine
Loan Document, or any other instrument given as security therefor, shall
operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. 
In particular, and not by way of limitation, by accepting payment after
the due date of any amount payable under this Agreement, the Mezzanine Notes or
any other Mezzanine Loan Document, Mezzanine Lender shall not be deemed to have
waived any right either to require prompt payment when due of all other amounts
due under this Agreement, the Mezzanine Notes or the other Mezzanine Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.

 

19.6                           Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Mezzanine Loan Document
shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) certified or registered United States mail,
postage prepaid, return receipt requested, (b) expedited prepaid delivery
service, either 

 

143

 

commercial or United States Postal Service,
with proof of attempted delivery or (c) telecopier (with answer back
acknowledged), addressed as follows (or at such other address and Person as
shall be designated from time to time by any party hereto, as the case may be,
in a written notice to the other parties hereto in the manner provided for in
this Section):

 

	
  If to Mezzanine Lender:

  	
  German American Capital
  Corporation, on behalf of the holders of the Mezzanine Notes

  
	
   

  	
  60 Wall Street, 10th floor

  
	
   

  	
  New York, NY 10005

  
	
   

  	
  Attention: Robert
  Pettinato and General Counsel

  
	
   

  	
  Telecopy No.:  (212) 797-4489

  
	
   

  	
   

  
	
   

  	
  and to JPMorgan Chase Bank,
  N.A., on behalf of the holders of the Mezzanine Notes

  270 Park Avenue

  New York, New York 10017

  Attention: Michael Mesard

  Telecopy No.:  (212) 834-6592

  
	
   

  	
   

  
	
   

  	
   

  
	
  With a copy to:

  	
  Centerline Servicing Inc.

  
	
   

  	
  5221 N. O’Connor Boulevard, Suite 600

  
	
   

  	
  Irving, Texas  75039

  
	
   

  	
  Attention:  Wesley Wolf, SVP, Asset Management

  
	
   

  	
  Telecopy No.:  (972) 868-5493

  
	
   

  	
   

  
	
  With a copy to:

  	
  Latham & Watkins LLP

  
	
   

  	
  633 West Fifth Street, Suite 4000

  
	
   

  	
  Los Angeles, California  90071

  
	
   

  	
  Attention:  Donald I. Berger, Esq.

  
	
   

  	
  Telecopy No.:  (213) 891-8763

  
	
   

  	
   

  
	
  If to Mezzanine Borrower:

  	
  FCP MEZZCO BORROWER II, LLC

  1505 South Pavilion Center Drive

  Las Vegas, Nevada 89135

  Attention:  General Counsel

  Telecopy No.:  (702) 495-4260

  
	
   

  	
   

  
	
  With a copy to:

  	
  Milbank,
  Tweed, Hadley & McCloy LLP

  601 S.
  Figueroa Street, 30th Floor

  Los Angeles,
  California 90017

  Attention:  Kenneth J. Baronsky

  Telecopy
  No.:  (213) 892-4733

  

 

144

 

	
  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.

 

145

 

19.7                           Trial
By Jury.  MEZZANINE BORROWER AND ALL
PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, THE
PLEDGE, THE MEZZANINE NOTES OR ANY OTHER MEZZANINE LOAN DOCUMENT, INCLUDING,
WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, THE PLEDGE, THE MEZZANINE
NOTES OR ANY OTHER MEZZANINE LOAN DOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND MEZZANINE
BORROWER HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART OR A COPY
OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY.  MEZZANINE BORROWER ACKNOWLEDGES THAT IT HAS
CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVER AND
ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE
LOAN.  THIS WAIVER SHALL SURVIVE THE
REPAYMENT OF THE LOAN.

 

19.8                           Headings.  The Article and/or Section headings
and the Table of Contents in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.

 

19.9                           Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

 

19.10                     Preferences.  To the extent Mezzanine Borrower makes a
payment or payments to Mezzanine Lender, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received by Mezzanine Lender.

 

19.11                     Waiver of Notice.  Mezzanine Borrower shall not be entitled to
any notices of any nature whatsoever from Mezzanine Lender except with respect
to matters for which this Agreement or the other Mezzanine Loan Documents
specifically and expressly provide for the giving of notice by Mezzanine Lender
to Mezzanine Borrower and except with respect to matters for which Mezzanine
Borrower is not, pursuant to applicable Legal Requirements, permitted to

 

146

 

waive the giving of notice.  Mezzanine Borrower hereby expressly waives
the right to receive any notice from Mezzanine Lender with respect to any
matter for which this Agreement or the other Mezzanine Loan Documents do not
specifically and expressly provide for the giving of notice by Mezzanine Lender
to Mezzanine Borrower.

 

19.12                     Expenses;
Indemnity

 

(a)                                              Mezzanine Borrower covenants and agrees to
pay or, if Mezzanine Borrower fails to pay, to reimburse, Mezzanine Lender upon
receipt of written notice from Mezzanine Lender for all reasonable
out-of-pocket costs and expenses (including reasonable attorneys’ fees and
disbursements), except as may be otherwise expressly provided elsewhere in this
Agreement or the Mezzanine Loan Documents, incurred by Mezzanine Lender in
connection with (i) the preparation, negotiation, execution and delivery
of the Mezzanine 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 Mezzanine Borrower (excluding any opinions requested by
Mezzanine Lender pursuant to this Agreement in conjunction with such resizing);
(ii) Mezzanine Lender’s ongoing performance of and compliance with all
agreements and conditions contained in this Agreement and the other Mezzanine
Loan Documents on its part to be performed or complied with after the Closing
Date; (iii) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Mezzanine Loan Documents and any other documents
or matters as required herein or under the other Mezzanine Loan Documents; (iv) securing
Mezzanine Borrower’s compliance with any requests made pursuant to the
provisions of this Agreement; (v) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Mezzanine Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Mezzanine Lender
pursuant to this Agreement and the other Mezzanine Loan Documents; (vi) enforcing
or preserving any rights, in response to third party claims or the prosecuting
or defending of any action or proceeding or other litigation, in each case
against, under or affecting Mezzanine Borrower, this Agreement, the other
Mezzanine Loan Documents, the Collateral, the Senior Mezzanine Collateral or
the Property, or any other security given for the Loan; (vii) enforcing
any obligations of or collecting any payments due from Mezzanine Borrower under
this Agreement, the other Mezzanine Loan Documents or with respect to the
Collateral, the Senior Mezzanine Collateral or the Property or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a work-out or of any insolvency or bankruptcy
proceedings and (viii) procuring insurance policies pursuant to Section 6.1;
provided, however, that Mezzanine 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
Mezzanine Lender. Any cost and expenses due and payable to Mezzanine Lender may
be paid from any amounts in the Mezzanine Account.

 

(b)                                             Subject to the non-recourse provisions of Section 18.1,
Mezzanine Borrower shall protect, indemnify and save harmless Mezzanine Lender,
and all officers, directors, stockholders, members, partners, employees,
managers, agents, successors and assigns thereof (collectively, the “Indemnified
Parties”) from and against all liabilities, obligations, claims,

 

147

 

damages, penalties, causes of action, costs
and expenses (including all reasonable attorneys’ fees and expenses actually
incurred) imposed upon or incurred by or asserted against the Indemnified
Parties, the Collateral, the Senior Mezzanine Collateral or the Property or any
part of its interest therein, by reason of the occurrence or existence of any
of the following (to the extent Proceeds payable on account of the following
shall be inadequate; it being understood that in no event will the Indemnified
Parties be required to actually pay or incur any costs or expenses as a
condition to the effectiveness of the foregoing indemnity) prior to (i) the
acceptance by Mezzanine Lender or its designee of a transfer-in-lieu of
foreclosure with respect to the Collateral, or (ii) an Indemnified Party
or its designee or a receiver taking possession or control of the Collateral or
(iii) the foreclosure of the Pledge, except to the extent caused by the
actual willful misconduct or gross negligence of the Indemnified Parties (other
than such willful misconduct or gross negligence imputed to the Indemnified
Parties because of their interest in the Collateral):  (1) ownership of Mezzanine Borrower’s
interest in Senior Mezzanine Borrower or Senior Mezzanine Borrower’s ownership
of its interest in the Mortgage Borrower, or any interest therein, or receipt
of any Receipts or other sum therefrom, (2) any accident, injury to or
death of any persons or loss of or damage to property occurring on or about the
Property or any Appurtenances thereto, (3) any design, construction,
operation, repair, maintenance, use, non-use or condition of the Property or
Appurtenances thereto, including claims or penalties arising from violation of
any Legal Requirement or Insurance Requirement, as well as any claim based on any
patent or latent defect, whether or not discoverable by Mezzanine Lender and
any claim the insurance as to which is inadequate, (4) any Default under
this Agreement or any of the other Mezzanine Loan Documents or any Mortgage
Default or Senior Mezzanine Default or any failure on the part of Mezzanine
Borrower to cause the Mortgage Borrower or Senior Mezzanine Borrower to perform
or comply with any of the terms of any Operating Agreement within the
applicable notice or grace periods, (5) any performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property or any part thereof, (6) any negligence or tortious act or
omission on the part of Mezzanine Borrower or Mortgage Borrower or any of their
agents, contractors, servants, employees, sublessees, licensees or invitees, (7) any
contest referred to in Section 7.3 hereof, or (8) any
obligation or undertaking relating to the performance or discharge of any of
the terms, covenants and conditions of the landlord contained in the Subleases
or the Master Lease.  Any amounts the
Indemnified Parties are legally entitled to receive under this Section which
are not paid within fifteen (15) Business Days after written demand therefor by
the Indemnified Parties or Mezzanine Lender, setting forth in reasonable detail
the amount of such demand and the basis therefor, shall bear interest from the
date of demand at the Default Rate, and shall, together with such interest, be
part of the Indebtedness and secured by this Agreement and the Pledge.  In case any action, suit or proceeding is
brought against the Indemnified Parties by reason of any such occurrence,
Mezzanine Borrower shall at Mezzanine Borrower’s expense resist and defend such
action, suit or proceeding or will cause the same to be resisted and defended
by counsel at Mezzanine Borrower’s reasonable expense for the insurer of the
liability or by counsel designated by Mezzanine Borrower (unless reasonably
disapproved by Mezzanine Lender promptly after Mezzanine Lender has been
notified of such counsel); provided, however, that nothing herein
shall compromise the right of Mezzanine Lender (or any Indemnified Party) to
appoint its own counsel at Mezzanine Borrower’s expense for its defense with
respect to any action which in its reasonable opinion presents a conflict or
potential conflict between Mezzanine Lender or such Indemnified Party and
Mezzanine Borrower that would make such separate representation advisable;
provided

 

148

 

further that if Mezzanine Lender or such
Indemnified Party shall have appointed separate counsel pursuant to the
foregoing, Mezzanine Borrower shall not be responsible for the expense of
additional separate counsel of any Indemnified Party or Mezzanine Lender unless
in the reasonable opinion of Mezzanine Lender a conflict or potential conflict
exists between such Indemnified Party and Mezzanine Lender.  So long as Mezzanine Borrower is resisting
and defending such action, suit or proceeding as provided above in a prudent
and commercially reasonable manner, Mezzanine Lender and the Indemnified
Parties shall not be entitled to settle such action, suit or proceeding without
Mezzanine Borrower’s consent which shall not be unreasonably withheld or
delayed, and claim the benefit of this Section 19.12 with respect
to such action, suit or proceeding and Mezzanine Lender agrees that it will not
settle any such action, suit or proceeding without the consent of Mezzanine
Borrower; provided, however, that if Mezzanine Borrower is not
diligently defending such action, suit or proceeding in a prudent and
commercially reasonable manner as provided above, and Mezzanine Lender has
provided Mezzanine Borrower with thirty (30) days’ prior written notice, or
shorter period if mandated by the requirements of applicable law, and
opportunity to correct such determination, Mezzanine Lender may settle such
action, suit or proceeding and claim the benefit of this Section 19.12
with respect to settlement of such action, suit or proceeding.  Any Indemnified Party will give Mezzanine
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification hereunder.  The Indemnified Parties shall not settle or
compromise any action, proceeding or claim as to which it is indemnified under
this Section 19.12 without prior notice to and reasonable consent
of Mezzanine Borrower.

 

19.13                     Exhibits and Schedules
Incorporated.  The Exhibits and
Schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.

 

19.14                     Offsets, Counterclaims and
Defenses.  Any assignee of Mezzanine
Lender’s interest in and to this Agreement, the Mezzanine Notes and the other
Mezzanine Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Mezzanine
Borrower may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Mezzanine
Borrower in any action or proceeding brought by any such assignee upon such
documents and any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Mezzanine Borrower.

 

19.15                     Liability of Assignees of
Mezzanine Lender.  No assignee of
Mezzanine Lender shall have any personal liability, directly or indirectly,
under or in connection with this Agreement or any other Mezzanine Loan Document
or any amendment or amendments hereto made at any time or times, heretofore or
hereafter, any different than the liability of Mezzanine Lender hereunder.  In addition, no assignee shall have at any
time or times hereafter any personal liability, directly or indirectly, under
or in connection with or secured by any agreement, lease, instrument,
encumbrance, claim or right affecting or relating to the Property or to which
the Property is now or hereafter subject any different than the liability of
Mezzanine Lender hereunder.  The
limitation of liability provided in this Section 19.15 is (i) in
addition to, and not in limitation of, any limitation of liability applicable
to the assignee provided by law or by any

 

149

 

other contract, agreement or instrument, and (ii) shall
not apply to any assignee’s gross negligence or willful misconduct.

 

19.16                     No Joint Venture or Partnership; No Third Party Beneficiaries.

 

(a)                                              Mezzanine Borrower and Mezzanine Lender
intend that the relationships created hereunder and under the other Mezzanine
Loan Documents be solely that of borrower and lender.  Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Mezzanine Borrower and Mezzanine Lender nor to grant
Mezzanine Lender any interest in the Collateral other than that of secured
party, beneficiary or lender.

 

(b)                                             This Agreement and the other Mezzanine Loan
Documents are solely for the benefit of Mezzanine Lender and Mezzanine Borrower
and nothing contained in this Agreement or the other Mezzanine Loan Documents
shall be deemed to confer upon anyone other than Mezzanine Lender and Mezzanine
Borrower any right to insist upon or to enforce the performance or observance
of any of the obligations contained herein or therein.  All conditions to the obligations of
Mezzanine Lender to make the Loan hereunder are imposed solely and exclusively
for the benefit of Mezzanine Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Mezzanine Lender will refuse to make the Loan in the
absence of strict compliance with any or all thereof and no other Person shall
under any circumstances be deemed to be a beneficiary of such conditions, any
or all of which may be freely waived in whole or in part by Mezzanine Lender
if, in Mezzanine Lender’s sole discretion, Mezzanine Lender deems it advisable
or desirable to do so.

 

19.17                     Publicity.  Each party shall endeavor to permit the other
to review the initial press release relating to the Loan in order to provide
the other with a reasonable opportunity to comment thereon.

 

19.18                     Waiver of Marshalling of Assets.  To the fullest extent permitted by law,
Mezzanine Borrower, for itself and its successors and assigns, waives all
rights to a marshalling of the assets of Mezzanine Borrower, Mezzanine Borrower’s
members and others with interests in Mezzanine Borrower and of the Collateral,
and agrees not to assert any right under any laws pertaining to the marshalling
of assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Mezzanine Lender under the Mezzanine Loan
Documents to a sale of the Collateral for the collection of the Indebtedness
without any prior or different resort for collection or of the right of
Mezzanine Lender to the payment of the Indebtedness out of the net proceeds of
the Collateral in preference to every other claimant whatsoever.

 

19.19                     Waiver of Counterclaim and
other Actions.  Mezzanine Borrower
hereby expressly and unconditionally waives, in connection with any suit,
action or proceeding brought by Mezzanine Lender on this Agreement, the
Mezzanine Notes, the Pledge or any Mezzanine Loan Document, any and every right
it may have to (i) interpose any counterclaim therein (other than a
counterclaim which can only be asserted in the suit, action or proceeding
brought by Mezzanine Lender on this Agreement, the Mezzanine Notes, the Pledge
or any Mezzanine Loan

 

150

 

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.

 

(a)                                  In
the event of any conflict between the provisions of this Agreement and any of
the other Mezzanine Loan Documents, the provisions of this Agreement shall
control.  The parties hereto acknowledge
that they were represented by competent counsel in connection with the
negotiation, drafting and execution of the Mezzanine Loan Documents and that
such Mezzanine Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same.  Mezzanine Borrower acknowledges that, with
respect to the Loan, Mezzanine Borrower shall rely solely on its own judgment
and advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Mezzanine Lender or any
parent, subsidiary or Affiliate of Mezzanine Lender.  Mezzanine Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Mezzanine Loan Documents or any other agreements or
instruments which govern the Loan by virtue of the ownership by it or any
parent, subsidiary or Affiliate of Mezzanine Lender of any equity interest any
of them may acquire in Mezzanine Borrower, and Mezzanine Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Mezzanine Lender’s exercise of any such
rights or remedies.  Mezzanine Borrower
acknowledges that Mezzanine Lender engages in the business of real estate
financings and other real estate transactions and investments which may be
viewed as adverse to or competitive with the business of Mezzanine Borrower or
its Affiliates.

 

(b)                                             Notwithstanding
anything to the contrary set forth in this Agreement, any right of Mezzanine
Lender or obligation of Mezzanine Borrower with respect to the Operating
Agreements shall be subject to the rights of Mortgage Lender and obligations of
Mortgage Borrower under the Loan Documents (Mortgage).

 

19.21                     Prior Agreements.  This Agreement and the other Mezzanine Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, are
superseded by the terms of this Agreement and the other Mezzanine Loan
Documents and unless specifically set forth in a writing contemporaneous
herewith the terms, conditions and provisions of any and all such prior
agreements do not survive execution of this Agreement.

 

19.22                     Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which
shall constitute one document.

 

19.23                     Direction of Mortgage Borrower
with Respect to the Property. 
Mezzanine Borrower and Mezzanine Lender acknowledge and agree that, as
to any clauses or provisions contained in this Agreement or any of the other
Mezzanine Loan Documents to the effect that (i) Mezzanine Borrower shall
cause Mortgage Borrower to act or to refrain from acting in any manner, or (ii) Mezzanine
Borrower shall cause to occur or not to occur, or otherwise be obligated in any
manner with respect to, any matters pertaining to Mortgage Borrower or the

 

151

 

Property, or (iii) other similar effect,
such clause or provisions, in each case, is intended to mean, and shall be
construed as meaning, that Mezzanine Borrower has undertaken to act and is
obligated to act in Mezzanine Borrower’s capacity as the indirect sole member
of Mortgage Borrower (which Mortgage Borrower, in turn, is the fee owner of the
Property) but not directly with respect to Mortgage Borrower or the Property or
in any other manner which would violate any of the covenants contained in Section 5.1.4
hereof or other similar covenants contained in Mezzanine Borrower’s
Organizational Documents.

 

 

[NO FURTHER
TEXT ON THIS PAGE]

 

152

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed by their duly authorized
representatives, all as of the day and year first above written.

 

	
   

  	
  MEZZANINE BORROWER:

  
	
   

  	
   

  
	
   

  	
  FCP MEZZCO BORROWER II, LLC, a
  Delaware

  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Thomas
  M. Friel

  
	
   

  	
  Name: Thomas M. Friel

  
	
   

  	
  Title: Authorized Signatory

  

 

 

[Mezzanine
Lender’s signature appears on following page]

 

 

Mezzanine
Borrower’s Execution Page

 

 

	
   

  	
  MEZZANINE LENDER:

  
	
   

  	
   

  
	
   

  	
  GERMAN AMERICAN CAPITAL

  CORPORATION, a Maryland corporation, on

  behalf of the holders of the Mezzanine Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ 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
 Mezzanine Notes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Michael
  Mesard

  
	
   

  	
  Name: Michael
  Mesard

  
	
   

  	
  Title: Executive
  Director

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