Document:

Exhibit 4.1

 

 

 

CREDIT AGREEMENT

Dated as of November 7, 2007

among

 

STATION CASINOS, INC.

as Borrower,

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent

THE OTHER LENDERS PARTY HERETO,

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

 

 

BANK OF SCOTLAND plc,

BANK OF AMERICA, N.A., and

WACHOVIA BANK, N.A.,

as Co-Documentation Agents

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS
  AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01. Defined
  Terms

  	
   

  	
  1

  
	
  SECTION 1.02. Other
  Interpretive Provisions

  	
   

  	
  44

  
	
  SECTION 1.03. Accounting
  Terms

  	
   

  	
  44

  
	
  SECTION 1.04. Rounding

  	
   

  	
  45

  
	
  SECTION 1.05. References
  to Agreements, Laws, Etc.

  	
   

  	
  45

  
	
  SECTION 1.06. Times of Day

  	
   

  	
  45

  
	
  SECTION 1.07. Timing of
  Payment or Performance

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE
  COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01. The
  Revolving Credit Borrowings

  	
   

  	
  45

  
	
  SECTION 2.02. Borrowings,
  Conversions and Continuations of Loans

  	
   

  	
  45

  
	
  SECTION 2.03. Letters of
  Credit

  	
   

  	
  47

  
	
  SECTION 2.04. Swing Line
  Loans

  	
   

  	
  54

  
	
  SECTION 2.05. Prepayments

  	
   

  	
  56

  
	
  SECTION 2.06. Termination
  or Reduction of Commitments.

  	
   

  	
  59

  
	
  SECTION 2.07. Repayment of
  Loans

  	
   

  	
  59

  
	
  SECTION 2.08. Interest

  	
   

  	
  59

  
	
  SECTION 2.09. Fees

  	
   

  	
  60

  
	
  SECTION 2.10. Computation
  of Interest and Fees

  	
   

  	
  60

  
	
  SECTION 2.11. Evidence of
  Indebtedness

  	
   

  	
  61

  
	
  SECTION 2.12. Payments
  Generally

  	
   

  	
  61

  
	
  SECTION 2.13. Sharing of
  Payments

  	
   

  	
  63

  
	
  SECTION 2.14. Incremental
  Credit Extensions

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  ARTICLE III TAXES,
  INCREASED COSTS PROTECTION AND ILLEGALITY

  	
   

  	
  65

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01. Taxes

  	
   

  	
  65

  
	
  SECTION 3.02. Illegality

  	
   

  	
  67

  
	
  SECTION 3.03. Inability to
  Determine Rates

  	
   

  	
  67

  
	
  SECTION 3.04. Increased
  Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Loans

  	
   

  	
  68

  
	
  SECTION 3.05. Funding
  Losses

  	
   

  	
  68

  
	
  SECTION 3.06. Matters
  Applicable to All Requests for Compensation

  	
   

  	
  69

  
	
  SECTION 3.07. Replacement
  of Lenders under Certain Circumstances

  	
   

  	
  70

  
	
  SECTION 3.08. Survival

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CONDITIONS
  PRECEDENT TO CREDIT EXTENSIONS

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01. Conditions
  of Initial Credit Extension

  	
   

  	
  71

  
	
  SECTION 4.02. Conditions
  to All Credit Extensions

  	
   

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  75

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01. Existence,
  Qualification and Power; Compliance with Laws

  	
   

  	
  75

  
	
  SECTION 5.02. Authorization;
  No Contravention

  	
   

  	
  75

  

 

 

	
  SECTION 5.03. Governmental
  Authorization; Other Consents

  	
   

  	
  75

  
	
  SECTION 5.04. Binding
  Effect

  	
   

  	
  76

  
	
  SECTION 5.05. Financial
  Statements; No Material Adverse Effect

  	
   

  	
  76

  
	
  SECTION 5.06. Litigation

  	
   

  	
  77

  
	
  SECTION 5.07. No Default

  	
   

  	
  77

  
	
  SECTION 5.08. Ownership of
  Property; Liens

  	
   

  	
  77

  
	
  SECTION 5.09.
  Environmental Compliance

  	
   

  	
  78

  
	
  SECTION 5.10. Taxes

  	
   

  	
  79

  
	
  SECTION 5.11. ERISA
  Compliance

  	
   

  	
  79

  
	
  SECTION 5.12.
  Subsidiaries; Equity Interests

  	
   

  	
  79

  
	
  SECTION 5.13. Margin
  Regulations; Investment Company Act

  	
   

  	
  79

  
	
  SECTION 5.14. Disclosure

  	
   

  	
  80

  
	
  SECTION 5.15. Intellectual
  Property; Licenses, Etc.

  	
   

  	
  80

  
	
  SECTION 5.16. Solvency

  	
   

  	
  80

  
	
  SECTION 5.17. Maintenance
  of Insurance.

  	
   

  	
  81

  
	
  SECTION 5.18.
  Subordination of Junior Financing

  	
   

  	
  81

  
	
  SECTION 5.19. Labor
  Matters

  	
   

  	
  81

  
	
  SECTION 5.20. Transaction
  Documentation

  	
   

  	
  81

  
	
  SECTION 5.21. Collateral

  	
   

  	
  81

  
	
  SECTION 5.22. Location of
  Real Property.

  	
   

  	
  81

  
	
  SECTION 5.23. Permits.

  	
   

  	
  81

  
	
  SECTION 5.24. Fiscal Year

  	
   

  	
  81

  
	
  SECTION 5.25. Patriot Act.

  	
   

  	
  82

  
	
  SECTION 5.26. Use of
  Proceeds

  	
   

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  AFFIRMATIVE COVENANTS

  	
   

  	
  82

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01. Financial
  Statements

  	
   

  	
  82

  
	
  SECTION 6.02.
  Certificates; Other Information

  	
   

  	
  83

  
	
  SECTION 6.03. Notices

  	
   

  	
  85

  
	
  SECTION 6.04. Payment of
  Obligations

  	
   

  	
  85

  
	
  SECTION 6.05. Preservation
  of Existence, Etc.

  	
   

  	
  86

  
	
  SECTION 6.06. Maintenance
  of Properties

  	
   

  	
  86

  
	
  SECTION 6.07. Maintenance
  of Insurance

  	
   

  	
  86

  
	
  SECTION 6.08. Compliance
  with Laws

  	
   

  	
  86

  
	
  SECTION 6.09. Books and
  Records

  	
   

  	
  86

  
	
  SECTION 6.10. Inspection
  Rights

  	
   

  	
  86

  
	
  SECTION 6.11. Covenant to
  Guarantee Obligations and Give Security

  	
   

  	
  87

  
	
  SECTION 6.12. Compliance
  with Environmental Laws

  	
   

  	
  89

  
	
  SECTION 6.13. Further
  Assurances and Post-Closing Conditions.

  	
   

  	
  89

  
	
  SECTION 6.14. Designation
  of Subsidiaries

  	
   

  	
  90

  
	
   

  	
   

  	
   

  
	
  SECTION 6.15. Information
  Regarding Collateral.

  	
   

  	
  90

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII NEGATIVE
  COVENANTS

  	
   

  	
  90

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01. Liens

  	
   

  	
  91

  
	
  SECTION 7.02. Investments

  	
   

  	
  93

  
	
  SECTION 7.03. Indebtedness

  	
   

  	
  96

  
	
  SECTION 7.04. Fundamental
  Changes

  	
   

  	
  99

  
	
  SECTION 7.05. Dispositions

  	
   

  	
  100

  

 

ii

 

	
  SECTION 7.06. Restricted
  Payments

  	
   

  	
  101

  
	
  SECTION 7.07. Change in
  Nature of Business

  	
   

  	
  103

  
	
  SECTION 7.08. Transactions
  with Affiliates

  	
   

  	
  103

  
	
  SECTION 7.09. Burdensome
  Agreements

  	
   

  	
  103

  
	
  SECTION 7.10. Use of
  Proceeds

  	
   

  	
  104

  
	
  SECTION 7.11. Financial
  Covenants

  	
   

  	
  104

  
	
  SECTION 7.12. Accounting
  Changes

  	
   

  	
  105

  
	
  SECTION 7.13. Prepayments,
  Etc. of Indebtedness

  	
   

  	
  105

  
	
  SECTION 7.14. Equity
  Interests of the Borrower and Restricted Subsidiaries

  	
   

  	
  106

  
	
  SECTION 7.15. The Holding
  Companies

  	
   

  	
  106

  
	
  SECTION 7.16. Capital
  Expenditures

  	
   

  	
  106

  
	
  SECTION 7.17.
  Sale-Leaseback Transactions

  	
   

  	
  107

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII EVENTS
  OF DEFAULT AND REMEDIES

  	
   

  	
  107

  
	
  0

  	
   

  	
   

  
	
  SECTION 8.01. Events of
  Default

  	
   

  	
  107

  
	
  SECTION 8.02. Remedies
  Upon Event of Default

  	
   

  	
  109

  
	
  SECTION 8.03. Exclusion of
  Immaterial Subsidiaries

  	
   

  	
  110

  
	
  SECTION 8.04. Application
  of Funds

  	
   

  	
  110

  
	
  SECTION 8.05. Borrower’s
  Right to Cure

  	
   

  	
  111

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX
  ADMINISTRATIVE AGENT AND OTHER AGENTS

  	
   

  	
  111

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01. Appointment
  and Authorization of Agents

  	
   

  	
  111

  
	
  SECTION 9.02. Delegation
  of Duties

  	
   

  	
  112

  
	
  SECTION 9.03. Liability of
  Agents

  	
   

  	
  112

  
	
  SECTION 9.04. Reliance by
  Agents

  	
   

  	
  113

  
	
  SECTION 9.05. Notice of
  Default

  	
   

  	
  113

  
	
  SECTION 9.06. Credit
  Decision; Disclosure of Information by Agents

  	
   

  	
  113

  
	
  SECTION 9.07.
  Indemnification of Agents

  	
   

  	
  114

  
	
  SECTION 9.08. Agents in
  their Individual Capacities

  	
   

  	
  114

  
	
  SECTION 9.09. Successor
  Agents

  	
   

  	
  115

  
	
  SECTION 9.10.
  Administrative Agent May File Proofs of Claim

  	
   

  	
  115

  
	
  SECTION 9.11. Collateral
  and Guaranty Matters

  	
   

  	
  116

  
	
  SECTION 9.12. Other
  Agents; Joint Lead Arrangers and Managers

  	
   

  	
  116

  
	
  SECTION 9.13. Appointment
  of Supplemental Administrative Agents

  	
   

  	
  117

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  MISCELLANEOUS

  	
   

  	
  118

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01. Amendments,
  Etc.

  	
   

  	
  118

  
	
  SECTION 10.02. Notices and
  Other Communications; Facsimile Copies

  	
   

  	
  119

  
	
  SECTION 10.03. No Waiver;
  Cumulative Remedies

  	
   

  	
  120

  
	
  SECTION 10.04. Attorney
  Costs, Expenses and Taxes

  	
   

  	
  120

  
	
  SECTION 10.05.
  Indemnification by the Borrower

  	
   

  	
  121

  
	
  SECTION 10.06. Payments
  Set Aside

  	
   

  	
  122

  
	
  SECTION 10.07. Successors
  and Assigns

  	
   

  	
  122

  
	
  SECTION 10.08.
  Confidentiality

  	
   

  	
  126

  
	
  SECTION 10.09. Setoff

  	
   

  	
  126

  
	
  SECTION 10.10. Interest
  Rate Limitation

  	
   

  	
  126

  
	
  SECTION 10.11.
  Counterparts

  	
   

  	
  127

  
	
  SECTION 10.12. Integration

  	
   

  	
  127

  

 

iii

 

	
  SECTION 10.13. Survival of
  Representations and Warranties

  	
   

  	
  127

  
	
  SECTION 10.14.
  Severability

  	
   

  	
  128

  
	
  SECTION 10.15. Tax Forms

  	
   

  	
  128

  
	
  SECTION 10.16. GOVERNING
  LAW

  	
   

  	
  129

  
	
  SECTION 10.17. WAIVER OF
  RIGHT TO TRIAL BY JURY

  	
   

  	
  130

  
	
  SECTION 10.18. Binding
  Effect

  	
   

  	
  130

  
	
  SECTION 10.19. Lender
  Action

  	
   

  	
  130

  
	
  SECTION 10.20.
  Acknowledgments

  	
   

  	
  130

  
	
  SECTION 10.21. USA PATRIOT Act

  	
   

  	
  131

  
	
  SECTION 10.22. Gaming
  Authorities and Liquor Authorities

  	
   

  	
  131

  
	
  SECTION 10.23. Certain
  Matters Affecting Lenders

  	
   

  	
  131

  

 

iv

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.01B

  	
   

  	
  Certain
  Security Interests and Guarantees

  
	
  1.01C

  	
   

  	
  Unrestricted
  Subsidiaries

  
	
  1.01D

  	
   

  	
  Existing
  Letters of Credit

  
	
  1.01F

  	
   

  	
  [Reserved.]

  
	
  1.01H

  	
   

  	
  Sale
  Leasebacks

  
	
  1.01I

  	
   

  	
  Immaterial
  Subsidiaries and Native American Subsidiaries

  
	
  1.01J

  	
   

  	
  Material
  Contracts

  
	
  1.01K

  	
   

  	
  Casino
  Subleases

  
	
  1.01L

  	
   

  	
  CMBS
  Subsidiaries

  
	
  1.01M

  	
   

  	
  Scotia
  Bank Letters of Credit

  
	
  1.01N

  	
   

  	
  Principal
  Control Persons

  
	
  2.01

  	
   

  	
  Commitments

  
	
  5.03

  	
   

  	
  Consents

  
	
  5.05

  	
   

  	
  Certain
  Liabilities

  
	
  5.09

  	
   

  	
  Environmental
  Matters

  
	
  5.10

  	
   

  	
  Taxes

  
	
  5.11

  	
   

  	
  ERISA
  Compliance

  
	
  5.12

  	
   

  	
  Subsidiaries
  and Other Equity Investments

  
	
  5.17

  	
   

  	
  Insurance

  
	
  5.20

  	
   

  	
  Transaction
  Documents

  
	
  5.22

  	
   

  	
  Location
  of Real Property

  
	
  7.01(b)

  	
   

  	
  Existing
  Liens

  
	
  7.02(f)

  	
   

  	
  Existing
  Investments

  
	
  7.02(r)

  	
   

  	
  Real
  Estate to be Invested by Native American Subsidiaries

  
	
  7.03(b)

  	
   

  	
  Existing
  Indebtedness

  
	
  7.05(k)

  	
   

  	
  Dispositions

  
	
  7.08

  	
   

  	
  Transactions
  with Affiliates

  
	
  7.09

  	
   

  	
  Existing
  Restrictions

  
	
  10.02

  	
   

  	
  Administrative
  Agent’s Office, Certain Addresses for Notices

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Committed
  Loan Notice

  
	
  B

  	
   

  	
  Swing
  Line Loan Notice

  
	
  C-1

  	
   

  	
  Term
  Note

  
	
  C-2

  	
   

  	
  Revolving
  Credit Note

  
	
  D

  	
   

  	
  Compliance
  Certificate

  
	
  E

  	
   

  	
  Assignment
  and Assumption

  
	
  F

  	
   

  	
  Guaranty

  
	
  G-1

  	
   

  	
  Security
  Agreement

  
	
  G-2

  	
   

  	
  Pledge
  Agreement

  
	
  G-3

  	
   

  	
  Shareholder
  Pledge Agreement

  
	
  H

  	
   

  	
  Mortgage

  
	
  I

  	
   

  	
  Intellectual
  Property Security Agreement

  
	
  J

  	
   

  	
  Opinion
  Matters — Counsel to Loan Parties

  

 

v

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of November 7, 2007, among
STATION CASINOS, INC., a Nevada corporation (the “Borrower”),
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (in such
capacity, together with any successor thereto, the “Administrative
Agent”), each lender from time to time party hereto (collectively,
the “Lenders” and individually, a “Lender”), DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN
SECURITIES INC., as Joint Lead Arrangers and Joint Bookrunners (in such
capacity, collectively, the “Joint Lead Arrangers”
and individually, a “Joint Lead Arranger”),
JPMORGAN CHASE BANK, N.A., as Syndication Agent (in such capacity, “Syndication Agent”) and BANK OF SCOTLAND plc, BANK OF
AMERICA, N.A., and WACHOVIA BANK, N.A., as Co-Documentation Agents (in such
capacities, the “Co-Documentation Agents”).

 

PRELIMINARY STATEMENTS

 

WHEREAS, pursuant to the
Acquisition Agreement (as this and other capitalized terms used in these
preliminary statements are defined in Section 1.01 below), Fertitta Colony
Partners, LLC, a Nevada limited liability company (“FCP”),
through its wholly-owned Subsidiary, FCP Holding, Inc., a Nevada corporation (“FCP Holding”), Fertitta Partners LLC, a Nevada limited
liability company (“Fertitta Partners”)
and FCP Voteco, LLC, a Nevada limited liability company (“FCP Voteco”)
have, collectively, acquired all of the outstanding Equity Interests of the
Borrower (the “Acquisition”).

 

WHEREAS, the Borrower has
requested that, simultaneously with the consummation of the Acquisition, the
Lenders extend credit to the Borrower in the form of (a) a $250,000,000 Term
Loan and (b) a Revolving Credit Facility in an initial aggregate amount of
$650,000,000. The Revolving Credit Facility may include one or more Swing Line
Loans and one or more Letters of Credit from time to time.

 

WHEREAS, the proceeds of the
Term Loans and the Revolving Credit Loans made on the Closing Date will be used
to finance the repayment of certain other existing Indebtedness of the Borrower
and its Subsidiaries and pay a portion of the purchase price for the
Acquisition and the Transaction Expenses. The proceeds of Revolving Credit
Loans made after the Closing Date will be used for working capital and other
general corporate purposes of the Borrower and its Subsidiaries, including the
financing of Permitted Acquisitions. Swing Line Loans and Letters of Credit
will be used for general corporate purposes of the Borrower and its
Subsidiaries.

 

WHEREAS, the applicable
Lenders have indicated their willingness to lend, and the L/C Issuers have
indicated their willingness to issue Letters of Credit, in each case, on the
terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I

 

Definitions and Accounting Terms

 

SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth below:

 

“6% Senior Notes” means the 6% Senior Notes due 2012 issued
by Borrower pursuant to the Indenture dated as of March 17, 2004.

 

 

“61⁄2% Senior Subordinated Notes” means the 61⁄2% Senior
Subordinated Notes due 2014 issued by Borrower pursuant to the Indenture dated
as of January 29, 2004.

 

“6 5/8% Senior Subordinated Notes” means the 6 5/8% Senior
Subordinated Notes due 2018 issued by Borrower pursuant to the Indenture dated
as of March 13, 2006.

 

“6 7/8% Senior Subordinated Notes” means the 6 7/8% Senior
Subordinated Notes due 2016 issued by Borrower pursuant to the Indenture dated
as of February 27, 2004.

 

“7.75% Senior Notes” means the 7.75% Senior Notes due 2016
issued by Borrower pursuant to the Indenture dated as of August 1, 2006.

 

“Acquired EBITDA” means, with respect to any Acquired Entity
or Business for any period, the amount for such period of Consolidated EBITDA
of such Acquired Entity or Business (determined as if references to the
Borrower and the Restricted Subsidiaries in the definition of Consolidated
EBITDA were references to such Acquired Entity or Business and its
Subsidiaries), all as determined on a consolidated basis for such Acquired
Entity or Business.

 

“Acquired Entity or Business” has the meaning set forth in
the definition of the term “Consolidated EBITDA”.

 

“Acquisition”
has the meaning set forth in the first preliminary statement hereto.

 

“Acquisition
Agreement” means the Agreement and Plan of Merger dated as of
February 23, 2007 (as amended by the amendment thereto dated May 4, 2007) by
and among the Borrower, FCP and FCP Acquisition, as may be further amended in
accordance with the terms hereof.

 

“Additional
Lender” has the meaning set forth in Section 2.14(a).

 

“Adjusted
LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100,000 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves, to the extent
applicable to any Lender.

 

“Administrative
Agent” has the meaning specified in the preamble hereto.

 

“Administrative
Agent’s Office” means the Administrative Agent’s address as set
forth on Schedule 10.02 or such other address as the Administrative Agent may
from time to time notify the Borrower and the Lenders.

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified. “Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. “Controlling” and “Controlled” have
meanings correlative thereto.

 

“Agent-Related
Persons” means the Agents, together with their respective
Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.

 

2

 

“Agents”
means, collectively, the Administrative Agent, the Syndication Agent, the
Co-Documentation Agents and the Supplemental Administrative Agents (if any).

 

“Aggregate
Commitments” means the Commitments of all the Lenders.

 

“Agreement”
means this Credit Agreement.

 

“Aliante”
means Aliante Station Hotel and Casino, a project currently in development by a
joint venture in which Aliante Station, LLC, a wholly-owned Subsidiary of
Borrower, is a joint venturer.

 

“Applicable Rate” means a percentage per annum equal to, (a)
until delivery of financial statements for the first full fiscal quarter
commencing on or after the Closing Date pursuant to Section 6.01, (A) for
Eurodollar Loans, 2.50%, (B) for Base Rate Loans, 1.50%, (C) for Letter of
Credit fees, 2.50% and (D) for commitment fees, 0.375% and (b) thereafter, the
following percentages per annum, based upon the Total Leverage Ratio as set
forth in the most recent Compliance Certificate received by the Administrative
Agent pursuant to Section 6.02(b):

 

Applicable Rate

 

	
  Pricing

  Level

  	
   

  	
  Total Leverage Ratio

  	
   

  	
  Eurodollar

  and

  Letter of

  Credit Fees

  	
   

  	
  Base Rate

  	
   

  	
  Commitment

  Fee

  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  < 4.00:1

  	
   

  	
  1.25

  	
  % 

  	
  0.25

  	
  % 

  	
  0.250

  	
  %

  
	
  2

  	
   

  	
  > 4.00:1 but < 4.50:1

  	
   

  	
  1.50

  	
  % 

  	
  0.50

  	
  % 

  	
  0.300

  	
  %

  
	
  3

  	
   

  	
  > 4.50:1 but < 5.00:1

  	
   

  	
  1.75

  	
  % 

  	
  0.75

  	
  % 

  	
  0.300

  	
  %

  
	
  4

  	
   

  	
  > 5.00:1 but < 6.00:1

  	
   

  	
  2.00

  	
  % 

  	
  1.00

  	
  % 

  	
  0.300

  	
  %

  
	
  5

  	
   

  	
  > 6.00:1 but < 7.00:1.0

  	
   

  	
  2.25

  	
  % 

  	
  1.25

  	
  % 

  	
  0.375

  	
  %

  
	
  6

  	
   

  	
  > 7.00:1.0

  	
   

  	
  2.50

  	
  % 

  	
  1.50

  	
  % 

  	
  0.375

  	
  %

  

 

Any increase or decrease in
the Applicable Rate resulting from a change in the Total Leverage Ratio shall
become effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered pursuant to Section 6.02(b); provided that at the option of the Administrative Agent or
the Required Lenders, the highest Pricing Level shall apply as of the first
Business Day after the date on which a Compliance Certificate was required to
have been delivered but was not delivered, and shall continue to so apply to
and including the date on which such Compliance Certificate is so delivered
(and thereafter the Pricing Level otherwise determined in accordance with this
definition shall apply). In the event that any financial statement or
certification delivered pursuant to Section 5.1 is shown to be inaccurate, and
such inaccuracy, if corrected, would have led to the application of a higher
Applicable Rate for any period (an “Applicable Period”)
than the Applicable Rate applied for such Applicable Period, then the Borrower
shall immediately (i) deliver to the Administrative Agent a corrected
Compliance Certificate for such Applicable Period, (ii) determine the
Applicable Rate for such Applicable Period based upon the corrected Compliance
Certificate and (iii) immediately pay to the Administrative Agent the accrued
additional interest owing as a result of such increased Applicable Rate for
such Applicable Period, which payment shall be promptly applied by the
Administrative Agent in accordance with Section 2.13. It is acknowledged and
agreed that nothing contained herein shall limit the rights of the
Administrative Agent and the Lenders under the Credit Documents, including
their rights under Section 2.08 and Article VIII and other of their respective
rights under this Agreement.

 

3

 

“Appropriate
Lender” means, at any time, (a) with respect to Loans of any Class,
the Lenders of such Class, (b) with respect to Letters of Credit, (i) the
relevant L/C Issuers and (ii) the Revolving Credit Lenders and (c) with respect
to the Swing Line Facility, (i) the Swing Line Lender and (ii) if any Swing
Line Loans are outstanding pursuant to Section 2.04(a), the Revolving
Credit Lenders.

 

“Approved
Bank” has the meaning specified in clause (c) of the definition of
“Cash Equivalents”.

 

“Approved
Fund” means any Fund that is administered, advised or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers, advises or manages a Lender.

 

“Assignees”
has the meaning specified in Section 10.07(b).

 

“Assignment
and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit E.

 

“Attorney
Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external legal counsel.

 

“Audited
Financial Statements” means the audited consolidated balance sheets
of Borrower and its Subsidiaries as of each of December 31, 2006, 2005 and
2004, and the related audited Consolidated statements of income, stockholders’
equity and cash flows for Borrower and its Subsidiaries for the fiscal years
ended December 31, 2006, 2005 and 2004, respectively.

 

“Auto-Renewal
Letter of Credit” has the meaning specified in
Section 2.03(b)(iii).

 

“Available
Distribution Amount” means, as of any date, the cumulative amount of
dividends and distributions in the form of cash and Cash Equivalents received
by the Borrower or any Restricted Subsidiary during the period from the Closing
Date to the date of determination from Unrestricted Subsidiaries or joint
ventures not constituting Subsidiaries.

 

“Base Rate”
means, for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Rate in effect on
such day plus 1/2 of 1%. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective as of the opening
of business on the effective date of such change in the Prime Rate or the
Federal Funds Rate, respectively.

 

“Base Rate
Loan” means a Loan that bears interest based on the Base Rate.

 

“Board”
means the Board of Governors of the Federal Reserve System of the United States
of America.

 

“Borrower
Parties” means the collective reference to the Borrower and the
Restricted Subsidiaries, and “Borrower Party” means any one of them.

 

“Borrower”
has the meaning specified in the preamble hereto.

 

“Borrowing”
means a Revolving Credit Borrowing, a Swing Line Borrowing, or a Term
Borrowing, as the context may require.

 

4

 

“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized or required by law to close in New York City; provided, however, that
when used in connection with a Eurodollar Loan (including with respect to all
notices and determinations in connection therewith and any payments of
principal, interest or other amounts thereon), the term “Business Day” shall
also exclude any day on which banks are not open for dealings in Dollar
deposits in the London interbank market.

 

“Capital
Expenditures” means, for any period, the aggregate of all expenditures
(whether paid in cash or accrued as liabilities) by the Borrower and the
Restricted Subsidiaries during such period that, in conformity with GAAP, are
or are required to be included as additions during such period to property,
plant or equipment reflected in the consolidated balance sheet of the Borrower
and the Restricted Subsidiaries, (b) provided that
the term “Capital Expenditures” shall not include (i) expenditures made in
connection with the replacement, substitution, restoration or repair of
assets to the extent financed with (x) insurance proceeds paid on account
of the loss of or damage to the assets being replaced, restored or repaired or
(y) awards of compensation arising from the taking by eminent domain or condemnation
of the assets being replaced, (ii) the purchase price of equipment that is
purchased simultaneously with the trade-in of existing equipment to the extent
that the gross amount of such purchase price is reduced by the credit granted
by the seller of such equipment for the equipment being traded in at such time,
(iii) the purchase of plant, property or equipment or software to the
extent financed with the proceeds of Dispositions that are not required to be
applied to prepay Term Loans pursuant to Section 2.05(b),
(iv) expenditures that constitute any part of Consolidated Lease Expense,
(v) expenditures that are accounted for as capital expenditures by the
Borrower or any Restricted Subsidiary and that actually are paid for by a
Person other than the Borrower or any Restricted Subsidiary and for which
neither the Borrower nor any Restricted Subsidiary has provided or is required
to provide or incur, directly or indirectly, any consideration or obligation to
such Person or any other Person (whether before, during or after such period),
(vi) the book value of any asset owned by the Borrower or any Restricted
Subsidiary prior to or during such period to the extent that such book value is
included as a capital expenditure during such period as a result of such Person
reusing or beginning to reuse such asset during such period without a
corresponding expenditure actually having been made in such period; provided that (x) any expenditure necessary in order to
permit such asset to be reused shall be included as a Capital Expenditure
during the period in which such expenditure actually is made and (y) such
book value shall have been included in Capital Expenditures when such asset was
originally acquired, or (vii) expenditures that constitute Permitted
Acquisitions.

 

“Capitalized
Lease Indebtedness” means, on any date, in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP.

 

“Capitalized
Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases; provided that
for all purposes hereunder the amount of obligations under any Capitalized
Lease shall be the amount thereof accounted for as a liability in accordance
with GAAP.

 

“Cash
Collateral” has the meaning specified in Section 2.03(g).

 

“Cash
Collateral Account” means a blocked account at DBTCA (or another
commercial bank selected in compliance with Section 9.09) in the name of
the Administrative Agent and under the sole dominion and control of the
Administrative Agent, and otherwise established in a manner satisfactory to the
Administrative Agent.

 

“Cash
Collateralize” has the meaning specified in Section 2.03(g).

 

5

 

“Cash
Equivalents” means any of the following types of Investments, to the
extent owned by the Borrower or any Restricted Subsidiary:

 

(a)  Dollars;

 

(b)  readily marketable obligations issued or
directly and fully guaranteed or insured by the government or any agency or
instrumentality of the United States having average maturities of not more than
12 months from the date of acquisition thereof; provided
that the full faith and credit of the United States is pledged in support
thereof;

 

(c)  time deposits with, or insured certificates
of deposit or bankers’ acceptances of, any commercial bank that (i)  is a Lender or (ii) (A) is organized under
the Laws of the United States, any state thereof or the District of Columbia or
is the principal banking Subsidiary of a bank holding company organized under
the Laws of the United States, any state thereof or the District of Columbia,
and is a member of the Federal Reserve System, and (B) has combined capital and
surplus of at least $250,000,000 (any such bank in the foregoing clauses (i) or
(ii) being an “Approved Bank”), in
each case with average maturities of not more than 12 months from the date of
acquisition thereof;

 

(d)  commercial paper and variable or fixed rate
notes issued by an Approved Bank (or by the parent company thereof) or any
variable or fixed rate note issued by, or guaranteed by, a corporation rated
A-2 (or the equivalent thereof) or better by S&P or P-2 (or the equivalent
thereof) or better by Moody’s, in each case with average maturities of not more
than 12 months from the date of acquisition thereof;

 

(e)  repurchase agreements entered into by any
Person with a bank or trust company (including any of the Lenders) or
recognized securities dealer, in each case, having capital and surplus in
excess of $250,000,000 for direct obligations issued by or fully guaranteed or
insured by the government or any agency or instrumentality of the United States
in which such Person shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase obligations;

 

(f)  securities with average maturities of 12
months or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political subdivision
or taxing authority of any such state, commonwealth or territory or by any
foreign government having an investment grade rating from either S&P or
Moody’s (or the equivalent thereof);

 

(g)  Investments with average maturities of 12
months or less from the date of acquisition in money market funds rated AAA-
(or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent
thereof) or better by Moody’s;

 

(h)  instruments equivalent to those referred to
in clauses (a) through (g) above denominated in Euros or any other foreign
currency comparable in credit quality and tenor to those referred to above and
customarily used by corporations for cash management purposes in any
jurisdiction outside the United States to the extent reasonably required in
connection with any business conducted by any Restricted Subsidiary organized
in such jurisdiction; and

 

(i)  Investments, classified in accordance with
GAAP as current assets of the Borrower or any Restricted Subsidiary, in money
market investment programs which are registered under the

 

6

 

Investment Company Act of
1940 or which are administered by financial institutions having capital of at
least $250,000,000, and, in either case, the portfolios of which are limited
such that substantially all of such investments are of the character, quality
and maturity described in clauses (a) through (h) of this definition.

 

“Cash Management Obligations” means obligations owed by the
Borrower or any Restricted Subsidiary to any Lender or any Affiliate of a
Lender in respect of any overdraft and related liabilities arising from
treasury, depository and cash management services or any automated clearing
house transfers of funds except to the extent that any such obligations are not
subject to any Lien in favor of any such Lender or Affiliate of such Lender and
such Lender or Affiliate of each Lender and Borrower or the applicable
Restricted Subsidiary have so notified the Administrative Agent in writing.

 

“Casino
Licenses” means, collectively, all licenses that are required to be
granted by any applicable federal, state, local, tribal or other regulatory
body, gaming board or other agency that has jurisdiction over (i) any
casino now or hereafter located in the State of Nevada, and (ii) any other
casinos otherwise owned or operated by the Borrower or any Restricted
Subsidiary.

 

“Casino Sale
Leaseback Transaction” means the collective transactions involving
the sale and leaseback of the properties listed on Schedule 1.01H pursuant to
the Purchase and Sale Agreement, the Master Lease and the Casino Subleases.

 

“Casino
Subleases” means the subleases described on Schedule 1.01K entered
into in respect of the Casino Sale Leaseback Transaction.

 

“Casualty
Event” means any event that gives rise to the receipt by the
Borrower or any Restricted Subsidiary of any insurance proceeds or condemnation
awards in respect of any equipment, fixed assets or real property (including
any improvements thereon) to replace or repair such equipment, fixed assets or
real property.

 

“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as subsequently amended.

 

“CERCLIS”
means the Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the U.S. Environmental Protection Agency.

 

“Change of Control” means (a) any event constituting a “Change
of Control Trigger Event” under any Existing Senior Notes Indenture or Existing
Senior Subordinated Notes Indenture or (b) (i) prior to the occurrence of a
Qualifying IPO, (x) the Permitted Holders shall fail to collectively own
directly or indirectly, beneficially and of record, Equity Interests that
represent greater than 50% of the aggregate equity value represented by the
issued and outstanding Equity Interests in the Borrower or (y) the Principal
Control Persons shall fail to collectively retain Control of the Borrower; or
(ii) after the occurrence of a Qualifying IPO, the consummation of any
transaction (including, without limitation, any merger or consolidation) as a
result of which (x) (A) any person, entity or “group” (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended), other than
the Permitted Holders and Principal Control Persons, becomes the beneficial
owner of more than twenty-five percent (25%) of the aggregate direct or
indirect ordinary voting power and aggregate equity value represented by the
issued and outstanding Equity Interests in the Borrower and (B) such ownership
represents a percentage of the aggregate direct or indirect ordinary voting
power or economic interest greater than the percentage of the ordinary voting
power or economic interest in respect of which the Principal Control Persons
and Permitted Holders are collectively the direct or indirect beneficial owners
or (y) Continuing Directors shall not constitute at least a majority of the
board of directors of the Borrower.

 

7

 

“Charges”
has the meaning specified in Section 10.10.

 

“Class”
(a) when used with respect to Lenders, refers to whether such Lenders are
Revolving Credit Lenders or Term Lenders, (b) when used with respect to Loans
or a Borrowing, refers to whether such Loans, or the Loans comprising such
Borrowing, are Revolving Credit Loans, Swing Line Loans or Term Loans and, (c)
when used with respect to any Commitment, refers to whether such Commitment is
a Revolving Credit Commitment or a Term Loan Commitment.

 

“Closing Date”
means the first date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 4.01.

 

“CMBS
Facility” means, collectively, the secured mortgage and mezzanine
loan facilities provided to the CMBS Subsidiary pursuant to the CMBS Loan
Documents.

 

“CMBS
Flowback Amount” means, an amount, for each fiscal period, equal to
the amount of dividends or distributions made by the CMBS Subsidiary to
Borrower during such period.

 

“CMBS Loan
Documents” means the Loan and Security Agreement dated November 7,
2007 entered into by FCP PropCo, LLC, as Borrower, German American Capital
Corporation, as a Lender, and JPMorgan Chase Bank, N.A., as a Lender and the
other Loan Documents as defined therein.

 

“CMBS
Subsidiary” means, (a) collectively, FCP MezzCo Parent Sub, LLC, a
Delaware limited liability company and each of the direct and indirect,
wholly-owned subsidiaries of FCP MezzCo Parent Sub, LLC described on Schedule
1.01L hereto or (b) FCP PropCo, LLC, as applicable.

 

“Code”
means the U.S. Internal Revenue Code of 1986 and rules and regulations related
thereto.

 

“Co-Documentation
Agents” has the meaning set forth in the preamble hereto.

 

“Collateral”
means all the “Collateral” as defined in any Collateral Document and shall
include the Mortgaged Properties.

 

“Collateral
and Guarantee Requirement” means, at any time, subject to applicable
Gaming Laws, the requirement that:

 

(a)  the Administrative Agent shall have received
each Collateral Document required to be delivered on the Closing Date pursuant
to Section 4.01(a)(iii) or at any other time pursuant to Section 6.11 at the
time so required, duly executed by each Loan Party thereto;

 

(b)  all Obligations shall have been
unconditionally guaranteed by each Restricted Subsidiary that is not an
Excluded Subsidiary (each, a “Guarantor”);

 

(c)  all guarantees issued or to be issued in
respect of the Existing Senior Subordinated Notes (i) shall be subordinated to
the Guaranty to the same extent that the Existing Senior Subordinated Notes are
subordinated to the Obligations and (ii) shall provide for their automatic
release upon a release of the Guaranty;

 

(d)  the Obligations and the Guaranty shall have
been secured by a first-priority security interest in (i) all the Equity
Interests of the Borrower and (ii) all Equity Interests owned (directly or
indirectly) by Borrower in each Restricted Subsidiary (other than, to the
extent prohibited by law or, with

 

8

 

the consent of the
Administrative Agent, such consent not to be unreasonably withheld, the
applicable management contract, Equity Interests in Native American
Subsidiaries);

 

(e)  except to the extent otherwise permitted
hereunder or under any Collateral Document, the Obligations and the Guaranty
shall have been secured by a security interest in, and mortgages on,
substantially all tangible and intangible assets of the Borrower and each
Guarantor other than any Immaterial Subsidiary (including accounts, inventory,
equipment, investment property, contract rights, intellectual property, other
general intangibles, owned and leased real property and proceeds of the
foregoing), in each case, with the priority required by the Collateral
Documents; provided that (x) security interests in
real property shall be limited to (i) the land, improvements and other real
property relating to the hotel casino properties known as Fiesta Rancho, Fiesta
Henderson, Santa Fe Station and Texas Station, in each case, including all
adjoining or adjacent land owned or leased by the Borrower and its
Subsidiaries, (ii) in the case of any capital project of the Borrower or its
Subsidiaries (other than any Unrestricted Subsidiaries and Native American
Subsidiaries) that is initiated or implemented after the Closing Date for which
the overall budget for Capital Expenditures exceeds $100,000,000, the land,
improvements and other real property in respect of such project and, (iii) in
the case of any other casino or hotel property now or hereafter owned or
operated by Borrower or its Subsidiaries (excluding Unrestricted Subsidiaries
and Native American Subsidiaries) whose individual Consolidated EBITDA for the
then most recently ended 12-month period for which financial statements are
then available exceeds $10,000,000, the land, improvements and other real
property relating to such property, and (y) security interests in the assets of
Native American Subsidiaries shall, to the extent prohibited by law or, with
the consent of the Administrative Agent, such consent not to be unreasonably
withheld, the applicable management contract, exclude security interests in
Native American Contracts (provided, however, that security interests shall be granted in respect
of all rights to receive income and cash flows attributable to Native American
Contracts);

 

(f)  none of the Collateral shall be subject to
any Liens other than Permitted Liens; and

 

(g)  the Administrative Agent shall have received
(i) counterparts of a Mortgage with respect to each owned or leased
property described in paragraph (e) above or required to be delivered pursuant to
Section 6.11 (the “Mortgaged
Properties”) duly executed and delivered by the record
owner of such property, (ii) a policy or policies of title insurance
issued by a nationally recognized title insurance company insuring the Lien of
each such Mortgage as a valid Lien on the property described therein, free of
any other Liens except Permitted Liens, together with such endorsements,
coinsurance and reinsurance as the Administrative Agent may reasonably request,
and (iii) such surveys, abstracts, appraisals, legal opinions and other
documents as the Administrative Agent may reasonably request with respect to
any such Mortgaged Property.

 

The foregoing definition
shall not require the creation or perfection of pledges of or security
interests in, or the obtaining of title insurance or surveys with respect to,
particular assets if and for so long as, in the reasonable judgment of the
Administrative Agent (confirmed in writing by notice to the Borrower), the cost
of creating or perfecting such pledges or security interests in such assets or
obtaining title insurance or surveys in respect of such assets shall be
excessive in view of the benefits to be obtained by the Lenders therefrom. The
Administrative Agent may grant extensions of time for the perfection of security
interests in or the obtaining of title insurance with respect to particular
assets (including extensions beyond the Closing Date for the perfection of
security interests in the assets of the Loan Parties on such date) where it
reasonably determines, in consultation with the Borrower, that perfection
cannot be accomplished without undue effort or expense by the time or times at
which it would otherwise be required by this Agreement or the Collateral
Documents.

 

9

 

Notwithstanding the
foregoing provisions of this definition or anything in this Agreement or any
other Loan Document to the contrary, (a) Liens required to be granted from time
to time pursuant to the Collateral and Guarantee Requirement shall be subject
to exceptions and limitations set forth in the Collateral Documents to the
extent appropriate and agreed between the Administrative Agent and the Borrower
and (b) the Collateral shall not include Excluded Assets.

 

“Collateral
Documents” means, collectively, the Security Agreement, the Pledge
Agreement, the Shareholder Pledge Agreement, the Intellectual Property Security
Agreement, the Mortgages, each of the mortgages, collateral assignments,
Security Agreement Supplements, Pledge Agreement Supplements, security
agreements, pledge agreements or other similar agreements delivered to the
Administrative Agent and the Lenders from time to time pursuant to
Section 6.11 or Section 6.13, the Guaranty and each of the other
agreements, instruments or documents that creates or purports to create a Lien
or Guarantee in favor of the Administrative Agent for the benefit of the
Secured Parties.

 

“Commitment”
means a Revolving Credit Commitment or a Term Loan Commitment.

 

“Commitment
Letter” means the Third Amended and Restated Commitment Letter dated
as of October 15, 2007 among FCP, DBTCA, DBSI, JPMorgan and JPMCB.

 

“Committed
Loan Notice” means a notice of (a) a Term Borrowing, (b) a Revolving
Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d)
a continuation of Eurodollar Loans, pursuant to Section 2.02(a), which, if
in writing, shall be substantially in the form of Exhibit A.

 

“Compensation
Period” has the meaning specified in Section 2.12(c)(ii).

 

“Compliance
Certificate” means a certificate substantially in the form of
Exhibit D.

 

“Consolidated
EBITDA” means, for any period, the Consolidated Net Income for such
period, plus:

 

(a)  without duplication and to the extent already
deducted (and not added back) in arriving at such Consolidated Net Income, the
sum of the following amounts for such period:

 

(i)  total Consolidated Interest Expense and, to
the extent not reflected in such total Consolidated Interest Expense, any
losses on hedging obligations or other derivative instruments entered into for
the purpose of hedging interest rate risk of the Borrower or its Subsidiaries,
net of interest income, premiums received and gains on such hedging
obligations, and costs of surety bonds in connection with financing activities,

 

(ii)  provision for taxes based on income, profits
or capital of the Borrower and the Restricted Subsidiaries, including state,
franchise and similar taxes and foreign withholding taxes paid or accrued
during such period,

 

(iii)  depreciation and amortization,

 

(iv)  Non-Cash Charges,

 

(v)  extraordinary losses and unusual or
non-recurring charges (including, without limitation, Pre-Opening Expenses)
severance, relocation costs and curtailments or modifications to pension and
post-retirement employee benefit plans,

 

10

 

(vi)  restructuring charges or reserves (including
restructuring costs related to acquisitions after the date hereof and to
closure/consolidation of facilities),

 

(vii)  any deductions attributable to minority interests,

 

(viii)  the amount of management, monitoring,
consulting and advisory fees and related expenses paid to the Sponsors; provided that the aggregate amount added pursuant to this
clause shall not exceed $15,000,000 for any period consisting of four
consecutive quarters,

 

(ix)  any costs or expenses incurred by the
Borrower or a Restricted Subsidiary pursuant to any management equity plan or
stock option plan or any other management or employee benefit plan or agreement
or any stock subscription or shareholder agreement, to the extent that such
costs or expenses are funded with cash proceeds contributed to the capital of
the Borrower or net cash proceeds of an issuance of Equity Interests of the
Borrower (other than Disqualified Equity Interests)

 

(x)  the amount of net cost savings projected by
the Borrower in good faith to be realized as a result of specified actions
taken during such period (calculated on a pro forma basis as though such cost
savings had been realized on the first day of such period), net of the amount
of actual benefits realized during such period from such actions; provided that (A) such cost savings are reasonably
identifiable and factually supportable, (B) such actions are taken within
48 months after the Closing Date, (C) no cost savings shall be added
pursuant to this clause (x) to the extent duplicative of any expenses or
charges relating to such cost savings that are included in clause (vi)
above with respect to such period and (D) the aggregate amount of cost savings
added pursuant to this clause in respect of cost savings (other than in respect
of Permitted Acquisitions) (x) shall not exceed $40,000,000 for any period
consisting of four consecutive quarters,

 

(xi)  the Borrower’s share (based on its economic
interest in such entities at the time of calculation) of the earnings (whether
positive or negative) before interest and taxes (calculated in a manner
consistent with the definition of Consolidated EBITDA, except that depreciation
and amortization will not be added back to such earnings) of Aliante and Green
Valley Ranch Gaming LLC, less

 

(b)  without duplication and to the extent
included in arriving at such Consolidated Net Income, the sum of the following
amounts for such period:

 

(i)  extraordinary gains and unusual or non-recurring
gains,

 

(ii)  non-cash gains (excluding any non-cash gain
to the extent it represents the reversal of an accrual or reserve for a
potential cash item that reduced Consolidated EBITDA in any prior period),

 

(iii)  gains on asset sales (other than asset sales
in the ordinary course of business),

 

(iv)  any net after-tax income from the early
extinguishment of Indebtedness or hedging obligations or other derivative
instruments, and

 

(v)  all gains from investments recorded using the
equity method.

 

in each case, as determined on a consolidated basis for the Borrower
and the Restricted Subsidiaries in accordance with GAAP; provided
that, to the extent included in Consolidated Net Income,

 

11

 

(i)  there shall be excluded in determining
Consolidated EBITDA currency translation gains and losses related to currency
remeasurements of Indebtedness (including the net loss or gain resulting from
Swap Contracts for currency exchange risk);

 

(ii)  there shall be excluded in determining
Consolidated EBITDA for any period any adjustments resulting from the
application of Statement of Financial Accounting Standards No. 133;

 

(iii)  there shall be included in determining
Consolidated EBITDA for any period, without duplication, (A) the Acquired
EBITDA of any Person, property, business or asset acquired by the Borrower or
any Restricted Subsidiary during such period (but not the Acquired EBITDA of
any related Person, property, business or assets to the extent not so acquired),
to the extent not subsequently sold, transferred or otherwise disposed by the
Borrower or such Restricted Subsidiary (each such Person, property, business or
asset acquired and not subsequently so disposed of, an “Acquired Entity or Business”), based on the
actual Acquired EBITDA of such Acquired Entity or Business for such period
(including the portion thereof occurring prior to such acquisition) and
(B) for the purposes of the definition of the term “Permitted Acquisition”
and Section 7.11, an adjustment in respect of each Acquired Entity or
Business equal to the amount of the Pro Forma Adjustment with respect to such
Acquired Entity or Business for such period (including the portion thereof
occurring prior to such acquisition) as specified in a certificate executed by
a Responsible Officer and delivered to the Lenders and the Administrative Agent
and (C) for purposes of determining the Total Leverage Ratio, Senior Secured
Leverage Ratio or Interest Coverage Ratio only, there shall be excluded in determining
Consolidated EBITDA for any period the Disposed EBITDA of any Person, property,
business or asset sold, transferred or otherwise disposed of, closed or
classified as discontinued operations by the Borrower or any Restricted
Subsidiary during such period (each such Person, property, business or asset so
sold or disposed of, a “Sold Entity or
Business”), based on the actual Disposed EBITDA of such Sold Entity
or Business for such period (including the portion thereof occurring prior to
such sale, transfer or disposition); and

 

(iv)  there shall be included in determining
Consolidated EBITDA for any period, without duplication, the New Property
EBITDA for such period of any New Property, to the extent not subsequently
sold, transferred or otherwise disposed of by the Borrower or the Restricted
Subsidiary that owns such New Property.

 

For the purpose of the
definition of Consolidated EBITDA, “Non-Cash Charges”
means (a) losses on asset sales, disposals or abandonments, (b) any
impairment charge or asset write-off related to intangible assets, long-lived
assets, and investments in debt and equity securities pursuant to GAAP, (c) all
losses from investments recorded using the equity method, (d) stock-based
awards compensation expense, and (e) other non-cash charges (provided that if any non-cash charges referred to in this
clause (e) represent an accrual or reserve for potential cash items in any
future period, the cash payment in respect thereof in such future period shall
be subtracted from Consolidated EBITDA to such extent, and excluding
amortization of a prepaid cash item that was paid in a prior period).

 

“Consolidated
Interest Expense” means, for any period, the sum of (i) the
cash interest expense and capitalized interest (including that attributable to
Capitalized Leases), net of cash interest income, of the Borrower and the
Restricted Subsidiaries, determined on a consolidated basis in accordance with
GAAP, with respect to all outstanding Indebtedness of the Borrower and the
Restricted Subsidiaries, including all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Swap Contracts and (ii) any cash payments made
during such period in respect of obligations referred to in clause (b) below
relating to

 

12

 

Funded Debt that were
amortized or accrued in a previous period (other than any such obligations
resulting from the discounting of Indebtedness in connection with the
application of purchase accounting in connection with the Transaction or any
Permitted Acquisition), but excluding, however, (a) amortization of deferred
financing costs and any other amounts of non-cash interest, (b) the accretion
or accrual of discounted liabilities during such period, and (c) all
non-recurring cash interest expense consisting of liquidated damages for
failure to timely comply with registration rights obligations and financing
fees, all as calculated on a consolidated basis in accordance with GAAP; provided that for purposes of the definition of the term
“Permitted Acquisition” and Section 7.11, there shall be included in determining
Consolidated Interest Expense for any period the cash interest expense (or
income) and capitalized interest of any Acquired Entity or Business acquired
during such period, based on the cash interest expense (or income) or
capitalized interest of such Acquired Entity or Business for such period (including
the portion thereof occurring prior to such acquisition) assuming any
Indebtedness incurred or repaid in connection with any such acquisition had
been incurred or prepaid on the first day of such period. Notwithstanding
anything to the contrary contained herein, for purposes of determining
Consolidated Interest Expense for any period ending prior to the first
anniversary of the Closing Date, Consolidated Interest Expense shall be an
amount equal to actual Consolidated Interest Expense from the Closing Date
through the date of determination multiplied by a fraction the numerator of
which is 365 and the denominator of which is the number of days from the
Closing Date through the date of determination.

 

“Consolidated
Lease Expense” means, for any period, all rental expenses of the
Borrower and the Restricted Subsidiaries during such period under operating
leases for real or personal property (including in connection with
sale-leaseback transactions permitted by Section 7.05(f)), excluding real
estate taxes, insurance costs and common area maintenance charges and net of
sublease income, other than (a) obligations under vehicle leases entered into
in the ordinary course of business, (b) all such rental expenses associated
with assets acquired pursuant to a Permitted Acquisition to the extent such
rental expenses relate to operating leases in effect at the time of (and
immediately prior to) such acquisition and related to periods prior to such
acquisition and (c) all obligations under Capitalized Leases, all as determined
on a consolidated basis in accordance with GAAP.

 

“Consolidated
Net Income” means, for any period, the net income (loss) of the
Borrower and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, plus, to the extent not included in
the calculation of such net income (loss), the CMBS Flowback Amount for such
period, if any, excluding, without duplication, (a) extraordinary items
for such period, (b) the cumulative effect of a change in accounting principles
during such period to the extent included in Consolidated Net Income, (c)
Transaction Expenses, (d) any fees and expenses incurred during such period, or
any amortization thereof for such period, in connection with any acquisition,
investment, asset disposition, issuance or repayment of debt, issuance of equity
securities, refinancing transaction or amendment or other modification of any
debt instrument (in each case, including any such transaction consummated prior
to the Closing Date and any such transaction undertaken but not completed) and
any charges or non-recurring merger costs incurred during such period as a
result of any such transaction, and (e) any income (loss) for such period
attributable to the early extinguishment of Indebtedness. There shall be
excluded from Consolidated Net Income for any period the purchase accounting
effects of adjustments to property and equipment, software and other intangible
assets and deferred revenue in component amounts required or permitted by GAAP
and related authoritative pronouncements (including the effects of such
adjustments pushed down to the Borrower and the Restricted Subsidiaries), as a
result of the Transaction, any acquisition consummated prior to the Closing
Date, any Permitted Acquisitions, or the amortization or write-off of any
amounts thereof. There shall be excluded from Consolidated Net Income the
income (or loss) of any Person that is not a Restricted Subsidiary (including
joint venture investments recorded using the equity method), except to the
extent of the amount of dividends or other distributions actually paid to
Borrower or a Restricted Subsidiary during such period.

 

13

 

“Consolidated
Senior Secured Debt” means, as of any date of determination, the
aggregate principal amount of Indebtedness of the Borrower and the Restricted
Subsidiaries outstanding on such date (other than Indebtedness under clause (c)
of such term to the extent that no termination event has occurred thereunder),
determined on a consolidated basis in accordance with GAAP that is secured by
first priority (other than Permitted Liens) Liens or Permitted Liens on the
properties and assets of Borrower and Restricted Subsidiaries, and Capitalized
Leases.

 

“Consolidated
Total Net Debt” means, as of any date of determination, (a) the
aggregate principal amount of Indebtedness of the Borrower and the Restricted
Subsidiaries outstanding on such date, determined on a consolidated basis in
accordance with GAAP (but excluding the effects of any discounting of
Indebtedness resulting from the application of purchase accounting in
connection with the Transaction or any Permitted Acquisition), consisting of
Indebtedness for borrowed money, obligations in respect of Capitalized Leases
(but excluding, for the avoidance of doubt, amounts payable under operating
leases), debt obligations evidenced by promissory notes or similar instruments,
the maximum amount (after giving effect to any prior drawings or
reductions which may have been reimbursed) of all (or, solely for purposes of
determining compliance with Section 7.11(a), the amount of reasonably
anticipated usage of) letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds, performance bonds and
similar instruments issued or created by or for the account of such Persons,
all obligations of to pay the deferred purchase price of property or services
(other than (i) trade accounts payable in the ordinary course of business and
(ii) any earn-out obligation until such obligation becomes a liability on the
balance sheet in accordance with GAAP) and, without duplication, all Guarantees
with respect to outstanding Indebtedness of the types described above, minus (b) the aggregate amount of
cash and Cash Equivalents (in each case, free and clear of all Liens, other
than nonconsensual Permitted Liens and Liens permitted by Section 7.01(s) and
clauses (i) and (ii) of Section 7.01(t)) included in the consolidated balance
sheet of the Borrower and the Restricted Subsidiaries as of such date.

 

“Consolidated
Working Capital” means, at any date, the excess of (a) the sum of
all amounts (other than cash and Cash Equivalents) that would, in conformity
with GAAP, be set forth opposite the caption “total current assets” (or any
like caption) on a consolidated balance sheet of the Borrower and the
Restricted Subsidiaries at such date over (b) the sum of all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total
current liabilities” (or any like caption) on a consolidated balance sheet of
the Borrower and the Restricted Subsidiaries on such date, including deferred
revenue but excluding, without duplication, (i) the current portion of any
Funded Debt, (ii) all Indebtedness consisting of Loans and L/C Obligations to
the extent otherwise included therein, (iii) the current portion of
interest and (iv) the current portion of current and deferred income taxes.

 

“Continuing
Director” means, at any date, an individual (a) who is a member of
the board of directors of the Borrower on the date hereof, (b) who, as of the
date of determination, has been a member of such board of directors for at
least the twelve preceding months, (c) who has been nominated to be a member of
such board of directors, directly or indirectly, by a Principal Control Person
or Persons nominated by a Principal Control Person or (d) who has been
nominated to be a member of such board of directors by a majority of the other
Continuing Directors then in office.

 

“Contractual
Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Control”
(a) as used in clause (b) of the definition of “Change of Control” means (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

 

14

 

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 and (b) for all other purposes
hereunder, has the meaning specified in the definition of “Affiliate.”

 

“Core
Property” means, collectively, the hotel, resort and casino
properties commonly known as Palace Station, Boulder Station, Texas Station,
Santa Fe Station, Sunset Station, Fiesta Henderson, Fiesta Rancho and Red Rock
Casino, Resort and Spa and (b) each casino or hotel property hereafter owned or
operated by Borrower or a Guarantor and its Subsidiaries (but not any such
property owned or operated by an Unrestricted Subsidiary) whose individual
Consolidated EBITDA for the then most recently ended twelve-month period for
which financial statements are then available exceeds $10,000,000, excluding
any real property or improvements that have been released from the Liens of the
Administrative Agent.

 

“Corporate Head Office Sale
Leaseback Transaction”
means the sale and leaseback by Borrower of its corporate headquarters building
located at 1505 South Pavilion Center Drive, Las Vegas, Nevada 89135 on terms
and subject to documentation reasonably acceptable to the Administrative Agent.

 

“Credit
Extension” means each of the following:  (a) a Borrowing and (b) an L/C Credit
Extension.

 

“Cumulative
Excess Cash Flow” means the sum of Excess Cash Flow for the fiscal
quarter ending March 31, 2008 and Excess Cash Flow for each succeeding and
completed fiscal year.

 

“DBSI”
means Deutsche Bank Securities Inc.

 

“DBTCA”
means Deutsche Bank Trust Company Americas.

 

“Debt
Issuance” means the issuance by any Person and its Subsidiaries of
any Indebtedness for borrowed money.

 

“Debt
Prepayment” means the prepayment by the Borrower on the Closing Date
of any Indebtedness outstanding under the Existing Credit Agreement.

 

“Debtor
Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Default”
means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would be an Event of
Default.

 

“Default Rate”
means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate,
if any, applicable to Base Rate Loans plus (c) 2.0% per annum; provided that with respect to a Eurodollar Loan, the Default
Rate shall be an interest rate equal to the interest rate (including any

 

15

 

Applicable Rate) otherwise
applicable to such Loan plus 2.0% per annum, in each case, to the fullest
extent permitted by applicable Laws.

 

“Defaulting
Lender” means any Lender that (a) has failed to fund any portion of
the Term Loans, Revolving Credit Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one (1) Business Day of the date required to be funded by it hereunder, unless
the subject of a good faith dispute or subsequently cured, (b) has otherwise
failed to pay over to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder within one (1) Business Day of the
date when due, unless the subject of a good faith dispute or subsequently
cured, or (c) has been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.

 

“Designated
Obligations” means all obligations of the Borrower with respect to
(a) principal of and interest on the Loans, (b) Unreimbursed Amounts and
interest thereon and (c) accrued and unpaid fees under the Loan Documents.

 

“Disposed
EBITDA” means, with respect to any Sold Entity or Business for any
period, the amount for such period of Consolidated EBITDA of such Sold Entity
or Business (determined as if references to the Borrower and the Restricted Subsidiaries
in the definition of Consolidated EBITDA were references to such Sold Entity or
Business and its Subsidiaries), all as determined on a consolidated basis for
such Sold Entity or Business.

 

“Disposition”
or “Dispose” means the sale, transfer, license,
lease or other disposition (including any sale and leaseback transaction and
any sale of Equity Interests) of any property by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith; provided that “Disposition” and “Dispose” shall not be
deemed to include any issuance by the Holding Companies of any of their
respective Equity Interests to another Person.

 

“Disqualified
Equity Interests” means any Equity Interest that, by its terms (or
by the terms of any security or other Equity Interests into which it is
convertible or for which it is exchangeable), or upon the happening of any
event or condition (a) matures or is mandatorily redeemable (other than
solely for Qualified Equity Interests), pursuant to a sinking fund obligation
or otherwise (except as a result of a change of control or asset sale so long
as any rights of the holders thereof upon the occurrence of a change of control
or asset sale event shall be subject to the prior repayment in full of the
Loans and all other Obligations that are accrued and payable and the
termination of the Commitments), (b) is redeemable at the option of the holder
thereof (other than solely for Qualified Equity Interests), in whole or in
part, (c) provides for the scheduled payments of dividends in cash, or (d) is
or becomes convertible into or exchangeable for Indebtedness or any other
Equity Interests that would constitute Disqualified Equity Interests, in each
case, prior to the date that is ninety-one (91) days after the Maturity Date.

 

“Disqualified
Institutions” means any banks, financial institutions or other
Persons separately identified by the Borrower to the Joint Lead Arrangers in
writing prior to the Closing Date.

 

“Disqualified Transferee” means 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 Administrative Agent in its reasonable 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.

 

16

 

“Dollar”
and “$” mean lawful money of the United
States.

 

“Domestic
Subsidiary” means any Subsidiary that is organized under the Laws of
the United States, any state thereof or the District of Columbia.

 

“Eligible
Assignee” means any Assignee permitted by and consented to in
accordance with Section 10.07(b).

 

“Environmental
Laws” means any and all Federal, state, and local statutes, Laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution, the protection of the environment, natural
resources, or, to the extent relating to exposure to Hazardous Materials, human
health or to the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

 

“Environmental
Liability” means any liability, contingent or otherwise (including
any liability for damages, costs of environmental remediation, fines, penalties
or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

 

“Environmental
Permit” means any permit, approval, identification number, license
or other authorization required under any Environmental Law.

 

“Equity
Contributions” means, collectively, (a) the contribution by one or
more of the Affiliates of Colony Capital LLC of an aggregate amount of cash of
not less than $2,404,621,790 to the Holding Companies and (b) the further
contribution to the Borrower of any portion of such cash contribution proceeds
not used by any Holding Company on or prior to the Closing Date to pay
Transaction Expenses.

 

“Equity
Interests” means, with respect to any Person, all of the shares,
interests, rights, participations or other equivalents (however designated) of
capital stock of (or other ownership or profit interests or units in) such
Person and all of the warrants, options or other rights for the purchase,
acquisition or exchange from such Person of any of the foregoing (including
through convertible securities).

 

“Equity
Investors” means the Sponsors, the Management Stockholders and Blake
and Delise Sartini.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated)
that is under common control with any Loan Party within the meaning of
Section 414 of the Code or Section 4001 of ERISA.

 

“ERISA Event”
means (a) a Reportable Event with respect to a Pension Plan; (b) incurrence of
a liability with respect to a withdrawal by any Loan Party or any ERISA
Affiliate from a

 

17

 

Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) incurrence of a liability with respect to a complete or partial withdrawal
by any Loan Party or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than for funding contributions in the ordinary
course or PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon any Loan Party or any ERISA Affiliate.

 

“Eurodollar”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.

 

“Event of
Default” has the meaning specified in Section 8.01.

 

“Excess Cash
Flow” means, for any period, an amount equal to the excess of:

 

(a)  the sum, without duplication, of:

 

(i)  Consolidated Net Income for
such period,

 

(ii)  an amount equal to the
amount of all non-cash charges (including depreciation and amortization) to the
extent deducted in arriving at such Consolidated Net Income,

 

(iii)  decreases in Consolidated
Working Capital and long-term account receivables for such period (other than
any such decreases arising from acquisitions by the Borrower and the Restricted
Subsidiaries during such period),

 

(iv)  an amount equal to the
aggregate net non-cash loss on Dispositions by the Borrower and the Restricted
Subsidiaries during such period to the extent deducted in arriving at such
Consolidated Net Income, and

 

(v)  the amount of tax expense
that was deducted in determining Consolidated Net Income for such period, to
the extent it exceeds the amount of cash taxes paid in such period;

 

less

 

(b)  the sum, without duplication, of

 

(i)  an amount equal to the
amount of all non-cash credits included in arriving at such Consolidated Net
Income,

 

(ii)  without duplication of
amounts deducted pursuant to clause (xi) below in prior fiscal years, the
amount of Capital Expenditures made in cash or accrued during such period
pursuant to Section 7.16, except to the extent that such Capital Expenditures

 

18

 

were
financed with the proceeds of Indebtedness of the Borrower or the Restricted
Subsidiaries (other than the Revolving Credit Facility),

 

(iii)  the aggregate amount of
all principal payments of Indebtedness of the Borrower and the Restricted
Subsidiaries (including (A) the principal component of payments in respect of
Capitalized Leases and (B) the amount of any mandatory prepayment of Term Loans
to the extent required due to a Disposition that resulted in an increase to
Consolidated Net Income and not in excess of the amount of such increase but
excluding all prepayments of Revolving Credit Loans and Swing Line Loans) made
during such period (other than in respect of any revolving credit facility to
the extent there is not an equivalent permanent reduction in commitments
thereunder) except to the extent financed with the proceeds of other
Indebtedness of the Borrower or the Restricted Subsidiaries,

 

(iv)  an amount equal to the
aggregate net non-cash gain on Dispositions by the Borrower and the Restricted
Subsidiaries during such period to the extent included in arriving at such
Consolidated Net Income,

 

(v)  increase in Consolidated
Working Capital and long-term account receivables for such period (other than
any such increases arising from acquisitions by the Borrower and the Restricted
Subsidiaries during such period),

 

(vi)  cash payments by the
Borrower and the Restricted Subsidiaries during such period in respect of
long-term liabilities of the Borrower and the Restricted Subsidiaries other
than Indebtedness,

 

(vii)  without duplication of
amounts deducted pursuant to clause (viii) below in prior fiscal years, the
amount of cash Investments and acquisitions made during such period pursuant to
Section 7.02 (other than Section 7.02(a) and 7.02(c)) to the extent that such
Investments and acquisitions were financed with internally generated cash flow
of the Borrower and the Restricted Subsidiaries (or funded with proceeds of the
Revolving Credit Facility),

 

(viii)  the amount of Restricted
Payments paid during such period pursuant to Section 7.06(g) to the extent such
Restricted Payments were paid with internally generated cash flow of the
Borrower and the Restricted Subsidiaries,

 

(ix)  the aggregate amount of
expenditures actually made by the Borrower and the Restricted Subsidiaries in
cash during such period (including expenditures for the payment of financing
fees) to the extent that such expenditures are not expenses during such period,

 

(x)  the aggregate amount of any
premium, make-whole or penalty payments actually paid in cash by the Borrower
and the Restricted Subsidiaries during such period that are required to be made
in connection with any prepayment of Indebtedness,

 

(xi)  without duplication of
amounts deducted from Excess Cash Flow in prior periods, the aggregate
consideration required to be paid in cash by the Borrower or any of the
Restricted Subsidiaries pursuant to binding contracts (the “Contract Consideration”) entered into prior to or during
such period relating to Permitted Acquisitions or Capital Expenditures to be
consummated or made during the period of four consecutive fiscal

 

19

 

quarters
of the Borrower following the end of such period; provided
that to the extent the aggregate amount of internally generated cash actually
utilized to finance such Permitted Acquisitions during such period of four
consecutive fiscal quarters is less than the Contract Consideration, the amount
of such shortfall shall be added to the calculation of Excess Cash Flow at the
end of such period of four consecutive fiscal quarters, and

 

(xii)  the amount of cash taxes
paid in such period to the extent they exceed the amount of tax expense
deducted in determining Consolidated Net Income for such period.

 

“Exchange Act”
means the Securities Exchange Act of 1934.

 

“Excluded Assets” has the meaning given in the Security
Agreement.

 

“Excluded Subsidiary” means any Restricted Subsidiary acquired
pursuant to a Permitted Acquisition financed with secured Indebtedness incurred
pursuant to Section 7.03(g) and each Restricted Subsidiary thereof that
guarantees such Indebtedness (in each case to the extent that Guaranteeing the
Obligations or granting a security interest in support thereof is prohibited by
such Indebtedness); provided that
each such Restricted Subsidiary shall cease to be an Excluded Subsidiary
hereunder if such secured Indebtedness is repaid or becomes unsecured or if
such Restricted Subsidiary ceases to guarantee such secured Indebtedness, as applicable.

 

“Existing
Credit Agreement” means the Amended and Restated Loan Agreement
dated as of December 15, 2005, among the Palace Station Hotel & Casino,
Inc., Boulder Station, Inc., Texas Station, LLC, Santa Fe Station, Inc., Sunset
Station, Inc., Lake Mead Station Holdings, LLC, Lake Mead Station, Inc., Fiesta
Station Holdings, LLC, Fiesta Station, Inc., Charleston Station, LLC, the
lenders  named therein, Bank of America,
N.A., as Administrative Agent, Wells Fargo Bank, N.A., as Syndication Agent,
DBTCA, The Royal Bank of Scotland plc, Wachovia Bank, National Association and
Bank of Scotland, as Co-Documentation Agents, and Banc of America Securities
LLC and Walls Fargo Bank, N.A., as joint Lead Arrangers and join Book Managers.

 

“Existing
Indebtedness” means  the Existing
Credit Facility, the Scotia Bank LCs, the Existing Notes and each other item of
Indebtedness set forth on Schedule 7.03(b).

 

“Existing
Letters of Credit” means the letters of credit outstanding on the
Closing Date and set forth on Schedule 1.01D.

 

“Existing Notes” means, collectively, the Existing Senior
Notes and the Existing Senior Subordinated Notes.

 

“Existing Senior Notes” means, collectively, the 6% Senior
Notes and the 7.75% Senior Notes.

 

“Existing Senior Notes Documentation” means the Existing Senior
Notes, the Existing Senior Notes Indentures and all other documents executed
and delivered with respect to the Existing Senior Notes.

 

“Existing
Senior Notes Indentures” means, collectively, means the 6% Senior
Notes Indenture dated as of March 17, 2004 and the 7.75% Senior Notes Indenture
dated as of August 1, 2006.

 

20

 

“Existing
Senior Subordinated Notes” means, collectively, the 61⁄2% Senior
Subordinated Notes, the 6 5/8% Senior Subordinated Notes and the 6 7/8% Senior
Subordinated Notes.

 

“Existing Senior Subordinated Notes Documentation” means the
Existing Senior Subordinated Notes, the Existing Senior Subordinated Notes
Indentures and all other documents executed and delivered with respect to the
Existing Senior Subordinated Notes.

 

“Existing
Senior Subordinated Notes Indentures” means, collectively, the 61⁄2%
Senior Subordinated Notes Indenture dated as of January 29, 2004, the 6 5/8%
Senior Subordinated Notes Indenture dated as of March 13, 2006 and the 6 7/8%
Senior Subordinated Notes Indenture dated as of February 27, 2004.

 

“Facility”
means the Term Loan Facility, the Revolving Credit Facility, the Swing Line
Sublimit or the Letter of Credit Sublimit, as the context may require.

 

“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.)

 

“FCP”
has the meaning specified in the recitals hereto.

 

“FCP Holding”
has the meaning specified in the recitals hereto.

 

“FCP Voteco”  has the meaning specified in the recitals hereto.

 

“Federal
Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates (rounded upwards, if necessary, to the next 1/100
of 1%) on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to JPMorgan Chase Bank on such day on such transactions as determined
by the Administrative Agent.

 

“Fee Letter”
means the Amended and Restated Fee Letter dated as of October 15, 2007, among
FCP and DBSI, DBTCA, JPMorgan and JPMCB, as amended, amended and restated,
supplemented or otherwise modified from time to time.

 

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

 

“Fertitta Partners” has the meaning specified in the recitals
hereto.

 

“Foreign Lender” has the meaning specified in
Section 10.15(a)(i).

 

“Former
Lender” has the meaning specified in Section 10.23(a).

 

“Fund”
means any Person (other than a natural person) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course.

 

21

 

“Funded Debt”
means all Indebtedness of the Borrower and the Restricted Subsidiaries for
borrowed money that matures more than one year from the date of its creation or
matures within one year from such date that is renewable or extendable, at the
option of such Person, to a date more than one year from such date or arises
under a revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year from such date,
including Indebtedness in respect of the Loans.

 

“GAAP”
means generally accepted accounting principles in the United States of America,
as in effect from time to time; provided, however, that if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the Closing Date in GAAP or
in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.

 

“Gaming
Authorities” shall mean, in any jurisdiction in which the Borrower
or any of its Subsidiaries manages or conducts any racing, riverboat and/or
casino gaming operations or activities (including any Acquired Business), the
applicable gaming board, commission or other governmental authority responsible
for interpreting, administering and enforcing the Gaming Laws including the
Nevada Gaming Commission and State Gaming Control Board and any agency or
authority with jurisdiction over gaming operations on Native American tribal
lands.

 

“Gaming Laws”
shall mean all laws, rules, regulations, orders and other enactments applicable
to racing, riverboat and/or casino gaming operations or activities (including
any Acquired Business of the Borrower or any of its Subsidiaries in any
jurisdiction), as in effect from time to time, including the policies,
interpretations and administration thereof by any Gaming Authorities, including
the Nevada Gaming Control Act, as codified in Chapter 463 of the Nevada Revised
Statutes, as amended from time to time, and the regulations of the Nevada
Gaming Commission promulgated thereunder, as amended from time to time .

 

“Governmental
Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Granting
Lender” has the meaning specified in Section 10.07(h).

 

“Guarantee”
means, as to any Person, without duplication, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other monetary obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other monetary obligation, (ii) to purchase
or lease property, securities or services for the purpose of assuring the
obligee in respect of such Indebtedness or monetary other obligation of the
payment or performance of such Indebtedness or other monetary obligation, (iii)
to maintain working capital, equity capital or any other financial statement
condition or liquidity or level of income or cash flow of the primary obligor
so as to enable the primary obligor to pay such Indebtedness or other monetary
obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligee in 

 

22

 

respect of such Indebtedness
or other monetary obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
monetary obligation of any other Person, whether or not such Indebtedness or
monetary other obligation is assumed by such Person (or any right, contingent
or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business, or
customary and reasonable indemnity obligations in effect on the Closing Date or
entered into in connection with any acquisition or disposition of assets
permitted under this Agreement (other than such obligations with respect to
Indebtedness). The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantors”
has the meaning set forth in the definition of “Collateral and Guarantee
Requirement”.

 

“Guaranty”
means, collectively, (a) the Guaranty Agreement made by each Subsidiary
Guarantor in favor of the Administrative Agent on behalf of the Secured
Parties, substantially in the form of Exhibit F and (b) each other guaranty and
guaranty supplement delivered pursuant to Section 6.11.

 

“Hazardous
Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all
other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Hedge Bank”
means any Person that is a Lender or an Affiliate of a Lender at the time it
enters into a Secured Hedge Agreement, in its capacity as a party thereto.

 

“Holding
Companies” means, collectively, FCP Holding, Fertitta Partners and
FCP Voteco.

 

“Honor Date”
has the meaning specified in Section 2.03(c)(i).

 

“Immaterial
Subsidiaries” means (a) as of the Closing Date, those Subsidiaries
of Borrower which are designated as such on Schedule 1.01I, and (b) each
additional Subsidiary of Borrower which is hereafter designated as such from
time to time by written notice to Administrative Agent in a manner consistent
with the provisions of Section 6.14(b); provided that
no Person shall be so designated (i) if, as of the date of its designation, its
Consolidated EBITDA for the then most recent period of twelve months is in
excess of $10,000,000, (ii) at any time when the aggregate book value (as
reasonably determined by Borrower) of the assets of all Immaterial Subsidiaries
would thereby be in excess of $300,000,000, (iii) if it owns any interest in
any Core Property or any Equity Interests in Borrower or any Guarantor, (iv) if
it owns any material assets which are used in connection with any gaming,
lodging or hospitality business, or (v) when any Default or Event of Default
has occurred and remains continuing.

 

“Incremental Amendment” has the meaning set forth in
Section 2.14(a).

 

“Incremental Facility Closing Date” has the meaning set forth
in Section 2.14(a).

 

“Incremental Revolving Credit Loans” has the meaning set forth
in Section 2.14(a).

 

“Incremental Term Loans” has the meaning set forth in
Section 2.14(a).

 

23

 

“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

 

(a)  all obligations of such Person for borrowed
money and all obligations of such Person evidenced by bonds, debentures, notes,
loan agreements or other similar instruments;

 

(b)  the maximum amount (after giving effect to
any prior drawings or reductions which may have been reimbursed) of all letters
of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds, performance bonds and similar instruments issued or
created by or for the account of such Person;

 

(c)  net obligations of such Person
under any Swap Contract (or, to the extent of any related Swap Contracts
entered into with the same counterparty and which provide that amounts due
thereunder may be set off among such Swap Contacts, the net obligations of such
Person under all such related Swap Contracts);

 

(d)  all obligations of such Person to pay the
deferred purchase price of property or services (other than (i) trade accounts
payable in the ordinary course of business and (ii) any earn-out
obligation until such obligation becomes a liability on the balance sheet of
such Person in accordance with GAAP);

 

(e)  indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements and mortgage, industrial revenue bond, industrial
development bond and similar financings), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;

 

(f)  all Capitalized Lease Indebtedness;

 

(g)  all obligations of such Person in respect of
Disqualified Equity Interests;

 

(h)  obligations under Support Agreements; and

 

(i)  all Guarantees of such Person in respect of
any of the foregoing.

 

For all purposes hereof, the
Indebtedness of any Person shall (A) include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, except to the extent such Person’s liability for
such Indebtedness is otherwise limited and only to the extent such Indebtedness
would be included in the calculation of Consolidated Total Net Debt, (B) in the
case of the Borrower and the Guarantors, exclude all intercompany Indebtedness
having a term not exceeding 364 days (inclusive of any roll-over or extensions
of terms) and made in the ordinary of business consistent with past practice
and (C) exclude the Indebtedness evidenced by the unsecured note in the
principal amount of $100,000,000 dated February 16, 2007 issued by GV Ranch
Station Capital Holdings, LLC to Green Valley Ranch Gaming LLC. The amount of
any net obligation under any Swap Contract on any date shall be deemed to be
the Swap Termination Value as of such date. The amount of Indebtedness
represented by Guarantees and Support Agreements shall be deemed to be an
amount equal to the stated or determinable amount of the related primary obligation,
or portion thereof, in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by the guaranteeing Person in good faith; provided, that in no event shall such amount be less than
the amount required to be reflected in the consolidated balance sheet of the 

 

24

 

Person providing such
Guarantee or Support Agreement in accordance with GAAP (including Financial Standards
Board Statement No. 5). The amount of Indebtedness of any Person for purposes
of clause (e) shall be deemed to be equal to the lesser of (i) the aggregate
unpaid amount of such Indebtedness and (ii) the fair market value of the
property encumbered thereby as determined by such Person in good faith.

 

“Indemnified
Liabilities” has the meaning set forth in Section 10.05.

 

“Indemnitees”
has the meaning set forth in Section 10.05.

 

“Information”
has the meaning specified in Section 10.08.

 

“Intellectual
Property Security Agreement” means the Intellectual Property
Security Agreement, substantially in the form attached as Exhibit K.

 

“Interest
Coverage Ratio” means, with respect to the Borrower and the
Restricted Subsidiaries on a consolidated basis, as of the end of any fiscal
quarter of the Borrower for the Test Period ending on such date, the ratio of
(a) Consolidated EBITDA to (b) Consolidated Interest Expense.

 

“Interest
Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided that if any Interest Period for
a Eurodollar Loan exceeds three months, the respective dates that fall every
three months after the beginning of such Interest Period shall also be Interest
Payment Dates; (b) as to any Base Rate Loan (including a Swing Line Loan), the
last Business Day of each March, June, September and December and the Maturity
Date and (c) as to any Swing Line Loan, the day that such Loan is required to
be repaid.

 

“Interest
Period” means, as to each Eurodollar Loan, the period commencing on
the date such Eurodollar Loan is disbursed or converted to or continued as a
Eurodollar Loan and (i) with respect to Borrowings prior to the date that is
the earlier to occur of the thirtieth day after the Closing Date and the date
upon which the Joint Lead Arrangers determine in their sole discretion that
primary syndication of the Revolving Credit Facility and the Term Loans has
been completed ending one month after the Closing Date and (ii) thereafter
ending one, two, three or six months after the date of such Borrowing as
selected by the Borrower in its Committed Loan Notice; provided
that:

 

(a)  any Interest Period that would otherwise end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;

 

(b)  any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and

 

(c)  no Interest Period shall extend beyond the
Maturity Date.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
Equity Interests or debt or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of Indebtedness of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture
interest in such other Person or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of all or substantially all of the
property and assets or business of another Person or assets constituting a
business unit, line of business or division 

 

25

 

of such Person. For purposes
of covenant compliance, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment.

 

“IP
Collateral” means all “Intellectual Property Collateral” referred to
in the Collateral Documents and all of the other IP Rights that are or are
required by the terms hereof or of the Collateral Documents to be subject to
Liens in favor of the Administrative Agent for the benefit of the Secured
Parties.

 

“IP Rights”
has the meaning set forth in Section 5.15.

 

“IRS”
means the United States Internal Revenue Service.

 

“Joint Lead
Arrangers” has the meaning specified in the preamble hereto.

 

“JPMCB” means JPMorgan Chase Bank, N.A. and its successors.

 

“JPMorgan”
means J.P. Morgan Securities Inc.

 

“Junior
Financing” has the meaning specified in Section 7.13.

 

“Junior
Financing Documentation” means any documentation governing any
Junior Financing.

 

“Land Loan”
means, collectively, the real estate-backed delayed draw term loans provided to
the Land Loan Subsidiaries pursuant to the Land Loan Documents.

 

“Land Loan
Subsidiaries” means one or more special purpose Unrestricted Subsidiaries
of the Borrower, to be formed immediately prior to consummation of the initial
advance under the Land Loan, into which the Land Loan Property shall be
transferred by its current owner.

 

“Land Loan
Documents” means the Loan Documents as such term is defined in the
Commitment Letter dated November 2, 2007 between DBTCA, JPMCB and FCP regarding
the $250,000,000 delayed draw term loan to be provided pursuant to the terms
thereof.

 

“Land Loan
Property” means, collectively, the Wild Wild West Assemblage and the
Cactus Assemblage, in each case as defined in the Land Loan Documents.

 

“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“L/C Advance”
means, with respect to each Revolving Credit Lender, such Lender’s funding of
its participation in any L/C Borrowing in accordance with its Pro Rata Share.

 

“L/C
Borrowing” means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Credit Borrowing.

 

26

 

“L/C Credit
Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

 

“L/C Issuer”
means DBTCA and any other Lender that becomes an L/C Issuer in accordance with
Section 2.03(k) or 10.07(j), in each case, in its capacity as an issuer of
Letters of Credit (including Existing Letters of Credit) hereunder, or any
successor issuer of Letters of Credit hereunder.

 

“L/C
Obligations” means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.

 

“Lender”
means each Person from time to time part hereto as a Lender, including any
Person that becomes party hereto pursuant to an Assignment and Assumption and,
as the context requires, includes each L/C Issuer and the Swing Line Lender,
and their respective successors and assigns as permitted hereunder, each of
which is referred to herein as a “Lender.”

 

“Lending
Office” means, as to any Lender, the office or offices of such
Lender described as such in such Lender’s Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.

 

“Letter of
Credit” means any Existing Letter of Credit or any letter of credit
issued hereunder. A Letter of Credit may be a commercial letter of credit or a
standby letter of credit.

 

“Letter of
Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in
use by the relevant L/C Issuer.

 

“Letter of
Credit Expiration Date” means the day that is five (5) Business Days
prior to the Maturity Date (or, if such day is not a Business Day, the next
preceding Business Day).

 

“Letter of
Credit Sublimit” means an amount equal to the lesser of
(a) $100,000,000 and (b) the aggregate amount of the Revolving Credit
Commitments. The Letter of Credit Sublimit is part of, and not in addition to,
the Revolving Credit Facility.

 

“LIBO Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, the
rate for eurodollar deposits for a period equal to one, two, three or six
months (as selected by the Borrower) appearing on Reuters Screen LIBOR1 Page; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the
“LIBO Rate” shall be the interest rate per annum determined by the
Administrative Agent to be the average of the rates per annum at which deposits
in dollars are offered for such relevant Interest Period to major banks in the
London interbank market in London, England by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of such Interest Period.

 

“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any easement, right of way or other encumbrance on title to real property, and
any Capitalized Lease having substantially the same economic effect as any of
the foregoing).

 

“Liquor Authorities” means, in any
jurisdiction in which the Borrower or any of its Subsidiaries sells and
distributes liquor, the applicable alcoholic beverage commission or
other Governmental Authority responsible for interpreting, administering and
enforcing the Liquor Laws.

 

27

 

“Liquor Laws” means the laws, rules,
regulations and orders applicable to or involving the sale and distribution of
liquor by the Borrower or any of its Subsidiaries in any jurisdiction, as in
effect from time to time, including the policies, interpretations and
administration thereof by the applicable Liquor Authorities.

 

“Loan”
means an extension of credit by a Lender to the Borrower under Article 2 in the
form of a Term Loan, Revolving Credit Loan or a Swing Line Loan.

 

“Loan
Documents” means, collectively, (i) this Agreement, (ii) the Notes,
(iii) the Guaranty, (iv) the Collateral Documents, (v) each Letter of Credit
Application, (vi) the Commitment Letter and (vii) the Fee Letter.

 

“Loan Parties”
means, collectively, the Borrower, each Restricted Subsidiary and each other
Affiliate of the Borrower required to execute and deliver any Loan Document.

 

“Management
Stockholders” means the members of management of the Borrower or its
Subsidiaries who are investors in the Borrower or any direct or indirect parent
thereof.

 

“Master
Agreement” has the meaning specified in the definition of “Swap
Contract.”

 

“Master Lease”
means the triple net lease agreement dated as of November 7, 2007 between the
CMBS Subsidiary and the Borrower.

 

“Material Adverse Change” means a material
adverse effect on the assets or liabilities, business, financial condition or
results of operations of the Borrower and its Subsidiaries, taken as a whole; provided, however, that
in no event shall any of the following, alone or in combination, be deemed to
constitute, nor shall any of the following be taken into account in determining
whether there has been, a Material Adverse Change:  (A) any fact, change, development,
circumstance, event, effect or occurrence (an “Effect”)
in general economic or political conditions, whether locally, nationally or
internationally, or in the financial or securities markets, or any outbreak or
escalation of hostilities or declared or undeclared acts of terrorism; (B) any
Effect generally affecting, or resulting from general changes or developments
in, the travel, hospitality or gaming industries; (C) any failure to meet
internal or published projections, forecasts or revenue or earnings predictions
for any period (provided that the underlying
causes of such failures shall not be excluded); (D) any change in the price or
trading volume of the Shares in and of itself (provided
that the underlying causes of such changes shall not be excluded); (E) any
Effect that is demonstrated to have resulted from the announcement of the
proposal of the Acquisition or the Acquisition Agreement and the transactions
contemplated thereby, or the identity of FCP or any of its Affiliates as the
acquirer of the Borrower; (F) any Effect arising from any action taken by the
Borrower to comply with its obligations under the Acquisition Agreement; or (G)
any changes in Law or GAAP (or the interpretation thereof), except, in the case
of clauses (A) and (B), to the extent such Effects referred to therein have had
a materially disproportionate impact on the assets or liabilities, business,
financial condition or results of operations of the Borrower and its
Subsidiaries, taken as a whole, relative to other participants in the travel,
hospitality or gaming industries.

 

“Material
Adverse Effect” means any change, occurrence, event, circumstance or
development that has had or could reasonably be expected to have a material
adverse effect on (a) the business, property, condition (financial or
otherwise), operation or performance of the Borrower and its Subsidiaries,
taken as a whole or (b) the validity or enforceability of any of the Loan
Documents or the rights and remedies of the Administrative Agent and other
Secured Parties.

 

28

 

“Material
Contracts” means each of the Master Lease, each Casino Sublease,
each Existing Senior Notes Indenture, each Existing Senior Subordinated Notes
Indenture and each contract set forth on Schedule 1.01J, in each case as in
effect on the date hereof or as amended, restated, supplemented or otherwise
modified in accordance with the provisions of the Loan Documents.

 

“Maturity
Date” means the date that is
fifty-seven (57) months after the Closing Date; provided,
however, that the Borrower may request,
no later than fifteen (15) days prior to such date, a single fifteen (15)-month
extension of the Maturity Date, and the Maturity Date shall be so extended, so
long as (i) no Event of Default has occurred and is continuing, (ii) the CMBS
Subsidiary shall have refinanced the CMBS Facility and (iii) at the time
Borrower requests such extension, Borrower delivers Projections (which shall be
reasonably acceptable to the Administrative Agent) in respect of such
additional fifteen (15)-month period that project that Borrower will remain in
compliance with the covenants set forth in Section 7.11 during such additional
fifteen (15)-month period after taking into account any change in the amount of
rent to be paid under the Master Lease during such fifteen (15)-month period
and after giving pro forma effect to the refinancing of the CMBS Facility.

 

“Maximum Rate”
has the meaning specified in Section 10.10.

 

“Moody’s”
means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage”
means, collectively, the deeds of trust, trust deeds, hypothecs and mortgages
made by the Loan Parties in favor or for the benefit of the Administrative
Agent on behalf of the Lenders substantially in the form of Exhibit H (with
such changes as may be customary to account for local Law matters), and any
other mortgages executed and delivered pursuant to Section 6.11.

 

“Mortgage
Policies” has the meaning specified in Section 6.13(b)(ii).

 

“Mortgaged
Properties” has the meaning specified in paragraph (j) of the
definition of Collateral and Guarantee Requirement.

 

“Multiemployer
Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.

 

“Native
American Contracts” means contracts between Borrower or any of its
Restricted Subsidiaries and Native American tribes, bands or other forms of
government, or their agencies and instrumentalities, related to the
development, construction, management or operation of gaming, lodging and other
related businesses.

 

“Native
American Subsidiary” means (a) as of the Closing Date, those
Subsidiaries of the Borrower which are designated as such on Schedule 1.01I and
(b) each additional Subsidiary of Borrower which is hereafter designated as
such from time to time by written notice to the Administrative Agent in a
manner consistent with the provisions of Section 6.14(b); provided,
that no such Subsidiary shall be so designated (i) unless at all times such
Subsidiary is engaging exclusively in the business of managing, constructing,
developing, servicing, and otherwise supporting gaming, lodging and other
related businesses under the auspices of a Native American tribe, band or other
forms of government, (ii) unless at all times it does not own any interest in
any Core Property or any Equity Interests in any Person that is not itself a
Native American Subsidiary or (iii) when any Default or Event of Default has
occurred and is continuing.

 

29

 

“Net Cash
Proceeds” means:

 

(a)  with respect to the Disposition of any asset
by the Borrower or any Restricted Subsidiary or any Casualty Event, the
remainder, if any, of (i) the sum of cash and Cash Equivalents received in
connection with such Disposition or Casualty Event (including any cash or Cash
Equivalents received by way of deferred payment pursuant to, or by monetization
of, a note receivable or otherwise, but only as and when so received and, with
respect to any Casualty Event, any insurance proceeds or condemnation awards in
respect of such Casualty Event actually received by or paid to or for the
account of the Borrower or any Restricted Subsidiary) minus (ii) the sum
of (A) the principal amount, premium or penalty, if any, interest and other amounts
on any Indebtedness that is secured by the asset subject to such Disposition or
Casualty Event and that is required to be repaid (and is timely repaid) in
connection with such Disposition or Casualty Event (other than Indebtedness
under the Loan Documents), (B) the out-of-pocket expenses (including attorneys’
fees, investment banking fees, survey costs, title insurance premiums, and
related search and recording charges, transfer taxes, deed or mortgage
recording taxes, other customary expenses and brokerage, consultant and other
customary fees) actually incurred by the Borrower or such Restricted Subsidiary
in connection with such Disposition or Casualty Event, (C) taxes paid or
reasonably estimated to be actually payable in connection therewith, and (D)
any reserve for adjustment in respect of (x) the sale price of such asset or
assets established in accordance with GAAP and (y) any liabilities associated
with such asset or assets and retained by the Borrower or any Restricted
Subsidiary after such sale or other disposition thereof, including pension and
other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated
with such transaction and it being understood that “Net Cash Proceeds” shall
include any cash or Cash Equivalents (i) received upon the Disposition of any
non-cash consideration received by the Borrower or any Restricted Subsidiary in
any such Disposition and (ii) upon the reversal (without the satisfaction of any
applicable liabilities in cash in a corresponding amount) of any reserve
described in clause (D) of the preceding sentence or, if such liabilities have
not been satisfied in cash and such reserve is not reversed within three
hundred and sixty-five (365) days after such Disposition or Casualty Event, the
amount of such reserve; provided that
(x) no net cash proceeds calculated in accordance with the foregoing
realized in a single transaction or series of related transactions shall
constitute Net Cash Proceeds unless such net cash proceeds shall exceed
$10,000,000 and (y) no such net cash proceeds shall constitute Net Cash
Proceeds under this clause (a) in any fiscal year until the aggregate amount of
all such net cash proceeds in such fiscal year shall exceed $25,000,000 (and
thereafter only net cash proceeds in excess of such amount shall constitute Net
Cash Proceeds under this clause (a)); and

 

(b)  with respect to the incurrence or issuance of
any Indebtedness by the Borrower or any Restricted Subsidiary or any Permitted
Equity Issuance, the excess, if any, of (i) the sum of the cash received by the
Borrower or a Restricted Subsidiary in connection with such incurrence or
issuance over (ii) the investment banking fees, underwriting discounts,
commissions, costs and other out-of-pocket expenses and other customary
expenses, incurred by the Borrower or such Restricted Subsidiary in connection
with such incurrence or issuance.

 

“New Property”
means, with respect to any period, any new hotel and/or casino and related
amenities (as opposed to any expansion to existing properties) opened for
business to the public by Borrower or its Restricted Subsidiaries during such
period.

 

“New Property
EBITDA” means, with respect to any New Property for any period, the
amount for such period of Consolidated EBITDA of such New Property (determined
as if references to the Borrower and the Restricted Subsidiaries in the
definition of Consolidated EBITDA were references 

 

30

 

to the Person that owns such
New Property and its Subsidiaries), all as determined on a consolidated basis
for such New Property; provided that,
for any period, if the New Property was not opened on the first day of such
period, then the New Property EBITDA for such period shall be equal to (i) the
actual Consolidated EBITDA for such New Property during such period as
determined above, divided by (ii) the number of days during such period from
and after the opening of such New Property, times (iii) the total number of
days in such period.

 

“Non-Cash
Charges” has the meaning set forth in the definition of the term
“Consolidated EBITDA”.

 

“Non-Consenting Lenders” has the meaning specified in Section
3.07(d).

 

“Nonrenewal
Notice Date” has the meaning specified in Section 2.03(b)(iii).

 

“Note”
means a Term Note or a Revolving Credit Note, as the context may require.

 

“Not
Otherwise Applied” means, with reference to (i) any amount of Net
Cash Proceeds of any transaction or event, (ii) Excess Cash Flow or (iii) the
Available Distributions Amount, that such amount (a) was not required to be
applied to prepay the Loans pursuant to Section 2.5(b), and (b) was not
previously taken into account in permitting a transaction under the Loan
Documents where such permissibility is (or may have been) contingent on the
amount of Net Cash Proceeds, Cumulative Excess Cash Flow or Available
Distributions Amount received or generated. For the avoidance of doubt, the
aggregate amount of Investments, Restricted Payments and Capital Expenditures
made in reliance on the amount of Net Cash Proceeds, Cumulative Excess Cash
Flow and/or Available Distributions Amount pursuant to Sections 7.02(n)(iv),
7.06(g) and/or 7.16(a)(vii) shall reduce the amount “Not Otherwise Applied” of
any Net Cash Proceeds, Cumulative Excess Cash Flow and Available Distributions
Amount, as applicable. The Borrower shall promptly notify the Administrative
Agent of any application of such amount as contemplated by (b) above.

 

“Notice of
Intent to Cure” has the meaning specified in Section 6.02(b).

 

“NPL”
means the National Priorities List under CERCLA.

 

“Obligations”
means all (x) advances to, and debts, liabilities, obligations, covenants and
duties of, any Loan Party and its Subsidiaries arising under any Loan Document
or otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or
Subsidiary of any proceeding under any Debtor Relief Laws naming such Person as
the debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding, (y) obligations of any Loan Party and its
Subsidiaries arising under any Secured Hedge Agreement and (z) Cash Management
Obligations. Without limiting the generality of the foregoing, the Obligations
of the Loan Parties under the Loan Documents (and of their Subsidiaries to the
extent they have obligations under the Loan Documents) include (a) the
obligation (including guarantee obligations) to pay principal, interest, Letter
of Credit commissions, reimbursement obligations, charges, expenses, fees,
Attorney Costs, indemnities and other amounts payable by any Loan Party or its
Subsidiaries under any Loan Document and (b) the obligation of any Loan Party
or any of its Subsidiaries to reimburse any amount in respect of any of the
foregoing that any Lender, in its sole discretion, may elect to pay or advance
on behalf of such Loan Party or such Subsidiary.

 

31

 

“Organization
Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Other Taxes”
has the meaning specified in Section 3.01(b).

 

“Outstanding
Amount” means (a) with respect to the Term Loans, Revolving Credit
Loans and Swing Line Loans on any date, the aggregate amount thereof after
giving effect to any borrowings and prepayments or repayments of Term Loans,
Revolving Credit Loans (including any refinancing of outstanding unpaid
drawings under Letters of Credit or L/C Credit Extensions as a Revolving Credit
Borrowing) and Swing Line Loans, as the case may be, occurring on such date;
and (b) with respect to any L/C Obligations on any date, the aggregate amount
thereof on such date after giving effect to any L/C Credit Extension occurring
on such date and any other changes thereto as of such date, including as a
result of any reimbursements of outstanding unpaid drawings under any Letters
of Credit (including any refinancing of outstanding unpaid drawings under
Letters of Credit or L/C Credit Extensions as a Revolving Credit Borrowing) or
any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.

 

“Participant”
has the meaning specified in Section 10.07(e).

 

“Patriot Act”
has the meaning specified in Section 10.21.

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

“Pension Plan”
means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject
to Title IV of ERISA and is sponsored or maintained by any Loan Party or any
ERISA Affiliate or to which any Loan Party or any ERISA Affiliate contributes
or has an obligation to contribute.

 

“Permits”
means any and all franchises, licenses, leases, permits, approvals,
notifications, certifications, registrations, authorizations, exemptions,
qualifications, easements, rights of way, Liens and other rights, privileges
and approvals required under any applicable Law.

 

“Permitted
Acquisition” has the meaning specified in Section 7.02(i).

 

“Permitted
Equity Issuance” means (i) an issuance of Qualified Equity Interests
to managers of Borrower and its Subsidiaries as incentive compensation or to
Holdings Companies, (ii) any issuance of Qualified Equity Interests by any one
or more of the Holding Companies, prior to a Qualifying IPO, (iii) any issuance
of Qualified Equity Interests in respect of a Qualifying IPO and (iv) any
issuance of Qualified Equity Interests by Borrower following a Qualifying IPO.

 

“Permitted
Holders” means (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 

 

32

 

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.

 

“Permitted Land Loan Investment” means, from time to time,
one or more Investments in the Land Loan Subsidiaries in an aggregate amount no
greater than the amount necessary to repay or prepay the outstanding principal
amount of the Land Loan when due or permitted to be paid under the Land Loan
Documents; provided that (a) after giving effect to
such repayment or prepayment, the excess of the Revolving Credit Commitment
over the sum of the Outstanding Amount of Revolving Credit Loans, Swing Line
Loans and L/C Obligations will exceed $100,000,000, (b) the Total Leverage
Ratio calculated at such time for the Test Period, after giving pro forma
effect to such Investment, is no greater than 0.50:1.00 less than the maximum
Total Leverage Ratio permitted pursuant to Section 7.11(a) as of such last day
of the Test Period and (c) the Total Leverage Ratio calculated at such time for
the Test Period, after giving pro forma effect to such Investment, is no higher
than the Total Leverage Ratio for the Test Period calculated on the Closing
Date. In calculating the Total Leverage Ratio for purposes of determining
whether an Investment constitutes a Permitted Land Loan Investment, (i) pro
forma effect will be given to any Revolving Credit Borrowing made to fund any
portion of such Investment and (ii) in the event that, during the fiscal
quarter of the Borrower immediately preceding the date of calculation, the CMBS
Flowback Amount is less than it would have been but for a limitation imposed on
the payment thereof by the terms of the CMBS Loan Documents (the “CMBS Flowback Deficiency”), the amount of the CMBS Flowback
Deficiency will be given pro forma effect as if it applied during each of the
four fiscal quarters during the applicable Test Period. For the avoidance of
doubt, in the event that, pursuant to this definition, only a portion of the
Investment that the Borrower proposes to make in the Land Loan Subsidiaries would
constitute a Permitted Land Loan Investment (the “Reduced
Permitted Land Loan Investment”), the Borrower will be permitted to
make an Investment in the Land Loan Subsidiaries in an amount not to exceed
Reduced Permitted Land Loan Investment; provided, however, that in no case shall the aggregate Investments in
the Land Loan Subsidiaries made pursuant to Section 7.02(s) exceed the
aggregate amount necessary to repay or prepay the outstanding principal amount
of the Land Loan.

 

“Permitted
Lien” means each Lien permitted under Section 7.01.

 

“Permitted
Refinancing” means, with respect to any Person, any modification,
refinancing, refunding, renewal or extension of any Indebtedness of such
Person; provided that (a) the principal amount
(or accreted value, if applicable) thereof does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so modified, refinanced,
refunded, renewed or extended except by an amount equal to unpaid accrued
interest and premium thereon plus other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such modification,
refinancing, refunding, renewal or extension and by an amount equal to any
existing commitments unutilized thereunder, (b) other than with respect to a Permitted
Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(e),
such modification, refinancing, refunding, renewal or extension has a final
maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being modified, refinanced, refunded,
renewed or extended, (c) other than with respect to a Permitted 

 

33

 

Refinancing in respect of
Indebtedness permitted pursuant to Section 7.03(e), at the time thereof, no
Event of Default shall have occurred and be continuing, and (d) if such
Indebtedness being modified, refinanced, refunded, renewed or extended is
Indebtedness permitted pursuant to Section 7.03(b), 7.03(t) or 7.13(a), (i) to
the extent such Indebtedness being modified, refinanced, refunded, renewed or
extended is subordinated in right of payment to the Obligations, such
modification, refinancing, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms at least as favorable to the
Lenders as those contained in the documentation governing the Indebtedness
being modified, refinanced, refunded, renewed or extended, (ii) the terms and
conditions of any such modified, refinanced, refunded, renewed or extended
Indebtedness, taken as a whole, are not materially less favorable to the
interests of the Lenders than the terms and conditions of the Indebtedness
being modified, refinanced, refunded, renewed or extended; provided
that a certificate of a Responsible Officer delivered to the Administrative
Agent at least five Business Days prior to the incurrence of such Indebtedness,
together with a reasonably detailed description of the material terms and
conditions of such Indebtedness or drafts of the documentation relating
thereto, stating that the Borrower has determined in good faith that such terms
and conditions satisfy the foregoing requirement shall be conclusive evidence
that such terms and conditions satisfy the foregoing requirement unless the
Administrative Agent notifies the Borrower within such five Business Day period
that it disagrees with such determination (including a reasonable description
of the basis upon which it disagrees) and (iii) such modification, refinancing,
refunding, renewal or extension is incurred by the Person who is the obligor of
the Indebtedness being modified, refinanced, refunded, renewed or extended.

 

“Permitted Subordinated Indebtedness” shall
mean Indebtedness of the Borrower that (a) does not mature, and is not subject
to mandatory repurchase, redemption or amortization (other than pursuant to
customary asset sale or change in control provisions requiring redemption or
repurchase only if and to the extent then permitted by this Agreement), in each
case, prior to the date that is six months after the Maturity Date, (b) is not
secured by any assets of any Borrower or any Subsidiary, (c) is not
exchangeable or convertible into any other Indebtedness of any Borrower or any
Disqualified Equity Issuance, (d) is, together with any Guarantee thereof by
any Subsidiary, subordinated to the obligations under the Loan Documents
pursuant to a written instrument either (i) in the form set forth in the
most recently executed indenture for senior subordinated notes, or (ii)
otherwise containing subordination terms and in form and
substance satisfactory, to the Administrative Agent (it being agreed that, at
any given time, in determining whether any such subordination
terms proposed under (ii) above  are reasonably satisfactory to the
Administrative Agent, the Administrative Agent will, in good faith, take into
consideration then prevailing market conditions), (e) contains covenants and
events of default, which, when taken as a whole, are determined in good faith
by a Responsible Officer to be consistent with customary high yield
documentation and in any event to be no less favorable, when taken as a whole,
to the Borrower in any material respect than the covenants and events of
default herein, (f) shall accrue interest at a rate determined in good faith by
the board of directors of the Borrower to be a market rate of interest for such
Indebtedness at the time of issuance thereof and (g) so long as immediately
after giving effect to any such Indebtedness, no Default has occurred and is
continuing and the Borrower and the Restricted Subsidiaries will be in Pro
Forma Compliance with the covenants set forth in Section 7.11.

 

“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.

 

“Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3)
of ERISA) established by any Loan Party or, with respect to any such plan that
is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

34

 

“Pledge
Agreement” means, collectively, the Pledge Agreement executed by the
Loan Parties, substantially in the form of Exhibit G-2, together with each
other pledge agreement supplement executed and delivered pursuant to
Section 6.11.

 

“Pledge
Agreement Supplement” has the meaning specified in the Security
Agreement.

 

“Pledged Debt”
means, as the context may require, the meaning specified in the Security
Agreement or the Pledge Agreement.

 

“Pledged
Equity” means, as the context may require, the meaning specified in
the Security Agreement or the Shareholder Pledge Agreement.

 

“Post-Acquisition
Period” means, with respect to any Permitted Acquisition, the period
beginning on the date such Permitted Acquisition is consummated and ending on
the last day of the sixth full consecutive fiscal quarter immediately following
the date on which such Permitted Acquisition is consummated.

 

“Pre-Opening
Expenses” means, with respect to any fiscal period, the amount of
expenses (other than Consolidated Interest Expense) classified as “pre-opening
expenses” on the applicable financial statements of Borrower and its
Subsidiaries for that period, prepared in accordance with GAAP consistently
applied.

 

“Prime Rate”
means the rate of interest per annum publicly announced from time to time by
DBTCA as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective as of the opening of business on
the date such change is publicly announced as being effective. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually available.

 

“Principal
Control Persons” means (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’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 Lenders 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 1.01N designated by Borrower (subject to
compliance with applicable Gaming Laws and provided that
the Person so designated shall not be a Disqualified Transferee) as a Principal
Control Person in lieu of the Fertitta Brothers.

 

“Principal
L/C Issuer” means any L/C Issuer that has issued Letters of Credit
having an aggregate Outstanding Amount in excess of $2,000,000.

 

“Pro Forma
Adjustment” means, for any Test Period that includes all or any part
of a fiscal quarter included in any Post-Acquisition Period, with respect to
the Acquired EBITDA of the applicable Acquired Entity or Business or the
Consolidated EBITDA of the Borrower, the pro forma increase or decrease in such
Acquired EBITDA or such Consolidated EBITDA, as the case may be, projected by
the Borrower in good faith as a result of (a) actions taken during such
Post-Acquisition Period for the purposes of realizing reasonably identifiable
and factually supportable cost savings or (b) any additional costs incurred
during such Post-Acquisition Period, in each case in connection with the
combination of the operations of such Acquired Entity or Business with the
operations of the Borrower and the Restricted Subsidiaries; provided that, so long as such actions are taken during such
Post-Acquisition Period or such costs are incurred during such Post-Acquisition
Period, as applicable, the cost 

 

35

 

savings related to such
actions or such additional costs, as applicable, it may be assumed, for
purposes of projecting such pro forma increase or decrease to such
Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such cost
savings will be realizable during the entirety of such Test Period, or such
additional costs, as applicable, will be incurred during the entirety of such
Test Period; provided further that any such
pro forma increase or decrease to such Acquired EBITDA or such Consolidated
EBITDA, as the case may be, shall be without duplication for cost savings or
additional costs already included in such Acquired EBITDA or such Consolidated
EBITDA, as the case may be, for such Test Period.

 

“Pro Forma Balance Sheet” has the meaning set forth in
Section 5.05(a)(ii).

 

“Pro Forma
Basis”, “Pro Forma Compliance”
and “Pro Forma Effect” mean, with respect to
compliance with any test or covenant hereunder, that (A) to the extent
applicable, the Pro Forma Adjustment shall have been made and (B) all Specified
Transactions and the following transactions in connection therewith shall be
deemed to have occurred as of the first day of the applicable period of
measurement in such test or covenant: 
(a) income statement items (whether positive or negative) attributable
to the property or Person subject to such Specified Transaction, (i) in the
case of a Disposition of all or substantially all Equity Interests in any
Subsidiary of the Borrower or any division, product line, or facility used for
operations of the Borrower or any of its Subsidiaries, shall be excluded, and
(ii) in the case of a Permitted Acquisition or Investment described in the
definition of  “Specified Transaction”,
shall be included, (b) any retirement of Indebtedness, and (c) any Indebtedness
incurred or assumed by the Borrower or any of the Restricted Subsidiaries in
connection therewith and if such Indebtedness has a floating or formula rate,
shall have an implied rate of interest for the applicable period for purposes
of this definition determined by utilizing the rate which is or would be in
effect with respect to such Indebtedness as at the relevant date of
determination; provided that, without limiting
the application of the Pro Forma Adjustment pursuant to (A) above, the
foregoing pro forma adjustments may be applied to any such test or covenant
solely to the extent that such adjustments are consistent with the definition
of Consolidated EBITDA and give effect to events (including operating expense
reductions) that are (i) (x) directly attributable to such transaction, (y)
expected to have a continuing impact on the Borrower and the Restricted
Subsidiaries and (z) factually supportable or (ii) otherwise consistent with
the definition of Pro Forma Adjustment.

 

“Pro Forma
Financial Statements” has the meaning set forth in
Section 5.05(a)(ii).

 

“Pro Rata
Share” means, with respect to each Lender at any time a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitments of such Lender under the
applicable Facility or Facilities at such time and the denominator of which is
the amount of the Aggregate Commitments under the applicable Facility or
Facilities at such time; provided that
if such Commitments under a Facility have been terminated, then the Pro Rata
Share of each Lender with respect to such Facility shall be determined based on
the Pro Rata Share of such Lender with respect to such Facility immediately
prior to such termination and after giving effect to any subsequent assignments
made pursuant to the terms hereof.

 

“Projections” shall have the meaning set forth in
Section 6.01(d).

 

“Purchase and
Sale Agreement” means that certain Purchase and Sale Agreement dated
as of February 23, 2007 among Boulder Station, Inc., Fiesta Station Holdings,
LLC, Lake Mead Station Holdings, LLC, Palace Station Hotel & Casino, Inc.,
Santa Fe Station, Inc., Sunset Station, Inc. and FCP Newco, LLC.

 

36

 

“Qualified Equity Interests” means any Equity Interests that
are not Disqualified Equity Interests.

 

“Qualifying
IPO” means the issuance by the Borrower or any direct or indirect
parent of the Borrower of its common Equity Interests in an underwritten
primary public offering (other than a public offering pursuant to a
registration statement on Form S-8) pursuant to an effective registration
statement filed with the SEC in accordance with the Securities Act (whether
alone or in connection with a secondary public offering) that results in gross
cash proceeds to the Borrower and/or its parent entities of at least
$250,000,000.

 

“Real
Property” means all Mortgaged Property and all other real property
owned or leased from time to time by any of the Borrower or any Subsidiary.

 

“Red Rock”
means the hotel casino commonly known as Red Rock Casino, Resort and Spa
located on the southeast corner of the intersection of the Beltway (I-215) and
Charleston Blvd. in Clark County, Nevada.

 

“Register”
has the meaning set forth in Section 10.07(d).

 

“Regulation T”
means Regulation T of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

 

“Regulation U”
means Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

 

“Regulation X”
means Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

 

“Reportable
Event” means any of the events set forth in Section 4043(c) of
ERISA or the regulations issued thereunder, other than events for which the
thirty (30) day notice period has been waived.

 

“Request for
Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Term Loans or Revolving Credit Loans, a Committed Loan
Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.

 

“Required
Lenders” means, as of any date of determination, Lenders having more
than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of
each Lender’s risk participation and funded participation in L/C Obligations
and Swing Line Loans being deemed “held” by such Lender for purposes of this
definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and
the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders; provided, further that in the event the
“Required Lenders” determined in accordance with the foregoing constitute less
than three Lenders (and three or more Lenders (other than Defaulting Lenders)
then exist), the “Required Lenders” shall mean such Lenders plus the number of
additional Lenders (that are not Defaulting Lenders) necessary so that the
Required Lenders constitute three Lenders.

 

“Responsible
Officer” means the chief executive officer, president, vice
president, principal accounting officer, treasurer or assistant treasurer or
other similar officer of a Loan Party and, as 

 

37

 

to any document delivered on
the Closing Date, any secretary or assistant secretary of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

 

“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interest of the
Borrower or any Restricted Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, defeasance, acquisition,
cancellation or termination of any such Equity Interest, or on account of any
return of capital to any Holding Company or the Borrower’s other stockholders,
partners or members (or the equivalent Persons thereof) or any option, warrant
or other right to acquire any such Equity Interests in the Borrower or any
Restricted Subsidiary.

 

“Restricted
Subsidiary” means any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.

 

“Revolving
Commitment Increase” has the meaning set forth in
Section 2.14(a).

 

“Revolving
Commitment Increase Lender” has the meaning set forth in
Section 2.14(a).

 

“Revolving
Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurodollar Loans,
having the same Interest Period, made by each of the Revolving Credit Lenders
pursuant to Section 2.01(b).

 

“Revolving
Credit Commitment” means, as to Revolving Credit Lender, its
obligation to (a) make Revolving Credit Loans to the Borrower pursuant to
Section 2.01(b), (b) purchase participations in L/C Obligations in respect of
Letters of Credit and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth, and opposite such Lender’s name on Schedule 2.01 under the caption
“Revolving Credit Commitment” or in an Incremental Amendment or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement. The aggregate Revolving Credit Commitments of all
Revolving Credit Lenders shall be $650,000,000 on the Closing Date, as such
amount may be adjusted from time to time in accordance with the terms of this
Agreement.

 

“Revolving
Credit Exposure” means, as to each Revolving Credit Lender, the sum
of the outstanding principal amount of such Revolving Credit Lender’s Revolving
Credit Loans and its Pro Rata Share of the L/C Obligations and the Swing Line
Obligations at such time.

 

“Revolving
Credit Lender” means, at any time, any Lender that has a Revolving
Credit Commitment at such time.

 

“Revolving
Credit Loan” has the meaning specified in Section 2.01(b).

 

“Revolving Credit Facility” means, at any time, the aggregate
amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such
time.

 

38

 

“Revolving
Credit Note” means a promissory note of the Borrower payable to any
Revolving Credit Lender or its registered assigns, in substantially the form of
Exhibit C-2 hereto, evidencing the aggregate Indebtedness of the Borrower to
such Revolving Credit Lender resulting from the Revolving Credit Loans made by
such Revolving Credit Lender.

 

“Rollover
Amount” has the meaning set forth in Section 7.15(b).

 

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

 

“Scotia Bank
LCs” means, collectively, the letters of credit issued by the Bank
of Nova Scotia pursuant to the unsecured Reimbursement Agreement dated January
6, 2006, entered into between Borrower and the Bank of Nova Scotia, as issuing
bank, which letters of credit are itemized on Schedule 1.01M.

 

“SEC”
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.

 

“Secured
Hedge Agreement” means any Swap Contract permitted under
Article 7 that is entered into by and between any Loan Party or any
Restricted Subsidiary and any Hedge Bank, except to the extent that the parties
thereto agree in writing that such Swap Contract shall not be secured by any
Liens on the Collateral and such parties have delivered such writing to the
Administrative Agent.

 

“Secured
Obligations” has the meaning specified in the Security Agreement.

 

“Secured
Parties” means, collectively, the Administrative Agent, the Lenders,
the Hedge Banks, the Supplemental Administrative Agent and each co-agent or
sub-agent appointed by the Administrative Agent from time to time pursuant to
Section 9.02.

 

“Securities
Act” means the Securities Act of 1933.

 

“Security
Agreement” means, collectively, the Security Agreement executed by
the Loan Parties, substantially in the form of Exhibit G-1, together with each
other security agreement supplement executed and delivered pursuant to
Section 6.11.

 

“Security
Agreement Supplement” has the meaning specified in the Security
Agreement.

 

“Senior Secured Leverage Ratio”
means, with respect to any Test Period, the ratio of (a) Consolidated
Senior Secured Debt as of the last day of such Test Period to (b) Consolidated
EBITDA for such Test Period.

 

“Shareholder
Pledge Agreement” means the Shareholder Pledge and Security
Agreement executed by the Holding Companies, substantially in the form of
Exhibit G-3.

 

“Sold Entity
or Business” has the meaning set forth in the definition of the term
“Consolidated EBITDA”.

 

“Solvent”
and “Solvency” mean, with respect to any
Person on any date of determination, that on such date (a) the fair value of
the property of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person, (b) the present fair salable
value of 

 

39

 

the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature and (d) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such
Person’s property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.

 

“SPC”
has the meaning specified in Section 10.07(h).

 

“Specified
FF&E” means, with respect to each Casino Sublease, the
furniture, fixtures and equipment owned by the tenant under such Casino
Sublease that are located within the premises leased under such Casino Sublease
and that are required to be pledged by such tenant in favor of the landlord
under such Casino Sublease to secure such tenant’s obligations under such
Casino Sublease as in effect on the date hereof.

 

“Specified
FF&E and Reserve Accounts Lien” has the meaning specified in
Section 7.01(x).

 

“Specified
Transaction” means, with respect to any period, any Investment,
Disposition, incurrence or repayment of Indebtedness, Restricted Payment,
Subsidiary designation, Incremental Term Loan or Revolving Commitment Increase
that by the terms of this Agreement requires “Pro Forma Compliance” with a test
or covenant hereunder or requires such test or covenant to be calculated on a
“Pro Forma Basis”.

 

“Sponsors”
means, collectively, one or more Affiliates of Colony Capital, LLC
(collectively, “Colony”), Mr. Frank J. Fertitta III
and his personal investment vehicles and Mr. Lorenzo J. Fertitta and his
personal investment vehicles, together with other co-investors that are
reasonably acceptable to the Joint Lead Arrangers prior to the Closing Date and
their respective Affiliates.

 

“Statutory
Reserves” means a fraction (expressed as a decimal), the numerator
of which is the number one minus the aggregate of the maximum reserve
percentage (including any marginal, special, emergency or supplemental
reserves) applicable on the interest rate determination date (expressed as a
decimal) established by the Board and applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency Liabilities (as defined in
Regulation D of the Board) and the denominator of which is the number one.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned by such Person. Unless otherwise specified, all references
herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of the Borrower.

 

“Substitute
Lender” has the meaning specified in Section 10.23(a).

 

“Supplemental
Administrative Agent” has the meaning specified in
Section 9.13(a) and “Supplemental Administrative Agents” shall have the
corresponding meaning.

 

40

 

“Support
Agreement” means (a) the guaranty by the Borrower or a Restricted
Subsidiary of the completion of the development, construction and opening of a
new gaming facility by any Affiliate or Subsidiary of Borrower (including a
Native American Subsidiary) or of any gaming facility owned by others which is
to be managed exclusively by any such Affiliate or Subsidiary, (b) the
agreement by Borrowers or a Restricted Subsidiary to advance funds, property or
services to or on behalf of an Affiliate or Subsidiary (including a Native
American Subsidiary) in order to maintain the financial condition or level of
any balance sheet item of such Subsidiary or Affiliate (including “keep well”
or “make well” agreements) in connection with the development, construction and
operations of a new gaming facility by such Native American Subsidiary (or of
any gaming facility owned by others which is to be managed exclusively by such
Subsidiary or Affiliate; provided that
such guaranty or agreement is entered into in connection with obtaining
financing for such gaming facility or is required by a Governmental Agency.

 

“Swap
Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

 

“Swap
Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).

 

“Swing Line
Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

 

“Swing Line
Facility” means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.

 

“Swing Line
Lender” means DBTCA, in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.

 

“Swing Line
Loan” has the meaning specified in Section 2.04(a).

 

“Swing Line
Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form
of Exhibit B.

 

41

 

“Swing Line
Obligations” means, as at any date of determination, the aggregate
principal amount of all Swing Line Loans outstanding.

 

“Swing Line
Sublimit” means an amount equal to the lesser of (a) $25,000,000 and
(b) the aggregate amount of the Revolving Credit Commitments. The Swing Line
Sublimit is part of, and not in addition to, the Revolving Credit Commitments.

 

“Syndication
Agent” has the meaning set forth in the preamble hereto.

 

“Taxes”
has the meaning specified in Section 3.01(a).

 

“Term
Borrowing” means a borrowing consisting of simultaneous Term Loans
of the same Type and currency and, in the case of Eurocurrency Rate Loans,
having the same Interest Period made by each of the Term Lenders pursuant to
Section 2.14.

 

“Term Lender”
means, at any time, any Lender that has a Term Loan at such time.

 

“Term Loan”
means a Loan made pursuant to Section 2.01(a) or an Incremental Term Loan.

 

“Term Loan
Commitment” means, with respect to each Lender, the commitment of
such Lender to make Term Loans on the Closing Date pursuant to Section 2.01(a)
in an aggregate amount not to exceed the amount set forth opposite such
Lender’s name on Schedule 2.01 under the caption “Term Loan Commitment”. The
aggregate amount of the Term Loan Commitments of all Term Lenders on the
Closing Date is $250,000,000.

 

“Term Loan
Facility” means the Term Loan Commitment and all Term Loans made
hereunder.

 

“Term Note”
means a promissory note of the Borrower payable to any Term Lender or its
registered assigns, in substantially the form of Exhibit C-1 hereto, evidencing
the aggregate Indebtedness of the Borrower to such Term Lender resulting from
the Term Loans made by such Term Lender.

 

“Test Period”
means, for any determination under this Agreement, the four consecutive fiscal
quarters of the Borrower then last ended.

 

“Threshold
Amount” means $50,000,000.

 

“Total Leverage Ratio” means, with
respect to any Test Period, the ratio of (a) Consolidated Total Net Debt
as of the last day of such Test Period to (b) Consolidated EBITDA for such
Test Period.

 

“Total
Outstandings” means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.

 

“Tranche”
means a category of Commitments or Credit Extensions thereunder. For purposes
hereof, each of the following comprises a separate Tranche:  (a) the unused Revolving Credit Commitments,
(b) the outstanding Revolving Credit Loans and L/C Obligations in respect of
Letters of Credit and (c) the outstanding Term Loans.

 

42

 

“Transaction”
means, collectively, (a) the Equity Contributions, (b) the Acquisition, (c) the
funding of the Term Loans and up to $260,000,000 of Revolving Credit Loans on
the Closing Date, (e) the funding of the CMBS Facility on the Closing Date, (f)
the Casino Sale Leaseback Transaction, (g) the consummation of any other
transactions in connection with the foregoing, and (h) the payment of the fees
and expenses incurred in connection with any of the foregoing.

 

“Transaction Documents” means the Acquisition Agreement and all
other material documents, instruments and certificates delivered pursuant to
the Acquisition Agreement.

 

“Transaction
Expenses” means any fees or expenses incurred or paid by the Holding
Companies, the Borrower or any Restricted Subsidiary in connection with the
Transaction, this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby.

 

“Type”
means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Loan.

 

“Unaudited
Financial Statements” has the meaning set forth in Section 4.01(g).

 

“Uniform
Commercial Code” means the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York or the Uniform
Commercial Code (or similar code or statute) of another jurisdiction, to the
extent it may be required to apply to any item or items of Collateral.

 

“United
States” and “U.S.” mean the
United States of America.

 

“Unreimbursed
Amount” has the meaning set forth in Section 2.03(c)(i).

 

“Unrestricted
Subsidiary” means (i) each Subsidiary of the Borrower listed on
Schedule 1.01C and (ii) any Subsidiary of the Borrower designated by the board
of directors of Borrower as an Unrestricted Subsidiary pursuant to
Section 6.14 subsequent to the date hereof. For the avoidance of doubt,
“Unrestricted Subsidiary” includes the CMBS Subsidiary.

 

“U.S. Lender”
has the meaning set forth in Section 10.15(b).

 

“Weighted
Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between such
date and the making of such payment; by (ii) the then outstanding
principal amount of such Indebtedness.

 

“wholly owned” means, with respect to a Subsidiary of a Person,
a Subsidiary of such Person all of the outstanding Equity Interests of which
(other than (x) director’s qualifying shares and (y) shares issued to foreign
nationals to the extent required by applicable Law) are owned by such Person
and/or by one or more wholly owned Subsidiaries of such Person.

 

“Wild Wild
West” means the Wild Wild West Gaming Hall & Hotel, together
with any real property interests associated therewith and adjacent real
property, collectively owned or leased by the following wholly-owned Unrestricted
Subsidiaries of Borrower: Vista Holdings, LLC; Tropicana Station, Inc.;
Tropicana Acquisitions, LLC and the Land Loan Subsidiaries.

 

43

 

SECTION 1.02. Other Interpretive Provisions. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:

 

(a)  The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.

 

(b)  (i) 
The words “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

 

(i)  Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference appears.

 

(ii)  The terms “include,” “includes” and
“including” are each by way of example and not limitation and shall be deemed
to be followed by the phrase “without limitation.”

 

(iii)  The term “documents” includes any and all
instruments, documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.

 

(c)  In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including;” the words “to” and “until” each mean “to but excluding;” and the
word “through” means “to and including.”

 

(d)  Section headings herein and in the other
Loan Documents are included for convenience of reference only and shall not
affect the interpretation of this Agreement or any other Loan Document.

 

(e)  The words “asset” and “property” shall be
construed as having the same meaning and effect and to refer to any and all
rights and interests in tangible and intangible assets and properties of any
kind whatsoever, whether real, personal or mixed, including cash, securities,
Equity Interests, accounts and contract rights.

 

(f)  The words  “to
the knowledge of the Borrower” mean, when modifying a representation, warranty
or other statement, that the fact or situation described therein is known by a
Responsible Officer of Borrower or with the exercise of reasonable due
diligence under the circumstances (in accordance with the standards of what a
reasonable Person in similar circumstances would have done) would have been
known by a Responsible Officer of the Borrower.

 

SECTION 1.03. Accounting Terms

 

. (a)  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP, applied in a manner consistent with that used in
preparing the Audited Financial Statements, except as otherwise specifically
prescribed herein.

 

(a)  Notwithstanding anything to the contrary
herein, for purposes of determining compliance with any test or covenant
contained in this Agreement with respect to any period during which any
Specified Transaction occurs, the Total Leverage Ratio, Senior Secured Leverage
Ratio and Interest Coverage Ratio shall be calculated with respect to such
period and such Specified Transaction on a Pro Forma Basis.

 

44

 

SECTION 1.04. Rounding. Any financial ratios required to be
maintained by the Borrower pursuant to this Agreement (or required to be
satisfied in order for a specific action to be permitted under this Agreement)
shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).

 

SECTION 1.05. References to Agreements, Laws, Etc. Unless
otherwise expressly provided herein, (a) references to Organization Documents,
agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
permitted by any Loan Document; and (b) references to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.

 

SECTION 1.06. Times of Day. Unless otherwise specified, all
references herein to times of day shall be references to the time of day in New
York, New York (daylight savings or standard, as applicable).

 

SECTION 1.07. Timing of Payment or Performance. When the payment
of any obligation or the performance of any covenant, duty or obligation is
stated to be due or performance required on a day which is not a Business Day,
the date of such payment (other than as described in the definition of Interest
Period) or performance shall extend to the immediately succeeding Business Day.

 

ARTICLE II

 

The Commitments and Credit Extensions

 

SECTION 2.01. The Loans. (a) The Term Loans.
Subject to the terms and conditions set forth herein, each Term Loan Lender
severally agrees to make to the Borrower on the Closing Date a single loan
denominated in Dollars in an amount equal to such Lender’s Term Loan Commitment.
Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed. Term Loans made under this Section 2.01(a) may be Base Rate Loans
or Eurodollar Loans, as further provided herein.

 

(b)  The Revolving Credit
Borrowings. Subject to the terms and conditions set forth herein,
each Revolving Credit Lender severally agrees to make loans to the Borrower as
elected by the Borrower pursuant to Section 2.02 (each such loan, including
each loan made pursuant to a Revolving Commitment Increase, a “Revolving Credit Loan”) from time to time, on any Business
Day until the Maturity Date, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender’s Revolving Credit Commitment; provided that after giving effect to any Revolving Credit
Borrowing, (i) the aggregate Outstanding Amount of the Revolving Credit Loans
of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of
all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount
of all Swing Line Loans shall not exceed such Lender’s Revolving Credit
Commitment and (ii)  the aggregate amount of Revolving Credit Loans made
on the Closing Date shall not exceed $260,000,000. Within the limits of each
Lender’s Revolving Credit Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.01, prepay
under Section 2.05, and reborrow under this Section 2.01. Revolving Credit
Loans may be Base Rate Loans or Eurodollar Loans, as further provided herein.

 

SECTION 2.02. Borrowings, Conversions and Continuations of Loans.
(a)  Each Term Borrowing, each Revolving
Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans 

 

45

 

from one Type to the other, and each continuation of Eurodollar Loans
shall be made upon the Borrower’s irrevocable notice to the Administrative
Agent, which may be given by telephone. Each such notice must be received by
the Administrative Agent not later than 12:30 p.m. (i) three (3)
Business Days prior to the requested date of any Borrowing of Eurodollar Loans
or continuation thereof or any conversion of Base Rate Loans to Eurodollar
Loans, and (ii) no later than 12:00 noon New York time on the requested date of
any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower
pursuant to this Section 2.02(a) must be confirmed promptly by delivery to
the Administrative Agent of a written Committed Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Each Borrowing
of, conversion to or continuation of Eurodollar Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except
as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to
Base Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof. Each Committed Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a
Term Borrowing, Revolving Credit Borrowing, a conversion of Term Loans or
Revolving Credit Loans from one Type to the other, or a continuation of
Eurodollar Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type
of Loans to be borrowed or to which existing Term Loans or Revolving Credit
Loans are to be converted, and (v) if applicable, the duration of the Interest
Period with respect thereto. If the Borrower fails to specify a Type of Loan in
a Committed Loan Notice or fails to give a timely notice requesting a
conversion or continuation, then the applicable Term Loans or Revolving Credit
Loans shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Loans.
If the Borrower requests a Borrowing of, conversion to, or continuation of
Eurodollar Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
(1) month.

 

(b)  Following receipt of a Committed Loan Notice,
the Administrative Agent shall promptly notify each Lender of the amount of its
Pro Rata Share of the applicable Class of Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans or continuation described in Section 2.02(a). In the case
of each Borrowing, each Appropriate Lender shall make the amount of its Loan
available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is
the initial Credit Extension, Section 4.01), the Administrative Agent
shall make all funds so received available to the Borrower in like funds as
received by the Administrative Agent either by (i) crediting the account of the
Borrower on the books of the Administrative Agent with the amount of such funds
or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower; provided that
if, on the date the Committed Loan Notice with respect to such Borrowing is
given by the Borrower, there are Swing Line Loans or L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to
the payment in full of any such L/C Borrowings, second, to the payment in full
of any such Swing Line Loans, and third, to the Borrower as provided above.

 

(c)  Except as otherwise provided herein, a
Eurodollar Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Loan unless the Borrower pays the amount
due, if any, under Section 3.05 in connection therewith. During the
existence of an Event of Default, the Administrative Agent or the Required
Lenders may require that no Loans may be converted to or continued as Eurodollar
Loans.

 

46

 

(d)  The Administrative Agent shall promptly
notify the Borrower and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Loans upon determination of such interest rate. The
determination of the Adjusted LIBO Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in the DBTCA prime rate used in determining the Base Rate
promptly following the public announcement of such change.

 

(e)  After giving effect to all Term Borrowings,
all Revolving Credit Borrowings, all conversions of Term Loans or Revolving
Credit Loans from one Type to the other, and all continuations of Term Loans or
Revolving Credit Loans as the same Type, there shall not be more than ten (10)
Interest Periods in effect.

 

(f)  The failure of any Lender to make the Loan to
be made by it as part of any Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Loan on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender on the date of any
Borrowing.

 

SECTION 2.03. Letters of Credit. (a)  The Letter of Credit
Commitment. (i)   On and after
the Closing Date, the Existing Letters of Credit will constitute Letters of
Credit under this Agreement and for purposes hereof will be deemed to have been
issued on the Closing Date; provided, however, that no Existing Letter of Credit shall be
permitted to be renewed upon the expiration thereof; provided
that Existing Letters of Credit may be replaced by letters of credit issued by
DBTCA as L/C Issuer upon request by Borrower and satisfaction of the
requirements therefor set forth herein. Subject to the terms and conditions set
forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of
the other Revolving Credit Lenders set forth in this Section 2.03, (1)
from time to time on any Business Day during the period from the Closing Date
until the Letter of Credit Expiration Date, to issue Letters of Credit for the
account of the Borrower (provided, that
any Letter of Credit may be for the benefit of any Subsidiary of the Borrower; provided, further, to the
extent that any such Subsidiary is not a Loan Party, such Letter of Credit
shall be deemed an Investment in such Subsidiary and shall only be issued so
long as it is permitted under Section 7.02) and to amend or renew Letters of
Credit previously issued by it, in accordance with Section 2.03(b), and
(2) to honor drafts under the Letters of Credit, and (B) the Revolving Credit
Lenders severally agree to participate in Letters of Credit issued pursuant to
this Section 2.03; provided that
no L/C Issuer shall be obligated to make any L/C Credit Extension with respect
to any Letter of Credit, and no Lender shall be obligated to participate in any
Letter of Credit if as of the date of such L/C Credit Extension, (x) the
Revolving Credit Exposure of any Lender would exceed such Lender’s Revolving
Credit Commitment or (y) the Outstanding Amount of the L/C Obligations would
exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject
to the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

 

(ii)  An L/C Issuer shall be under no obligation to
issue any Letter of Credit if:

 

(A)  any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain such L/C Issuer from issuing such Letter of Credit, or any Law
applicable to such L/C Issuer or any directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over such L/C Issuer
shall prohibit, or direct that such L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which such L/C Issuer is not
otherwise compensated hereunder) not in effect on the 

 

47

 

Closing Date, or shall
impose upon such L/C Issuer any unreimbursed loss, cost or expense which was
not applicable on the Closing Date (for which such L/C Issuer is not
otherwise compensated hereunder);

 

(B)  subject to Section 2.03(b)(iii), the
expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last renewal, unless the Required Lenders
have approved such expiry date;

 

(C)  the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date, unless all the
Revolving Credit Lenders have approved such expiry date; or

 

(D)  the issuance of such Letter of Credit would
violate any Laws binding upon such L/C Issuer.

 

(iii)  An L/C Issuer shall be under no obligation to
amend any Letter of Credit if (A) such L/C Issuer would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.

 

(b)  Procedures for Issuance
and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit. (i) 
Each Letter of Credit shall be issued or amended, as the case may be,
upon the request of the Borrower delivered to an L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower. Such
Letter of Credit Application must be received by the relevant L/C Issuer and
the Administrative Agent not later than 12:30 p.m. at least two (2) Business
Days prior to the proposed issuance date or date of amendment, as the case may
be; or, in each case, such later date and time as the relevant L/C Issuer
may agree in a particular instance in its sole discretion. In the case of a
request for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail reasonably satisfactory to the relevant L/C
Issuer:  (a) the proposed issuance date
of the requested Letter of Credit (which shall be a Business Day); (b) the
amount thereof; (c) the expiry date thereof; (d) the name and address of the
beneficiary thereof; (e) the documents to be presented by such beneficiary
in case of any drawing thereunder; (f) the full text of any certificate to
be presented by such beneficiary in case of any drawing thereunder; and (g)
such other matters as the relevant L/C Issuer may reasonably request. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail reasonably
satisfactory to the relevant L/C Issuer (1) the Letter of Credit to be
amended; (2) the proposed date of amendment thereof (which shall be a Business
Day); (3) the nature of the proposed amendment; and (4) such other matters as
the relevant L/C Issuer may reasonably request.

 

(ii)  Promptly after receipt of any Letter of
Credit Application, the relevant L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from the Borrower and,
if not, such L/C Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the relevant L/C Issuer of confirmation from the
Administrative Agent that the requested issuance or amendment is permitted in
accordance with the terms hereof, then, subject to the terms and conditions
hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit
for the account of the Borrower or enter into the applicable amendment, as the
case may be. Immediately upon the issuance of each Letter of Credit, each
Revolving Credit Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the relevant L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of
such Lender’s Pro Rata Share times the amount of such Letter of Credit.

 

48

 

(iii)  If the Borrower so requests in any applicable
Letter of Credit Application, the relevant L/C Issuer shall agree to issue a
standby Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”); provided that any such Auto-Renewal Letter of Credit must
permit the relevant L/C Issuer to prevent any such renewal at least once in
each twelve month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Nonrenewal Notice Date”)
in each such twelve month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the relevant L/C Issuer, the
Borrower shall not be required to make a specific request to the relevant L/C
Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may not require)
the relevant L/C Issuer to permit the renewal of such Letter of Credit at any
time to an expiry date not later than the Letter of Credit Expiration Date; provided that the relevant L/C Issuer shall not permit any
such renewal if (A) the relevant L/C Issuer has determined that it would have
no obligation at such time to issue such Letter of Credit in its renewed form
under the terms hereof (by reason of the provisions of Section 2.03(a)(ii)
or otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five (5) Business Days before the
Nonrenewal Notice Date from the Administrative Agent, any Revolving Credit
Lender or the Borrower that one or more of the applicable conditions specified
in Section 4.02 is not then satisfied.

 

(iv)  Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the relevant L/C Issuer will also
deliver to the Borrower and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment.

 

(c)  Drawings and
Reimbursements; Funding of Participations. (i) 
Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the relevant L/C Issuer shall
notify promptly the Borrower and the Administrative Agent thereof. Not later
than 3:00 p.m. on the Business Day on which any payment by an L/C Issuer under
a Letter of Credit (each such date, an “Honor
Date”), the Borrower shall reimburse such L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing. If the
Borrower fails to so reimburse such L/C Issuer by such time, the Administrative
Agent shall promptly notify each Appropriate Lender of the Honor Date, the
amount of the unreimbursed drawing (the “Unreimbursed
Amount”), and the amount of such Appropriate Lender’s Pro Rata Share
thereof. In such event, the Borrower shall be deemed to have requested a
Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the minimum
and multiples specified in Section 2.02 for the principal amount of Base
Rate Loans but subject to the amount of the unutilized portion of the Revolving
Credit Commitments of the Appropriate Lenders and the conditions set forth in
Section 4.02 (other than the delivery of a Committed Loan Notice). Any
notice given by an L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

 

(ii)  Each Appropriate Lender (including any Lender
acting as an L/C Issuer) shall upon any notice pursuant to
Section 2.03(c)(i) make funds available to the Administrative Agent for
the account of the relevant L/C Issuer, in Dollars, at the Administrative Agent’s
Office for payments in an amount equal to its Pro Rata Share of the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in
such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Appropriate Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to the
relevant L/C Issuer.

 

49

 

(iii)  With respect to any Unreimbursed Amount that
is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans
because the conditions set forth in Section 4.02 cannot be satisfied or
for any other reason, the Borrower shall be deemed to have incurred from the
relevant L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the Default Rate. In
such event, each Appropriate Lender’s payment to the Administrative Agent for
the account of the relevant L/C Issuer pursuant to Section 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.

 

(iv)  Until each Appropriate Lender funds its
Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to
reimburse the relevant L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Pro Rata Share of such amount
shall be solely for the account of the relevant L/C Issuer.

 

(v)  Each Revolving Credit Lender’s obligation to
make Revolving Credit Loans or L/C Advances to reimburse an L/C Issuer for
amounts drawn under Letters of Credit, as contemplated by this
Section 2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against the
relevant L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided that each Revolving Credit
Lender’s obligation to make Revolving Credit Loans pursuant to this
Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Committed Loan
Notice). No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the relevant L/C Issuer for the amount
of any payment made by such L/C Issuer under any Letter of Credit, together
with interest as provided herein.

 

(vi)  If any Revolving Credit Lender fails to make
available to the Administrative Agent for the account of the relevant L/C
Issuer any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.03(c) by the time specified in
Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover from
such Lender (acting through the Administrative Agent), on demand, such amount
with interest thereon for the period from the date such payment is required to
the date on which such payment is immediately available to such L/C Issuer
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
A certificate of the relevant L/C Issuer submitted to any Revolving Credit
Lender (through the Administrative Agent) with respect to any amounts owing
under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

 

(d)  Repayment of
Participations.

 

(i)  If, at any time after an L/C Issuer has made
a payment under any Letter of Credit and has received from any Revolving Credit
Lender such Lender’s L/C Advance in respect of such payment in accordance with
Section 2.03(c), the Administrative Agent receives for the account of such
L/C Issuer any payment in respect of the related Unreimbursed Amount or
interest thereon (whether directly from the Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative Agent), the
Administrative Agent will distribute to such Lender its Pro Rata Share thereof
(appropriately adjusted, in the case of interest payments, to reflect the 

 

50

 

period of time during which
such Lender’s L/C Advance was outstanding) in the same funds as those received
by the Administrative Agent.

 

(ii)  If any payment received by the Administrative
Agent for the account of an L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by such
L/C Issuer in its discretion), each Appropriate Lender shall pay to the
Administrative Agent for the account of such L/C Issuer its Pro Rata Share
thereof on demand of the Administrative Agent, plus interest thereon from the
date of such demand to the date such amount is returned by such Lender, at a
rate per annum equal to the Federal Funds Rate from time to time in effect.

 

(e)  Obligations Absolute.
The obligation of the Borrower to reimburse the relevant L/C Issuer for each
drawing under each Letter of Credit issued by it and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

 

(i)  any lack of validity or enforceability of
such Letter of Credit, this Agreement, or any other agreement or instrument
relating thereto;

 

(ii)  the existence of any claim, counterclaim,
setoff, defense or other right that Borrower or any Subsidiary may have at any
time against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting), the
relevant L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)  any draft, demand, certificate or other
document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;

 

(iv)  any payment by the relevant L/C Issuer under
such Letter of Credit against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of Credit; or any payment
made by the relevant L/C Issuer under such Letter of Credit to any Person purporting
to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit
of creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law;

 

(v)  any exchange, release or nonperfection of any
Collateral, or any release or amendment or waiver of or consent to departure
from the Guaranty or any other guarantee, for all or any of the Obligations any
Loan Party in respect of such Letter of Credit; or

 

(vi)  any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a discharge
of, any Loan Party;

 

provided that the foregoing shall not excuse any L/C
Issuer from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are waived by the
Borrower to the extent permitted by applicable Law) suffered by the Borrower
that are caused by such 

 

51

 

L/C Issuer’s gross
negligence or willful misconduct when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof.

 

(f)  Role of L/C Issuers.
Each Lender and the Borrower agree that, in paying any drawing under a Letter
of Credit, the relevant L/C Issuer shall not have any responsibility to obtain
any document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document. None of the L/C Issuers, any Agent-Related Person
nor any of the respective correspondents, participants or assignees of any L/C
Issuer shall be liable to any Lender for (i) any action taken or omitted
in connection herewith at the request or with the approval of the Lenders or
the Required Lenders, as applicable; (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary
or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuers, any Agent-Related Person, nor any of the respective
correspondents, participants or assignees of any L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (vi)
of Section 2.03(e); provided that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against an L/C Issuer, and such L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by such L/C Issuer’s willful misconduct or gross negligence
or such L/C Issuer’s willful or grossly negligent failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing, each
L/C Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and no L/C Issuer shall be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

(g)  Cash Collateral.
(i) If an L/C Issuer has honored any full or partial drawing request under
any Letter of Credit and such drawing has resulted in an L/C Borrowing and the
conditions set forth in Section 4.02 to a Revolving Credit Borrowing
cannot then be met, (ii) if, as of the Letter of Credit Expiration Date,
any Letter of Credit may for any reason remain outstanding and partially or
wholly undrawn, (iii) if any Event of Default occurs and is continuing and the
Administrative Agent or the Required Lenders, as applicable, require the
Borrower to Cash Collateralize the L/C Obligations pursuant to Section 8.02(c)
or (iv) an Event of Default set forth under Section 8.01(f) occurs and is
continuing, then the Borrower shall Cash Collateralize the then Outstanding
Amount of all L/C Obligations (in an amount equal to such Outstanding Amount
determined as of the date of such L/C Borrowing or the Letter of Credit
Expiration Date, as the case may be), and shall do so not later than 2:00 P.M.
on (x) in the case of the immediately preceding clauses (i) through (iii), (1)
the Business Day that the Borrower receives notice thereof, if such notice is
received on such day prior to 12:00 Noon or (2) if clause (1) above does not
apply, the Business Day immediately following the day that the Borrower
receives such notice and (y) in the case of the immediately preceding clause
(iv), the Business Day on which an Event of Default set forth under Section 8.01(f)
occurs or, if such day is not a Business Day, the Business Day immediately
succeeding such day. For purposes hereof, “Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the relevant L/C Issuer and the
Lenders, as collateral for the L/C Obligations, cash or deposit account
balances (“Cash Collateral”)
pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent and the relevant L/C Issuer 

 

52

 

(which documents are hereby consented to by the Lenders). Derivatives
of such term have corresponding meanings. The Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked accounts at DBTCA and may be invested in readily available Cash
Equivalents. If at any time the Administrative Agent determines that any funds
held as Cash Collateral are subject to any right or claim of any Person other
than the Administrative Agent (on behalf of the Secured Parties) or that the
total amount of such funds is less than the aggregate Outstanding Amount of all
L/C Obligations, the Borrower will, forthwith upon demand by the Administrative
Agent, pay to the Administrative Agent, as additional funds to be deposited and
held in the deposit accounts at DBTCA as aforesaid, an amount equal to the
excess of (a) such aggregate Outstanding Amount over (b) the total amount of
funds, if any, then held as Cash Collateral that the Administrative Agent
reasonably determines to be free and clear of any such right and claim. Upon
the drawing of any Letter of Credit for which funds are on deposit as Cash
Collateral, such funds shall be applied, to the extent permitted under
applicable Law, to reimburse the relevant L/C Issuer. To the extent the amount
of any Cash Collateral exceeds the then Outstanding Amount of such L/C
Obligations and so long as no Event of Default has occurred and is continuing,
the excess shall be refunded to the Borrower.

 

(h)  Letter of Credit Fees.
The Borrower shall pay to the Administrative Agent for the account of each
Revolving Credit Lender in accordance with its Pro Rata Share a Letter of
Credit fee for each Letter of Credit issued pursuant to this Agreement equal to
the Applicable Rate times the daily maximum amount then available to be drawn
under such Letter of Credit (whether or not such maximum amount is then in
effect under such Letter of Credit if such maximum amount increases
periodically pursuant to the terms of such Letter of Credit). Such letter of
credit fees shall be computed on a quarterly basis in arrears. Such letter of
credit fees shall be due and payable in Dollars on the first Business Day after
the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter
of Credit Expiration Date and thereafter on demand. If there is any change in
the Applicable Rate during any quarter, the daily maximum amount of each Letter
of Credit shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect.

 

(i)  Fronting Fee and
Documentary and Processing Charges Payable to L/C Issuers. The
Borrower shall pay directly to each L/C Issuer for its own account a fronting
fee with respect to each Letter of Credit issued by it equal to 0.25% per annum
(but in no event less than $500) of the daily maximum amount then available to
be drawn under such Letter of Credit (whether or not such maximum amount is
then in effect under such Letter of Credit if such maximum amount increases
periodically pursuant to the terms of such Letter of Credit). Such fronting
fees shall be computed on a quarterly basis in arrears. Such fronting fees
shall be due and payable on the first Business Day after the end of each March,
June, September and December, commencing with the first such date to occur
after the issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand. In addition, the Borrower shall pay directly to
each L/C Issuer for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
such L/C Issuer relating to letters of credit as from time to time in effect. Such
customary fees and standard costs and charges are due and payable within ten
(10) Business Days of demand and are nonrefundable.

 

(j)  Conflict with Letter of
Credit Application. Notwithstanding anything else to the contrary in
this Agreement, in the event of any conflict between the terms hereof and the
terms of any Letter of Credit Application, the terms hereof shall control.

 

(k)  Addition of an L/C Issuer.
A Revolving Credit Lender may become an additional L/C Issuer hereunder
pursuant to a written agreement among the Borrower, the Administrative Agent
and 

 

53

 

such Revolving Credit Lender. The Administrative Agent shall notify the
Revolving Credit Lenders of any such additional L/C Issuer.

 

SECTION 2.04. Swing Line Loans. (a)  The Swing Line.
Subject to the terms and conditions set forth herein, the Swing Line Lender
agrees to make loans (each such loan, a “Swing Line Loan”)
to the Borrower from time to time on any Business Day (other than the Closing
Date) until the Maturity Date in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact
that such Swing Line Loans, when aggregated with the Pro Rata Share of the
Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender
acting as Swing Line Lender, may exceed the amount of such Lender’s Revolving
Credit Commitment; provided that,
after giving effect to any Swing Line Loan, the aggregate Outstanding Amount of
the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata Share of
the Outstanding Amount of all L/C Obligations, plus such Lender’s Pro Rata
Share of the Outstanding Amount of all Swing Line Loans shall not exceed such
Lender’s Revolving Credit Commitment then in effect; provided
further that, the Borrower shall not use the proceeds of any Swing
Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing
limits, and subject to the other terms and conditions hereof, the Borrower may
borrow under this Section 2.04, prepay under Section 2.05, and reborrow
under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately
upon the making of a Swing Line Loan, each Revolving Credit Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender’s Pro Rata Share times the amount of such
Swing Line Loan.

 

(b)  Borrowing Procedures.
Each Swing Line Borrowing shall be made upon the Borrower’s irrevocable notice
to the Swing Line Lender and the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the requested borrowing date,
and shall specify (i) the amount to be borrowed, which shall be a minimum
of $100,000, and (ii) the requested borrowing date, which shall be a
Business Day. Each such telephonic notice must be confirmed promptly by
delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line
Lender will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the
request of any Revolving Credit Lender) prior to 2:00 p.m. on the date of the
proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make
such Swing Line Loan as a result of the limitations set forth in the proviso to
the first sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender will,
not later than 3:00 p.m. on the borrowing date specified in such Swing Line
Loan Notice, make the amount of its Swing Line Loan available to the Borrower.

 

(c)  Refinancing of Swing Line
Loans. (i)  The Swing Line
Lender at any time in its sole and absolute discretion may request, on behalf
of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to
so request on its behalf), that each Revolving Credit Lender make a Base Rate
Loan in an amount equal to such Lender’s Pro Rata Share of the amount of Swing
Line Loans then outstanding. Such request shall be made in writing (which
written request shall be deemed to be a Committed Loan Notice for purposes
hereof) and in accordance with the requirements of Section 2.02, without
regard to the minimum and multiples specified therein for the principal amount
of Base Rate Loans, but subject to the unutilized portion of the aggregate
Revolving Credit Commitments and the conditions set forth in Section 4.02.
The Swing Line Lender shall furnish the Borrower with a copy of the applicable
Committed 

 

54

 

Loan Notice promptly after delivering such notice to the Administrative
Agent. Each Revolving Credit Lender shall make an amount equal to its Pro Rata
Share of the amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m.
on the day specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to the Swing
Line Lender.

 

(ii)  If for any reason any Swing Line Loan cannot
be refinanced by such a Revolving Credit Borrowing in accordance with
Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing
Line Lender as set forth herein shall be deemed to be a request by the Swing
Line Lender that each of the Revolving Credit Lenders fund its risk
participation in the relevant Swing Line Loan and each Revolving Credit Lender’s
payment to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such
participation.

 

(iii)  If any Revolving Credit Lender fails to make
available to the Administrative Agent for the account of the Swing Line Lender
any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.04(c) by the time specified in
Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the
Swing Line Lender at a rate per annum equal to the Federal Funds Rate from time
to time in effect. A certificate of the Swing Line Lender submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (iii) shall be conclusive absent manifest error.

 

(iv)  Each Revolving Credit Lender’s obligation to
make Revolving Credit Loans or to purchase and fund risk participations in
Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Borrower or any other Person for any
reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided that each Revolving Credit
Lender’s obligation to make Revolving Credit Loans pursuant to this
Section 2.04(c) is subject to the conditions set forth in
Section 4.02. No such funding of risk participations shall relieve or
otherwise impair the obligation of the Borrower to repay Swing Line Loans,
together with interest as provided herein.

 

(d)  Repayment of
Participations.

 

(i)  At any time after any Revolving Credit Lender
has purchased and funded a risk participation in a Swing Line Loan, if the
Swing Line Lender receives any payment on account of such Swing Line Loan, the
Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s risk participation was funded) in the
same funds as those received by the Swing Line Lender.

 

(ii)  If any payment received by the Swing Line
Lender in respect of principal or interest on any Swing Line Loan is required
to be returned by the Swing Line Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered
into by the Swing Line Lender in its discretion), each Revolving Credit Lender
shall pay to the Swing 

 

55

 

Line Lender its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender.

 

(e)  Interest for Account of
Swing Line Lender. The Swing Line Lender shall be responsible for
invoicing the Borrower for interest on the Swing Line Loans. Until each
Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant
to this Section 2.04 to refinance such Lender’s Pro Rata Share of any
Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for
the account of the Swing Line Lender.

 

(f)  Payments Directly to Swing
Line Lender. The Borrower shall make all payments of principal and
interest in respect of the Swing Line Loans directly to the Swing Line Lender.

 

SECTION 2.05. Prepayments.

 

(a)   Optional (i)
The Borrower may, upon notice to the Administrative Agent, at any time or from
time to time voluntarily prepay Term Loans and Revolving Credit Loans in whole
or in part without premium or penalty; provided that
(1) such notice must be received by the Administrative Agent not later than
12:30 p.m. (A) three (3) Business Days prior to any date of prepayment of
Eurodollar Loans and (B) on the date of prepayment of Base Rate Loans; (2) any
prepayment of Eurodollar Loans shall be in a principal amount of $5,000,000 or
a whole multiple of $1,000,000 in excess thereof; and (3) any prepayment of
Base Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment and the Class(es) and Type(s) of Loans to be
prepaid. The Administrative Agent will promptly notify each Appropriate Lender
of its receipt of each such notice, and of the amount of such Lender’s Pro Rata
Share of such prepayment. If such notice is given by the Borrower, the Borrower
shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein. Any prepayment of a
Eurodollar Loan shall be accompanied by all accrued interest thereon, together
with any additional amounts required pursuant to Section 3.05. Each
prepayment of the Loans pursuant to this Section 2.05(a) shall be paid to
the Appropriate Lenders in accordance with their respective Pro Rata Shares. Each
prepayment of Term Loans pursuant to this Section 2.05(a) shall be applied in
such order as directed by the Borrower.

 

(ii)  The Borrower may, upon notice to the Swing
Line Lender (with a copy to the Administrative Agent), at any time or from time
to time, voluntarily prepay Swing Line Loans in whole or in part without
premium or penalty; provided that
(1) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment,
and (2) any such prepayment shall be in a minimum principal amount of $100,000
or a whole multiple of $100,000 in excess thereof or, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment. If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount specified in
such notice shall be due and payable on the date specified therein.

 

(iii)  Notwithstanding anything to the contrary
contained in this Agreement, the Borrower may rescind any notice of prepayment
under Section 2.05(a)(i)or 2.05(a)(ii) if such prepayment would have
resulted from a refinancing of all of the Facilities, which refinancing shall
not be consummated or shall otherwise be delayed.

 

56

 

(b)  Mandatory. (i)
No later than the earlier of (x) 90 days after the end of each fiscal year of
the Borrower, commencing with the fiscal year ending on December 31, 2007, and
(y) the date on which the financial statements with respect to such period have
been delivered pursuant to Section 6.01(a) and the related Compliance Certificate
have been delivered pursuant to Section 6.02(b), the Borrower shall cause
outstanding Incremental Term Loans to be prepaid in an amount equal to (A) 50%
of Excess Cash Flow, if any, for the fiscal year then ended minus (B)
the sum of (i) all voluntary prepayments of Term Loans during such fiscal year
and (ii) all voluntary prepayments of Revolving Credit Loans during such fiscal
year to the extent the Revolving Credit Commitments are permanently reduced by
the amount of such payments, in the case of each of the immediately preceding
clauses (i) and (ii), to the extent such prepayments are not funded with the
proceeds of Indebtedness; provided that
(1) the percentage set forth in clause (A) above shall be 25% if the Total
Leverage Ratio for the Test Period as of the last day of the fiscal year
covered by such financial statements was less than or equal to 6.00:1 and
greater than 5.00:1 and no Default or Event of Default has occurred and is
continuing on the date determined pursuant to clauses (x) and (y) above and (2)
no payment of any Loans shall be required under this Section 2.05(b)(i) if the
Total Leverage Ratio for the Test Period as of the last day of the fiscal year
covered by such financial statements was less than 5.00:1 and no Default or Event
of Default has occurred and is continuing on the date determined pursuant to
clauses (x) and (y) above.

 

(ii)  (A) If (x), the Borrower or any Restricted
Subsidiary Disposes of any property or assets (other than any Disposition of
any property or assets permitted by Section 7.05(a), (b), (c), (d) (to the
extent constituting a Disposition by any Restricted Subsidiary to a Loan
Party), (e), (h), (k) or (y) any Casualty Event occurs, which in the aggregate
results in the realization or receipt by the Borrower or such Restricted
Subsidiary of Net Cash Proceeds, the Borrower shall cause the Term Loans to be
prepaid, on or prior to the date which is ten (10) Business Days after the date
of the realization or receipt of such Net Cash Proceeds in an amount equal to
100% of all Net Cash Proceeds received; provided that
no such prepayment shall be required pursuant to this Section 2.05(b)(ii)(A)
with respect to such portion of such Net Cash Proceeds that the Borrower shall
have, on or prior to such date, given written notice to the Administrative
Agent of its intent to reinvest in accordance with Section 2.05(b)(ii)(B)
(which notice may only be provided if no Event of Default has occurred and is
then continuing);

 

(B)
With respect to any Net Cash Proceeds realized or received with respect to any
Disposition (other than any Disposition specifically excluded from the
application of Section 2.05(b)(ii)(A)) or any Casualty Event, the Borrower may
reinvest all or any portion of such Net Cash Proceeds in assets useful for its
business within (x) fifteen (15) months following receipt of such Net Cash
Proceeds or (y) if the Borrower enters into a legally binding commitment to
reinvest such Net Cash Proceeds within fifteen (15) months following receipt
thereof, within one hundred and eighty (180) days of the date of such legally
binding commitment; provided that
(i) so long as an Event of Default shall have occurred and be continuing, the
Borrower (x) shall not be permitted to make any such reinvestments (other than
pursuant to a legally binding commitment that the Borrower entered into at a
time when no Event of Default is continuing) and (y) shall not be required to
apply such Net Cash Proceeds which have been previously applied to prepay
Revolving Credit Loans to the prepayment of Term Loans until such time as the
relevant investment period has expired and no Event of Default is continuing
and (ii) if any Net Cash Proceeds are no longer intended to be or cannot be so
reinvested at any time after deliver of a notice of reinvestment election or if
any Net Cash Proceeds are not reinvested by the expiration of the relevant time
periods set forth above, an amount equal to any such Net Cash Proceeds shall be
applied to the prepayment of the Term Loans as set forth in this Section 2.05
within five (5) Business Days after the Borrower reasonably determines that
such Net Cash Proceeds are no longer intended to be or cannot be so reinvested
or the expiration of such time periods.

 

57

 

(iii)
 If the Borrower or any Restricted
Subsidiary incurs or issues any Indebtedness not expressly permitted to be
incurred or issued pursuant to Section 7.03, the Borrower shall cause Loans
(first, the Term Loans and, to the extent of any excess Net Cash Proceeds, the
Revolving Credit Loans) to be prepaid in an amount equal to 100% of all Net
Cash Proceeds received therefrom on or prior to the date which is five (5)
Business Days after the receipt of such Net Cash Proceeds.

 

(iv)  If for any reason the aggregate Revolving
Credit Exposures at any time exceeds the aggregate Revolving Credit Commitments
then in effect, the Borrower shall promptly prepay or cause to be promptly
prepaid Revolving Credit Loans and Swing Line Loans and/or Cash Collateralize
the L/C Obligations in an aggregate amount equal to such excess; provided that the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.05(d) unless after
the prepayment in full of the Revolving Credit Loans and Swing Line Loans such
aggregate Outstanding Amount exceeds the aggregate Revolving Credit Commitments
then in effect.

 

(v)  Each prepayment of Term Loans pursuant to
this Section 2.05(b) shall be applied in direct order of maturity to repayments
thereof and each such prepayment shall be paid to the Lenders in accordance
with their respective Pro Rata Shares, subject to clause (vi) of this Section
2.05(b).

 

(vi)  The Borrower shall notify the Administrative
Agent in writing of any mandatory prepayment of Term Loans required to be made
pursuant to clauses (i) through (iii) and (v) of this Section 2.05(b) at least
three (3) Business Days prior to the date of such prepayment. Each such notice
shall specify the date of such prepayment and provide a reasonably detailed calculation
of the amount of such prepayment. The Administrative Agent will promptly notify
each Appropriate Lender of the contents of the Borrower’s prepayment notice and
of such Appropriate Lender’s Pro Rata Share of the prepayment.

 

(c)  Funding Losses, Etc. All
prepayments under this Section 2.05 shall be made together with, in the
case of any such prepayment of a Eurodollar Loan on a date other than the last
day of an Interest Period therefor, any amounts owing in respect of such
Eurodollar Loan pursuant to Section 3.05. Notwithstanding any of the other
provisions of this Section 2.05, so long as no Event of Default shall have
occurred and be continuing, if any prepayment of Eurodollar Loans is required
to be made under this Section 2.05, other than on the last day of the
Interest Period therefor, the Borrower may, in its sole discretion, deposit the
amount of any such prepayment otherwise required to be made thereunder into a
Cash Collateral Account until the last day of such Interest Period, at which time
the Administrative Agent shall be authorized (without any further action by or
notice to or from the Borrower or any other Loan Party) to apply such amount to
the prepayment of such Loans in accordance with this Section 2.05. Upon
the occurrence and during the continuance of any Event of Default, the
Administrative Agent shall also be authorized (without any further action by or
notice to or from the Borrower or any other Loan Party) to apply such amount to
the prepayment of the outstanding Loans in accordance with this
Section 2.05.

 

SECTION 2.06. Termination or Reduction of
Commitments. (a)  Optional. The Borrower may, upon written notice to the
Administrative Agent, terminate the unused Commitments of any Class, or from
time to time permanently reduce the unused Commitments of any Class; provided that (i) any such notice shall be received by the
Administrative Agent three (3) Business Days prior to the date of termination
or reduction, (ii) any such partial reduction shall be in an aggregate amount
of $5,000,000 or any whole multiple of $1,000,000 in excess thereof and (iii)
if, after giving effect to any reduction of the Commitments, the Letter of
Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Revolving
Credit Facility, such sublimit shall be automatically reduced by the amount of
such excess.

 

58

 

The amount of any Revolving Credit Commitment reduction shall not be
applied to the Letter of Credit Sublimit or the Swing Line Sublimit unless
otherwise specified by the Borrower. Notwithstanding the foregoing, the
Borrower may rescind or postpone any notice of termination of the Commitments
if such termination would have resulted from a refinancing of the Facility,
which refinancing shall not be consummated or otherwise shall be delayed.

 

(b)  Application of Commitment
Reductions; Payment of Fees.
The Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Letter of Credit Sublimit, or the Swing
Line Sublimit or the Class of unused Commitments under this Section 2.06. Upon
any reduction of Class of unused Commitments, the Commitment of each Lender of
such Class shall be reduced by such Lender’s Pro Rata Share of the amount by
which such Commitments are reduced (other than the termination of the
Commitment of any Lender as provided in Section 3.07). All commitment fees
accrued until the effective date of any termination of the Revolving Credit
Commitments shall be paid on the effective date of such termination.

 

SECTION 2.07. Repayment of Loans. (a) 
Term Loans. The Borrower shall repay to
the Administrative Agent for the ratable account of the Term Loan Lenders (i)
on the last Business Day of each March, June, September and December, commencing
on March 31, 2008, an amount equal to 0.25% of the aggregate amount of all Term
Loans outstanding on the Closing Date (which payments shall be reduced as a
result of the application of prepayments in accordance with Section 2.05(b)(v))
and (ii) on the Maturity Date, the aggregate principal amount of all Term Loans
outstanding on such date. Notwithstanding anything to the contrary contained in
this Agreement, the foregoing amortization payments shall be for the benefit of
the Term Loans made on the Closing Date only, and any scheduled amortization
payments with respect to any Incremental Term Loans shall be independently
agreed between the Borrower and the providers of such Incremental Term Loans.

 

(b)  Revolving Credit Loans.
The Borrower shall repay to the Administrative Agent for the ratable account of
the Appropriate Lenders on the Maturity Date the aggregate principal amount of
all of its Revolving Credit Loans outstanding on such date.

 

(c)  Swing Line Loans.
The Borrower shall repay each Swing Line Loan on the earlier to occur of (i)
the date ten (10) Business Days after such Loan is made and (ii) the
Maturity Date.

 

SECTION 2.08. Interest. (a) 
Subject to the provisions of Section 2.08(b), (i) each Eurodollar
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Adjusted LIBO Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate and (iii) each Swing Line Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate, plus the Applicable Rate for Revolving Credit Loans,
less the Commitment Fee Rate.

 

(b)  The Borrower shall pay interest on past due
amounts hereunder at a fluctuating interest rate per annum at all times equal
to the Default Rate to the fullest extent permitted by applicable Laws. Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

 

(c)  Interest on each Loan shall be due and
payable in arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein. Interest hereunder shall be due and
payable in accordance with the terms hereof before and after judgment, and
before and after the commencement of any proceeding under any Debtor Relief
Law.

 

59

 

(d)  Until the day that is three (3) Business Days
after the Closing Date, each Loan shall be a Base Rate Loan.

 

SECTION 2.09. Fees. In addition to
certain fees described in Sections 2.03(h) and (i):

 

(a)  Commitment Fee.
The Borrower shall pay to the Administrative Agent for the account of each
Revolving Credit Lender in accordance with its Pro Rata Share, a commitment fee
equal to the Applicable Rate with respect to commitment fees times the actual
daily amount by which the aggregate Revolving Credit Commitment exceeds the sum
of (A) Outstanding Amount of Revolving Credit Loans and (B) the
Outstanding Amount of L/C Obligations; provided that
any commitment fee accrued with respect to any of the Revolving Credit
Commitments of a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall not be payable
by the Borrower so long as such Lender shall be a Defaulting Lender except to the
extent that such commitment fee shall otherwise have been due and payable by
the Borrower prior to such time; provided, further, that no commitment fee shall accrue on any of the
Revolving Credit Commitments of a Defaulting Lender so long as such Lender shall
be a Defaulting Lender. The commitment fee shall accrue at all times from the
date hereof until the Maturity Date, including at any time during which one or
more of the conditions in Article 4 is not met, and shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur after the
Closing Date, and on the Maturity Date. The commitment fee shall be calculated
quarterly in arrears, and if there is any change in the Applicable Rate during
any quarter, the actual daily amount shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.

 

(b)  Other Fees. The
Borrower shall pay to the Agents the fees set forth in the Fee Letter and such
other fees as shall have been separately agreed upon in writing in the amounts
and at the times so specified. Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever (except as expressly agreed
between the Borrower and the applicable Agent).

 

SECTION 2.10. Computation of Interest and
Fees. All computations of interest for Base Rate Loans when the Base Rate
is determined by the Prime Rate shall be made on the basis of a year of three
hundred and sixty-five (365) days and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a three hundred
and sixty (360) day year and actual days elapsed. Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on
which it is made shall, subject to Section 2.12(a), bear interest for one
(1) day. Each determination by the Administrative Agent of an interest rate or
fee hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

SECTION 2.11. Evidence of Indebtedness.
(a)  The Credit Extensions made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender and evidenced by one or more entries in the Register maintained by the
Administrative Agent, acting solely for purposes of Treasury Regulation Section 5f.103-1(c),
as agent for the Borrower, in each case in the ordinary course of business. The
accounts or records maintained by the Administrative Agent and each Lender
shall be prima facie evidence absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts
and records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the Administrative
Agent, the Borrower shall 

 

60

 

execute and deliver to such Lender (through the Administrative Agent) a
Note payable to such Lender, which shall evidence such Lender’s Loans in
addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity of
its Loans and payments with respect thereto.

 

(b)  In addition to the accounts and records
referred to in Section 2.11(a), each Lender and the Administrative Agent
shall maintain in accordance with its usual practice accounts or records and,
in the case of the Administrative Agent, entries in the Register, evidencing
the purchases and sales by such Lender of participations in Letters of Credit
and Swing Line Loans. In the event of any conflict between the accounts and
records maintained by the Administrative Agent and the accounts and records of
any Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.

 

(c)  Entries made in good faith by the
Administrative Agent in the Register pursuant to Sections 2.11(a) and (b), and
by each Lender in its account or accounts pursuant to Sections 2.11(a) and (b),
shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement and the other Loan
Documents, absent manifest error; provided that
the failure of the Administrative Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement and the other Loan Documents.

 

SECTION 2.12. Payments Generally. (a)  All payments to be made by the Borrower shall
be made without condition or deduction for any counterclaim, defense,
recoupment or setoff. All payments by the Borrower hereunder shall be made to
the Administrative Agent, for the account of the respective Lenders to which
such payment is owed, at the applicable Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender’s
Lending Office. All payments received by the Administrative Agent after 2:00
p.m. shall in each case be deemed received on the next succeeding Business Day
and any applicable interest or fee shall continue to accrue.

 

(b)  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be; provided
that, if such extension would cause payment of interest on or principal of
Eurodollar Loans to be made in the next succeeding calendar month, such payment
shall be made on the immediately preceding Business Day.

 

(c)  Unless the Borrower or any Lender has
notified the Administrative Agent, prior to the date any payment is required to
be made by it to the Administrative Agent hereunder, that the Borrower or such
Lender, as the case may be, will not make such payment, the Administrative
Agent may assume that the Borrower or such Lender, as the case may be, has
timely made such payment and may (but shall not be so required to), in reliance
thereon, make available a corresponding amount to the Person entitled thereto. If
and to the extent that such payment was not in fact made to the Administrative
Agent in immediately available funds, then:

 

(i)  if the Borrower failed to make such payment,
each Lender shall forthwith on demand repay to the Administrative Agent the
portion of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect of each
day from and including the date such amount was made available by the Administrative
Agent to 

 

61

 

such Lender to the date such
amount is repaid to the Administrative Agent in immediately available funds at
the Federal Funds Rate from time to time in effect; and

 

(ii)  if any Lender failed to make such payment,
such Lender shall forthwith on demand pay to the Administrative Agent the
amount thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the Administrative
Agent to the Borrower to the date such amount is recovered by the
Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the Federal Funds Rate from
time to time in effect. When such Lender makes payment to the Administrative
Agent (together with all accrued interest thereon), then such payment amount
(excluding the amount of any interest which may have accrued and been paid in
respect of such late payment) shall constitute such Lender’s Loan included in
the applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent’s demand therefor, the Administrative Agent may
make a demand therefor upon the Borrower, and the Borrower shall pay such
amount to the Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of interest
applicable to the applicable Borrowing. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Commitment or to
prejudice any rights which the Administrative Agent or the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

 

A notice of the
Administrative Agent to any Lender or the Borrower with respect to any amount
owing under this Section 2.12(c) shall be conclusive, absent manifest
error.

 

(d)  If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided
in the foregoing provisions of this Article 2, and such funds are not made
available to the Borrower by the Administrative Agent because the conditions to
the applicable Credit Extension set forth in Article 4 are not satisfied or
waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest.

 

(e)  The obligations of the Lenders hereunder to
make Loans and to fund participations in Letters of Credit and Swing Line Loans
are several and not joint. The failure of any Lender to make any Loan or to
fund any such participation on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan or purchase its participation.

 

(f)  Nothing herein shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or manner
or to constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.

 

(g)  Whenever any payment received by the
Administrative Agent under this Agreement or any of the other Loan Documents is
insufficient to pay in full all amounts due and payable to the Administrative
Agent and the Lenders under or in respect of this Agreement and the other Loan
Documents on any date, such payment shall be distributed by the Administrative
Agent and applied by the Administrative Agent and the Lenders in the order of
priority set forth in Section 8.04. If the Administrative Agent receives
funds for application to the Obligations of the Loan Parties under or in
respect of the Loan Documents under circumstances for which the Loan Documents
do not specify the manner in which such funds are to be applied, the Administrative
Agent may, but shall not be obligated to, elect to distribute such funds to
each of the Lenders in accordance with such Lender’s Pro Rata Share of the sum
of (a) the Outstanding Amount of all Loans outstanding at such time and (b) the
Outstanding 

 

62

 

Amount of all L/C Obligations outstanding at such time, in repayment or
prepayment of such of the outstanding Loans or other Obligations then owing to
such Lender.

 

SECTION 2.13. Sharing of Payments. If,
other than as expressly provided elsewhere herein, any Lender shall obtain on
account of the Loans made by it, or the participations in L/C Obligations and
Swing Line Loans held by it, any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) in excess of its
ratable share (or other share contemplated hereunder) thereof, such Lender
shall immediately (a) notify the Administrative Agent of such fact, and
(b) purchase from the other Lenders such participations in the Loans made
by them and/or such subparticipations in the participations in L/C Obligations
or Swing Line Loans held by them, as the case may be, as shall be necessary to
cause such purchasing Lender to share the excess payment in respect of such Loans
or such participations, as the case may be, pro rata with each of them; provided that if all or any portion of such excess payment
is thereafter recovered from the purchasing Lender under any of the
circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender’s ratable share (according to the proportion of
(i) the amount of such paying Lender’s required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered, without further interest thereon. The Borrower agrees that any
Lender so purchasing a participation from another Lender may, to the fullest
extent permitted by applicable Law, exercise all its rights of payment
(including the right of setoff, but subject to Section 10.09) with respect
to such participation as fully as if such Lender were the direct creditor of
the Borrower in the amount of such participation. The Administrative Agent will
keep records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased under this Section 2.13 and will in
each case notify the Lenders following any such purchases or repayments. Each
Lender that purchases a participation pursuant to this Section 2.13 shall
from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.

 

SECTION 2.14. Incremental Credit
Extensions. (a)  The Borrower may, at
any time or from time to time on or after the date that is 180 days after the
Closing Date, by notice to the Administrative Agent (whereupon the
Administrative Agent shall promptly deliver a copy to each of the Lenders),
request (a) one or more new tranches of term loans (the “Incremental Term Loans”) or (b) one or more increases
in the amount of the Revolving Credit Commitments (each such increase, a “Revolving Commitment Increase”); provided
that (i) both at the time of any such request and upon the effectiveness
of any Incremental Amendment referred to below, no Default or Event of Default
shall exist and at the time that any such Incremental Term Loan is made (and
after giving effect thereto) no Default or Event of Default shall exist and
(ii) the Borrower shall (unless, with respect to a Revolving Commitment
Increase, no Revolving Credit Borrowing will be made on the effective date
thereof) be in compliance with each of the covenants set forth in
Section 7.11 determined on a Pro Forma Basis as of the date of such
Incremental Term Loan or Revolving Commitment Increase and the last day of the
most recent Test Period, in each case, as if such Incremental Term Loans or
Revolving Commitment Increases, as applicable, had been outstanding on the last
day of such fiscal quarter of the Borrower for testing compliance therewith. Each
tranche of Incremental Term Loans and each Revolving Commitment Increase shall
be in an aggregate principal amount that is not less than $25,000,000 (provided that such amount may be less than $25,000,000 if
such amount represents all remaining availability under the limit set forth in
the next sentence). Notwithstanding anything to the contrary herein, the
aggregate amount of the Incremental Term Loans and the Revolving Commitment
Increases shall not exceed $100,000,000. The Incremental Term Loans
(a) shall rank pari  passu in right of payment and of security with the 

 

63

 

Revolving Credit Loans and the Term Loans, (b) shall not mature
earlier than the Maturity Date, (c) shall have a Weighted Average Life to
Maturity equal to or in excess of the then longest maturing tranche of Term
Loans and (d) except as set forth above, shall be treated substantially the
same as the Term Loans (in each case, including with respect to mandatory and
voluntary prepayments but not with respect to scheduled amortization payments
(which shall be independently agreed between the Borrower and the providers of
such Incremental Term Loans)); provided that
(i) the terms and conditions applicable to Incremental Term Loans may be
materially different from those of the Term Loans to the extent such
differences are reasonably acceptable to the Joint Lead Arrangers and
(ii) the interest rates and amortization schedule applicable to the
Incremental Term Loans shall be determined by the Borrower and the lenders
thereof. Each notice from the Borrower pursuant to this Section shall set forth
the requested amount and proposed terms of the relevant Incremental Term Loans
or Revolving Commitment Increases. Incremental Term Loans may be made, and
Revolving Commitment Increases may be provided, by any existing Lender or by
any other bank or other financial institution (any such other bank or other
financial institution being called an “Additional Lender”);
provided that the Administrative Agent
shall have consented (not to be unreasonably withheld) to such Lender’s or
Additional Lender’s making such Incremental Term Loans or providing such
Revolving Commitment Increases if such consent would be required under
Section 10.07(b) for an assignment of Loans or Revolving Credit
Commitments, as applicable, to such Lender or Additional Lender. Commitments in
respect of Incremental Term Loans and Revolving Commitment Increases shall
become Commitments (or in the case of a Revolving Commitment Increase to be
provided by an existing Revolving Credit Lender, an increase in such Lender’s
applicable Revolving Credit Commitment) under this Agreement pursuant to an
amendment (an “Incremental Amendment”) to this
Agreement and, as appropriate, the other Loan Documents, executed by the
Borrower, each Lender agreeing to provide such Commitment, if any, each
Additional Lender, if any, and the Administrative Agent. The Incremental
Amendment may, without the consent of any other Lenders, effect such amendments
to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent to effect
the provisions of this Section. The effectiveness of any Incremental Amendment
shall be subject to the satisfaction on the date thereof (each, an “Incremental Facility Closing Date”) of each of the
conditions set forth in Section 4.02 (it being understood that all
references to “the date of such Credit Extension” or similar language in such
Section 4.02 shall be deemed to refer to the effective date of such
Incremental Amendment) and such other conditions as the parties thereto shall
agree. The Borrower will use the proceeds of the Incremental Term Loans and
Revolving Commitment Increases for any purpose not prohibited by this Agreement.
No Lender shall be obligated to provide any Incremental Term Loans or Revolving
Commitment Increases, unless it so agrees. Upon each increase in the Revolving
Credit Commitments pursuant to this Section, each Revolving Credit Lender
immediately prior to such increase will automatically and without further act
be deemed to have assigned to each Lender providing a portion of the Revolving
Commitment Increase (each a “Revolving Commitment
Increase Lender”) in respect of such increase, and each such
Revolving Commitment Increase Lender will automatically and without further act
be deemed to have assumed, a portion of such Revolving Credit Lender’s
participations hereunder in outstanding Letters of Credit and Swing Line Loans
such that, after giving effect to each such deemed assignment and assumption of
participations, the percentage of the aggregate outstanding
(i) participations hereunder in Letters of Credit and
(ii) participations hereunder in Swing Line Loans held by each Revolving
Credit Lender (including each such Revolving Commitment Increase Lender) will
equal the percentage of the aggregate Revolving Credit Commitments of all
Revolving Credit Lenders represented by such Revolving Credit Lender’s
Revolving Credit Commitment and (b) if, on the date of such increase, there are
any Revolving Credit Loans outstanding, such Revolving Credit Loans shall on or
prior to the effectiveness of such Revolving Commitment Increase be prepaid
from the proceeds of additional Revolving Credit Loans made hereunder
(reflecting such increase in Revolving Credit Commitments), which prepayment
shall be accompanied by accrued interest on the Revolving Credit Loans being
prepaid and any costs incurred by any Lender in accordance with
Section 3.05. The Administrative Agent and the Lenders hereby agree that
the minimum borrowing, pro rata borrowing and pro rata payment 

 

64

 

requirements contained elsewhere in this Agreement shall not apply to
the transactions effected pursuant to the immediately preceding sentence.

 

(b)  This Section 2.14 shall supersede any
provisions in Section 2.13 or 10.01 to the contrary.

 

ARTICLE III

 

Taxes, Increased Costs Protection and
Illegality

 

SECTION 3.01. Taxes. (a)  Except as provided in this Section 3.01,
any and all payments by the Borrower (the term Borrower under Article 3 being
deemed to include any Subsidiary for whose account a Letter of Credit is
issued) to or for the account of any Agent or any Lender under any Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and all liabilities (including additions
to tax, penalties and interest) with respect thereto, excluding, in the case of
each Agent and each Lender, taxes imposed on or measured by its net income or
overall gross income (including branch profits), and franchise (and similar)
taxes imposed on it in lieu of net income taxes, by the jurisdiction (or any
political subdivision thereof) under the Laws of which such Agent or such
Lender, as the case may be, is organized or maintains a Lending Office, and all
liabilities (including additions to tax, penalties and interest) with respect
thereto (all such non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as “Taxes”). If the
Borrower shall be required by any Laws to deduct any Taxes or Other Taxes from
or in respect of any sum payable under any Loan Document to any Agent or any
Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 3.01), each of such Agent and such Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Laws, and
(iv) within thirty (30) days after the date of such payment (or, if
receipts or evidence are not available within thirty (30) days, as soon as
possible thereafter), the Borrower shall furnish to such Agent or Lender (as
the case may be) the original or a certified copy of a receipt evidencing
payment thereof to the extent such a receipt is issued therefor, or other
written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent. If the Borrower fails to pay any Taxes or Other Taxes
when due to the appropriate taxing authority or fails to remit to any Agent or
any Lender the required receipts or other required documentary evidence, the
Borrower shall indemnify such Agent and such Lender for any incremental taxes,
interest or penalties that may become payable by such Agent or such Lender
arising out of such failure.

 

(b)  In addition, the Borrower agrees to pay any
and all present or future stamp, court or documentary taxes and any other
excise, property, intangible or mortgage recording taxes or charges or similar
levies which arise from any payment made under any Loan Document or from the
execution, delivery, performance, enforcement or registration of, or otherwise
with respect to, any Loan Document (hereinafter referred to as “Other Taxes”).

 

(c)  The Borrower agrees to indemnify each Agent
and each Lender for (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.01) paid by such Agent and such
Lender and (ii) any liability (including additions to tax, penalties,
interest and expenses) arising therefrom or with respect thereto, in each case
whether or not such Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority; provided
such Agent or Lender, as the case may be, 

 

65

 

provides the Borrower with a written statement thereof setting forth in
reasonable detail the basis and calculation of such amounts. Payment under this
Section 3.01(c) shall be made within thirty (30) days after the date such
Lender or such Agent makes a demand therefor.

 

(d)  The Borrower shall not be required pursuant
to this Section 3.01 to pay any additional amount to, or to indemnify, any
Lender or Agent, as the case may be, to the extent that such Lender or such
Agent becomes subject to Taxes subsequent to the Closing Date (or, if later,
the date such Lender or Agent becomes a party to this Agreement) as a result of
a change in the place of organization of such Lender or Agent or a change in
the lending office of such Lender, except to the extent that any such change is
requested or required in writing by the Borrower (and provided
that nothing in this clause (d) shall be construed as relieving the Borrower
from any obligation to make such payments or indemnification in the event of a
change in lending office or place of organization that precedes a change in Law
to the extent such Taxes result from a change in Law).

 

(e)  Notwithstanding anything else herein to the
contrary, if a Lender or an Agent is subject to withholding tax imposed by any
jurisdiction in which the Borrower is formed or organized at a rate in excess
of zero percent at the time such Lender or such Agent, as the case may be,
first becomes a party to this Agreement, withholding tax imposed by such
jurisdiction at such rate shall be considered excluded from Taxes unless and
until such Lender or Agent, as the case may be, provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided that, if at the date of the Assignment
and Acceptance pursuant to which a Lender becomes a party to this Agreement,
the Lender assignor was entitled to payments under clause (a) of this
Section 3.01 in respect of withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition
to withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) withholding tax, if any, applicable with respect
to the Lender assignee on such date.

 

(f)  If any Lender or Agent determines, in its
reasonable discretion, that it has received a refund in respect of any Taxes or
Other Taxes as to which indemnification or additional amounts have been paid to
it by the Borrower pursuant to this Section 3.01, it shall promptly remit
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 3.01 with respect to the
Taxes or Other Taxes giving rise to such refund plus any interest included in
such refund by the relevant taxing authority attributable thereto) to the
Borrower, net of all out-of-pocket expenses of the Lender or Agent, as the case
may be and without interest (other than any interest paid by the relevant
taxing authority with respect to such refund); provided
that the Borrower, upon the request of the Lender or Agent, as the case may be,
agrees promptly to return such refund to such party in the event such party is
required to repay such refund to the relevant taxing authority. Such Lender or
Agent, as the case may be, shall, at the Borrower’s request, provide the
Borrower with a copy of any notice of assessment or other evidence of the
requirement to repay such refund received from the relevant taxing authority (provided that such Lender or Agent may delete any
information therein that such Lender or Agent deems confidential). Nothing
herein contained shall interfere with the right of a Lender or Agent to arrange
its tax affairs in whatever manner it thinks fit nor oblige any Lender or Agent
to claim any tax refund or to make available its tax returns or disclose any
information relating to its tax affairs or any computations in respect thereof
or require any Lender or Agent to do anything that would prejudice its ability
to benefit from any other refunds, credits, reliefs, remissions or repayments
to which it may be entitled.

 

(g)  Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 3.01(a) or (c) with
respect to such Lender it will, if requested by the Borrower, use commercially
reasonable efforts (subject to such Lender’s overall internal policies of
general application and legal and regulatory restrictions) to designate another
Lending Office for any Loan or Letter of Credit 

 

66

 

affected by such event; provided that
such efforts are made on terms that, in the sole judgment of such Lender, cause
such Lender and its Lending Office(s) to suffer no economic, legal or
regulatory disadvantage; provided, further, that nothing in this Section 3.01(g) shall
affect or postpone any of the Obligations of the Borrower or the rights of such
Lender pursuant to Section 3.01(a) or (c).

 

SECTION 3.02. Illegality. If any Lender determines that any Law
has made it unlawful, or that any Governmental Authority has asserted that it
is unlawful, for any Lender or its applicable Lending Office to make, maintain
or fund Eurodollar Loans, or to determine or charge interest rates based upon
the Adjusted LIBO Rate, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Loans or to convert Base Rate Loans to Eurodollar Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Loans of such Lender to Base Rate Loans, either on the
last day of the Interest Period therefor, if such Lender may lawfully continue
to maintain such Eurodollar Loans to such day, or promptly, if such Lender may
not lawfully continue to maintain such Eurodollar Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted and all amounts due, if any, in connection with
such prepayment or conversion under Section 3.05. Each Lender agrees to
designate a different Lending Office if such designation will avoid the need
for such notice and will not, in the good faith judgment of such Lender,
otherwise be materially disadvantageous to such Lender.

 

SECTION 3.03. Inability to Determine Rates. If the Required
Lenders determine that for any reason adequate and reasonable means do not
exist for determining the Adjusted LIBO Rate for any requested Interest Period
with respect to a proposed Eurodollar Loan, or that the Adjusted LIBO Rate for
any requested Interest Period with respect to a proposed Eurodollar Loan does
not adequately and fairly reflect the cost to such Lenders of funding such
Loan, or that Dollar deposits are not being offered to banks in the London
interbank eurodollar market for the applicable amount and the Interest Period
of such Eurodollar Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain Eurodollar Loans shall be suspended until the Administrative Agent
(upon the instruction of the Required Lenders) revokes such notice. Upon
receipt of such notice, the Borrower may revoke any pending request for a
Borrowing of, conversion to or continuation of Eurodollar Loans or, failing
that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

 

SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy;
Reserves on Eurodollar Loans. (a)  If
any Lender determines that as a result of the introduction of or any change in
or in the interpretation of any Law, in each case after the date hereof, or
such Lender’s compliance therewith, there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining Eurodollar
Loans or (as the case may be) issuing or participating in Letters of Credit, or
a reduction in the amount received or receivable by such Lender in connection
with any of the foregoing (excluding for purposes of this Section 3.04(a)
any such increased costs or reduction in amount resulting from (i) Taxes
or Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income
(including branch profits), and franchise (and similar) taxes imposed in lieu
of net income taxes, by the United States or any political subdivision thereof
under the Laws of which such Lender is organized or maintains a Lending Office
and (iii) reserve requirements contemplated by Section 3.04(c), then
from time to time within fifteen (15) days after demand by such Lender setting
forth in reasonable detail such increased costs (with a copy of such demand to
the Administrative Agent given in accordance with Section 3.06), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.

 

67

 

(b)  If any Lender determines that the
introduction of any Law regarding capital adequacy or any change therein or in
the interpretation thereof, in each case after the date hereof, or compliance
by such Lender (or its Lending Office) therewith, has the effect of reducing
the rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of such Lender’s obligations hereunder (taking
into consideration its policies with respect to capital adequacy and such
Lender’s desired return on capital), then from time to time upon demand of such
Lender setting forth in reasonable detail the charge and the calculation of
such reduced rate of return (with a copy of such demand to the Administrative
Agent given in accordance with Section 3.06), the Borrower shall pay to
such Lender such additional amounts as will compensate such Lender for such
reduction within fifteen (15) days after receipt of such demand.

 

(c)  The Borrower shall pay to each Lender,
(i) as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits, additional interest on the unpaid principal amount of each
Eurodollar Loan equal to the actual costs of such reserves allocated to such
Loan by such Lender (as determined by such Lender in good faith, which determination
shall be conclusive in the absence of manifest error), and (ii) as long as
such Lender shall be required to comply with any reserve ratio requirement or
analogous requirement of any other central banking or financial regulatory
authority imposed in respect of the maintenance of the Commitments or the
funding of the Eurodollar Loans, such additional costs (expressed as a
percentage per annum and rounded upwards, if necessary, to the nearest five
decimal places) equal to the actual costs allocated to such Commitment or Loan
by such Lender (as determined by such Lender in good faith, which determination
shall be conclusive absent manifest error) which in each case shall be due and
payable on each date on which interest is payable on such Loan; provided the Borrower shall have received at least fifteen
(15) days’ prior notice (with a copy to the Administrative Agent) of such
additional interest or cost from such Lender. If a Lender fails to give notice
fifteen (15) days prior to the relevant Interest Payment Date, such additional
interest or cost shall be due and payable fifteen (15) days from receipt of
such notice.

 

(d)  Failure or delay on the part of any Lender to
demand compensation pursuant to this Section 3.04 shall not constitute a
waiver of such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender pursuant to
Section 3.04(a), (b) or (c) for any such increased cost or reduction
incurred more than one hundred and eighty (180) days prior to the date that
such Lender demands, or notifies the Borrower of its intention to demand,
compensation therefore; provided, further, that, if the circumstance giving rise to such
increased cost or reduction is retroactive, then such 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.

 

(e)  If any Lender requests compensation under
this Section 3.04, then such Lender will, if requested by the Borrower,
use commercially reasonable efforts to designate another Lending Office for any
Loan or Letter of Credit affected by such event; provided
that such efforts are made on terms that, in the reasonable judgment of such
Lender, cause such Lender and its Lending Office(s) to suffer no material
economic, legal or regulatory disadvantage; provided, further,  that nothing
in this Section 3.04(e) shall affect or postpone any of the Obligations of
the Borrower or the rights of such Lender pursuant to Section 3.04(a),
(b), (c) or (d).

 

SECTION 3.05. Funding Losses. Upon demand of any Lender (with a copy to
the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense (but not loss of profit margin) incurred by it as a result of:

 

68

 

(a)  any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise); or

 

(b)  any failure by the Borrower (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan other than
a Base Rate Loan on the date or in the amount notified by the Borrower;

 

including any loss or expense
(but not loss of profit margin) arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate
the deposits from which such funds were obtained.

 

For purposes of calculating
amounts payable by the Borrower to the Lenders under this Section 3.05,
each Lender shall be deemed to have funded each Eurodollar Loan made by it at
the Adjusted LIBO Rate for such Loan by a matching deposit or other borrowing
in the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Loan was in fact so funded.

 

SECTION 3.06. Matters Applicable to All Requests for Compensation.
 (a) 
Any Agent or any Lender claiming compensation under this Article 3 shall
deliver a certificate to the Borrower setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Agent or such Lender may use
any reasonable averaging and attribution methods.

 

(b)  With respect to any Lender’s claim for
compensation under Section 3.01, 3.02, 3.03 or 3.04, the Borrower shall
not be required to compensate such Lender for any amount incurred more than one
hundred eighty (180) days prior to the date that such Lender notifies the
Borrower of the event that gives rise to such claim; provided
that, if the circumstance giving rise to such claim is retroactive, then such
180-day period referred to above shall be extended to include the period of
retroactive effect thereof. If any Lender requests compensation by the Borrower
under Section  3.04, the Borrower may, by notice to such Lender (with a
copy to the Administrative Agent), suspend the obligation of such Lender to
make or continue from one Interest Period to another Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans, until the event or condition
giving rise to such request ceases to be in effect (in which case the
provisions of Section 3.06(c) shall be applicable); provided
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.

 

(c)  If the obligation of any Lender to make or
continue from one Interest Period to another any Eurodollar Loan, or to convert
Base Rate Loans into Eurodollar Loans shall be suspended pursuant to
Section 3.06(b) hereof, such Lender’s Eurodollar Loans shall be
automatically converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the case of an
immediate conversion required by Section 3.02, on such earlier date as
required by Law) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 3.01, 3.02, 3.03 or 3.04
hereof that gave rise to such conversion no longer exist:

 

(i)  to the extent that such Lender’s Eurodollar
Loans have been so converted, all payments and prepayments of principal that
would otherwise be applied to such Lender’s Eurodollar Loans shall be applied
instead to its Base Rate Loans; and

 

(ii)  all Loans that would otherwise be made or
continued from one Interest Period to another by such Lender as Eurodollar
Loans shall be made or continued instead as Base Rate Loans, and all Base Rate 

 

69

 

Loans of such Lender that
would otherwise be converted into Eurodollar Loans shall remain as Base Rate
Loans.

 

(d)  If any Lender gives notice to the Borrower
(with a copy to the Agent) that the circumstances specified in Section 3.01,
3.02, 3.03 or 3.04 hereof that gave rise to the conversion of such Lender’s
Eurodollar Loans pursuant to this Section 3.06 no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Eurodollar Loans made by other Lenders are outstanding, such Lender’s
Base Rate Loans shall be automatically converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Eurodollar Loans, to
the extent necessary so that, after giving effect thereto, all Loans held by
the Lenders holding Eurodollar Loans and by such Lender are held pro rata (as
to principal amounts, interest rate basis, and Interest Periods) in accordance
with their respective Commitments.

 

SECTION 3.07. Replacement of Lenders under
Certain Circumstances.  (a)  If at any time (i) the Borrower becomes
obligated to pay additional amounts or indemnity payments described in
Section 3.01 or 3.04 as a result of any condition described in such
Sections or any Lender ceases to make Eurodollar Loans as a result of any
condition described in Section 3.02 or Section 3.04, (ii) any Lender
becomes a Defaulting Lender or (iii) any Lender becomes a Non-Consenting
Lender, then the Borrower may, on ten (10) Business Days’ prior written notice
to the Administrative Agent and such Lender, replace such Lender by causing
such Lender to (and such Lender shall be obligated to) assign pursuant to
Section 10.07(b) (with the assignment fee to be paid by the Borrower in
such instance) all of its rights and obligations under this Agreement to one or
more Eligible Assignees; provided that
neither the Administrative Agent nor any Lender shall have any obligation to
the Borrower to find a replacement Lender or other such Person; provided, further, that (A)
in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such
compensation or payments and (B) in the case of any such assignment resulting
from a Lender becoming a Non-Consenting Lender, the applicable Eligible
Assignees shall have agreed to the applicable departure, waiver or amendment of
the Loan Documents.

 

(b)  Any Lender being replaced pursuant to
Section 3.07(a) above shall (i) execute and deliver an Assignment and
Assumption with respect to such Lender’s Commitment and outstanding Loans and
participations in L/C Obligations and Swing Line Loans, and (ii) deliver any
Notes evidencing such Loans to the Borrower or Administrative Agent. Pursuant
to such Assignment and Assumption, (A) the assignee Lender shall acquire
all or a portion, as the case may be, of the assigning Lender’s Commitment and
outstanding Loans and participations in L/C Obligations and Swing Line Loans,
(B) all obligations of the Borrower owing to the assigning Lender relating
to the Loans and participations so assigned shall be paid in full by the
assignee Lender to such assigning Lender concurrently with such assignment and
assumption and (C) upon such payment and, if so requested by the assignee
Lender, delivery to the assignee Lender of the appropriate Note or Notes
executed by the Borrower, the assignee Lender shall become a Lender hereunder
and the assigning Lender shall cease to constitute a Lender hereunder with
respect to such assigned Loans, Commitments and participations, except with
respect to indemnification provisions under this Agreement, which shall survive
as to such assigning Lender.

 

(c)  Notwithstanding anything to the contrary contained
above, any Lender that acts as an L/C Issuer may not be replaced hereunder at
any time that it has any Letter of Credit outstanding hereunder unless
arrangements reasonably satisfactory to such L/C Issuer (including the
furnishing of a back-up standby letter of credit in form and substance, and
issued by an issuer reasonably satisfactory to such L/C Issuer or the
depositing of cash collateral into a cash collateral account in amounts and
pursuant to arrangements reasonably satisfactory to such L/C Issuer) have been
made with respect to each such outstanding Letter of Credit and the Lender that
acts as the Administrative Agent may not be replaced hereunder except in
accordance with the terms of Section 9.09.

 

70

 

(d)  In the event that (i) the Borrower or
the Administrative Agent has requested that the Lenders consent to a departure
or waiver of any provisions of the Loan Documents or agree to any amendment
thereto, (ii) the consent, waiver or amendment in question requires the
agreement of all affected Lenders in accordance with the terms of Section 10.01
or all the Lenders with respect to a certain Class of the Loans and
(iii) the Required Lenders have agreed to such consent, waiver or
amendment, then any Lender who does not agree to such consent, waiver or
amendment shall be deemed a “Non-Consenting
Lender.”

 

SECTION 3.08. Survival.  All of the Borrower’s obligations under this
Article 3 shall survive termination of the Aggregate Commitments and
repayment of all other Obligations hereunder.

 

ARTICLE IV

 

Conditions Precedent to Credit Extensions

 

SECTION 4.01. Conditions of Initial Credit
Extension.  The obligation of each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)  The Administrative Agent’s receipt of the
following, each of which shall be originals or facsimiles (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each in form and substance reasonably
satisfactory to the Administrative Agent and its legal counsel:

 

(i)  executed counterparts of this Agreement and
the Guaranty;

 

(ii)  a Note executed by the Borrower in favor of
each Lender that has requested a Note at least two Business Days in advance of
the Closing Date;

 

(iii)  each Collateral Document set forth on
Schedule 1.01B, duly executed by each Loan Party thereto, together with:

 

(A)  certificates, if any, representing the
Pledged Equity referred to therein accompanied by undated stock powers executed
in blank and instruments evidencing the Pledged Debt indorsed in blank,

 

(B)  opinions of counsel for the Loan Parties in
states in which the Loan Parties are formed or the Mortgaged Properties are
located, with respect to perfection of the Liens granted pursuant to the
Collateral Documents (including the Mortgages) and any related filings,
recordations or notices (including fixture filings), in each case, in form and
substance reasonably satisfactory to the Administrative Agent; and

 

(C)  evidence that all other actions, recordings
and filings that the Administrative Agent may deem reasonably necessary to
satisfy the Collateral and Guarantee Requirement (including UCC Financing
Statements), and other filings, recordations or notices and with respect to the
Mortgaged Properties, title insurance, surveys and environmental assessments)
shall have been taken, completed or otherwise provided for in a manner
reasonably satisfactory to the Administrative Agent;

 

provided, however, that the
procurement of title insurance with respect to each Mortgage shall not be a
condition to the Closing Date; provided,
further, that with respect to any
Collateral the security interest in which may not be perfected by filing of a
UCC financing statement,

 

71

 

recordation of a Mortgage or
delivery to Administrative Agent (or, if delivery to Administrative Agent
cannot be made on or prior to the Closing Date because gaming approval of the
relevant pledge has not yet been obtained, delivery into escrow) of a physical
stock certificate (or other Equity Interest certificate), if the perfection of
the Administrative Agent’s security interest in such Collateral may not be accomplished
prior to the Closing Date without undue delay, burden or expense, then delivery
of documents and instruments for perfection of such security interest shall not
constitute a condition precedent to the Closing Date hereunder; provided that the Borrower shall deliver
or cause to be delivered such documents and instruments, and take or cause to
be taken such other actions, as may be required to perfect such security
interests (and, if not procured on or prior to the Closing Date, to procure
lender title insurance policies in form and substance reasonably satisfactory
to the Administrative Agent), within 90 days after the Closing Date (or within
180 days after the Closing Date in respect of the delivery of stock
certificates (or other Equity Interest certificates) that requires gaming
approval);

 

(iv)  such certificates of resolutions or other
action, incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Administrative Agent may reasonably require
evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a party or
is to be a party on the Closing Date;

 

(v)  a legal opinion from Milbank, Tweed, Hadley
& McCloy LLP, New York counsel to the Loan Parties substantially in the
form of Exhibit J;

 

(vi)  a certificate signed by a Responsible Officer
of the Company certifying that there has been no change, effect, event or
occurrence since December 31, 2006, that has had or could reasonably be
expected to result in a Material Adverse Change;

 

(vii)  a certificate attesting to the Solvency of
the Loan Parties (taken as a whole) after giving effect to the Transaction,
from the principal accounting officer of the Borrower;

 

(viii)  evidence that all insurance (including title
insurance) required to be maintained pursuant to the Loan Documents has been
obtained and is in effect and that the Administrative Agent has been named as
loss payee under each insurance policy with respect to such insurance as to
which the Administrative Agent shall have requested to be so named;

 

(ix)  certified copies of the Acquisition
Agreement, duly executed by the parties thereto, together with all Material
Contracts and all material agreements, instruments and other documents
delivered in connection therewith as the Administrative Agent shall reasonably
request, each including certification by a Responsible Officer of the Borrower
that such documents are in full force and effect as of the Closing Date; and

 

(x)  a Committed Loan Notice or Letter of Credit
Application, as applicable, relating to the initial Credit Extension.

 

(b)  All costs, fees and expenses required to be
paid hereunder and invoiced before the Closing Date shall have been paid in
full in cash.

 

(c)  Prior to or simultaneously with the initial
Credit Extension, the Holding Companies, collectively, shall have received
equity contributions in an aggregate amount equal to at least $3,750,735,410
and the Holding Companies shall have either (x) contributed as a common equity

 

72

 

contribution all proceeds of such equity contribution to the Borrower
or (y) otherwise applied such proceeds, or caused such proceeds to be applied
to finance the Acquisition.

 

(d)  Prior to or simultaneously with the initial
Credit Extensions, the Borrower shall have terminated the Existing Credit
Agreement.

 

(e)  The CMBS Subsidiary shall have received gross
proceeds in an aggregate amount of no less than $2,475,000,000 from the CMBS
Facility (and, to the extent that the proceeds of the CMBS Facility do not
equal $2,475,000,000, from additional Equity Contributions) which CMBS Facility
shall be on terms and conditions satisfactory to the Joint Lead Arrangers.

 

(f)  After giving effect to the consummation of
the Acquisition, (a) Borrower and its Subsidiaries shall have no outstanding
preferred Equity Interests or Indebtedness, except for (i) (A) Indebtedness incurred
pursuant to the Existing Senior Subordinated Notes and the Existing Senior
Notes, in an aggregate principal amount of not more than $2,300,000,000, (B)
the Obligations, (C) Indebtedness incurred pursuant to the CMBS Facility, (D)
Indebtedness incurred pursuant to the Corporate Head Office Sale Leaseback
Transaction, (E) Indebtedness evidenced by an unsecured note in the principal
amount of $100,000,000 dated February 16, 2007 issued by GV Ranch Station
Capital Holdings, LLC to Green Valley Ranch Gaming LLC; (F) Indebtedness
evidenced by a series of unsecured notes in an aggregate principal amount of
$9,200,000 issued by a Subsidiary of the Borrower having a weighted average
interest rate of 7.1% and maturity dates ranging from 2009 to 2026 and (g) Indebtedness
in respect of Support Agreements relating to Aliante and (ii) preferred stock
held by the Borrower in its Subsidiaries and preferred stock held by one Loan
Party in another Loan Party, so long as, in each such case, such preferred
stock does not constitute Disqualified Equity Interests, is not otherwise
entitled to any mandatory dividends or redemptions, and contains terms that are
otherwise reasonably satisfactory to the Joint Lead Arrangers (provided that the Joint Lead Arrangers shall approve such
terms so long as they are not adverse to the interests of the Secured Parties),
(b) all stock of Borrower shall be owned, collectively, by the Holding
Companies free and clear of Liens (other than those securing the Obligations);
(c) the Casino Sale Leaseback Transaction shall have been implemented in a
manner consistent with the structure previously disclosed to the Joint Lead
Arrangers and pursuant to documentation reasonably satisfactory to the Joint
Lead Arrangers.

 

(g)  The Joint Lead Arrangers and the Lenders
shall have received (i) the Audited Financial Statements and the audit
report for such financial statements (which shall not be subject to any
qualification) and (ii) unaudited consolidated balance sheets and related
statements of income, stockholders’ equity and cash flows of the Borrower and
its Subsidiaries for (A) each subsequent fiscal quarter ended at least
forty-five (45) days before the Closing Date and (B) to the extent
reasonably available and, in any event, excluding footnotes, each fiscal month
after the most recent fiscal period for which financial statements were
received by the Joint Lead Arrangers and the Lenders as described above and
ended at least thirty (30) days before the Closing Date (collectively, the
“Unaudited Financial Statements”),
which financial statements described in clauses (i) and (ii)(A) shall
be prepared in accordance with GAAP.

 

(h)  The Joint Lead Arrangers and the Lenders
shall have received the Pro Forma Financial Statements.

 

(i)  The Acquisition Agreement shall be in full
force and effect and any amendment, restatement, supplement or other
modification shall be reasonably satisfactory to the Administrative Agent.

 

73

 

(j)  The Acquisition shall have been consummated,
or substantially simultaneously with the initial Borrowings under the Facility
shall be consummated, in accordance with the Acquisition Agreement, and all
conditions precedent to the consummation of the Acquisition, as set forth in
the documentation relating thereto, shall have been satisfied (and would have
been satisfied without taking into consideration the application of the last
paragraph of Section 6.1 of the Acquisition Agreement) or (subject to the
following clause) waived, and no item requiring consent of FCP (including
pursuant to Section 6.1 of the Acquisition Agreement) that is material to the
interests of the Secured Parties shall have been given and no condition
material to the interests of the Secured Parties shall have been waived except,
in each such case, with the consent of the Joint Lead Arrangers (such consent
not to be unreasonably withheld or delayed).

 

(k)  After giving effect to the consummation of
the Acquisition, the Principal Investors (as defined in the Commitment Letter),
collectively, shall beneficially own and control, with unrestricted voting
power, at least 70% of the voting equity of Borrower pursuant to arrangements
consistent with the arrangements previously disclosed to the Joint Lead
Arrangers.

 

(l)  All material Permits necessary in connection
with the consummation of the transactions contemplated by the Loan Documents
(including all necessary regulations and gaming approvals) and the continuing
operations of the Borrower, its Subsidiaries (including shareholder approvals,
if any) shall have been obtained on terms satisfactory to the Joint Lead
Arrangers and the Lenders 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 upon the consummation of the transactions
contemplated by the Loan Documents.

 

(m)  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 FCP not to
consummate the Acquisition.

 

SECTION 4.02. Conditions to All Credit
Extensions.  The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Loans) is subject to the following conditions
precedent:

 

(a)  The representations and warranties of the
Borrower and each other Loan Party contained in Article 5 (or, with
respect to the initial Credit Extension, only Sections 5.01(a) and (b)(ii),
5.02, 5.03, 5.04, 5.13 and 5.21) or any other Loan Document shall be true and
correct in all material respects on and as of the date of such Credit
Extension; provided that, to the
extent that such representations and warranties specifically refer to an
earlier date, they shall be true and correct in all material respects as of
such earlier date; provided, further
that, any representation and warranty that is qualified as to
“materiality,” “Material Adverse Effect” or similar language shall be true and
correct in all respects on such respective dates.

 

(b)  No Default shall exist, or would result from
such proposed Credit Extension or from the application of the proceeds
therefrom.

 

(c)  The Administrative Agent and, if applicable,
the relevant L/C Issuer or the Swing Line Lender shall have received a Request
for Credit Extension in accordance with the requirements hereof.

 

74

 

Each Request for Credit
Extension (other than a Committed Loan Notice requesting only a conversion of
Loans to the other Type or a continuation of Eurodollar Loans) submitted by the
Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 4.02(a) and (b) have been satisfied
on and as of the date of the applicable Credit Extension.

 

ARTICLE V

 

Representations and Warranties

 

The Borrower represents and
warrants to the Agents, the L/C Issuer and the Lenders that:

 

SECTION 5.01. Existence, Qualification and
Power; Compliance with Laws.  Each of
Borrower, each other Loan Party and each of their Subsidiaries (a) is a Person
duly organized or formed, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority to (i) own or lease its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the
Loan Documents to which it is a party, (c) is duly qualified and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification, (d) is in compliance with all Laws, orders, writs, injunctions
and orders and (e) has all requisite governmental licenses, authorizations,
consents and approvals to operate its business as currently conducted; except
in each case referred to in clause (c), (d) or (e), to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect
(or, with respect to clauses (a) and (b)(ii) above as of the Closing Date only,
a Material Adverse Change).

 

SECTION 5.02. Authorization; No
Contravention.  The execution, delivery
and performance by the Borrower and each other Loan Party of each Loan Document
to which such Person is a party, and the consummation of the Transaction, are
within such Loan Party’s corporate or other powers, have been duly authorized
by all necessary corporate or other organizational action, and do not and will
not (a) contravene the terms of any of such Person’s Organization
Documents, (b) conflict with or result in any breach or contravention of, or
the creation of any Lien under (other than Permitted Liens), or require any
payment to be made under (i) (x) any Existing Notes Documentation or (y)
any other Contractual Obligation to which such Person is a party or affecting
such Person or the properties of such Person or any of its Subsidiaries or (ii) any
material order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject; or (c) violate
any material Law.

 

SECTION 5.03. Governmental Authorization; Other Consents.  No material approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, the Holding Companies or any other Loan Party of this Agreement or any
other Loan Document, or for the consummation of the Transaction, (b) the grant
by the Holding Companies or any other Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (c) the perfection or maintenance of the
Liens created under the Collateral Documents (including the priority thereof)
or (d) the exercise by the Administrative Agent or any Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents, except for (i) filings necessary to perfect
the Liens on the Collateral granted by the Holding Companies and the other Loan
Parties in favor of the Secured Parties, (ii) the approvals, consents, exemptions,
authorizations, actions, notices and filings which have been duly obtained,
taken, given or made and are in full force and effect, (iii) filings necessary
to release collateral provided under the Existing Credit Facility which have
been delivered to the Collateral Agent for filing and for which a payoff letter
has been obtained acknowledging that such collateral has been released from any
Lien

 

75

 

created thereunder, (iv) those items set forth on Schedule 5.03, (v)
approvals, consents, authorization or Permits from a Governmental Authority in
connection with an exercise of remedies under any of the Collateral Documents
with respect to Equity Interests  and
(vi) those approvals, consents, exemptions, authorizations or other
actions, notices or filings, the failure of which to obtain or make could not
reasonably be expected to cause a Material Adverse Change or, after the Closing
Date, have a Material Adverse Effect.

 

SECTION 5.04. Binding Effect.  This Agreement and each other Loan Document
has been duly executed and delivered by each Loan Party that is party thereto.
This Agreement and each other Loan Document constitutes, a legal, valid and
binding obligation of such Loan Party, enforceable against each such Person
that is party thereto in accordance with its terms, except as such
enforceability may be limited by Debtor Relief Laws and by general principles
of equity.

 

SECTION 5.05. Financial Statements; No Material Adverse Effect.

 

(a)  (i)  The Audited Financial Statements and the
Unaudited Financial Statements fairly present in all material respects the
financial condition of the Borrower and its Subsidiaries as of the dates
thereof and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the periods covered thereby, except
as otherwise expressly noted therein. During the period from December 31, 2006
to and including the Closing Date, there has been (i) no sale, transfer or
other disposition by the Borrower or any of its Subsidiaries of any material
part of the business or property of the Borrower or any of its Subsidiaries,
taken as a whole and (ii) no purchase or other acquisition by the Borrower or
any of its Subsidiaries of any business or property (including any Equity
Interests of any other Person) material in relation to the consolidated
financial condition of the Borrower and its Subsidiaries, in each case, which
is not reflected in the foregoing financial statements or in the notes thereto
or has not otherwise been disclosed in writing to the Lenders prior to the
Closing Date.

 

(ii)  The unaudited pro forma consolidated balance
sheet of the Borrower and its Subsidiaries as at June 30, 2007 (the “Pro Forma Balance Sheet”) and the unaudited
pro forma consolidated statement of operations of the Borrower and its
Subsidiaries for the most recent fiscal year, the quarter ended June 30, 2007
and the 12-month period ending on June 30, 2007 (together with the Pro Forma
Balance Sheet, the “Pro Forma Financial
Statements”), copies of which have heretofore been furnished to each
Lender, have been prepared giving effect (as if such events had occurred on
such date or at the beginning of such periods, as the case may be) to the
Transaction, each material acquisition by the Borrower or any of its
Subsidiaries consummated after June 30, 2007 and prior to the Closing Date and
all other transactions that would be required to be given pro forma effect by
Regulation S-X promulgated under the Exchange Act (including other adjustments
consistent with the definition of Pro Forma Adjustment or as otherwise agreed
between the Borrower and the Joint Lead Arrangers). The Pro Forma Financial
Statements have been prepared in good faith, based on assumptions believed by
the Borrower to be reasonable as of the date of delivery thereof, and present
fairly in all material respects on a pro forma basis and in accordance with
GAAP the estimated financial position of the Borrower and its Subsidiaries as
at June 30, 2007 and their estimated results of operations for the periods
covered thereby, assuming that the events specified in the preceding sentence
had actually occurred at such date or at the beginning of the periods covered
thereby.

 

(b)  Since the Closing Date, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

76

 

(c)  The forecasts of consolidated balance sheets,
income statements and cash flow statements of the Borrower and its Subsidiaries
for each fiscal year ending after the Closing Date until the fifth anniversary
of the Closing Date, copies of which have been furnished to the Administrative
Agent prior to the Closing Date in a form reasonably satisfactory to it, have
been prepared in good faith on the basis of the assumptions stated therein,
which assumptions were believed to be reasonable at the time of preparation of
such forecasts, it being understood that actual results may vary from such
forecasts and that such variations may be material.

 

(d)  As of the Closing Date, neither the Borrower
nor any Subsidiary has any Indebtedness or other obligations or liabilities,
direct or contingent (other than (i) the liabilities reflected on
Schedule 5.05, (ii) obligations arising under this Agreement and
(iii) liabilities incurred in the ordinary course of business) that,
either individually or in the aggregate, have had or could reasonably be expected
to have a Material Adverse Effect.

 

SECTION 5.06. Litigation.  There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of the Borrower, threatened in
writing or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its Subsidiaries
or against any of their properties or revenues that either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.07. No Default.  Neither the Borrower nor any Subsidiary is in
default under or with respect to, or a party to, any Contractual Obligation
that could, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.

 

SECTION 5.08. Ownership of Property; Liens.  (a) 
Each of the Borrower and each of the Subsidiaries has good and
marketable title to, or valid leasehold (or subleasehold, as applicable)
interests in, all its material properties and assets (including all Real
Property), except for minor defects in title that, in the aggregate, are not
substantial in amount and do not materially detract from the value of the
property subject thereto or interfere with its ability to conduct its business
as currently conducted or to utilize such properties and assets for their
intended purposes and subject to Permitted Liens and except, in the case of any
Unrestricted Subsidiaries, any failures to so hold good and marketable title or
valid leasehold that could not reasonably be expected to have a Material
Adverse Effect. Except where the failure could not reasonably be expected to
have a Material Adverse Effect, each parcel of Real Property is free from
material structural defects and all building systems contained therein are in
good working order and condition, ordinary wear and tear excepted, suitable for
the purposes for which they are currently being used. No portion of the Real
Property has suffered any material damage by fire or other casualty loss that
has not heretofore been completely repaired and restored to its original
condition, except where such damage could not reasonably be expected to have a
Material Adverse Effect. Each parcel of Real Property and the current use
thereof complies in all material respects with all applicable laws (including
building and zoning ordinances and codes) and with all insurance requirements,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect. None of the Real Property constitutes a non-conforming
use under applicable zoning ordinances and codes, except where such
non-conforming use could not reasonably be expected to have a Material Adverse
Effect.

 

(b)           Except as, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(i) none of the Borrower or the Subsidiaries, or, to the knowledge of the
Borrower, any other party thereto, is in material default under any material
leases to which it is a party and no event has occurred and no fact exists
which could become a default with the giving of notice or the passage of time
and all such leases are legal, valid, binding and in full force and effect and
are enforceable in accordance with their terms, (ii) each of the Borrower and the
Subsidiaries enjoys peaceful

 

77

 

and
undisturbed possession under all such material leases and (iii) no landlord
Lien has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any lease payment under any material lease.

 

(c)           As of the Closing Date, none of the
Borrower or any of the other Loan Parties has received any notice of, nor has
any knowledge of, any pending or contemplated condemnation proceeding affecting
any Real Property or any sale or disposition thereof in lieu of condemnation

 

(d)           As of the Closing Date, none of the
Borrower or any other Loan Party, or, to the knowledge of the Borrower, any
other party thereto, is in default under any Material Contract.

 

(e)           There are no Liens of any nature
whatsoever on any of the properties or assets of the Borrower or any of the or
the other Loan Parties (other than, in the case of any assets other than Equity
Interests representing Collateral, Permitted Liens).

 

SECTION 5.09. Environmental Compliance.  (a) 
There are no claims, actions, suits, or proceedings alleging potential
liability or responsibility for violation of, or otherwise relating to, any
Environmental Law that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(b)  Except as specifically disclosed in
Schedule 5.09(b) or except as could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (i) none of the
properties currently or formerly owned, leased or operated by any Loan Party or
any of its Subsidiaries is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to any
such property; (ii) there are no and never have been any underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned, leased or operated by any
Loan Party or any of its Subsidiaries or, to the Borrower’s knowledge, on any
property formerly owned or operated by any Loan Party or any of its
Subsidiaries; (iii) there is no asbestos or asbestos-containing material on any
property currently owned or operated by any Loan Party or any of its
Subsidiaries; and (iv) Hazardous Materials have not been released,
discharged or disposed of by any Person on any property currently or formerly
owned, leased or operated by any Loan Party or any of its Subsidiaries and
Hazardous Materials have not otherwise been released, discharged or disposed of
by any of the Loan Parties and their Subsidiaries at any other location.

 

(c)  The properties owned, leased or operated by
the Borrower and the Subsidiaries do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation
of, (ii) require remedial action under, or (iii) could give rise to
liability under, Environmental Laws, which violations, remedial actions and
liabilities, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.

 

(d)  Except as specifically disclosed in
Schedule 5.09(d), neither the Borrower nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or remedial or
response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law except for such investigation or
assessment or remedial or response action that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

(e)  All Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party or any of its

 

78

 

Subsidiaries have been disposed of in a manner not reasonably expected
to result, individually or in the aggregate, in a Material Adverse Effect.

 

(f)  Except as would not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect, none of
the Loan Parties and their Subsidiaries has contractually assumed any liability
or obligation under or relating to any Environmental Law.

 

SECTION 5.10. Taxes.  Except
as set forth in Schedule 5.10 and except as could not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, the Borrower and its Subsidiaries have filed all Federal and state and
other tax returns and reports required to be filed by them and all such tax
returns are correct and complete. Each of the Borrower and its Subsidiaries has
timely paid or timely caused to be paid all Federal and state and other taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those
(a) which are not overdue by more than thirty (30) days or (b) which
are being contested in good faith by appropriate proceedings diligently conducted
and for which adequate reserves have been provided in accordance with GAAP. No
Tax Lien has been filed, and to the knowledge of the Borrower, no claim is
being asserted, with respect to any Tax.

 

SECTION 5.11. ERISA Compliance.  (a) 
Except as set forth in Schedule 5.11(a) or as could not, either
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, each Plan is in compliance in with the applicable
provisions of ERISA, the Code and other Federal or state Laws.

 

(a)  (i) No ERISA Event has occurred during the
five year period prior to the date on which this representation is made or
deemed made or is reasonably expected to occur with respect to any Pension
Plan; (ii) no Pension Plan has an “accumulated funding deficiency” (as
defined in Section 412 of the Code), whether or not waived, has been or is
reasonably expected to be determined “at risk” (as defined in Title IV of
ERISA) or not satisfying minimum funding standards (within the meaning of
Section 412 of the Code or 302 of ERISA); and (iii) neither any Loan Party
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA, except, with respect to each of the
foregoing clauses of this Section 5.11(b), as could not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.

 

SECTION 5.12. Subsidiaries; Equity Interests.  As of the Closing Date, neither Borrower nor
any other Loan Party has any Subsidiaries other than those specifically
disclosed in Schedule 5.12, and all of the outstanding Equity Interests in
material Subsidiaries have been validly issued, are fully paid and
nonassessable and all Equity Interests owned by Borrower or any of its
Subsidiaries are owned free and clear of all Liens except (i) those
created under the Collateral Documents and (ii) any nonconsensual
Permitted Lien. As of the Closing Date, Schedule 5.12 (a) sets forth
the name and jurisdiction of each Subsidiary, (b) sets forth the ownership
interest of Borrower and any other Subsidiary in Borrower and each Subsidiary,
including the percentage of such ownership, (c) identifies each Subsidiary
the Equity Interests of which are required to be pledged on the Closing Date
pursuant to the Collateral and Guarantee Requirement and (d) identifies the
Immaterial Subsidiaries, the Unrestricted Subsidiaries and the Native American
Subsidiaries.

 

SECTION 5.13. Margin Regulations; Investment Company Act.  (a)   No
Loan Party is engaged nor will it engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board), or extending credit
for the purpose of purchasing or carrying margin stock, and no proceeds of any
Borrowings or drawings under any Letter of Credit will be used, whether
directly or indirectly, and whether immediately, incidentally or
ultimately, for purchasing or carrying margin stock or for the purpose of
purchasing,

 

79

 

carrying or trading in any securities under such circumstances as to
involve the Borrower in a violation of Regulation X or to involve any broker or
dealer in a violation of Regulation T. No Indebtedness being reduced or retired
out of the proceeds of any Loans or Letters of Credit was or will be incurred
for the purpose of purchasing or carrying any margin stock. Following the
application of the proceeds of the Loans and the Letters of Credit, margin
stock will not constitute more than 25% of the value of the assets of the
Borrower and its Subsidiaries. None of the transactions contemplated by this
Agreement will violate or result in the violation of any of the provisions of
the Regulations of the Board, including Regulation T, U or X. If requested
by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
Regulation U.

 

(a)  None of the Borrower, any Person Controlling
the Borrower, or any Subsidiary  is required to be registered as an
“investment company” under the Investment Company Act of 1940.

 

SECTION 5.14. Disclosure.  No report, financial statement, certificate or
other written information furnished by or on behalf of any Loan Party or any
Affiliate of a Loan Party to any Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or any other Loan Document (as modified or supplemented by
other information so furnished) when taken as a whole contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading; provided that,
with respect to projected financial information and pro forma financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time of
preparation; it being understood that such projections may vary from actual
results and that such variances may be material.

 

SECTION 5.15. Intellectual Property; Licenses, Etc.  Each of the Loan Parties and their
Subsidiaries own, license or possess the right to use, all of the trademarks,
service marks, trade names, domain names, copyrights, patents, patent rights,
licenses, technology, software, know-how database rights, design rights and
other intellectual property rights (collectively, “IP Rights”)
that are reasonably necessary for the operation of their respective businesses
as currently conducted, and, without conflict with the rights of any Person,
except to the extent such conflicts, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. No IP
Rights, advertising, product, process, method, substance, part or other
material used by any Loan Party or any Subsidiary in the operation of their
respective businesses as currently conducted infringes upon any rights held by
any Person except for such infringements, individually or in the aggregate,
which could not reasonably be expected to have a Material Adverse Effect. No
claim or litigation regarding any of the IP Rights, is pending or, to the
knowledge of the Borrower, threatened against any Loan Party or Subsidiary,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

 

SECTION 5.16. Solvency.  On the Closing Date after giving effect to the
Transaction, the Loan Parties, on a consolidated basis, are Solvent.

 

SECTION 5.17. Maintenance of Insurance.  The Borrower and the other Loan Parties, as
applicable, maintain insurance in accordance with the requirements set forth in
Section 6.07. None of the Borrower or any of its Subsidiaries (a) has
received notice from any insurer (or any agent thereof) that substantial
capital improvements or other substantial expenditures will have to be made in
order to continue such insurance or (b) has any reason to believe that it
will not be able to renew its existing coverage as and when such coverage
expires or to obtain similar coverage from similar insurers at a substantially
similar cost except in each case as would not, individually or in the
aggregate, have a

 

80

 

Material Adverse Effect. Schedule 5.17 sets forth a true, complete and
correct description of all insurance maintained by or on behalf of the Borrower
and the other Loan Parties as of the Closing Date.

 

SECTION 5.18. Subordination of Junior Financing.  The Obligations are “Senior Debt,” “Senior
Indebtedness,” “Guarantor Senior Debt” or “Senior Secured Financing” (or any
comparable term) under, and as defined in, any Junior Financing Documentation.

 

SECTION 5.19. Labor Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labor
disputes against any of the Borrower or its Subsidiaries pending or, to the
knowledge of Borrower, threatened; (b) hours worked by and payment made to
employees of each of the Borrower or its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Laws dealing
with such matters; and (c) all payments due from any of the Borrower or
its Subsidiaries on account of employee health and welfare insurance have been
paid or accrued as a liability on the books of the relevant party.

 

SECTION 5.20. Transaction Documentation.  (a)  The
Transaction Documents listed on Schedule 5.20 constitute all of the material
agreements, instruments and undertakings to which the Borrower or any of the
Subsidiaries is bound or by which any of their respective property or assets is
bound or affected relating to, or arising out of, the Acquisition. Except as
described in Schedule 5.20, none of the Transaction Documents has been amended,
supplemented or otherwise modified, and all such Transaction Documents are in
full force and effect. To the knowledge of the Responsible Officers, no party
to any of the Transaction Documents is in default thereunder as of the Closing
Date.

 

(b)  As of the Closing Date, the representations
and warranties of the applicable Loan Parties and their Affiliates set forth in
the Transaction Documentation are true and correct in all material respects.

 

SECTION 5.21. Collateral.
 To the extent required by the Collateral
and Guarantee Requirement and Section 4.01(a), the provisions of the Collateral
Documents are effective to create in favor of the Collateral Agent for the
benefit of the Secured Parties a legal, valid and enforceable first priority
Lien (subject to Permitted Liens) on all right, title and interest of the
respective Loan Parties in the Collateral, and no filing, recording,
registration or other action will be necessary to perfect or protect such
Liens.

 

SECTION 5.22. Location of Real Property.   Schedule 5.22 lists completely and
correctly, as of the Closing Date, all material owned or leased Real Property
and the addresses thereof, indicating for each parcel whether it is owned or
leased, including in the case of leased Real Property, the landlord name, lease
date and lease expiration date. The Borrower and its Subsidiaries own in fee or
have valid leasehold interests in, as the case may be, all the real property
set forth on Schedule 5.22.

 

SECTION 5.23. Permits.  (a)
The Borrower and each Restricted Subsidiary has obtained and holds all Permits
required in respect of all Real Property and for any other property otherwise
operated by or on behalf of, or for the benefit of, such person and for the
operation of each of its businesses as presently conducted and as proposed to
be conducted, (b) all such Permits are in full force and effect, and each such
Person has performed and observed all requirements of such Permits, (c) no
event has occurred that allows or results in, or after notice or lapse of time
would allow or result in, revocation or termination by the issuer thereof or in
any other impairment of the rights of the holder of any such Permit, (d) no
such Permits contain any restrictions, either individually or in the aggregate,
that are materially burdensome to any such Person, or to the operation of any
of its businesses or any property owned, leased or otherwise operated by such
person, (e) each such Person reasonably believes that each of its Permits will
be timely renewed and complied with, without material expense, and that any

 

81

 

additional Permits that may be required of such Person will be timely
obtained and complied with, without material expense and (f) no such Person has
any knowledge or reason to believe that any Governmental Authority is
considering limiting, suspending, revoking or renewing on materially burdensome
terms any such Permit, in each case except as which could not reasonably be
expected to have a Material Adverse Effect.

 

SECTION 5.24. Fiscal Year.  The fiscal year of each the Borrower and each
Restricted Subsidiary ends on December 31 of each calendar year.

 

SECTION 5.25. Patriot Act. 
To the extent applicable, each Loan Party is in compliance, in all
material respects, with the (a) Trading with the Enemy Act, as amended,
and each of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other
enabling legislation or executive order relating thereto, and (b) the
Patriot Act.

 

SECTION 5.26. Use of Proceeds.  The Borrower will use the proceeds of the
Loans only as permitted hereunder to effect the Acquisition and for general
corporate purposes of the Borrower and the other Loan Parties.

 

ARTICLE VI

 

Affirmative Covenants

 

So long as any Lender shall
have any Commitment hereunder, any Loan or other Obligation hereunder which is
accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each
Restricted Subsidiary to:

 

SECTION 6.01. Financial Statements.  Deliver to the Administrative Agent for prompt
further distribution to each Lender:

 

(a)  as soon as available, but in any event within
ninety (90) days after the end of each fiscal year of the Borrower beginning
with the 2007 fiscal year, a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, stockholders’ equity and cash flows for
such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and opinion of Ernst
& Young LLP or any other independent registered public accounting firm of
nationally recognized standing, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject
to any “going concern” or like qualification or exception or any qualification
or exception as to the scope of such audit;

 

(b)  as soon as available, but in any event within
forty-five (45) days after the end of each of the first three (3) fiscal
quarters of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related (i) consolidated statements of income or operations for such fiscal
quarter and for the portion of the fiscal year then ended and (ii) consolidated
statements of cash flows for the portion of the fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting in all material respects the
financial condition, results of operations, stockholders’ equity and cash

 

82

 

flows of the Borrower and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes;

 

(c)  as soon as available, but in any event within
30 days after the end of the first two fiscal months of each fiscal quarter of
the Borrower and its Subsidiaries, a consolidated balance sheet and related
statements of income of the Borrower and its Subsidiaries showing the financial
condition of the Borrower and its Subsidiaries during such fiscal month and the
then elapsed portion of the fiscal year, all in reasonable detail and certified
by a Responsible Officer of the Borrower as fairly presenting in all material
respects the financial condition and results of operations of the Borrower and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes;

 

(d)  as soon as available, and in any event no
later than ninety (90) days after the end of each fiscal year of the Borrower,
a detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, the related consolidated statements of
projected cash flow and projected income and a summary of the material
underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to
such fiscal year (collectively, the “Projections”),
which Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer has no
reason to believe that such Projections are incorrect or misleading in any material
respect; and

 

(e)  simultaneously with the delivery of each set
of consolidated financial statements referred to in Sections 6.01(a) and
6.01(b) above, related unaudited consolidating financial statements reflecting
the adjustments necessary to eliminate the accounts of Unrestricted
Subsidiaries (if any) from such consolidated financial statements in a form to
be mutually agreed by Borrower and Administrative Agent.

 

Notwithstanding the foregoing, the obligations in paragraphs (a) and
(b) of this Section 6.01 may be satisfied with respect to financial information
of the Borrower and the Restricted Subsidiaries by furnishing the Borrower’s
(or any direct or indirect parent thereof, as applicable) Form 10-K or 10-Q, as
applicable, filed with the SEC; provided
that, to the extent such information relates to a parent company of the
Borrower, such information is accompanied by consolidating information that
explains in reasonable detail the differences between the information relating
to such parent, on the one hand, and the information relating to the Borrower
and the Restricted Subsidiaries on a standalone basis, on the other hand and
(ii) to the extent such information is in lieu of information required to be
provided under Section 6.01(a), such materials are accompanied by a report and
opinion of Ernst & Young LLP or any other independent registered public
accounting firm of nationally recognized standing, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and shall
not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit.

 

SECTION 6.02. Certificates; Other Information.  Deliver to the Administrative Agent for prompt
further distribution to each Lender:

 

(a)  no later than five (5) days after the
delivery of the financial statements referred to in Section 6.01(a), a
certificate of its independent registered public accounting firm certifying
such financial statements and stating that in making the examination necessary
therefor no knowledge was obtained of any Event of Default under
Section 7.11 or, if knowledge of any such Event of Default was so
obtained, relevant information stating the nature and status of such event;

 

83

 

(b)  no later than five (5) days after the
delivery of the financial statements referred to in Section 6.01(a) and
(b), a duly completed Compliance Certificate signed by a Responsible Officer of
the Borrower and, if such Compliance Certificate demonstrates an Event of
Default of any covenant under Section 7.11, any of the Equity Investors
may deliver, together with such Compliance Certificate, notice of their intent
to cure (a “Notice of Intent to Cure”)
such Event of Default pursuant to Section 8.05; provided
that the delivery of a Notice of Intent to Cure shall in no way affect or alter
the occurrence, existence or continuation of any such Event of Default or the
rights, benefits, powers and remedies of the Administrative Agent and the
Lenders under any Loan Document;

 

(c)  promptly after the same are publicly
available, copies of all annual, regular, periodic and special reports and
registration statements which the Borrower files with the SEC or with any
Governmental Authority that may be substituted therefor (other than amendments
to any registration statement (to the extent such registration statement, in
the form it became effective, is delivered), exhibits to any registration
statement and, if applicable, any registration statement on Form S-8) and in
any case not otherwise required to be delivered to the Administrative Agent
pursuant hereto;

 

(d)  promptly after the furnishing thereof, copies
of any material requests or material notices received by the Borrower or any
Restricted Subsidiary (other than in the ordinary course of business) or
material statements or material reports furnished to any holder of debt
securities of the Borrower or any Restricted Subsidiary pursuant to the terms
of any Existing Notes Documentation, Junior Financing Documentation, the CMBS
Loan Documents, the Land Loan Documents or any other Indebtedness of the
Borrower or any Restricted Subsidiary in a principal amount greater than the
Threshold Amount and not otherwise required to be furnished to the Lenders
pursuant to any other clause of this Section 6.02;

 

(e)  together with the delivery of each Compliance
Certificate pursuant to Section 6.02(b), (i) a report setting forth
the information required by Section 3.03(c) of the Security Agreement or
confirming that there has been no change in such information since the Closing
Date or the date of the last such report), (ii) a description of each
event, condition or circumstance during the last fiscal quarter covered by such
Compliance Certificate requiring a mandatory prepayment under
Section 2.05(b) and (iii) a list of each Subsidiary that identifies
each Subsidiary as a Restricted Subsidiary, Immaterial Subsidiary or an
Unrestricted Subsidiary as of the date of delivery of such Compliance Certificate;
and

 

(f)  promptly, such additional information
regarding the business, legal, financial or corporate affairs of any Loan Party
or any Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender through the Administrative Agent may from
time to time reasonably request.

 

Documents required to be
delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to
the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s website on the Internet
at the website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether sponsored
by the Administrative Agent); provided that:
(i) upon written request by the Administrative Agent, the Borrower shall
deliver paper copies of such documents to the Administrative Agent for further
distribution to each Lender until a written request to cease delivering paper
copies is given by the Administrative Agent and (ii) the Borrower shall
notify (which may be by facsimile or electronic mail) the Administrative Agent
of the posting of any such documents and provide to the Administrative Agent

 

84

 

by electronic mail
electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent. Each
Lender shall be solely responsible for timely accessing posted documents or
requesting delivery of paper copies of such documents from the Administrative
Agent and maintaining its copies of such documents.

 

SECTION 6.03. Notices.  Promptly after obtaining knowledge thereof,
notify the Administrative Agent of:

 

(a)  the occurrence of any Default;

 

(b)  any material amendment, waiver or other
material modification made to, or delivery of any notice of default or
termination of, or the entry into, any Material Contract (together with a copy
of any such amendment, waiver, modification or notice);

 

(c)  the entering into by any Borrower or
Subsidiary of any management contract (together with a copy of any such
management contract) whereby another Person will manage the gaming operations
at one or more of the properties owned or leased by Borrower or its
Subsidiaries;

 

(d)  any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect, including
arising out of or resulting from (i) breach or non-performance of, or any
default or event of default under, a Contractual Obligation of any Loan Party
or any Subsidiary, (ii) any dispute, litigation, investigation, proceeding
or suspension between any Loan Party or any Subsidiary and any Governmental
Authority, (iii) the commencement of, or any material development in, any
litigation or proceeding affecting any Loan Party or any Subsidiary, including
pursuant to any applicable Environmental Laws or in respect of IP Rights or the
assertion or occurrence of any noncompliance by any Loan Party or as any of its
Subsidiaries with, or liability under, any Environmental Law or Environmental
Permit, or (iv) the occurrence of any ERISA Event;

 

(e)  the occurrence of a casualty event or the
damage or destruction of a material portion of the Collateral; and

 

(f)  with respect to Plan years beginning on or
after December 31, 2007, any documents or notices described in Sections 101(k)
and (m) of ERISA that any Loan Party or ERISA Affiliate is permitted to request
with respect to any Multiemployer Plan, and provide copies of such documents or
notices on annual basis.

 

Each notice pursuant to this
Section shall be accompanied by a written statement of a Responsible Officer of
the Borrower (x) that such notice is being delivered pursuant to
Section 6.03(a) or (b) (as applicable) and (y) setting forth details
of the occurrence referred to therein and stating what action the Borrower has
taken and proposes to take with respect thereto.

 

SECTION 6.04. Payment of Obligations.  Pay, discharge or otherwise satisfy as the
same shall become due and payable, all its obligations and liabilities in
respect of taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits or in respect of its property, except, in each
case, to the extent the failure to pay or discharge the same could not
reasonably be expected to have a Material Adverse Effect.

 

85

 

SECTION 6.05. Preservation of Existence, Etc.  Preserve, renew and maintain in full force
and effect its legal existence under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 or 7.05 and
(b) take all reasonable action to maintain all rights, privileges
(including its good standing), permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except (i) to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect or (ii) pursuant to a transaction permitted by Section 7.04 or 7.05.

 

SECTION 6.06. Maintenance of Properties.  Except if the failure to do so could not
reasonably be expected to have a Material Adverse Effect, (a) maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order, repair and condition,
ordinary wear and tear excepted and casualty or condemnation excepted, and
(b) make all necessary renewals, replacements, modifications,
improvements, upgrades, extensions and additions thereof or thereto in
accordance with prudent industry practice.

 

SECTION 6.07. Maintenance of Insurance.  Maintain with financially sound and reputable
insurance companies, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts (after
giving effect to any self-insurance reasonable and customary for similarly
situated Persons engaged in the same or similar businesses as the Borrower and
the Restricted Subsidiaries) as are customarily carried under similar
circumstances by such other Persons and ensure that the Agents and the Lenders
are additional insureds and/or loss payees, as applicable. under such
insurance, as reasonably requested by the Administrative Agent or the
Collateral Agent.

 

SECTION 6.08. Compliance with Laws.  Comply in all material respects with and
requirements of all Laws, all orders, writs, injunctions and decrees, of any
Governmental Authority applicable to it or to its business or property, except
if the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

SECTION 6.09. Books and Records.  Maintain proper books of record and account,
in which entries that are full, true and correct in all material respects and
are in conformity with GAAP consistently applied shall be made of all material
financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be.

 

SECTION 6.10. Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its officers and independent public
accountants, all at the reasonable expense of the Borrower and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Borrower; provided
that, excluding any such visits and inspections during the continuation of an
Event of Default, only the Administrative Agent on behalf of the Lenders may
exercise rights of the Administrative Agent and the Lenders under this
Section 6.10 and the Administrative Agent shall not exercise such rights more
often than two (2) times during any calendar year absent the existence of an
Event of Default and only one (1) such time shall be at the Borrower’s expense;
provided, further,
that when an Event of Default exists, the Administrative Agent or any Lender
(or any of their respective representatives or independent contractors) may do
any of the foregoing at the expense of the Borrower at any time during normal
business hours and upon reasonable advance notice. The Administrative Agent and
the Lenders shall give the Borrower the opportunity to participate in any
discussions with the Borrower’s independent public accountants.

 

86

 

SECTION 6.11. Covenant to Guarantee Obligations and Give Security.
 At the Borrower’s expense, take all
action necessary or reasonably requested by the Administrative Agent to ensure
that the Collateral and Guarantee Requirement continues to be satisfied,
including:

 

(a)  upon the formation or acquisition of any new
direct or indirect wholly owned Domestic Subsidiary (other than an Unrestricted
Subsidiary or an Excluded Subsidiary) by any Loan Party or the designation in
accordance with Section 6.14(a) of any existing direct or indirect wholly
owned Domestic Subsidiary as a Restricted Subsidiary, or upon an Immaterial
Subsidiary’s ceasing to be designated as such pursuant to Section 6.14(b):

 

(i)  within thirty (30) days after such formation,
acquisition or designation or such longer period as the Administrative Agent
may agree in its discretion:

 

(A)  cause each such Restricted Subsidiary that is
required to grant Liens on its property under the Collateral and Guarantee
Requirement to furnish to the Administrative Agent a description of the real
properties owned or leased by such Restricted Subsidiary that generate
Consolidated EBITDA in excess of $10,000,000 on an annualized basis, in detail
reasonably satisfactory to the Administrative Agent;

 

(B)  cause (x) each such Restricted Subsidiary
that is required to grant Liens on its property pursuant to the Collateral and
Guarantee Requirement to duly execute and deliver to the Administrative Agent
Mortgages, Security Agreement Supplements, Pledge Agreement Supplements,
Intellectual Property Security Agreements and to execute, deliver, file and record
any such other documents, statements, assignment, instrument, agreement or
other paper and take all other actions necessary in order to create a perfected
security interest in all of its assets that are required to be pledged pursuant
to the Collateral and Guarantee Requirement (including, with respect to
Mortgages, the documents listed in Section 6.13(b)), as reasonably
requested by and in form and substance reasonably satisfactory to the
Administrative Agent (to the extent applicable due to similar jurisdiction
and/or type of property, consistent with the Mortgages, Security Agreement,
Pledge Agreement, Intellectual Property Security Agreements and other security
agreements in effect on the Closing Date), in each case granting Liens required
by the Collateral and Guarantee Requirement and (y) each direct or
indirect parent of each such Restricted Subsidiary to duly execute and deliver
to the Administrative Agent such Security Agreement Supplements and Pledge
Agreement Supplements to execute, deliver, file and record any such other
documents, statements, assignment, instrument, agreement or other paper and
take all other actions (with the priority required by the Collateral Documents)
as reasonably requested by and in form and substance reasonably satisfactory to
the Administrative Agent (to the extent applicable due to similar jurisdiction
and/or type of property, consistent with the Security Agreements in effect on
the Closing Date), in each case granting Liens required by the Collateral and
Guarantee Requirement;

 

(C)  (x) cause each such Restricted
Subsidiary to deliver any and all certificates representing Equity Interests
(to the extent certificated) that are required to be pledged pursuant to the
Collateral and Guarantee Requirement, accompanied by undated stock powers or
other appropriate instruments of transfer executed in blank and instruments
evidencing the intercompany Indebtedness held by such Restricted Subsidiary and
required to be pledged pursuant to the Collateral Documents, indorsed in blank to
the Administrative Agent and (y) cause each direct or indirect parent of
such Restricted Subsidiary to deliver any and all certificates representing the
outstanding Equity Interests

 

87

 

(to the extent certificated)
of such Restricted Subsidiary that are required to be pledged pursuant to the
Collateral and Guarantee Requirement, accompanied by undated stock powers or
other appropriate instruments of transfer executed in blank and instruments
evidencing the intercompany Indebtedness issued by such Restricted Subsidiary
and required to be pledged in accordance with the Collateral Documents indorsed
in blank to the Administrative Agent;

 

(D)  take and cause such Restricted Subsidiary and
each direct or indirect parent of such Restricted Subsidiary to take whatever
action (including the recording of Mortgages, the filing of Uniform Commercial
Code financing statements and delivery of stock and membership interest
certificates, the delivery of promissory notes duly endorsed in favor of the
Administrative Agent (if any such Investment is by way of loan or advance)) may
be necessary in the reasonable opinion of the Administrative Agent to vest in
the Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid Liens required by the Collateral and Guarantee
Requirement, enforceable against all third parties in accordance with their
terms, except as such enforceability may be limited by Debtor Relief Laws and
by general principles of equity;

 

(E)  cause each such Restricted Subsidiary that is
required to become a Guarantor under the Collateral and Guarantee Requirement
to duly execute and deliver to the Administrative Agent a supplement to an
existing Guaranty or a new guaranty, in each case in form and substance
reasonably satisfactory to the Administrative Agent, guaranteeing the
Obligations;

 

(F)  cause each such Restricted Subsidiary to
deliver to the Administrative Agent such documents and certificates as would
have been required pursuant to Sections 4.01(a)(iii) and (iv) had such wholly
owned Subsidiary been a Subsidiary on the Closing Date;

 

(ii)  within thirty (30) days after the request
therefor by the Administrative Agent, deliver to the Administrative Agent a
signed copy of an opinion, addressed to the Administrative Agent and the other
Secured Parties, of counsel for the Loan Parties reasonably acceptable to the
Administrative Agent as to such matters of law set forth in this
Section 6.11(a) as the Administrative Agent may reasonably request;

 

(iii)  as promptly as practicable after the request
therefor by the Administrative Agent, deliver to the Administrative Agent with
respect to each parcel of real property that is required to be subject to a
Lien for the benefit of the Lenders pursuant to the Collateral and Guarantee
Requirement any existing title reports, surveys or environmental assessment
reports; and

 

(iv)  after the Closing Date, concurrently with (x)
the acquisition of any material personal property by any Restricted Subsidiary
other than an Immaterial Subsidiary, (y) the acquisition of any owned real
property by any Restricted Subsidiary that is required to be subject to a Lien
for the benefit of the Lenders pursuant to the Collateral and Guarantee
Requirement or (z) the entering into, or renewal, by any Restricted Subsidiary
of a lease in respect of real property that is required to be subject to a Lien
for the benefit of the Lenders pursuant to the Collateral and Guarantee
Requirement, and such personal property, owned real property or lease shall not
already be subject to a perfected Lien pursuant to the Collateral and Guarantee
Requirement, the Borrower shall give notice thereof to the Administrative Agent
and promptly thereafter shall cause such assets to be subjected to a Lien to
the extent required by the Collateral and Guarantee Requirement and will take,
or cause the relevant Loan Party to take, such actions as shall be

 

88

 

necessary or reasonably
requested by the Administrative Agent to grant and perfect or record such Lien,
including, as applicable, the actions referred to in Section 6.13(b) with
respect to real property.

 

SECTION 6.12. Compliance with Environmental Laws.  Except, in each case, to the extent that the
failure to do so could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, comply, and take all reasonable
actions to cause all lessees and other Persons operating or occupying its
properties to comply with all applicable Environmental Laws and Environmental
Permits; obtain and renew all Environmental Permits necessary for its
operations and properties; and, in each case to the extent required by
Environmental Laws, conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove
and clean up all Hazardous Materials from any of its properties, in accordance
with the requirements of all Environmental Laws.

 

SECTION 6.13. Further Assurances and Post-Closing Conditions.  (a) 
Promptly upon reasonable request by the Administrative Agent
(i) correct any material defect or error that may be discovered in the
execution, acknowledgment, filing or recordation of any Collateral Document or
other document or instrument relating to any Collateral, and (ii) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Administrative Agent may reasonably request from time
to time in order to carry out more effectively the purposes of the Collateral
Documents.

 

(b)  In the case of any real property referred to
in Section 6.11, provide the Administrative Agent with Mortgages with respect
to such owned real property within thirty (30) days of the acquisition of, or,
if requested by the Administrative Agent, entry into, or renewal of, a ground
lease in respect of, such real property, together with:

 

(i)  evidence that counterparts
of the Mortgages have been duly executed, acknowledged and delivered and are in
form suitable for filing or recording in all filing or recording offices that
the Administrative Agent may deem reasonably necessary or desirable in order to
create a valid and subsisting perfected Lien on the property and/or rights
described therein in favor of the Administrative Agent for the benefit of the
Secured Parties and that all filing and recording taxes and fees have been paid
or otherwise provided for in a manner reasonably satisfactory to the
Administrative Agent;

 

(ii)  fully paid American Land
Title Association Lender’s Extended Coverage title insurance policies or the
equivalent or other form available in each applicable jurisdiction (the “Mortgage Policies”) in form and substance, with endorsements
and in amount, reasonably acceptable to the Administrative Agent (not to exceed
the value of the real properties covered thereby), issued, coinsured and
reinsured by title insurers reasonably acceptable to the Administrative Agent,
insuring the Mortgages to be valid subsisting Liens on the property described
therein, free and clear of all defects and encumbrances, subject to Permitted
Liens, and providing for such other affirmative insurance (including
endorsements for future advances under the Loan Documents) and such coinsurance
and direct access reinsurance as the Administrative Agent may reasonably
request;

 

(iii)  opinions of local counsel
for the Loan Parties in states in which the real properties are located, with
respect to the enforceability and perfection of the Mortgages and any related
fixture filings in form and substance reasonably satisfactory to the
Administrative Agent; and

 

89

 

(iv)  such other evidence that
all other actions that the Administrative Agent may reasonably deem necessary
or desirable in order to create valid and subsisting Liens on the property
described in the Mortgages has been taken.

 

SECTION 6.14. Designation of Subsidiaries.  (a)  The
Borrower may at any time designate any Restricted Subsidiary as an Unrestricted
Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and after such
designation, no Default shall have occurred and be continuing, (ii) immediately
after giving effect to such designation, the Borrower and the Restricted
Subsidiaries shall be in compliance, on a Pro Forma Basis, with the covenants
set forth in Section 7.11 (and, as a condition precedent to the
effectiveness of any such designation, the Borrower shall deliver to the
Administrative Agent a certificate setting forth in reasonable detail the
calculations demonstrating such compliance), (iii) no Subsidiary may be
designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for
the purpose of the Existing Notes or any Junior Financing, as applicable, and
(iv) no Restricted Subsidiary may be designated as an Unrestricted
Subsidiary if it was previously designated an Unrestricted Subsidiary. The
designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an
Investment by the Borrower therein at the date of designation in an amount
equal to the net book value of the Borrower’s (as applicable) investment
therein. The designation of any Unrestricted Subsidiary as a Restricted
Subsidiary shall constitute the incurrence at the time of designation of any
Indebtedness or Liens of such Subsidiary existing at such time.

 

(b)  The Borrower may, at any
time, designate a Restricted Subsidiary as an Immaterial Subsidiary, but only
to the extent that such designation is consistent with the definition of
“Immaterial Subsidiary” or as a Native American Subsidiary, but only to the
extent that such designation is consistent with the definition of “Native
American Subsidiary”. Upon any Immaterial Subsidiary’s or Native American
Subsidiary’s (whether designated as such on the Closing Date or thereafter
pursuant to the preceding sentence) ceasing to satisfy the requirements set
forth in the definition of such term, the Borrower shall notify the
Administrative Agent thereof and shall take the actions required pursuant to
Section 6.11 and such Subsidiary shall cease to be an Immaterial Subsidiary or
Native American Subsidiary, as the case may be.

 

SECTION 6.15. Information Regarding Collateral.  SECTION 6.16. Furnish to the Administrative
Agent and prompt written notice of any change (a) in any Loan Party’s corporate
name, (b) in the location of any Loan Party’s chief executive office, its
principal place of business, and, upon request of the Administrative Agent, in
the location of any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by
it is located (including the establishment of any such new office or facility),
(c) in any Loan Party’s identity or corporate structure or (d) in any Loan
Party’s US Federal Taxpayer Identification Number, as applicable, and, in any
event, no such change shall be effected or permitted unless all filings have been
made (or will be made on a timely basis) under applicable Laws or otherwise and
all other actions have been taken (or will be taken on a timely basis) that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral.

 

ARTICLE VII

 

Negative Covenants

 

So long as any Lender shall
have any Commitment hereunder, any Loan or other Obligation hereunder which is
accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall not, nor shall it permit any of
the Restricted Subsidiaries to, directly or indirectly:

 

90

 

SECTION 7.01. Liens.  Create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following:

 

(a)  Liens pursuant to any Loan Document;

 

(b)  Liens existing on the date hereof and listed
on Schedule 7.01(b) and any modifications, replacements, renewals or extensions
thereof; provided that (i) any such Lien does not
extend to any additional property other than (A) after-acquired property that
is affixed or incorporated into the property covered by such Lien, and (B)
proceeds and products thereof, and (ii) such Liens shall secure only those
obligations which they secure on the Closing Date and refinancings, extensions,
renewals and replacements thereof permitted hereunder;

 

(c)  Liens for taxes, assessments or governmental
charges which are not overdue for a period of more than thirty (30) days or
which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;

 

(d)  statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen, repairmen, construction contractors or
other like Liens arising in the ordinary course of business which secure
amounts not overdue for a period of more than thirty (30) days or if more than
thirty (30) days overdue, are unfiled and no other action has been taken to
enforce such Lien or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;

 

(e)   (i) pledges or deposits in the ordinary
course of business in connection with workers’ compensation, unemployment insurance
and other social security legislation and (ii) pledges and deposits in the
ordinary course of business securing liability for reimbursement or
indemnification obligations of (including obligations in respect of letters of
credit or bank guarantees for the benefit of) insurance carriers providing
property, casualty or liability insurance to the Borrower or any Restricted
Subsidiary;

 

(f)  deposits to secure the performance of bids,
trade contracts, governmental contracts and leases (other than Indebtedness for
borrowed money and Capitalized Leases), statutory obligations, surety, stay,
customs and appeal bonds, performance bonds and other obligations of a like
nature (including those to secure health, safety and environmental obligations)
incurred in the ordinary course of business;

 

(g)  public and private easements, rights-of-way,
restrictions, encroachments, protrusions, franchises, licenses, permits, zoning
laws, covenants, conditions, restrictions and other similar encumbrances and
minor title defects affecting real property which, in the aggregate, do not in
any case materially interfere with the ordinary conduct of the business of the
Borrower or any material Subsidiary;

 

(h)  Liens securing judgments for the payment of
money not constituting an Event of Default under Section 8.01(h);

 

(i)  Liens securing Indebtedness permitted under
Section 7.03(e); provided that
(i) such Liens attach concurrently with or within two hundred seventy
(270) days after the acquisition, repair, replacement, construction or
improvement (as applicable) of the property subject to such Liens,
(ii) such Liens do not at any time encumber any property except for the
property financed by such Indebtedness, accessions thereto and the proceeds and
the products thereof and (iii) with respect to Capitalized Leases, such
Liens do not at any time extend to or cover any assets (except for accessions
to such assets) other than the assets subject to such Capitalized Leases; provided that individual financings of equipment

 

91

 

provided by one lender may be cross collateralized to other financings
of equipment provided by such lender;

 

(j)  leases, licenses, subleases or sublicenses
granted to others in the ordinary course of business which do not
(i) interfere in any material respect with the business of the Borrower or
any material Subsidiary or (ii) secure any Indebtedness;

 

(k)  Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of business;

 

(l)  Liens (i) of a collection bank arising
under Section 4-210 of the Uniform Commercial Code on items in the course
of collection, (ii) attaching to commodity trading accounts or other
commodities brokerage accounts incurred in the ordinary course of business; and
(iii) in favor of a banking institution arising as a matter of law
encumbering deposits (including the right of set-off) and which are within the
general parameters customary in the banking industry;

 

(m)  Liens (i) on cash advances in favor of the
seller of any property to be acquired in an Investment permitted pursuant to
Sections 7.02(g), (i) and (n) to be applied against the purchase price for such
Investment, and (ii) consisting of an agreement to Dispose of any property in a
Disposition permitted under Section 7.05, in each case, solely to the
extent such Investment or Disposition, as the case may be, would have been
permitted on the date of the creation of such Lien;

 

(n)  Liens in favor of the Borrower or a
Restricted Subsidiary securing Indebtedness permitted under

Section 7.03(d);

 

(o)  Liens existing on property at the time of its
acquisition or existing on the property of any Person at the time such Person
becomes a Restricted Subsidiary (other than by designation as a Restricted
Subsidiary pursuant to Section 6.14), in each case after the date hereof (other
than Liens on the Equity Interests of any Person that becomes a Restricted
Subsidiary); provided that (i) such Lien
was not created in contemplation of such acquisition or such Person becoming a
Restricted Subsidiary, (ii) such Lien does not extend to or cover any
other assets or property (other than the proceeds or products thereof and other
than after-acquired property subjected to a Lien securing Indebtedness and
other obligations incurred prior to such time and which Indebtedness and other
obligations are permitted hereunder that require, pursuant to their terms at
such time, a pledge of after-acquired property, it being understood that such
requirement shall not be permitted to apply to any property to which such
requirement would not have applied but for such acquisition), and
(iii) the Indebtedness secured thereby is permitted under Section 7.03(e),
(g) or (k);

 

(p)  any interest or title of a lessor under
leases entered into by the Borrower or any of the Restricted Subsidiaries in
the ordinary course of business;

 

(q)  Liens arising out of conditional sale, title
retention, consignment or similar arrangements for sale of goods entered into
by the Borrower or any of the Restricted Subsidiaries in the ordinary course of
business permitted by this Agreement;

 

(r)  Liens deemed to exist in connection with
Investments in repurchase agreements under Section 7.02;

 

(s)  Liens encumbering reasonable customary
initial deposits and margin deposits and similar Liens attaching to commodity
trading accounts or other brokerage accounts incurred in the ordinary course of
business and not for speculative purposes;

 

92

 

(t)  Liens that are contractual rights of set-off
(i) relating to the establishment of depository relations with banks not
given in connection with the issuance of Indebtedness, (ii) relating to
pooled deposit or sweep accounts of the Borrower or any Restricted Subsidiary
to permit satisfaction of overdraft or similar obligations incurred in the
ordinary course of business of the Borrower and the Restricted Subsidiaries or
(iii) relating to purchase orders and other agreements entered into with
customers of the Borrower or any Restricted Subsidiary in the ordinary course
of business;

 

(u)  Liens solely on any cash earnest money
deposits made by the Borrower or any of the Restricted Subsidiaries in
connection with any letter of intent or purchase agreement permitted hereunder;

 

(v)  (i) Liens placed upon the Equity Interests of
any Restricted Subsidiary acquired pursuant to a Permitted Acquisition to
secure Indebtedness incurred pursuant to Section 7.03(g) in connection with
such Permitted Acquisition and (ii) Liens placed upon the assets of such
Restricted Subsidiary and any of its Subsidiaries to secure a Guarantee by such
Restricted Subsidiary and its Subsidiaries of any such Indebtedness incurred
pursuant to Section 7.03(g);

 

(w)  ground leases in respect of real property on
which facilities owned or leased by the Borrower or any of its Subsidiaries are
located;

 

(x)  Liens in favor of the Borrower as landlord
under each Casino Sublease on Specified FF&E owned by a Guarantor that is
the tenant under the Casino Sublease and on FF&E reserve accounts
established under such Casino Sublease and that secure such Guarantor’s
obligations to Borrower under such Casino Sublease (“Specified FF&E and Reserve Accounts Liens”);

 

(y)  Liens upon the Borrower’s rights as secured
party with respect to the Specified FF&E and Reserve Accounts Liens pledged
by the Borrower in favor of the landlord under the Master Lease to secure the
Borrower’s obligations under the Master Lease; and

 

(z)  other Liens securing Indebtedness outstanding
in an aggregate principal amount not to exceed $65,000,000.

 

SECTION 7.02. Investments.  Make or hold any Investments, except:

 

(a)  Investments by the Borrower or a Restricted
Subsidiary in assets that were Cash Equivalents when such Investments were
made;

 

(b)  loans or advances to officers, directors and
employees of the Borrower and the Restricted Subsidiaries (i) for reasonable
and customary business-related travel, entertainment, relocation and analogous
ordinary business purposes so long as made in accordance with applicable law,
(ii) in connection with such Person’s purchase of Equity Interests of any
of the Holding Companies (or any direct or indirect parent thereof) (provided that the amount of such loans and advances shall be
contributed to the Borrower in cash as common equity) and (iii) for purposes
not described in the foregoing clauses (i) and (ii), in an aggregate principal
amount outstanding not to exceed $5,000,000;

 

(c)  Investments by the Borrower or any Restricted
Subsidiary in any Restricted Subsidiary that is a Guarantor (excluding any new
Restricted Subsidiary which becomes a Guarantor or by a Restricted Subsidiary
in Borrower);

 

(d)  Investments consisting of extensions of
credit in the nature of accounts receivable or notes receivable arising from
the grant of trade credit in the ordinary course of business, and Investments

 

93

 

received in satisfaction or partial satisfaction thereof from
financially troubled account debtors and other credits to suppliers in the
ordinary course of business;

 

(e)  Investments consisting of Liens,
Indebtedness, fundamental changes, Dispositions and Restricted Payments
permitted under Sections 7.01, 7.03, 7.04, 7.05 and 7.06, respectively; provided that for purposes of any Indebtedness incurred by a
Restricted Subsidiary that is not a Guarantor in favor of a Guarantor, and any
Dispositions by a Guarantor to a Restricted Subsidiary that is not a Guarantor,
such Investments shall be permitted pursuant to the other provisions of this
Section 7.02 (and not solely pursuant to this clause (e));

 

(f)  Investments (i) existing on the date hereof
and set forth on Schedule 7.02(f) and (ii) existing on the date hereof by the
Borrower or any Restricted Subsidiary in the Borrower or any other Restricted
Subsidiary; provided that the amount of the original
Investment is not increased except by the terms of such Investment or as
otherwise permitted by this Section 7.02;

 

(g)  Investments in Swap Contracts permitted under
Section 7.03;

 

(h)  promissory notes and other noncash
consideration received in connection with Dispositions permitted by
Section 7.05;

 

(i)  the purchase or other acquisition of property
and assets or businesses of any Person or of assets constituting a business
unit, a line of business or division of such Person, or Equity Interests in a
Person (including as a result of a merger or consolidation); provided that, with respect to each purchase or other
acquisition made pursuant to this Section 7.02(i) (each, a “Permitted Acquisition”):

 

(A)  subject to clause (B) below, all property,
assets and businesses acquired in such purchase or other acquisition shall
constitute Collateral (unless the same constitute Excluded Assets) and each
applicable Loan Party and any such newly created or acquired Subsidiary (and,
to the extent required under the Collateral and Guarantee Requirement, the
Subsidiaries of such created or acquired Subsidiary) shall be a Guarantor and
shall have complied with the requirements of Section 6.11, within the
times specified therein;

 

(B)  the aggregate amount of consideration (cash
and noncash and including the fair market value of all Equity Interests issued
or transferred to the sellers thereof, all indemnities, earnouts and other contingent
payment obligations to, and the aggregate amounts paid or to be paid under
noncompete, consulting and other affiliated agreements with, the sellers
thereof, all write-downs of property and reserves for liabilities with respect
thereto and all assumptions of debt, liabilities and other obligations in
connection therewith) paid in respect of acquisitions of Persons that do not
become Guarantors (including Persons who do not become wholly-owned
Subsidiaries of the Borrower) shall not exceed $75,000,000 (net of any return
representing a return of capital in respect of any such Investment);

 

(C)  the acquired property, assets, business or
Person is in the same line of business as the Borrower or a Subsidiary;

 

(D)  (1) immediately before and immediately after
giving Pro Forma Effect to any such purchase or other acquisition, no Default
shall have occurred and be continuing and (2) immediately after giving effect
to such purchase or other acquisition (including any Indebtedness incurred in
connection therewith), the Borrower and the Restricted Subsidiaries shall be in
Pro Forma Compliance with all of the covenants set forth in

 

94

 

Section 7.11, such
compliance to be determined on the basis of the financial information most
recently delivered to the Administrative Agent and the Lenders pursuant to
Section 6.01(a) or (b) as though such purchase or other acquisition had
been consummated as of the first day of the fiscal period covered thereby and
evidenced by a certificate from the principal accounting officer of the
Borrower demonstrating such compliance calculation in reasonable detail; and

 

(E)  the Borrower shall have delivered to the
Administrative Agent, on behalf of the Lenders, no later than five (5) Business
Days after the date on which any such purchase or other acquisition is
consummated, a certificate of a Responsible Officer, in form and substance
reasonably satisfactory to the Administrative Agent, certifying that all of the
requirements set forth in this clause (i) have been satisfied or will be
satisfied on or prior to the consummation of such purchase or other
acquisition;

 

(j)  the Transaction;

 

(k)  Investments in the ordinary course of
business consisting of Article 3 of the Uniform Commercial Code endorsements
for collection or deposit and Article 4 of the Uniform Commercial Code
customary trade arrangements with customers consistent with past practices;

 

(l)  Investments (including debt obligations and
Equity Interests) received in connection with the bankruptcy or reorganization
of suppliers and customers or in settlement of delinquent obligations of, or
other disputes with, customers and suppliers arising in the ordinary course of
business or upon the foreclosure with respect to any secured Investment or
other transfer of title with respect to any secured Investment;

 

(m)  loans and advances to any of the Holding
Companies (or any direct or indirect parent thereof) in lieu of, and not in
excess of the amount of (after giving effect to any other loans, advances or
Restricted Payments in respect thereof), Restricted Payments to the extent
permitted to be made to such Holding Company (or such parent) in accordance
with Section 7.06(f);

 

(n)  so long as immediately after giving effect to
any such Investment, no Default has occurred and is continuing and the Borrower
and the Restricted Subsidiaries will be in Pro Forma Compliance with the
covenants set forth in Section 7.11:

 

(i)  Investments that are
required by the terms of Support Agreements permitted under Section 7.03(u) in
an amount not exceeding $200,000,000;

 

(ii)  Investments in Aliante in
an amount not to exceed $150,000,000 in the aggregate;

 

(iii)  Investments in Wild Wild
West (other than Permitted Land Loan Investments) in an amount not to exceed
$65,000,000 in the aggregate; and

 

(iv)  Investments of $566,835,410
plus (A) Net Cash Proceeds of Permitted Equity Issuances (other than
Permitted Equity Issuances made pursuant to Section 8.05) that are Not
Otherwise Applied, and (B) so long as (after giving Pro Forma Effect to such
Investments) the Borrower and its Restricted Subsidiaries will be in Pro Forma
Compliance with the covenants set forth in Section 7.11, an amount equal to the
sum of (x) 50% of Cumulative Excess Cash Flow, excluding therefrom any amounts
constituting the Available Distributions Amount, plus (y) 100% of the

 

95

 

Available
Distribution Amount, to the extent that such sum is Not Otherwise Applied, it
being understood that, subject to the limitations set forth in this Section
7.02(n)(iv), the Borrower may make Investments that constitute payments in
respect of the Land Loan under this Section 7.02(n)(iv) regardless of whether
such Investments fail to constitute Permitted Land Loan Investments pursuant to
the definition thereof;

 

(o)  advances of payroll payments to employees in
the ordinary course of business;

 

(p)  Investments to the extent that payment for
such Investments is made solely with capital stock of the Borrower after a
Qualifying IPO of the Borrower;

 

(q)  Investments of a Restricted Subsidiary
acquired after the Closing Date or of a corporation merged into the Borrower or
merged or consolidated with a Restricted Subsidiary in accordance with Section
7.04 after the Closing Date to the extent that such Investments were not made
in contemplation of or in connection with such acquisition, merger or
consolidation and were in existence on the date of such acquisition, merger or
consolidation;

 

(r)  Investments consisting of the contribution or
other transfer or real estate described on Schedule 7.02(r) and owned on the
Closing Date by a Native American Subsidiary to an Unrestricted Subsidiary or
joint venture or pursuant to a Native American Contract;

 

(s)  Permitted Land Loan Investments that are used
entirely to repay or prepay the outstanding principal amounts under the Land
Loan; and

 

(t)  Investments consisting of contributions to
the Land Loan Subsidiaries from time to time in an amount at any time not to
exceed the amount then necessary to replenish the interest reserve account
required to be maintained under the Land Loan Documents, which Investments
shall in no case exceed $30,000,000 in any calendar year.

 

provided that
no Investment in an Unrestricted Subsidiary that would otherwise be permitted
under this Section 7.02 shall be permitted hereunder to the extent that any
portion of such Investment is used to make any prepayments, redemptions,
purchases, defeasances and other payments in respect of Junior Financings.

 

SECTION 7.03. Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:

 

(a)  Indebtedness of the Borrower and any of its
Subsidiaries under the Loan Documents;

 

(b)  Indebtedness outstanding on the date hereof
and listed on Schedule 7.03(b) and any Permitted Refinancing thereof;

 

(c)  Guarantees by the Borrower and the Restricted
Subsidiaries in respect of Indebtedness of the Borrower otherwise permitted
hereunder; provided that (A) no Guarantee by any
Restricted Subsidiary of any Existing Note or Junior Financing shall be
permitted unless such Restricted Subsidiary shall have also provided a
Guarantee of the Obligations substantially on the terms set forth in the
Subsidiary Guaranty and (B) if the Indebtedness being Guaranteed is
subordinated to the Obligations, such Guarantee shall be subordinated to the
Guarantee of the Obligations on terms at least as favorable to the Lenders as
those contained in the subordination of such Indebtedness;

 

96

 

(d)  Indebtedness of the Borrower or any
Restricted Subsidiary owing to the Borrower or any other Restricted Subsidiary
to the extent constituting an Investment permitted by Section 7.02; provided that, all such Indebtedness of any Guarantor owed
to any Person that is not a Guarantor shall be subject to the subordination
terms set forth in Section 5.03 of the Security Agreement; provided
that any such Indebtedness shall be evidenced by a note and pledged to the
Administrative Agent for the benefit of the Secured Parties in accordance with
the Collateral Documents and Section 6.11;

 

(e)  (i) so long as immediately after giving
effect to the incurrence of any such Indebtedness, no Event of Default has
occurred and is continuing and the Borrower and the Restricted Subsidiaries
will be in Pro Forma Compliance with the covenants set forth in Section 7.11,
Capitalized Lease Indebtedness and other Indebtedness (including Capitalized
Leases) financing the acquisition, construction, repair, replacement or improvement
of fixed or capital assets; provided that
such Indebtedness is incurred concurrently with or within two hundred seventy
(270) days after the applicable acquisition, construction, repair, replacement
or improvement, (ii) Capitalized Lease Indebtedness arising out of
sale-leaseback transactions permitted by Section 7.05(f) and (iii) any
Permitted Refinancing of any Indebtedness set forth in the immediately
preceding clauses (i) and (ii); provided that
the aggregate principal amount of all Indebtedness permitted under clause (i)
of this Section 7.03(e) shall not exceed $50,000,000 at any time outstanding;

 

(f)  Indebtedness in respect of Swap
Contracts designed to hedge against interest rates, foreign exchange rates or
commodities pricing risks of the Borrower or its Subsidiaries incurred in the
ordinary course of business and not for speculative purposes;

 

(g)  Indebtedness of Restricted Subsidiaries or
Guarantors (i) assumed in connection with any Permitted Acquisition or (ii)
incurred to finance a Permitted Acquisition, in each case, that is secured only
by the assets or business acquired in the applicable Permitted Acquisition
(including any acquired Equity Interests) and so long as both immediately prior
and after giving effect thereto, (A) no Default shall exist or result
therefrom, (B) the Borrower and the Restricted Subsidiaries will be in Pro
Forma Compliance  with the covenants set forth in
Section 7.11, and (C) the aggregate principal amount of such Indebtedness
and all Indebtedness resulting from any Permitted Refinancing thereof at any
time outstanding pursuant to this paragraph (g) does not exceed $100,000,000;

 

(h)  (i) Indebtedness of the Borrower and the
Restricted Subsidiaries (A) assumed in connection with any Permitted
Acquisition; provided that such Indebtedness
is not incurred in contemplation of such Permitted Acquisition, or (B) incurred
to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the
foregoing; provided, in each case that such
Indebtedness and all Indebtedness resulting from any Permitted Refinancing
thereof (v) is unsecured and is subordinated to the Obligations on terms no
less favorable to the Lenders than the subordination terms set forth in the
Existing Senior Subordinated Notes Indentures as of the Closing Date, (w) both
immediately prior and after giving effect thereto, (1) no Default shall exist
or result therefrom and (2) the Borrower and the Restricted Subsidiaries will
be in Pro Forma Compliance with the covenants set forth in Section 7.11,
(x) matures after, and does not require any scheduled amortization or other
scheduled payments of principal prior to, the Maturity Date (it being
understood that such Indebtedness may have mandatory prepayment, repurchase or
redemptions provisions satisfying the requirement of clause (y) hereof), (y)
has terms and conditions (other than interest rate, redemption premiums and
subordination terms), taken as a whole, that are not materially less favorable
to the Borrower as the terms and conditions of the Senior Subordinated Notes of
the Closing Date; provided that a certificate of a
Responsible

 

97

 

Officer delivered to the
Administrative Agent at least five Business Days prior to the incurrence of
such Indebtedness, together with a reasonably detailed description of the
material terms and conditions of such Indebtedness or drafts of the
documentation relating thereto, stating that the Borrower has determined in
good faith that such terms and conditions satisfy the foregoing requirement
shall be conclusive evidence that such terms and conditions satisfy the
foregoing requirement unless the Administrative Agent notifies the Borrower
within such five Business Day period that it disagrees with such determination
(including a reasonable description of the basis upon which it disagrees); and
(z) with respect to such Indebtedness described in the immediately preceding
clause (B), is incurred by the Borrower or a Guarantor.

 

(i)  Indebtedness representing deferred compensation
to employees of the Borrower and the Restricted Subsidiaries incurred in the
ordinary course of business;

 

(j)  Indebtedness consisting of promissory notes
issued by any Loan Party to current or former officers, directors and
employees, their respective estates, spouses or former spouses to finance the
purchase or redemption of Equity Interests of any of the Holding Companies
permitted by Section 7.06;

 

(k)  Indebtedness incurred by the Borrower or the
Restricted Subsidiaries in a Permitted Acquisition, any other Investment
expressly permitted hereunder or any Disposition, in each case, constituting
indemnification obligations or obligations in respect of purchase price or
other similar adjustments;

 

(l)  Indebtedness consisting of obligations of the
Borrower or the Restricted Subsidiaries under deferred compensation or other
similar arrangements incurred by such Person in connection with the Transaction
and Permitted Acquisitions or any other Investment expressly permitted
hereunder;

 

(m)  Cash Management Obligations and other
Indebtedness in respect of netting services, overdraft protections and similar
arrangements in each case in connection with deposit accounts;

 

(n)  Indebtedness in an aggregate principal amount
not to exceed $150,000,000 at any time outstanding;

 

(o)  Indebtedness consisting of (a) the financing
of insurance premiums or (b) take-or-pay obligations contained in supply
arrangements, in each case, in the ordinary course of business;

 

(p)  Indebtedness incurred by the Borrower or any
of the Restricted Subsidiaries in respect of letters of credit, bank
guarantees, bankers’ acceptances or similar instruments issued or created in
the ordinary course of business, including in respect of workers compensation
claims, health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance or other Indebtedness with respect to
reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement
obligations in respect thereof are reimbursed within 30 days following the
incurrence thereof;

 

(q)  obligations in respect of performance, bid,
appeal and surety bonds and performance and completion guarantees and similar
obligations provided by the Borrower or any of the Restricted Subsidiaries or
obligations in respect of letters of credit, bank guarantees or similar
instruments related thereto, in each case in the ordinary course of business or
consistent with past practice;

 

98

 

(r)  Indebtedness supported by a Letter of Credit,
in a principal amount not to exceed the face amount of such Letter of Credit;

 

(s)  Permitted Subordinated Indebtedness;

 

(t)  all premiums (if any), interest (including
post-petition interest), fees, expenses, charges and additional or contingent
interest on obligations described in clauses (a) through (u) above;

 

(u)  Indebtedness or Guarantees consisting of
Support Agreements of Borrower and its Restricted Subsidiaries in amounts not
exceeding $200,000,000; and

 

(v)  Indebtedness pursuant to the corporate Head
Office Sale Leaseback Transaction.

 

SECTION 7.04. Fundamental Changes.  Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that:

 

(a)  any Restricted Subsidiary may merge with (i)
the Borrower; provided that (x) the Borrower
shall be the continuing or surviving Person and (y) such merger does not result
in the Borrower ceasing to be incorporated under the Laws of the United States,
any state thereof or the District of Columbia, or (ii) any one or more other
Restricted Subsidiaries; provided that
when any Restricted Subsidiary that is a Guarantor is merging with another
Restricted Subsidiary, a Guarantor shall be the continuing or surviving Person;

 

(b)  (i) any Subsidiary that is not a
Guarantor may merge or consolidate with or into any other Subsidiary that is
not a Guarantor (provided that (A) the
Borrower shall own, directly or indirectly, Equity Interests representing a
percentage of the aggregate ordinary voting power and aggregate equity value
represented by the issued and outstanding Equity Interests in such surviving
Subsidiary that is equal to or greater than the percentage of the aggregate
ordinary voting power and the aggregate equity value represented by the issued
and outstanding Equity Interests that were owned immediately prior to such
merger or consolidation, directly or indirectly, by the Borrower in such other
merged or consolidated Subsidiary, and (B) if any person other than the
Borrower or a Guarantor receives any consideration in connection with such
transaction, such transaction shall comply with the provisions of Section 7.02)
and (ii) any Subsidiary may liquidate or dissolve or change its legal form
(provided that (A) such transaction
shall not reduce the Borrower’s direct or indirect share of the aggregate
ordinary voting power and aggregate equity value in such Subsidiary,
(B) if such Subsidiary is a Guarantor it shall continue to be a Guarantor,
(C) the Borrower or Subsidiary shall comply with its obligations under
Section 6.14 in connection with such transaction and (D) such transaction
shall have been undertaken for a valid purpose (which includes the reduction of
taxes for direct or indirect owners of Equity Interests in the Borrower) and
shall not be disadvantageous to the Lenders in any manner);

 

(c)  any Restricted Subsidiary may Dispose of all
or substantially all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or to another Restricted Subsidiary; provided
that if the transferor in such a transaction is a Guarantor or the Borrower,
then (i) the transferee must either be the Borrower or a Guarantor or (ii) to
the extent constituting an Investment, such Investment must be a permitted
Investment in or Indebtedness of a Restricted Subsidiary which is not a Loan
Party in accordance with Sections 7.02 and 7.03, respectively;

 

99

 

(d)  so long as no Default exists or would result
therefrom, any Restricted Subsidiary may merge with any other Person in order
to effect an Investment permitted pursuant to Section 7.02; provided that the continuing or surviving Person shall be a
Restricted Subsidiary, which together with each of its Restricted Subsidiaries,
shall have complied with the requirements of Section 6.11;

 

(e)  the Borrower and the Restricted Subsidiaries
may consummate the Transaction;

 

(f)  Borrower may distribute, or cause to be
distributed, the Equity Interests of the CMBS Subsidiary to one or more of the
Holding Companies or their Affiliates.

 

(g)  so long as no Default exists or would result
therefrom, a merger, dissolution, liquidation, consolidation or Disposition,
the purpose of which is to effect a Disposition permitted pursuant to
Section 7.05;

 

provided that
in the case of clauses (a), (b) and (c) above, (x) the security interest of the
Administrative Agent in the property of such person formed by such merger or
consolidation (or such Person resulting from such change in corporate form)
shall be no less favorable than the security interest of the Administrative
Agent in the property of the Borrower or Subsidiary prior to such merger or
consolidation (or change in corporate form) and (y) the Guarantee by such
person formed by such merger or consolidation (or such Person resulting from
such change in corporate form) of the Obligations shall be no less favorable to
the Lenders than the Guarantees of the Obligations of the Subsidiary prior to
such merger or consolidation (or change in corporate form), in each case, as
reasonably determined by the Administrative Agent.

 

SECTION 7.05. Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except:

 

(a)  Dispositions of obsolete or worn out
property, whether now owned or hereafter acquired, in the ordinary course of
business and Dispositions of property no longer used or useful in the conduct
of the business of the Borrower and the Restricted Subsidiaries;

 

(b)  Dispositions of inventory (including cage
cash) and immaterial assets in the ordinary course of business;

 

(c)  Dispositions of property to the extent that
(i) such property is exchanged for credit against the purchase price of
similar replacement property or (ii) the proceeds of such Disposition are
promptly applied to the purchase price of such replacement property;

 

(d)  Dispositions of property to the Borrower or
to a Restricted Subsidiary; provided that
if the transferor of such property is a Guarantor or the Borrower (i) the
transferee thereof must either be the Borrower or a Guarantor or (ii) to the
extent such transaction constitutes an Investment, such transaction is permitted
under Section 7.02;

 

(e)  Dispositions permitted by Sections 7.04 and
7.06 and Permitted Liens;

 

(f)  the Casino Sale Leaseback Transaction and the
Corporate Head Office Sale Leaseback Transaction;

 

(g)  Dispositions of Cash Equivalents;

 

100

 

(h)  leases, subleases, licenses or sublicenses,
in each case in the ordinary course of business and which do not materially
interfere with the business of the Borrower or the Restricted Subsidiaries;

 

(i)  transfers of property subject to Casualty
Events upon receipt of the Net Cash Proceeds of such Casualty Event;

 

(j)  Dispositions of property not otherwise
permitted under this Section 7.05; provided that
(i) at the time of such Disposition (other than any such Disposition made
pursuant to a legally binding commitment entered into at a time when no Default
exists), no Default shall exist or would result from such Disposition,
(ii) the aggregate fair market value of all property Disposed of in
reliance on this clause (j) shall not exceed $200,000,000 in the aggregate and
(iii) with respect to any Disposition pursuant to this clause (j) for a
purchase price in excess of $25,000,000, the Borrower or a Restricted
Subsidiary shall receive not less than 75% of such consideration in the form of
cash or Cash Equivalents (in each case, free and clear of all Liens at the time
received, other than nonconsensual Permitted Liens and Liens permitted by
Section 7.01(r) and clauses (i) and (ii) of Section 7.01(t)); provided, however, that
for the purposes of this clause (iii), each of the following shall be deemed to
be cash: (A) any liabilities (as shown on the Borrower’s or such Restricted
Subsidiary’s most recent balance sheet provided hereunder or in the footnotes
thereto) of the Borrower or such Restricted Subsidiary, other than liabilities
that are by their terms subordinated to the payment in cash of the Obligations,
that are assumed by the transferee with respect to the applicable Disposition
and for which the Borrower and all of the Restricted Subsidiaries shall have
been validly released by all applicable creditors in writing and (B) any
securities received by the Borrower or such Restricted Subsidiary from such
transferee that are converted by the Borrower or such Restricted Subsidiary
into cash (to the extent of the cash received) within 180 days following the
closing of the applicable Disposition;

 

(k)  Dispositions listed on Schedule 7.05(k);

 

(l)  Dispositions of Real Property owned by Native
American Subsidiaries; and

 

(m)  Dispositions of Investments in joint ventures
to the extent required by, or made pursuant to customary buy/sell arrangements
between, the joint venture parties set forth in joint venture arrangements and
similar binding arrangements.

 

provided that (1) any Disposition of any property
pursuant to this Section 7.05 (except pursuant to Sections 7.05(e) and
except for Dispositions from a Guarantor to another Guarantor), shall be for no
less than the fair market value of such property at the time of such
Disposition and (2) in no case shall the Borrower or any Subsidiary be
permitted to effect a Disposition of Lake Mead Station, Inc., Fiesta Station,
Inc., Santa Fe Station, Inc., or Texas Station, LLC or a significant portion of
their respective properties other than in connection with the Corporate Head
Office Sale Leaseback Transaction. To the extent any Collateral is Disposed of
as expressly permitted by this Section 7.05 to any Person other than the
Borrower or any Restricted Subsidiary, such Collateral shall be sold free and
clear of the Liens created by the Loan Documents, and the Administrative Agent
shall be authorized to take any actions deemed appropriate in order to effect
the foregoing.

 

SECTION 7.06. Restricted Payments.  Declare or make or agree to declare or make,
directly or indirectly, any Restricted Payment, or incur any obligations
(contingent or otherwise) to do so, except:

 

(a)  each Restricted Subsidiary may make
Restricted Payments to the Borrower and to other Restricted Subsidiaries and,
in the case of a Restricted Payment by a non-wholly owned Restricted

 

101

 

Subsidiary, to the Borrower and any other Restricted Subsidiary and to
each other owner of Equity Interests of such Restricted Subsidiary based on
their relative ownership interests of the relevant class of Equity Interests;

 

(b)  the Borrower and each Restricted Subsidiary
may declare and make dividend payments or other distributions payable solely in
the Equity Interests (other than Disqualified Equity Interests not otherwise
permitted by Section 7.03) of such Person; provided that
to the extent required pursuant to the Collateral Documents, such Equity
Interests shall be pledged to the Administrative Agent and, in the case of a Restricted
Payment by a non-wholly owned Restricted Subsidiary, to the Borrower  and any other Restricted Subsidiary and to
each other owner of Equity Interests of such Restricted Subsidiary based on
their relative ownership interests of the relevant class of Equity Interests;

 

(c)  Restricted Payments made within 60 days after
the Closing Date to pay (or reimburse Persons for) fees, costs and expenses
incurred through the Closing Date to consummate the Transaction;

 

(d)  to the extent constituting Restricted
Payments, the Borrower and the Restricted Subsidiaries may enter into and
consummate transactions expressly permitted by any provision of
Section 7.04 or 7.08 other than Section 7.08(f);

 

(e)  the Borrower, after a Qualifying IPO (or
before a Qualifying IPO if approved in writing by the Required Lenders), may
pay (or make Restricted Payments to allow any direct or indirect parent thereof
to pay) for the repurchase, retirement or other acquisition or retirement for
value of Equity Interests of the Borrower by any future, present or former
employee or director of the Borrower or any of its Subsidiaries pursuant to any
employee or director equity plan, employee or director stock option plan or any
other employee or director benefit plan or any agreement (including any stock
subscription or shareholder agreement) with any employee or director of the
Borrower or any of its Subsidiaries;

 

(f)  the Borrower and its Restricted Subsidiaries
may make Restricted Payments to the Holding Companies:

 

(i)  if and to the extent that the Holding
Companies are required to pay taxes on the income generated by the Borrower and
its Subsidiaries, the proceeds of which will be used to pay (or to make
Restricted Payments to allow any direct or indirect parent of a Holding Company
to pay) the liability to each relevant jurisdiction in respect of such taxes;

 

(ii)  the proceeds of which shall be used by a
Holding Company to pay (or to make Restricted Payments to allow any direct or
indirect parent of such Holding Company to pay) the compensation of Frank
Fertitta or Lorenzo Fertitta in accordance with the employment contracts for
such persons in effect on the date hereof;

 

(iii)  the proceeds of which shall be used by a
Holding Company to pay franchise taxes and other fees, taxes and expenses
required to maintain its (or any of its direct or indirect parents’) corporate
existence; and

 

(iv)  of up to $25,000 per year, the proceeds of
which shall be used to by the Holding Companies to pay corporate overhead
expenses.

 

(g)  in addition to the foregoing Restricted
Payments and so long as no Default shall have occurred and be continuing or
would result therefrom, the Borrower may make additional Restricted Payments to
one or more of the Holding Companies in an aggregate amount, together with the
aggregate

 

102

 

amount of loans and advances to one or more of the Holding Companies
made pursuant to Section 7.02(m) in lieu of Restricted Payments permitted by
this clause (g), not to exceed the sum of (i) $100,000,000, (ii) the aggregate
amount of the Net Cash Proceeds of Permitted Equity Issuances (other than
Permitted Equity Issuances made pursuant to Section 8.05) that are Not
Otherwise Applied and, and (iii) so long as (after giving Pro Forma Effect to
such additional Restricted Payments) the Borrower and its Restricted
Subsidiaries will be in Pro Forma Compliance with the covenants set forth in
Section 7.11, the sum of (x) 50% of Cumulative Excess Cash Flow, excluding
therefrom any amounts constituting the Available Distributions Amount, plus (y)
100% of the Available Distribution Amount, to the extent that such sum is Not
Otherwise Applied.

 

SECTION 7.07. Change in Nature of Business.  Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and the Restricted Subsidiaries on the date hereof or any business reasonably
related or ancillary thereto.

 

SECTION 7.08. Transactions with Affiliates.  Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than (a) transactions among Guarantor or any entity that
becomes a Guarantor as a result of such transaction, (b) on terms substantially
as favorable to the Borrower or such Guarantor as would be obtainable by the
Borrower or such Guarantor at the time in a comparable arm’s-length transaction
with a Person other than an Affiliate, (c) the payment of fees and expenses
related to the Transaction, (d) the issuance of Equity Interests to the
management of the Borrower or any of its Subsidiaries in connection with the
Transaction, (e) loans and other transactions by the Borrower and the
Restricted Subsidiaries to the extent permitted under this Article 7, (f)
employment and severance arrangements between the Borrower and the Restricted
Subsidiaries and their respective officers and employees in the ordinary course
of business, (g) payments by the Borrower (and any direct or indirect parent
thereof) and the Restricted Subsidiaries pursuant to the tax sharing agreements
among the Borrower (and any such parent thereof) and the Restricted
Subsidiaries on customary terms to the extent attributable to the ownership or
operation of the Borrower and the Restricted Subsidiaries, (h) the payment of
customary fees and reasonable out of pocket costs to, and indemnities provided
on behalf of, directors, officers and employees of the Borrower and the
Restricted Subsidiaries in the ordinary course of business to the extent
attributable to the ownership or operation of the Borrower and the Restricted
Subsidiaries, (j) transactions pursuant to permitted agreements in existence on
the Closing Date and set forth on Schedule 7.08 or any amendment thereto to the
extent such an amendment is not adverse to the Lenders in any material respect,
(k) dividends, redemptions and repurchases permitted under Section 7.06,
and (m) customary payments by the Borrower and any Restricted Subsidiaries to
the Holding Companies or the Equity Investors made for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities (including in connection with acquisitions or divestitures),
which payments are approved by the majority of the members of the board of
directors or a majority of the disinterested members of the board of directors
of the Borrower, in good faith.

 

SECTION 7.09. Burdensome Agreements.  Enter into or permit to exist any Contractual
Obligation (other than this Agreement or any other Loan Document) that limits
the ability of (a) any Restricted Subsidiary of the Borrower to pay dividends
or other distributions with respect to any of its Equity Interests or to make
or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary or (b) the
Borrower or any Loan Party to create, incur, assume or suffer to exist Liens on
property of such Person for the benefit of the Lenders with respect to the
Facilities and the Obligations or under the Loan Documents; provided that the foregoing clauses (a) and (b) shall not
apply to Contractual Obligations which (i) (x) exist on the date hereof and (to
the extent not otherwise permitted by this Section 7.09) are listed on
Schedule 7.09 and (y) to the extent Contractual Obligations permitted by clause
(x) are set forth in an agreement evidencing Indebtedness, are set forth in any
agreement evidencing any permitted renewal, extension or refinancing

 

103

 

of such Indebtedness so long as such renewal, extension or refinancing
does not, in the reasonable opinion of the Administrative Agent, expand the
scope of such Contractual Obligation, (ii) are binding on a Restricted
Subsidiary at the time such Restricted Subsidiary first becomes a Restricted
Subsidiary of the Borrower, so long as such Contractual Obligations were not
entered into solely in contemplation of such Person becoming a Restricted
Subsidiary of the Borrower; provided, further, that this clause (ii) shall not apply to
Contractual Obligations that are binding on a Person that becomes a Restricted
Subsidiary pursuant to Section 6.14, (iii) represent Indebtedness of a
Restricted Subsidiary of the Borrower which is not a Loan Party which is
permitted by Section 7.03, (iv) arise in connection with any Disposition
permitted by Section 7.05, (v) subject to Section 6.13, are customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures permitted under Section 7.02 and applicable solely to
such joint venture entered into in the ordinary course of business, (vi) are
negative pledges and restrictions on Liens in favor of any holder of
Indebtedness permitted under Section 7.03 but solely to the extent any negative
pledge related to the property financed by or the subject of such Indebtedness
(and excluding in any event any Indebtedness constituting any Junior
Financing), (vii) are customary restrictions on leases, subleases, licenses or
asset sale agreements otherwise permitted hereby so long as such restrictions
relate to the assets subject thereto, (viii) comprise restrictions imposed by
any agreement relating to secured Indebtedness permitted pursuant to
Section 7.03(e) or 7.03(g) to the extent that such restrictions apply only
to the property or assets securing such Indebtedness or, in the case of
Indebtedness incurred pursuant to Section 7.03(g) only, to the Restricted
Subsidiaries incurring or guaranteeing such Indebtedness, (ix) are customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Borrower or any Restricted Subsidiary, (x) subject to
Section 6.13, are customary provisions restricting assignment of any agreement
entered into in the ordinary course of business, and (xi) are restrictions on
cash or other deposits imposed by customers under contracts entered into in the
ordinary course of business.

 

SECTION 7.10. Use of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, in a manner inconsistent with the uses set
forth in the preliminary statements to this Agreement; provided,
however, that no more than $260,000,000
of Revolving Credit Loans may be utilized for payment of the consideration for
the Acquisition and Transaction Expenses.

 

SECTION 7.11. Financial Covenants

 

(a)  Total Leverage Ratio.
Permit the Total Leverage Ratio as of the last day of any Test Period
(beginning with the Test Period ending on March 31, 2008) to be greater than
the ratio set forth below opposite the last day of such Test Period:

 

	
  Fiscal Year

  	
   

  	
  March 31

  	
   

  	
  June 30

  	
   

  	
  September 30

  	
   

  	
  December 31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  8.50:1.00

  	
   

  	
  8.25:1.00

  	
   

  	
  8.00:1.00

  	
   

  	
  7.75:1.00

  	
   

  
	
  2009

  	
   

  	
  7.50:1.00

  	
   

  	
  7.25:1.00

  	
   

  	
  7.00:1.00

  	
   

  	
  6.75:1.00

  	
   

  
	
  2010

  	
   

  	
  6.25:1.00

  	
   

  	
  6.00:1.00

  	
   

  	
  6.00:1.00

  	
   

  	
  6.00:1.00

  	
   

  
	
  2011

  	
   

  	
  5.75:1.00

  	
   

  	
  5.50:1.00

  	
   

  	
  5.50:1.00

  	
   

  	
  5.00:1.00

  	
   

  
	
  2012

  	
   

  	
  5.00:1.00

  	
   

  	
  5.00:1.00

  	
   

  	
  5.00:1.00

  	
   

  	
  5.00:1.00

  	
   

  
	
  2013

  	
   

  	
  5.00:1.00

  	
   

  	
  5.00:1.00

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(b)  Senior Secured Leverage
Ratio. Permit the Senior Secured Leverage Ratio as of the last day
of any Test Period (beginning with the Test Period ending on March 31, 2008) to
be greater than the ratio set forth below opposite the last day of such Test
Period:

 

104

 

	
  Fiscal Year

  	
   

  	
  March 31

  	
   

  	
  June 30

  	
   

  	
  September 30

  	
   

  	
  December 31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  2.25:1.00

  	
   

  	
  2.25:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  
	
  2009

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  
	
  2010

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  
	
  2011

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  
	
  2012

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  
	
  2013

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(c)  Interest Coverage Ratio.
Permit the Interest Coverage Ratio for any Test Period (beginning with the Test
Period ending on March 31, 2008) to be less than the ratio set forth below
opposite the last day of such Test Period:

 

	
  Fiscal Year

  	
   

  	
  March 31

  	
   

  	
  June 30

  	
   

  	
  September 30

  	
   

  	
  December 31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  1.50:1.00

  	
   

  	
  1.50:1.00

  	
   

  	
  1.75:1.00

  	
   

  	
  1.75:1.00

  	
   

  
	
  2009

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  	
  2.00:1.00

  	
   

  
	
  2010

  	
   

  	
  2.25:1.00

  	
   

  	
  2.25:1.00

  	
   

  	
  2.25:1.00

  	
   

  	
  2.25:1.00

  	
   

  
	
  2011

  	
   

  	
  2.50:1.00

  	
   

  	
  2.50:1.00

  	
   

  	
  2.50:1.00

  	
   

  	
  2.50:1.00

  	
   

  
	
  2012

  	
   

  	
  2.50:1.00

  	
   

  	
  2.50:1.00

  	
   

  	
  2.50:1.00

  	
   

  	
  2.50:1.00

  	
   

  
	
  2013

  	
   

  	
  2.50:1.00

  	
   

  	
  2.50:1.00

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

SECTION 7.12. Accounting Changes.  Make any change in fiscal year; provided, however, that
the Borrower may, upon written notice to the Administrative Agent, change its
fiscal year to any other fiscal year reasonably acceptable to the
Administrative Agent, in which case, the Borrower and the Administrative Agent
will, and are hereby authorized by the Lenders to, make any adjustments to this
Agreement that are necessary to reflect such change in fiscal year.

 

SECTION 7.13. Prepayments, Etc. of Indebtedness.  (a) 
Prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner (it being understood that payments of
regularly scheduled interest shall be permitted) the Existing Notes, any
subordinated Indebtedness incurred under Section 7.03(h) or any other
Indebtedness that is required to be subordinated to the Obligations pursuant to
the terms of the Loan Documents (collectively, “Junior
Financing”) or make any payment in violation of any subordination
terms of any Junior Financing Documentation, except (i) the refinancing
thereof with the Net Cash Proceeds of any Indebtedness (to the extent such
Indebtedness constitutes a Permitted Refinancing and, if applicable, is
permitted pursuant to Section 7.03(h)), to the extent not required to prepay
any Loans or Facility pursuant to Section 2.05(b), (ii) the
conversion of any Junior Financing to Equity Interests (other than Disqualified
Equity Interests) of any of the Holding Companies or any of its direct or
indirect parents, and (iii) the prepayment of Indebtedness of the Borrower or
any Restricted Subsidiary to the Borrower or any Loan Party to the extent
permitted by the Collateral Documents.

 

(b)  Amend, modify or change in any manner
materially adverse to the interests of the Lenders any term or condition of any
Junior Financing Documentation without the consent of the Joint Lead Arrangers.

 

(c)  Agree to (or vote in favor of) amending,
modifying or changing in any manner materially adverse to the interests of the
Lenders any term or condition of any Material Contract; it being acknowledged
and agreed by the parties hereto that any amendment or other modification which
would have the effect of (i) reducing any fees payable to the Borrower or any
Restricted Subsidiary under any Material Contract, (ii) shortening the term of
any Material Contract or (iii) allowing fees or other amounts

 

105

 

under any Material Contract to be paid to Persons other than the
Borrower or a Restricted Subsidiary shall, in each case, be deemed to be
materially adverse to the interests of the Lenders.

 

(d)  (i) permit any waiver, supplement,
modification, amendment, termination or release of, or fail to enforce strictly
the terms and conditions of, any of the indemnities and licenses furnished to
the Holding Companies and their Affiliates and Subsidiaries pursuant to the
Acquisition Agreement except in the prudent conduct of the business of the
Borrower and the Subsidiaries or (ii) otherwise permit any waiver, supplement,
modification, amendment, termination or release of, or fail to enforce strictly
the terms and conditions of, any of the Acquisition Agreement except to the
extent that such waiver, supplement, modification, amendment, termination or
release or failure to enforce could not reasonably be expected to have a
Material Adverse Effect.

 

SECTION 7.14. Equity Interests of the Borrower and Restricted
Subsidiaries.  Permit any Domestic
Subsidiary that is a Restricted Subsidiary to be a non-wholly owned Subsidiary,
except (i) as a result of or in connection with a dissolution, merger,
consolidation or Disposition of a Restricted Subsidiary permitted by
Section 7.04 or 7.05 or an Investment in any Person permitted under
Section 7.02 or (ii) so long as such Restricted Subsidiary continues to be a
Guarantor;

 

SECTION 7.15. The Holding Companies.  Permit any of the Holding Companies to
conduct, transact or otherwise engage in any business or operations other than
those incidental to (i) its ownership of the Equity Interests of the Borrower,
(ii) the maintenance of its legal existence, (iii) the performance of the Loan
Documents, the Acquisition Agreement and the other agreements contemplated by
the Acquisition Agreement, (iv) any public offering of its common stock or any
other issuance of its Equity Interests not prohibited by Article 7, and (v) any
transaction that such Holding Company is permitted to enter into or consummate
under this Article 7.

 

SECTION 7.16. Capital Expenditures.

 

(a)  Make any Capital Expenditure except for (i)
Capital Expenditures not exceeding, in the aggregate for the Borrower and the
Restricted Subsidiaries during each fiscal year, $85,000,000; provided that the amount of Capital Expenditures permitted
to be made in respect of any fiscal year shall be increased after the
consummation of any Permitted Acquisition in an amount equal to 10% of the pro
forma aggregate consolidated revenues of the Acquired Entity or Business so
acquired during the fiscal year of such Acquired Entity or Business beginning
after such Permitted Acquisition (such amount, the “Acquired Annual Capital Expenditure Amount”), (ii) so long as
Durango Station, Inc. is a Guarantor, $750,000,000 in the aggregate in respect
of the property being developed by Durango Station, Inc. and commonly referred
to as Durango Station, (iii) so long as Reno Land Holdings LLC is a Guarantor, $700,000,000
in the aggregate in respect of the property being developed by Reno Land
Holdings LLC and commonly referred to as the Reno Project, (iv) so long as
Centerline Holdings, LLC is a Guarantor, $90,000,000 in the aggregate in
respect of the property being developed by Centerline Holdings, LLC and
commonly referred to as the Castaways Project, (v) $20,000,000 in respect of
the Borrower’s corporate office building, (vi) $300,000,000 in the aggregate
with respect to all other Capital Expenditures related to new properties of the
Borrower and its Restricted Subsidiaries and (vii) Capital Expenditures made
with the proceeds of (A) Net Cash Proceeds of Permitted Equity Issuances (other
than Permitted Equity Issuances made pursuant to Section 8.05) that are Not
Otherwise Applied, and (B) so long as (after giving Pro Forma Effect to such
Capital Expenditures) the Borrower and its Restricted Subsidiaries will be in
Pro

 

 

 

106

 

Forma Compliance with the covenants set forth in Section 7.11, the sum
of (x) 50% of Cumulative Excess Cash Flow, excluding therefrom any amounts
constituting the Available Distributions Amount, plus (y) 100% of the Available
Distribution Amount, to the extent that such sum is Not Otherwise Applied.

 

(b)  Notwithstanding anything to the contrary
contained in clause (a)(i) above, to the extent that the aggregate amount of
Capital Expenditures made by the Borrower and the Restricted Subsidiaries in
any fiscal year pursuant to Section 7.16(a)(i) is less than the maximum
amount of Capital Expenditures permitted by Section 7.16(a)(i) with respect to
such fiscal year, the amount of such difference (the “Rollover Amount”)  may be carried forward and used to make Capital Expenditures
in the next succeeding fiscal year; provided that
Capital Expenditures in any fiscal year shall be counted against the base
amount set forth in Section 7.16(a)(i) with respect to such fiscal year
after being counted against any Rollover Amount available with respect to such
fiscal year.

 

SECTION 7.17. Sale-Leaseback Transactions.  Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal or mixed, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred except (a)
to the extent that (i) the sale of such property is permitted by Section 7.05
and (ii) any Capitalized Leases or Liens arising in connection therewith
are permitted by Sections 7.01 and 7.03, respectively, (b) for the Casino Sale
Leaseback Transaction and (c) the Corporate Head Office Sale Leaseback Transaction.

 

ARTICLE VIII

 

Events Of Default and Remedies

 

SECTION 8.01. Events of Default.  Any of the following shall constitute an Event
of Default:

 

(a)  Non-Payment.
The Borrower or any other Loan Party fails to pay, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise, (i) when and as required to be paid herein, any amount of
principal of any Loan, or (ii) within five (5) Business Days after the
same becomes due, any interest on any Loan or any other amount payable
hereunder or with respect to any other Loan Document; or

 

(b)  Specific Covenants.
The Borrower or any other Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Sections 6.03(a) or 6.05(a) (solely with
respect to the Borrower) or Article 7; provided that
any Event of Default under Section 7.11 is subject to cure as contemplated
by Section 8.05; or

 

(c)  Other Defaults.
The Borrower or any other Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for thirty (30) days after notice thereof by the
Administrative Agent to the Borrower; or

 

(d)  Representations and
Warranties. Any representation, warranty, certification or statement
of fact made or deemed made by or on behalf of the Borrower or any other Loan
Party herein, in any other Loan Document, or in any document required to be
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made or furnished; or

 

107

 

(e)  Cross-Default. Any
Loan Party or any other Restricted Subsidiary (i) fails to make any payment
beyond the applicable grace period with respect thereto, if any (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Indebtedness (other than Indebtedness hereunder) having an
aggregate principal amount of not less than the Threshold Amount, or (ii) fails
to observe or perform any other agreement or condition relating to any such
Indebtedness, or any other event occurs (other than, with respect to
Indebtedness consisting of Swap Contracts, termination events or equivalent
events pursuant to the terms of such Swap Contracts), the effect of which
default or other event is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due or to be repurchased, prepaid, defeased or
redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease
or redeem such Indebtedness to be made, prior to its stated maturity; provided that this clause (e)(ii) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness, if such sale or transfer is
permitted hereunder and under the documents providing for such Indebtedness; or

 

(f)  Insolvency Proceedings,
Etc. Any Loan Party or any of the Restricted Subsidiaries institutes
or consents to the institution of any proceeding under any Debtor Relief Law,
or makes an assignment for the benefit of creditors; or applies for or consents
to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator, administrator, administrative receiver or similar
officer for it or for all or any material part of its property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator,
administrator, administrative receiver or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for sixty (60) calendar days; or any proceeding under
any Debtor Relief Law relating to any such Person or to all or any material
part of its property is instituted without the consent of such Person and
continues undismissed or unstayed for sixty (60) calendar days, or an order for
relief is entered in any such proceeding; or

 

(g)  Inability to Pay Debts; Attachment. (i) Any Loan Party or any other Restricted
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts in excess of the Threshold Amount as they become due or makes
a general assignment for the benefit of its creditors, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of the Loan Parties, taken as
a whole, and is not released, vacated or fully bonded within sixty (60) days
after its issue or levy; or

 

(h)  Judgments. There
is entered against any Loan Party or any Restricted Subsidiary a final judgment
or order for the payment of money in an aggregate amount exceeding the
Threshold Amount (to the extent not covered by independent third-party
insurance as to which the insurer has been notified of such judgment or order
and has not denied coverage) and such judgment or order shall not have been
satisfied, vacated, discharged or stayed or bonded pending an appeal for a  period of sixty (60) consecutive days; or

 

(i)  ERISA. (i) An
ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of any Loan
Party under Title IV of ERISA in an aggregate amount which could reasonably be
expected to result in a Material Adverse Effect, or (ii) any Loan Party or any
ERISA Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount which could reasonably be expected to result in a Material Adverse
Effect; or

 

(j)  Invalidity of Loan
Documents. Any material provision of any Loan Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or

 

108

 

thereunder (including as a result of a transaction permitted under
Section 7.04 or 7.05) or as a result of acts or omissions by the
Administrative Agent or any Lender or the satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party contests
in writing the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies in writing that it has any or further liability
or obligation under any Loan Document (other than as a result of repayment in
full of the Obligations and termination of the Aggregate Commitments), or
purports in writing to revoke or rescind any Loan Document; or

 

(k)  Change of Control. There
occurs any Change of Control; or

 

(l)  Collateral Documents. (i)
Any Collateral Document after delivery thereof pursuant to Section 4.01 or
6.11 shall for any reason (other than pursuant to the terms thereof including
as a result of a transaction permitted under Section 7.04 or 7.05) cease
to create a valid and perfected lien, with the priority required by the
Collateral Documents, (or other security purported to be created on the
applicable Collateral) on and security interest in any material portion of the Collateral
purported to be covered thereby, subject to Permitted Liens, except to the
extent that any such loss of perfection or priority results from the failure of
the Administrative Agent to maintain possession of certificates actually
delivered to it representing securities pledged under the Collateral Documents
or to file Uniform Commercial Code continuation statements, or (ii) any of the
Equity Interests of the Borrower or any other Loan Party ceasing to be pledged
pursuant to the Security Agreement free of Liens other than Liens created by
the Security Agreement or any nonconsensual Liens arising solely by operation
of Law; or

 

(m)  Junior Financing
Documentation. (i) Any of the Obligations of the Loan Parties under
the Loan Documents for any reason shall cease to be “Senior Indebtedness” (or
any comparable term) or “Senior Secured Financing” (or any comparable term)
under, and as defined in any Junior Financing Documentation or (ii) the
subordination provisions set forth in any Junior Financing Documentation shall,
in whole or in part, cease to be effective or cease to be legally valid,
binding and enforceable against the holders of any Junior Financing, if
applicable; or

 

(n)  Loss or Revocation of
Casino License. Any Casino License (or the aggregate number of
licenses in the case of clause (ii) of the definition of “Casino Licenses”) for
any Core Property is revoked, suspended, rescinded, denied or not renewed when
required in accordance with its terms and as a result the casino or casinos
governed thereby are not able to operate for a period of three (3) or more
days; or

 

(o)  Amendment or Termination
of Material Contracts. Any Material Contract shall, in whole or in
part, be amended, supplemented, modified, terminated (other than upon the
expiration of the term thereof), cease to be effective or cease to be the
legally valid, binding and enforceable obligation in any material respect of
any party thereto, in each case if the effect of such amendment, supplement,
modification, termination or other action, could reasonably be expected to have
a Material Adverse Effect.

 

SECTION 8.02. Remedies Upon Event of Default.  If any Event of Default occurs and is
continuing, the Administrative Agent may and, at the request of the Required
Lenders, shall take any or all of the following actions:

 

(a)  declare the commitment of each Lender to make
Loans and any obligation of the L/C Issuers to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;

 

(b)  declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to

 

109

 

be immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower;

 

(c)  require that the Borrower Cash Collateralize
the L/C Obligations (in an amount equal to the then Outstanding Amount thereof);
and

 

(d)  exercise on behalf of itself and the Lenders
all rights and remedies available to it and the Lenders under the Loan
Documents or applicable Law;

 

provided that upon the occurrence of any event
described in Section 8.01(f) (subject to Section 8.03) or actual or deemed
entry of an order for relief with respect to the Borrower under the Bankruptcy
Code of the United States, the obligation of each Lender to make Loans and any
obligation of the L/C Issuers to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.

 

SECTION 8.03. Exclusion of Immaterial Subsidiaries.  Solely for the purpose of determining whether
a Default has occurred under clause (e), (f), (g) or (h) of Section 8.01,
any reference in any such clause to any Restricted Subsidiary or Loan Party
shall be deemed not to include any Immaterial Subsidiary.

 

SECTION 8.04. Application of Funds.  After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

 

First, to
payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (other than principal and interest, but including
Attorney Costs payable under Section 10.04 and amounts payable under
Article 3) payable to the Administrative Agent in its capacity as such;

 

Second, to
payment of that portion of the Obligations constituting fees, indemnities and
other amounts (other than principal and interest) payable to the Secured
Parties (including Attorney Costs payable under Section 10.05 and amounts
payable under Article 3), ratably among them in proportion to the amounts
described in this clause Second
payable to them;

 

Third, to
payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and L/C Borrowings, ratably among the Secured Parties in
proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to
payment of that portion of the Obligations constituting unpaid principal of the
Loans and L/C Borrowings, the termination value under Secured Hedge Obligations
and the Cash Management Obligations, ratably among the Lenders in proportion to
the respective amounts described in this clause Fourth held by them;

 

Fifth, to the
Administrative Agent for the account of the L/C Issuers, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit;

 

110

 

Sixth, to the
payment of all other Obligations of the Loan Parties that are due and payable
to the Administrative Agent and the other Secured Parties on such date, ratably
based upon the respective aggregate amounts of all such Obligations owing to
the Administrative Agent and the other Secured Parties on such date; and

 

Last, the
balance, if any, after all of the Obligations have been indefeasibly paid in
full, to the Borrower or as otherwise required by Law.

 

Subject to
Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Fifth
above shall be applied to satisfy drawings under such Letters of Credit as they
occur. If any amount remains on deposit as Cash Collateral after all Letters of
Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above and, if
no Obligations remain outstanding, to the Borrower.

 

SECTION 8.05. Borrower’s Right to Cure.  Notwithstanding anything to the contrary
contained in Section 8.01, in the event of any Event of Default under any
covenant set forth in Section 7.11 and until the expiration of the tenth
(10th) day after the date on which financial statements are required
to be delivered with respect to the applicable fiscal quarter hereunder, the
Borrower may engage in a Permitted Equity Issuance to any of the Equity
Investors and apply the amount of the Net Cash Proceeds thereof to increase
Consolidated EBITDA with respect to such applicable quarter; provided that such Net Cash Proceeds (i) are actually
received by the Borrower (including through capital contribution of such Net
Cash Proceeds by the Holding Companies to the Borrower) no later than ten (10)
days after the date on which financial statements are required to be delivered
with respect to such fiscal quarter hereunder and (ii) do not exceed the
aggregate amount necessary to cure such Event of Default under
Section 7.11 for any applicable period; provided,
further, that the Borrower shall not be
permitted to engage in any more than two Permitted Equity Issuances in any
consecutive four fiscal-quarter period in reliance on this Section 8.05. The
parties hereby acknowledge that this Section 8.05(a) may not be relied on
for purposes of calculating any financial ratios other than as applicable to
Section 7.11 and shall not result in any adjustment to any amounts other
than the amount of the Consolidated EBITDA referred to in the immediately
preceding sentence.

 

(a)  In each period of four fiscal quarters, there
shall be at least two (2)  consecutive
fiscal quarters in which no cure set forth in Section 8.05(a) is made.

 

ARTICLE IX

 

Administrative Agent and Other Agents

 

SECTION 9.01. Appointment and Authorization of Agents.  Each Lender hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere herein or in any other Loan Document, the
Administrative Agent shall have no duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender or participant, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Loan Documents with reference to any Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such

 

111

 

term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.

 

(a)  Each L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and each such L/C Issuer shall have all of the benefits
and immunities (i) provided to the Agents in this Article 9 with respect to any
acts taken or omissions suffered by such L/C Issuer in connection with Letters
of Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Agent” as used in this Article 9 and in the definition of
“Agent-Related Person” included such L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to such L/C
Issuer.

 

(b)  The Administrative Agent shall also act as
the “collateral agent” under the Loan Documents, and each of the Lenders (in
its capacities as a Lender, Swing Line Lender (if applicable), L/C Issuer (if
applicable) and a potential Hedge Bank) hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of (and to hold any
security interest created by the Collateral Documents for and on behalf of or
on trust for) such Lender for purposes of acquiring, holding and enforcing any
and all Liens on Collateral granted by any of the Loan Parties to secure any of
the Secured Obligations, together with such powers and discretion as are
reasonably incidental thereto. In this connection, the Administrative Agent, as
“collateral agent” (and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.02 for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article 9 (including,
Section 9.07, as though such co-agents, sub-agents and attorneys-in-fact
were the “collateral agent” under the Loan Documents) as if set forth in full
herein with respect thereto.

 

SECTION 9.02. Delegation of Duties.  The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document (including for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising any rights and
remedies thereunder) by or through agents, employees or attorneys-in-fact
including for the purpose of any Borrowings, such sub-agents as shall be deemed
necessary by the Administrative Agent and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or sub-agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct (as determined
in the final judgment of a court of competent jurisdiction).

 

SECTION 9.03. Liability of Agents.  No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct,
as determined by the final judgment of a court of competent jurisdiction, in
connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof, contained
herein or in any other Loan Document, or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or

 

112

 

participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party or any Affiliate thereof.

 

SECTION 9.04. Reliance by Agents.  Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Loan Party), independent accountants and other experts selected by such
Agent. Each Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

 

(a)  For purposes of determining compliance with
the conditions specified in Section 4.01, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received notice from such Lender prior to
the proposed Closing Date specifying its objection thereto.

 

SECTION 9.05. Notice of Default.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default.” The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take such
action with respect to any Event of Default as may be directed by the Required
Lenders in accordance with Article 8; provided that
unless and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable or in the best interest of the Lenders.

 

SECTION 9.06. Credit Decision; Disclosure of Information by Agents.
 Each Lender acknowledges that no
Agent-Related Person has made any representation or warranty to it, and that no
act by any Agent hereafter taken, including any consent to and acceptance of
any assignment or review of the affairs of any Loan Party or any Affiliate thereof,
shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession.
Each Lender represents to each Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower and the other Loan Parties
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis,

 

113

 

appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Borrower and the
other Loan Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by any Agent herein, such Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any of the Loan Parties or
any of their respective Affiliates which may come into the possession of any
Agent-Related Person.

 

SECTION 9.07. Indemnification of Agents.  Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Administrative Agent, the Supplemental Administrative Agents (if any) and, to
the extent of any determinations required to be made under the Loan Documents
(including determinations pursuant to Sections 2.14, 4.01, 5.05(ii) and 7.13(b)
of this Agreement) each Joint Lead Arranger and, in each such case, their
respective Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons (to the extent not reimbursed by or on behalf
of any Loan Party and without limiting the obligation of any Loan Party to do
so), pro rata, and hold harmless each such Person from and against any and all
Indemnified Liabilities incurred by it in exercising the powers, rights and
remedies of the Administrative Agent or the Supplemental Administrative Agents
(if any) or performing duties of the Administrative Agent or the Supplemental
Administrative Agents (if any) hereunder or under the other Loan Documents or
otherwise in its capacity of the Administrative Agent or the Supplemental
Administrative Agents (if any) or, in the case of the Joint Lead Arrangers
their respective Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of the Joint Lead Arrangers, any and all Indemnified
Liabilities incurred by it in making any determinations of the Joint Lead
Arrangers as described above; provided that
no Lender shall be liable for the payment to any such Person of any portion of
such Indemnified Liabilities resulting from such Person’s own gross negligence
or willful misconduct, as determined by the final judgment of a court of
competent jurisdiction; provided that
no action taken in accordance with the directions of the Required Lenders (or
such other number or percentage of the Lenders as shall be required by the Loan
Documents) shall be deemed to constitute gross negligence or willful misconduct
for purposes of this Section 9.07. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.07
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person. Without limitation of the foregoing, each
Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of the Borrower. The undertaking in this Section 9.07 shall
survive termination of the Aggregate Commitments, the payment of all other
Obligations and the resignation of the Administrative Agent.

 

SECTION 9.08. Agents in their Individual Capacities.  DBTCA and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire
Equity Interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with each of the Loan
Parties and their respective Affiliates as though DBTCA were not the
Administrative Agent or an L/C Issuer hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, DBTCA or its Affiliates may receive information regarding any Loan
Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, DBTCA shall have
the same rights and powers under this Agreement as any other Lender and may
exercise such rights and

 

114

 

powers as though it were not the Administrative Agent or an L/C Issuer,
and the terms “Lender” and “Lenders” include DBTCA in its individual capacity.

 

SECTION 9.09. Successor Agents.  The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days’ notice to the Lenders and the
Borrower. If the Administrative Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be consented to by the Borrower at all
times other than during the existence of an Event of Default under
Section 8.01(f) or (g) (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor agent from among the Lenders. Upon the acceptance of its
appointment as successor agent hereunder, the Person acting as such successor
agent shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term “Administrative Agent,” shall mean such
successor administrative agent and/or supplemental administrative agent, as the
case may be, and the retiring Administrative Agent’s appointment, powers and
duties as the Administrative Agent shall be terminated. After the retiring
Administrative Agent’s resignation hereunder as the Administrative Agent, the
provisions of this Article 9 and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as the Administrative Agent by the date which is thirty (30) days
following the retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. Upon the acceptance of any appointment
as the Administrative Agent hereunder by a successor and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to (a) continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents or (b) otherwise ensure
that the Collateral and Guarantee Requirement is satisfied, the Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After the retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this
Article 9 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Administrative Agent.

 

SECTION 9.10. Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether the Administrative Agent shall have
made any demand on the Borrower) shall be entitled and empowered, by intervention
in such proceeding or otherwise:

 

(a)  to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
L/C Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders
and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders and the Administrative Agent under Sections
2.03(h) and (i), 2.09 and 10.04) allowed in such judicial proceeding; and

 

115

 

(b)  to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders, to
pay to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Agents and their respective agents
and counsel, and any other amounts due the Administrative Agent under Sections
2.09 and 10.04.

 

Nothing contained herein
shall be deemed to authorize the Administrative Agent to authorize or consent
to or accept or adopt on behalf of any Lender any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or to authorize the Administrative Agent to vote in respect of
the claim of any Lender in any such proceeding.

 

SECTION 9.11. Collateral and Guaranty Matters.  The
Lenders irrevocably agree:

 

(a)  that any Lien on any property granted to or
held by the Administrative Agent under any Loan Document shall be automatically
released (i) upon termination of the Aggregate Commitments and payment in
full of all Obligations (other than (x) obligations under Secured Hedge
Agreements not yet due and payable, (y) Cash Management Obligations not yet due
and payable and (z) contingent indemnification obligations not yet accrued and
payable) and the expiration or termination of all Letters of Credit,
(ii) at the time the property subject to such Lien is transferred or to be
transferred as part of or in connection with any transfer permitted hereunder
or under any other Loan Document to any Person other than the Borrower or any
of its Domestic Subsidiaries that are Restricted Subsidiaries,
(iii) subject to Section 10.01, if the release of such Lien is approved,
authorized or ratified in writing by the Required Lenders, or (iv) if the
property subject to such Lien is owned by a Guarantor, upon release of such
Guarantor from its obligations under its Guaranty pursuant to clause (c) below;

 

(b)  to release or subordinate any Lien on any
property granted to or held by the Administrative Agent under any Loan Document
to the holder of any Permitted Lien on such property that is permitted by
Section 7.01(i); and

 

(c)  that any Guarantor shall be automatically
released from its obligations under the Guaranty if such Person ceases to be a
Restricted Subsidiary as a result of a transaction or designation permitted
hereunder; provided that no such release shall
occur if such Guarantor continues to be a guarantor in respect of the Existing
Notes or any Junior Financing.

 

Upon request by the
Administrative Agent at any time, the Required Lenders will confirm in writing
the Administrative Agent’s authority to release or subordinate its interest in
particular types or items of property, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 9.11. In each case
as specified in this Section 9.11, the Administrative Agent will (and each
Lender irrevocably authorizes the Administrative Agent to), at the Borrower’s
expense, execute and deliver to the applicable Loan Party such documents as
such Loan Party may reasonably request to evidence the release or subordination
of such item of Collateral from the assignment and security interest granted
under the Collateral Documents, or to evidence the release of such Guarantor
from its obligations under the Guaranty, in each case in accordance with the
terms of the Loan Documents and this Section 9.11.

 

SECTION 9.12. Other Agents; Joint Lead Arrangers and Managers.  None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a

 

116

 

“syndication agent”, “joint bookrunner” or “joint lead arranger” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders or other Persons so identified shall have or
be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders
or other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

 

SECTION 9.13. Appointment of Supplemental Administrative Agents.
 (a) 
It is the purpose of this Agreement and the other Loan Documents that
there shall be no violation of any Law of any jurisdiction denying or
restricting the right of banking corporations or associations to transact
business as agent or trustee in such jurisdiction. It is recognized that in
case of litigation under this Agreement or any of the other Loan Documents, and
in particular in case of the enforcement of any of the Loan Documents, or in
case the Administrative Agent deems that by reason of any present or future Law
of any jurisdiction it may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, the Administrative
Agent is hereby authorized to appoint an additional individual or institution
selected by the Administrative Agent in its sole discretion as a separate
trustee, co-trustee, administrative agent, collateral agent, administrative
sub-agent or administrative co-agent (any such additional individual or
institution being referred to herein individually as a “Supplemental
Administrative Agent” and collectively as “Supplemental
Administrative Agents”).

 

(a)  In the event that the Administrative Agent
appoints a Supplemental Administrative Agent with respect to any Collateral,
(i) each and every right, power, privilege or duty expressed or intended by
this Agreement or any of the other Loan Documents to be exercised by or vested
in or conveyed to the Administrative Agent with respect to such Collateral
shall be exercisable by and vest in such Supplemental Administrative Agent to
the extent, and only to the extent, necessary to enable such Supplemental
Administrative Agent to exercise such rights, powers and privileges with
respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Administrative Agent shall run to and be enforceable by either the
Administrative Agent or such Supplemental Administrative Agent, and (ii) the
provisions of this Article 9 and of Sections 10.04 and 10.05 that refer to the
Administrative Agent shall inure to the benefit of such Supplemental
Administrative Agent and all references therein to the Administrative Agent
shall be deemed to be references to the Administrative Agent and/or such
Supplemental Administrative Agent, as the context may require.

 

(b)  Should any instrument in writing from the
Borrower, or any other Loan Party be required by any Supplemental
Administrative Agent so appointed by the Administrative Agent for more fully
and certainly vesting in and confirming to him or it such rights, powers,
privileges and duties, the Borrower shall, or shall cause such Loan Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by the Administrative Agent. In case any Supplemental Administrative Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Administrative Agent, to the extent permitted by Law, shall vest in and be
exercised by the Administrative Agent until the appointment of a new
Supplemental Administrative Agent.

 

117

 

ARTICLE X

 

Miscellaneous

 

SECTION 10.01. Amendments, Etc. Except as otherwise set forth in
this Agreement, no amendment or waiver of any provision of this Agreement or
any other Loan Document, and no consent to any departure by the Borrower or any
other Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Loan Party, as the case may
be, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided
that, no such amendment, waiver or consent shall:

 

(a)  extend or increase the Commitment of any
Lender without the written consent of each Lender directly affected thereby (it
being understood that a waiver of any condition precedent set forth in
Section 4.02 or the waiver of any Default, mandatory prepayment or
mandatory reduction of the Commitments shall not constitute an extension or
increase of any Commitment of any Lender);

 

(b)  postpone any date scheduled for, or reduce
the amount of, or subordinate any payment of principal or interest under
Section 2.07 or 2.08 or any fees (including fees set forth in Section
2.05(d)) without the written consent of each Lender directly affected thereby,
it being understood that the waiver of (or amendment to the terms of) any
mandatory prepayment of the Term Loans shall not constitute a postponement of
any date scheduled for the payment of principal or interest;

 

(c)  reduce the principal of, or the rate of
interest specified herein on, any Loan or L/C Borrowing, or (subject to clause
(iii) of the second proviso to this Section 10.01) any fees (including
fees set forth in Section 2.05(d)) or other amounts payable hereunder or under
any other Loan Document without the written consent of each Lender directly
affected thereby, it being understood that any change to the definition of
Total Leverage Ratio or in the component definitions thereof shall not
constitute a reduction in the rate; provided that,
only the consent of the Required Lenders shall be necessary to amend the
definition of “Default Rate” or to waive any obligation of the Borrower to pay
interest at the Default Rate;

 

(d)  change any provision of this
Section 10.01, the definition of “Required Lenders” or “Pro Rata Share” or
Section 2.06(b), 8.04 or 2.13 without the written consent of all Lenders;

 

(e)  other than in a transaction permitted under
Section 7.05, release all or a substantial portion of the Collateral in
any transaction or series of related transactions, without the written consent
of each Lender; or

 

(f)  other than in connection with a transaction
permitted under Section 7.04 or 7.05, release all or a substantial portion
of the aggregate value of the Guarantees, without the written consent of each
Lender;

 

and provided
further that (i) no amendment, waiver or consent shall, unless
in writing and signed by each L/C Issuer in addition to the Lenders required
above, affect the rights or duties of an L/C Issuer under this Agreement or any
Letter of Credit Application relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Swing Line Lender in addition to the Lenders required
above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required
above, affect the rights or duties of, or any fees or other amounts payable to,
the Administrative Agent under this Agreement or any other Loan Document; (iv)
Section 10.07(h) may not be amended, waived or otherwise modified without
the consent

 

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of each Granting Lender all
or any part of whose Loans are being funded by an SPC at the time of such
amendment, waiver or other modification; and (v) the consent of Lenders holding
more than 50% of any Class of Commitments (or, in the event such Lenders
constitute less than three Lenders (and three or more Lenders holding such
Class of Commitments (other than Defaulting Lenders) then exist), the consent
of such Lenders plus a number of additional Lenders (that are not Defaulting
Lenders) holding such Class of Commitments so that the consent of not less than
three Lenders holding such Class of Commitments is obtained) shall be required
with respect to any amendment that (x) waives any condition precedent set forth
in Section 4.02 solely with respect to the making of Loans or other extensions
of credit by such Class (it being understood that a general waiver of a Default
or an Event of Default by the Required Lenders, as opposed to a waiver only for
the purposes of making Loans or other extensions of credit, shall not
constitute a waiver of a condition precedent governed under this clause) or (y)
by its terms adversely affects the rights of such Class in respect of payments
hereunder in a manner different than such amendment affects other Classes.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender (it being understood that any
Commitments or Loans held or deemed held by any Defaulting Lender shall be
excluded for a vote of the Lenders hereunder requiring any consent of the
Lenders).

 

Notwithstanding the
foregoing, this Agreement may be amended (or amended and restated) with the
written consent of the Required Lenders, the Administrative Agent and the
Borrower (a) to add one or more additional credit facilities to this Agreement
and to permit the extensions of credit from time to time outstanding thereunder
and the accrued interest and fees in respect thereof to share ratably in the
benefits of this Agreement and the other Loan Documents with the Term Loans and
the Revolving Credit Loans and the accrued interest and fees in respect thereof
and (b) to include appropriately the Lenders holding such credit facilities in
any determination of the Required Lenders.

 

Notwithstanding anything to
the contrary contained in Section 10.01, guarantees, collateral security
documents and related documents executed by Foreign Subsidiaries in connection
with this Agreement may be in a form reasonably determined by the
Administrative Agent and may be, together with this Agreement, amended and
waived with the consent of the Administrative Agent at the request of the
Borrower without the need to obtain the consent of any other Lender if such
amendment or waiver is delivered in order (i) to comply with local Law or
advice of local counsel, (ii) to cure ambiguities or defects or (iii) to cause
such guarantee, collateral security document or other document to be consistent
with this Agreement and the other Loan Documents.

 

SECTION 10.02. Notices and Other Communications; Facsimile Copies.
General. Unless otherwise expressly
provided herein, all notices and other communications provided for hereunder or
under any other Loan Document shall be in writing (including by facsimile
transmission). All such written notices shall be mailed, faxed or delivered to
the applicable address, facsimile number or electronic mail address, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

 

(i)  if to the Borrower, the Administrative Agent,
an L/C Issuer or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties; and

 

(ii)  if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such

 

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party in a notice to the
Borrower, the Administrative Agent, the L/C Issuers and the Swing Line Lender.

 

All such notices and other
communications shall be deemed to be given or made upon the earlier to occur of
(i) actual receipt by the relevant party hereto and (ii) (A) if delivered by
hand or by courier, when signed for by or on behalf of the relevant party
hereto; (B) if delivered by mail, four (4) Business Days after deposit in the
mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt
has been confirmed by telephone; and (D) if delivered by electronic mail (which
form of delivery is subject to the provisions of Section 10.02(c)), when
delivered; provided that notices and other
communications to the Administrative Agent, the L/C Issuers and the Swing Line
Lender pursuant to Article 2 shall not be effective until actually received by
such Person. In no event shall a voice mail message be effective as a notice,
communication or confirmation hereunder.

 

(b)  Effectiveness of Facsimile
Documents and Signatures. Loan Documents may be transmitted and/or
signed by facsimile. The effectiveness of any such documents and signatures
shall, subject to applicable Law, have the same force and effect as manually
signed originals and shall be binding on all Loan Parties, the Agents and the
Lenders.

 

(c)  Reliance by Agents and
Lenders. The Administrative Agent and the Lenders shall be entitled
to rely and act upon any notices (including telephonic Committed Loan Notices
and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower in the absence of gross
negligence or willful misconduct. All telephonic notices to the Administrative
Agent may be recorded by the Administrative Agent, and each of the parties
hereto hereby consents to such recording.

 

SECTION 10.03. No Waiver; Cumulative Remedies. No failure by any
Lender or the Administrative Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided, and provided under each other Loan Document, are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by Law.

 

SECTION 10.04. Attorney Costs, Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Administrative Agent, the Syndication Agent,
the Co-Documentation Agents and the Joint Lead Arrangers for all reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation, syndication and execution of this Agreement and the other Loan
Documents, and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
thereby are consummated), and the consummation and administration of the
transactions contemplated hereby and thereby, including all Attorney Costs of
Latham & Watkins LLP, and (b) to pay or reimburse the Administrative Agent,
the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers
and each Lender for all out-of-pocket costs and expenses incurred in connection
with the enforcement of any rights or remedies under this Agreement or the
other Loan Documents (including all such costs and expenses incurred during any
legal proceeding, including any proceeding under any Debtor Relief Law, and
including all Attorney Costs of counsel to the Administrative Agent). The
foregoing costs and expenses shall include all reasonable search, filing,
recording and title insurance charges and fees and taxes related thereto, and
other (reasonable, in the case 

 

120

 

of Section 10.04(a)) out-of-pocket expenses incurred by any Agent.
The agreements in this Section 10.04 shall survive the termination of the
Aggregate Commitments and repayment of all other Obligations. All amounts due
under this Section 10.04 shall be paid within ten (10) Business Days of receipt
by the Borrower of an invoice relating thereto setting forth such expenses in
reasonable detail. If any Loan Party fails to pay when due any costs, expenses
or other amounts payable by it hereunder or under any Loan Document, such
amount may be paid on behalf of such Loan Party by the Administrative
Agent  in its sole discretion.

 

SECTION 10.05. Indemnification by the Borrower. Whether or not
the transactions contemplated hereby are consummated, the Borrower shall
indemnify and hold harmless each Agent-Related Person, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents,
trustees, investment advisors and attorneys-in-fact (collectively the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of
or in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby
or the consummation of the transactions contemplated thereby, (b) any
Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by an L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), or (c)
any actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by the Borrower, any
Subsidiary or any other Loan Party, or any Environmental Liability related in
any way to the Borrower, any Subsidiary or any other Loan Party, or (d) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”), in all cases,
whether or not caused by or arising, in whole or in part, out of the negligence
of the Indemnitee; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses or disbursements resulted from the
gross negligence or willful misconduct of such Indemnitee or of any affiliate,
director, officer, employee, counsel, agent or attorney-in-fact of such Indemnitee,
in each case as determined by a final, non-appealable judgment. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee or any Loan Party have any liability for any special, punitive,
indirect or consequential damages relating to this Agreement or any other Loan
Document or arising out of its activities in connection herewith or therewith
(whether before or after the Closing Date). In the case of an investigation,
litigation or other proceeding to which the indemnity in this
Section 10.05 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by any Loan Party, its
directors, stockholders or creditors or an Indemnitee or any other Person,
whether or not any Indemnitee is otherwise a party thereto and whether or not
any of the transactions contemplated hereunder or under any of the other Loan
Documents is consummated. All amounts due under this Section 10.05 shall
be paid within ten (10) Business Days after demand therefor; provided, however, that
such Indemnitee shall promptly refund such amount to the extent that there is a
final judicial or arbitral determination that such Indemnitee was not entitled
to indemnification or contribution rights with respect to such payment pursuant
to the express terms of this Section 10.05. To the extent that the undertakings
to defend, indemnify, pay and hold harmless set forth in this Section 10.05 may
be unenforceable in whole or in part because they are violative of any Law or
public policy, the Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable

 

121

 

law to the payment and satisfaction of all indemnified liabilities
incurred by any Indemnitee. The agreements in this Section 10.05 shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.

 

SECTION 10.06. Payments Set Aside. To the extent that any
payment by or on behalf of the Borrower is made to any Agent or any Lender, or
any Agent or any Lender exercises its right of setoff, and such payment or the
proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by such Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such setoff had not occurred,
and (b) each Lender severally agrees to pay to the Administrative Agent upon
demand its applicable share of any amount so recovered from or repaid by any
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time
to time in effect.

 

SECTION 10.07. Successors and Assigns.

 

(a)  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee, (ii) by way of participation in accordance with the
provisions of Section 10.07(e), (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 10.07(g) or (iv)
to an SPC in accordance with the provisions of Section 10.07(h) (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby, Participants to the extent provided in
Section 10.07(e) and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.

 

(b)  (i) 
Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (other than to Disqualified
Institutions) (“Assignees”) all or
a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this
Section 10.07(b), participations in L/C Obligations and in Swing Line
Loans) at the time owing to it) with the prior written consent (such consent
not to be unreasonably withheld) of:

 

(A)  the Borrower; provided that no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or,
if an Event of Default has occurred and is continuing, any Assignee;

 

(B)  the Administrative Agent; provided that no consent of the
Administrative Agent shall be required for an assignment of a Term Loan to a
Lender or an Affiliate of a Lender and no consent of the Administrative Agent
shall be required for an assignment to an Agent or an Affiliate of an Agent;

 

122

 

(C)  each Principal L/C Issuer at the time of such
assignment; provided that no
consent of the Principal L/C Issuers shall be required for any assignment to an
Agent or an Affiliate of an Agent; and

 

(D)  the Swing Line Lender; provided that no consent of the Swing Line
Lender shall be required for any assignment to an Agent or an Affiliate of an
Agent.

 

(ii)  Assignments shall be subject to the following
additional conditions:

 

(A)  except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment or Loans of any Class, the amount
of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000 unless each of the Borrower and the Administrative
Agent otherwise consents; provided
that (1) no such consent of the Borrower shall be required if an Event of
Default has occurred and is continuing and (2) such amounts shall be aggregated
in respect of each Lender and its Affiliates or Approved Funds, if any;

 

(B)  the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500; and

 

(C)  the Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire;

 

(D)  none of the Holding Companies, any direct or
indirect holder of the Equity Interest in any Holding Company, the Borrower,
any Affiliate of the Borrower or any Person that has been denied an approval or
a license, or otherwise found unsuitable, under the Laws related to racing,
riverboat and/or casino gaming operations in any relevant jurisdiction
applicable to the Lenders shall be an Eligible Assignee.

 

This paragraph (b) shall not
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Facilities on a non-pro rata basis.

 

(c)  Subject to acceptance and recording thereof
by the Administrative Agent pursuant to Section 10.07(d), from and after
the effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon request, and
the surrender by the assigning Lender of its Note, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this clause (c) shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 10.07(e).

 

123

 

(d)  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and related interest amounts) of the
Loans, L/C Obligations (specifying the Unreimbursed Amounts), L/C Borrowings
and amounts due under Section 2.03, owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).
The entries in the Register shall be conclusive, absent manifest error, and the
Borrower, the Agents and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, any Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(e)  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agents and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or the other Loan Documents; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 10.01 that directly
affects such Participant. Subject to Section 10.07(f), the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 3.01, 3.04
and 3.05 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 10.07(c) but shall not be
entitled to recover greater amounts under such Sections than the selling Lender
would be entitled to recover unless the sale of such participation was made
with Borrower’s prior consent. To the extent permitted by applicable Law, each
Participant also shall be entitled to the benefits of Section 10.09 as
though it were a Lender; provided that such
Participant agrees to be subject to Section 2.13 as though it were a
Lender.

 

(f)  A Participant shall not be entitled to
receive any greater payment under Section 3.01, 3.04 or 3.05 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent. A
Participant shall not be entitled to the benefits of Section 3.01 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 10.15 as though it were a Lender.

 

(g)  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

(h)  Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose funding vehicle identified
as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an “SPC”)
the option to provide all or any part of any Loan that such Granting Lender
would otherwise be obligated to make pursuant to this

 

124

 

Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
and (ii) if an SPC elects not to exercise such option or otherwise fails to
make all or any part of such Loan, the Granting Lender shall be obligated to
make such Loan pursuant to the terms hereof. Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including its obligations
under Section 3.01, 3.04 or 3.05), (ii) no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement for which a Lender
would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder. The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Notwithstanding anything to the contrary contained herein, any
SPC may (i) with notice to, but without prior consent of the Borrower and the
Administrative Agent and with the payment of a processing fee of $3,500, assign
all or any portion of its right to receive payment with respect to any Loan to
the Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Loans to any rating agency, commercial
paper dealer or provider of any surety or Guarantee or credit or liquidity
enhancement to such SPC.

 

(i)  Notwithstanding anything to the contrary
contained herein, (1) any Lender may in accordance with applicable Law create a
security interest in all or any portion of the Loans owing to it and the Note,
if any, held by it and (2) any Lender that is a Fund may create a security
interest in all or any portion of the Loans owing to it and the Note, if any,
held by it to the trustee for holders of obligations owed, or securities
issued, by such Fund as security for such obligations or securities; provided that unless and until such trustee actually becomes
a Lender in compliance with the other provisions of this Section 10.07,
(i) no such pledge shall release the pledging Lender from any of its
obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents
even though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.

 

(j)  Notwithstanding anything to the contrary
contained herein, any L/C Issuer or the Swing Line Lender may, upon thirty (30)
days’ notice to the Borrower and the Lenders, resign as an L/C Issuer or the
Swing Line Lender, respectively; provided that
on or prior to the expiration of such 30-day period with respect to such
resignation, the relevant L/C Issuer or the Swing Line Lender shall have
identified a successor L/C Issuer or Swing Line Lender reasonably acceptable to
the Borrower willing to accept its appointment as successor L/C Issuer or Swing
Line Lender, as applicable. In the event of any such resignation of an L/C
Issuer or the Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders willing to accept such appointment a successor L/C Issuer or
Swing Line Lender hereunder; provided that
no failure by the Borrower to appoint any such successor shall affect the
resignation of the relevant L/C Issuer or the Swing Line Lender, as the case
may be, except as expressly provided above. If an L/C Issuer resigns as an L/C
Issuer, it shall retain all the rights and obligations of an L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as an L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)). If the Swing Line Lender resigns as Swing Line Lender,
it shall retain all the rights of the Swing Line Lender provided for hereunder
with respect to Swing Line Loans made by it and outstanding as of the effective
date of such resignation, including the right to require the Lenders to make
Base Rate Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c).

 

(k)  Notwithstanding anything to the contrary contained
herein, no Assignee shall have recourse to the provisions of Sections 3.01 and
3.05 if the condition upon which such recourse is based was in existence at the
time of the applicable assignment under this Section 10.07.

 

125

 

SECTION 10.08. Confidentiality. Each of the Agents and the
Lenders agrees to use commercially reasonable efforts (equivalent to the
efforts each such Person applies to maintain the confidentiality of its own
confidential information) to maintain the confidentiality of the Information,
except that Information may be disclosed (a) to its Affiliates and its and its
Affiliates’ directors, officers, employees, trustees, investment advisors and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any Governmental
Authority; (c) to the extent required by applicable Laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this
Agreement; (e) subject to an agreement containing provisions substantially the
same as those of this Section 10.08 (or as may otherwise be reasonably
acceptable to the Borrower), to any pledgee referred to in Section 10.07(g),
counterparty to a Swap Contract, Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement; (f) with the written consent of the
Borrower; (g) to the extent such Information becomes publicly available other
than as a result of a breach of this Section 10.08; (h) to any
Governmental Authority or examiner (including the National Association of
Insurance Commissioners or any other similar organization) regulating any
Lender; (i) in connection with the exercise of any remedies hereunder or under
the other Loan Documents or any suit, action or proceeding relating to the
enforcement of its rights hereunder or thereunder or (j) to any rating
agency when required by it (it being understood that, prior to any such
disclosure, such rating agency shall undertake to preserve the confidentiality
of any Information relating to the Loan Parties received by it from such
Lender). In addition, the Agents and the Lenders may disclose the existence of
this Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Agents and the Lenders in connection with the administration and management of
this Agreement, the other Loan Documents, the Commitments, and the Credit
Extensions. For the purposes of this Section 10.08, “Information”
means all information received from any Loan Party relating to any Loan Party
or its business, other than any such information that is publicly available to
any Agent or any Lender prior to disclosure by any Loan Party other than as a
result of a breach of this Section 10.08; provided
that, in the case of information received from a Loan Party after the date
hereof, such information is clearly identified at the time of delivery as
confidential or (ii) is delivered pursuant to Section 6.01, 6.02 or 6.03
hereof.

 

SECTION 10.09. Setoff. In addition to any rights and remedies of
the Lenders provided by Law, upon the occurrence and during the continuance of
any Event of Default, each Lender and its Affiliates is authorized at any time
and from time to time, without prior notice to the Borrower or any other Loan
Party, any such notice being waived by the Borrower (on its own behalf and on
behalf of each Loan Party and its Subsidiaries) to the fullest extent permitted
by applicable Law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
Indebtedness at any time owing by, such Lender and its Affiliates to or for the
credit or the account of the respective Loan Parties and their Subsidiaries
against any and all Obligations owing to such Lender and its Affiliates
hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not such Agent or such Lender or Affiliate shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or Indebtedness. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set off and application made by such Lender; provided,
that the failure to give such notice shall not affect the validity of such
setoff and application. The rights of the Administrative Agent and each Lender
under this Section 10.09 are in addition to other rights and remedies
(including other rights of setoff) that the Administrative Agent and such
Lender may have.

 

SECTION 10.10. Interest Rate Limitation. Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents

 

126

 

(collectively, the “Charges”) shall
not exceed the maximum rate of non-usurious interest permitted by applicable
Law (the “Maximum Rate”). If any Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by an Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder. To the extent permitted by
applicable Law, the interest and other Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section 10.10 shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Rate to the date of repayment, shall have been
received by such Lender. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in this Agreement, unless and
until the rate of interest again exceeds the Maximum Rate, and at that time
this paragraph shall again apply. In no event shall the total interest received
by any Lender pursuant to the terms hereof exceed the amount that such Lender
could lawfully have received had the interest due hereunder been calculated for
the full term hereof at the Maximum Rate. If the Maximum Rate is calculated
pursuant to this Section 10.10, such interest shall be calculated at a daily
rate equal to the Maximum Rate divided by the number of days in the year in
which such calculation is made. If, notwithstanding the provisions of this
Section 10.10, a court of competent jurisdiction shall finally determine that a
Lender has received interest hereunder in excess of the Maximum Rate, the
Administrative Agent shall, to the extent permitted by applicable Law, promptly
apply such excess in the order specified in this Agreement and thereafter shall
refund any excess to the Borrower or as a court of competent jurisdiction may
otherwise order.

 

SECTION 10.11. Counterparts. This Agreement and each other Loan
Document may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. Delivery by telecopier of an executed counterpart of a signature
page to this Agreement and each other Loan Document shall be effective as
delivery of an original executed counterpart of this Agreement and such other
Loan Document. The Agents may also require that any such documents and
signatures delivered by telecopier be confirmed by a manually signed original
thereof; provided that the failure to request or
deliver the same shall not limit the effectiveness of any document or signature
delivered by telecopier.

 

SECTION 10.12. Integration. This Agreement, together with the
other Loan Documents, comprises the complete and integrated agreement of the
parties on the subject matter hereof and thereof and supersedes all prior
agreements, written or oral, on such subject matter. In the event of any
conflict between the provisions of this Agreement and those of any other Loan
Document, the provisions of this Agreement shall control; provided
that the inclusion of supplemental rights or remedies in favor of the Agents or
the Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favor of any
party, but rather in accordance with the fair meaning thereof.

 

SECTION 10.13. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any
Lender or on their behalf and notwithstanding that any Agent or any Lender may
have had notice or knowledge of any Default at the

 

127

 

time of any Credit Extension, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain
unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

SECTION 10.14. Severability. If any provision of this Agreement
or the other Loan Documents is held to be illegal, invalid or unenforceable,
the legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 10.15. Tax Forms. (i) 
Each Lender and Agent that is not a “United States person” within the
meaning of Section 7701(a)(30) of the Code (each, a “Foreign
Lender”) shall deliver to the Borrower and the Administrative Agent,
on or prior to the date which is ten (10) Business Days after the Closing Date
(or upon accepting an assignment of an interest herein), two duly signed,
properly completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, United States withholding tax on all payments to be made to such
Foreign Lender by the Borrower or any other Loan Party pursuant to this
Agreement or any other Loan Document) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Foreign Lender by the
Borrower or any other Loan Party pursuant to this Agreement or any other Loan
Document) or such other evidence reasonably satisfactory to the Borrower and
the Administrative Agent that such Foreign Lender is entitled to an exemption
from, or reduction of, United States withholding tax, including any exemption
pursuant to Section 871(h) or 881(c) of the Code, and in the case of a
Foreign Lender claiming such an exemption under Section 881(c) of the
Code, a certificate that establishes in writing to the Borrower and the
Administrative Agent that such Foreign Lender is not (i) a “bank” as defined in
Section 881(c)(3)(A) of the Code, (ii) a 10-percent stockholder within the
meaning of Section 871(h)(3)(B) of the Code, or (iii) a controlled foreign
corporation related to the Borrower with the meaning of Section 864(d) of
the Code. Thereafter and from time to time, each such Foreign Lender shall (A)
promptly submit to the Borrower and the Administrative Agent such additional
duly completed and signed copies of one or more of such forms or certificates
(or such successor forms or certificates as shall be adopted from time to time
by the relevant United States taxing authorities) as may then be available
under then current United States Laws and regulations to avoid, or such
evidence as is reasonably satisfactory to the Borrower and the Administrative
Agent of any available exemption from, or reduction of, United States
withholding taxes in respect of all payments to be made to such Foreign Lender
by the Borrower or other Loan Party pursuant to this Agreement, or any other
Loan Document, in each case, (1) on or before the date that any such form,
certificate or other evidence expires or becomes obsolete, (2) after the
occurrence of any event requiring a change in the most recent form, certificate
or evidence previously delivered by it to the Borrower and the Administrative
Agent and (3) from time to time thereafter if reasonably requested by the
Borrower or the Administrative Agent, and (B) promptly notify the Borrower and
the Administrative Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.

 

(ii)  Each Foreign Lender, to the extent it does
not act or ceases to act for its own account with respect to any portion of any
sums paid or payable to such Foreign Lender under any of the Loan Documents
(for example, in the case of a typical participation by such Foreign Lender),
shall deliver to the Borrower and the Administrative Agent on the date when
such Foreign Lender ceases to act for its own account with respect to any
portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Borrower or the Administrative Agent (in
either case, in the reasonable exercise of its discretion), (A) two duly signed
completed copies of the forms or statements required to be provided by such
Foreign Lender as set forth above, to establish the portion of any such sums
paid or payable with respect to which such Foreign Lender acts for its own
account that is not subject to United States withholding tax, and (B) two duly
signed completed copies of IRS Form W-8IMY (or any

 

128

 

successor thereto), together
with any information such Foreign Lender chooses to transmit with such form,
and any other certificate or statement of exemption required under the Code, to
establish that such Foreign Lender is not acting for its own account with
respect to a portion of any such sums payable to such Foreign Lender.

 

(iii)  The Borrower shall not be required to pay any
additional amount or any indemnity payment under Section 3.01 to (A) any
Foreign Lender if such Foreign Lender shall have failed to satisfy the
foregoing provisions of this Section 10.15(a), or (B) any U.S. Lender if
such U.S. Lender shall have failed to satisfy the provisions of
Section 10.15(b); provided
that (i) if such Lender shall have satisfied the requirement of this or
Section 10.15(b), as applicable, on the date such Lender became a Lender
or ceased to act for its own account with respect to any payment under any of
the Loan Documents, nothing in this Section 10.15(a) or
Section 10.15(b) shall relieve the Borrower of its obligation to pay any
amounts pursuant to Section 3.01 in the event that, as a result of any
change in any applicable Law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms, certificates or
other evidence at a subsequent date establishing the fact that such Lender or
other Person for the account of which such Lender receives any sums payable
under any of the Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate and (ii) nothing in this Section 10.15(a)
shall relieve the Borrower of its obligation to pay any amounts pursuant to
Section 3.01 in the event that the requirements of 10.15(a)(ii) have not
been satisfied if the Borrower is entitled, under applicable Law, to rely on any
applicable forms and statements required to be provided under this
Section 10.15 by the Foreign Lender that does not act or has ceased to act
for its own account under any of the Loan Documents, including in the case of a
typical participation.

 

(iv)  The Administrative Agent may deduct and
withhold any taxes required by any Laws to be deducted and withheld from any
payment under any of the Loan Documents.

 

(b)  Each Lender and Agent that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code
(each, a “U.S. Lender”) shall
deliver to the Administrative Agent and the Borrower two duly signed, properly
completed copies of IRS Form W-9 on or prior to the Closing Date (or on or
prior to the date it becomes a party to this Agreement), certifying that such
U.S. Lender is entitled to an exemption from United States backup withholding
tax, or any successor form. If such U.S. Lender fails to deliver such forms,
then the Administrative Agent may withhold from any payment to such U.S. Lender
an amount equivalent to the applicable backup withholding tax imposed by the
Code.

 

SECTION 10.16. GOVERNING LAW. THIS AGREEMENT AND EACH OTHER LOAN
DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

 

(a)  ANY LEGAL ACTION OR PROCEEDING ARISING UNDER
ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER,
EACH AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, EACH AGENT AND
EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE

 

129

 

GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING
IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
THERETO.

 

(b)  NOTWITHSTANDING THE FOREGOING PROVISIONS OF
THIS SECTION 10.16, NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE
AGENTS, THE JOINT LEAD ARRANGERS, THE L/C ISSUER OR ANY LENDER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS AGAINST THE BORROWER OR ANY OF ITS SUBSIDIARIES OR ANY OF THEIR
PROPERTIES OR ASSETS IN THE COURTS OF ANY JURISDICTION.

 

SECTION 10.17. Waiver of Right to Trial by Jury. EACH PARTY TO
THIS AGREEMENT HEREBY EXPRESSLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 10.17 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

 

SECTION 10.18. Binding Effect. This Agreement shall become
effective when it shall have been executed by each party hereto and thereafter
shall be binding upon and inure to the benefit of the Borrower, each Agent and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders except as
permitted by Section 7.04.

 

SECTION 10.19. Lender Action. Each Lender agrees that it shall
not take or institute any actions or proceedings, judicial or otherwise, for
any right or remedy against any Loan Party or any other obligor under any of
the Loan Documents or the Secured Hedge Agreements (including the exercise of
any right of setoff, rights on account of any banker’s lien or similar claim or
other rights of self-help), or institute any actions or proceedings, or
otherwise commence any remedial procedures, with respect to any Collateral or
any other property of any such Loan Party, without the prior written consent of
the Administrative Agent. The provision of this Section 10.20 are for the
sole benefit of the Lenders and shall not afford any right to, or constitute a
defense available to, any Loan Party.

 

SECTION 10.20. Acknowledgments. The Borrower hereby acknowledges
that:

 

(a)  it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;

 

(b)  no Joint Lead Arranger, Agent or Lender has
any fiduciary relationship with or duty to the Borrower or any other Loan Party
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Joint Lead Arrangers, the Agents
and the Lenders, on one hand, and the Borrower and the other Loan Parties, on
the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

 

130

 

(c)  no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Joint Lead Arrangers, the Agents and the Lenders
or among the Borrower, the other Loan Parties and the Lenders. The amounts
payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.

 

SECTION 10.21. USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot  Act”), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the Patriot Act.

 

SECTION 10.22. Gaming Authorities and Liquor Authorities. This
Agreement is subject to the Gaming Laws and the Liquor Laws. Without limiting
the foregoing, the Agents and the Lenders acknowledge that rights, remedies and
powers in or under this Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provisions of the Gaming Laws
and the Liquor Laws and only to the extent that any required approvals
(including prior approvals) are obtained from the requisite Gaming Authorities
and the Liquor Authorities. Each of the Joint Lead Arrangers, the Agents and
Lenders agrees to cooperate with the applicable Gaming Authorities in
connection with the administration of their regulatory jurisdiction over the
Borrower and the other Loan Parties, including, without limitation, to the
extent not inconsistent with the internal policies of such Joint Lead Arranger,
Agent or Lender and any applicable legal or regulatory restrictions, the
provision of such documents or other information as may be requested by any
such Gaming Authorities relating to the Joint Lead Arrangers, the Agents, any
of the Lenders or the Borrower or any other Loan Party, or the Loan Documents.
Notwithstanding any other provision of this Agreement, the Borrower expressly
authorizes, and will cause each other Loan Party to authorize, each Joint Lead
Arranger, Agent and Lender to cooperate with the applicable Gaming Authorities
as described above.

 

SECTION 10.23. Certain Matters Affecting Lenders. (a) If
any Gaming Authority shall determine that any Lender does not meet suitability
standards prescribed under applicable Gaming Laws (a “Former
Lender”), the Administrative Agent shall have the right (but not the
duty) to cause such Former Lender (and such Former Lender hereby irrevocably
agrees) to assign its outstanding Loans and its Revolving Credit Commitments,
if any, in full to one or more Eligible Assignees (each a “Substitute
Lender”) in accordance with the provisions of Section 10.07 and
the Former Lender shall pay any fees payable thereunder in connection with such
assignment; provided, (1) on the date of such
assignment, the Substitute Lender shall pay to the Former Lender an amount
equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Former Lender, (B) an
amount equal to all unreimbursed drawings that have been funded by such Former
Lender, together with all then unpaid interest with respect thereto at such
time and (C) an amount equal to all accrued, but theretofore unpaid Fees
owing to such Former Lender; (2) on the date of such assignment, the
Borrower shall pay any amounts payable to such Former Lender pursuant to
Article III; or otherwise as if it were a prepayment. The Borrower shall bear
the costs and expenses of any Lender required by any Gaming Authorities to file
an application for a finding of suitability in connection with the
investigation of an application by the Borrower or the other Loan Parties for a
license to operate a gaming establishment.

 

(b)  Notwithstanding the provisions of
Section 10.23(a), if any Lender becomes a Former Lender, and if the
Administrative Agent fails to find a Substitute Lender pursuant to
Section 10.23(a) within any time period specified by the appropriate
Gaming Authority for the withdrawal of a Former Lender (the “Withdrawal Period”), the Borrower shall
immediately prepay in full the outstanding amount of all Term Loans and
Revolving Exposure of such Former Lender, together with all unpaid fees owing
to

 

131

 

such Former Lender pursuant to Section 2.09 and any amounts
payable to such Former Lender pursuant to Article III or otherwise as if it
were a prepayment and, in each case where applicable, with accrued interest
thereon to the earlier of (x) the date of payment or (y) the last day
of the applicable Withdrawal Period. Upon the prepayment of all amounts owing
to any Former Lender and the termination of such Former Lender’s Revolving
Credit Commitments, if any (whether pursuant to Section 10.23(a) or
10.23(b)), such Former Lender shall no longer constitute a “Lender” for
purposes hereof; provided, any rights of such
Former Lender to indemnification hereunder shall survive as to such Former Lender.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

132

 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.

 

	
   

  	
  STATION
  CASINOS, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   /s/  Thomas M. Friel

  
	
   

  	
   

  	
    Name: Thomas
  M. Friel

  
	
   

  	
   

  	
    Title:   Executive
  Vice President, Chief

  
	
   

  	
   

  	
                Accounting
  Officer & Treasurer

  
				

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as Administrative
  Agent, L/C Issuer and

  Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   /s/  Mary Kay Coyle

  
	
   

  	
   

  	
    Name: Mary
  Kay Coyle

  
	
   

  	
   

  	
    Title:   Managing
  Director

  
				

 

133

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., as Syndication Agent,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   /s/  Donald
  Shokrian

  
	
   

  	
   

  	
    Name:
  Donald Shokrian

  
	
   

  	
   

  	
    Title:   Managing
  Director

  
				

 

134

 

	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
    /s/ G. Lee Wagner, Jr.

  
	
   

  	
   

  	
    Name:
  G. Lee Wagner, Jr.

  
	
   

  	
   

  	
    Title:   Vice
  President

  
				

 

 

	
   

  	
  UNION
  BANK OF CALIFORNIA, N.A.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   /s/  Clifford F. Cho

  
	
   

  	
   

  	
    Name: Clifford
  F. Cho

  
	
   

  	
   

  	
    Title:   Vice President

  
				

 

 

	
   

  	
  BANK OF HAWAII,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Steven R. Nakahara

  
	
   

  	
   

  	
  Name: Steven
  R. Nakahara

  
	
   

  	
   

  	
  Title:   Vice President

  
				

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Jennifer Mesa

  
	
   

  	
   

  	
    Jennifer
  Mesa

  
	
   

  	
   

  	
    Vice President

  
				

 

 

	
   

  	
  BNP
  PARIBAS

  
	
   

  	
   

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   /s/  Janice
  S. Ho

  
	
   

  	
   

  	
    Name: Janice
  S. Ho

  
	
   

  	
   

  	
    Title:   Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   /s/  Mitchell
  Ozawa

  
	
   

  	
   

  	
    Name: Mitchell
  Ozawa

  
	
   

  	
   

  	
    Title:   Managing
  Director

  
				

 

 

	
   

  	
  NATIXIS, NEW YORK BRANCH,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Peyman Parhami

  
	
   

  	
   

  	
  Name: Peyman
  Parhami

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Mark A. Harrington

  
	
   

  	
   

  	
  Name: Mark
  A. Harrington

  
	
   

  	
   

  	
  Title:   Senior Managing Director

  
				

 

 

	
   

  	
  ERSTE BANK DER OESTERREICHISCHEN

  
	
   

  	
  SPARKASSEN
  AG, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Robert J. Wagman

  
	
   

  	
   

  	
  Name: Robert
  J. Wagman

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ERSTE
  BANK DER OESTERREICHISCHEN

  
	
   

  	
  SPARKASSEN
  AG, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Bryan Lynch

  
	
   

  	
   

  	
  Name: Bryan
  Lynch

  
	
   

  	
   

  	
  Title:   Managing Director

  
				

 

 

	
   

  	
  BANK OF SCOTLAND PLC,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Karen Weich

  
	
   

  	
   

  	
  Name: Karen
  Weich

  
	
   

  	
   

  	
  Title:   Vice President

  
				

 

 

	
   

  	
    Bank
  of Nevada

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ Todd Skadberg

  
	
   

  	
   

  	
  Name: Todd
  Skadberg

  
	
   

  	
   

  	
  Title:   SVP

  
				

 

 

	
   

  	
    First Tennessee Bank National Association,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  /s/ James H. Moore Jr.

  
	
   

  	
   

  	
  Name: James
  H. Moore Jr.

  
	
   

  	
   

  	
  Title:   Senior Vice PresidentExhibit 4.2

LOAN AND SECURITY AGREEMENT

 

 

 

Dated as of November 7, 2007

 

Among

 

 

FCP PROPCO, LLC

as Borrower

 

 

and

 

 

GERMAN AMERICAN CAPITAL CORPORATION

 

and

 

JPMORGAN CHASE BANK, N.A.,

 

on behalf of the holders of the Notes,

 

as Lender

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  I.

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
  2

  
	
   

  	
  1.2

  	
  Principles of Construction

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  GENERAL
  TERMS

  	
  35

  
	
   

  	
  2.1

  	
  Loan; Disbursement to
  Borrower

  	
   

  	
  35

  
	
   

  	
   

  	
  2.1.1

  	
  The Loan

  	
  35

  
	
   

  	
   

  	
  2.1.2

  	
  Disbursement to Borrower

  	
  35

  
	
   

  	
   

  	
  2.1.3

  	
  The
  Notes, Security Instruments and Loan Documents

  	
  35

  
	
   

  	
   

  	
  2.1.4

  	
  Use
  of Proceeds

  	
  36

  
	
   

  	
  2.2

  	
  Interest; Loan Payments;
  Late Payment Charge

  	
  36

  
	
   

  	
   

  	
  2.2.1

  	
  Payment
  of Principal and Interest

  	
  36

  
	
   

  	
   

  	
  2.2.2

  	
  Method
  and Place of Payment

  	
  36

  
	
   

  	
   

  	
  2.2.3

  	
  Late
  Payment Charge

  	
  36

  
	
   

  	
   

  	
  2.2.4

  	
  Usury
  Savings

  	
  37

  
	
   

  	
  2.3

  	
  Prepayments

  	
  37

  
	
   

  	
   

  	
  2.3.1

  	
  Prepayments

  	
  37

  
	
   

  	
   

  	
  2.3.2

  	
  Prepayments
  After Event of Default; Application of Amounts Paid

  	
  37

  
	
   

  	
   

  	
  2.3.3

  	
  Release
  of Property upon Repayment of Loan in Full

  	
  38

  
	
   

  	
   

  	
  2.3.4

  	
  Release of Individual
  Properties

  	
  38

  
	
   

  	
   

  	
  2.3.5

  	
  Substitution of Properties.

  	
  39

  
	
   

  	
   

  	
  2.3.6

  	
  Provisions Relating to
  Individual Properties That Go Dark

  	
  46

  
	
   

  	
   

  	
  2.3.7

  	
  Excess Account Collateral

  	
  46

  
	
   

  	
   

  	
  2.3.8

  	
  Reserve Requirements

  	
  47

  
	
   

  	
   

  	
  2.3.9

  	
  Release of Unimproved
  Parcels

  	
  47

  
	
   

  	
  2.4

  	
  Regulatory Change; Taxes

  	
  48

  
	
   

  	
   

  	
  2.4.1

  	
  Increased
  Costs

  	
  48

  
	
   

  	
   

  	
  2.4.2

  	
  Special
  Taxes

  	
  49

  
	
   

  	
   

  	
  2.4.3

  	
  Other
  Taxes

  	
  49

  
	
   

  	
   

  	
  2.4.4

  	
  Indemnity

  	
  49

  
	
   

  	
   

  	
  2.4.5

  	
  Change
  of Office

  	
  49

  
	
   

  	
   

  	
  2.4.6

  	
  Survival

  	
  49

  
	
   

  	
  2.5

  	
  Conditions Precedent to
  Closing

  	
  49

  
	
   

  	
   

  	
  2.5.1

  	
  Representations
  and Warranties; Compliance with Conditions

  	
  50

  
	
   

  	
   

  	
  2.5.2

  	
  Delivery
  of Loan Documents; Title Policies; Reports; Leases

  	
  50

  
	
   

  	
   

  	
  2.5.3

  	
  Delivery
  of Organizational Documents

  	
  51

  
	
   

  	
   

  	
  2.5.4

  	
  Counsel
  Opinions

  	
  52

  
	
   

  	
   

  	
  2.5.5

  	
  Consummation
  of the Merger

  	
  52

  
	
   

  	
   

  	
  2.5.6

  	
  Payments

  	
  53

  
	
   

  	
   

  	
  2.5.7

  	
  Transaction
  Costs

  	
  53

  
	
   

  	
   

  	
  2.5.8

  	
  Material
  Adverse Effect

  	
  53

  
	
   

  	
   

  	
  2.5.9

  	
  Control

   

   

   

   

  	
  53

  
							

 

	
   

  	
   

  	
  2.5.10

  	
  Insolvency

  	
  53

  
	
   

  	
   

  	
  2.5.11

  	
  Master
  Lease and Individual Property Subleases

  	
  53

  
	
   

  	
   

  	
  2.5.12

  	
  Equity Contribution

  	
  53

  
	
   

  	
   

  	
  2.5.13

  	
  Existing
  Indebtedness

  	
  53

  
	
   

  	
   

  	
  2.5.14

  	
  Ground
  Lease and Fee Mortgagee Estoppels

  	
  54

  
	
   

  	
   

  	
  2.5.15

  	
  Equity
  and Real Property Transfer Documents

  	
  54

  
	
   

  	
   

  	
  2.5.16

  	
  No Competing Financing

  	
  54

  
	
   

  	
   

  	
  2.5.17

  	
  Approvals

  	
  55

  
	
   

  	
   

  	
  2.5.18

  	
  Searches

  	
  55

  
	
   

  	
  2.6

  	
  [Reserved]

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  CASH
  MANAGEMENT

  	
  55

  
	
   

  	
  3.1

  	
  Cash Management

  	
  55

  
	
   

  	
   

  	
  3.1.1

  	
  Establishment
  of Accounts

  	
  55

  
	
   

  	
   

  	
  3.1.2

  	
  Pledge
  of Account Collateral

  	
  56

  
	
   

  	
   

  	
  3.1.3

  	
  Maintenance of Collateral
  Accounts

  	
  57

  
	
   

  	
   

  	
  3.1.4

  	
  Eligible
  Accounts

  	
  57

  
	
   

  	
   

  	
  3.1.5

  	
  Deposits
  into Sub-Accounts

  	
  57

  
	
   

  	
   

  	
  3.1.6

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

  	
  58

  
	
   

  	
   

  	
  3.1.7

  	
  Required Payments from Sub-Accounts

  	
  62

  
	
   

  	
   

  	
  3.1.8

  	
  Cash
  Management Bank

  	
  63

  
	
   

  	
   

  	
  3.1.9

  	
  Borrower’s Account
  Representations, Warranties and Covenants

  	
  64

  
	
   

  	
   

  	
  3.1.10

  	
  Account
  Collateral and Remedies

  	
  64

  
	
   

  	
   

  	
  3.1.11

  	
  Transfers
  and Other Liens

  	
  65

  
	
   

  	
   

  	
  3.1.12

  	
  Reasonable
  Care

  	
  65

  
	
   

  	
   

  	
  3.1.13

  	
  Lender’s
  Liability

  	
  65

  
	
   

  	
   

  	
  3.1.14

  	
  Continuing
  Security Interest

  	
  66

  
	
   

  	
   

  	
  3.1.15

  	
  Distributions

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  66

  
	
   

  	
  4.1

  	
  Borrower Representations

  	
  66

  
	
   

  	
   

  	
  4.1.1

  	
  Organization

  	
  66

  
	
   

  	
   

  	
  4.1.2

  	
  Proceedings

  	
  67

  
	
   

  	
   

  	
  4.1.3

  	
  No
  Conflicts

  	
  67

  
	
   

  	
   

  	
  4.1.4

  	
  Litigation

  	
  68

  
	
   

  	
   

  	
  4.1.5

  	
  Agreements

  	
  68

  
	
   

  	
   

  	
  4.1.6

  	
  Title

  	
  68

  
	
   

  	
   

  	
  4.1.7

  	
  No
  Bankruptcy Filing

  	
  69

  
	
   

  	
   

  	
  4.1.8

  	
  Full
  and Accurate Disclosure

  	
  69

  
	
   

  	
   

  	
  4.1.9

  	
  All Property

  	
  69

  
	
   

  	
   

  	
  4.1.10

  	
  No
  Plan Assets

  	
  69

  
	
   

  	
   

  	
  4.1.11

  	
  Compliance

  	
  70

  
	
   

  	
   

  	
  4.1.12

  	
  Financial
  Information

  	
  70

  
	
   

  	
   

  	
  4.1.13

  	
  Condemnation

  	
  70

  
	
   

  	
   

  	
  4.1.14

  	
  Federal Reserve
  Regulations

  	
  71

  
	
   

  	
   

  	
  4.1.15

  	
  Utilities
  and Public Access

  	
  7163

  

 

 

ii

 

	
   

  	
   

  	
  4.1.16

  	
  Not
  a Foreign Person

  	
  71

  
	
   

  	
   

  	
  4.1.17

  	
  Reserved

  	
  71

  
	
   

  	
   

  	
  4.1.18

  	
  Reserved

  	
  71

  
	
   

  	
   

  	
  4.1.19

  	
  Reserved

  	
  71

  
	
   

  	
   

  	
  4.1.20

  	
  Enforceability

  	
  71

  
	
   

  	
   

  	
  4.1.21

  	
  Reserved

  	
  71

  
	
   

  	
   

  	
  4.1.22

  	
  Insurance

  	
  71

  
	
   

  	
   

  	
  4.1.23

  	
  Use
  of Property

  	
  71

  
	
   

  	
   

  	
  4.1.24

  	
  Certificate
  of Occupancy; Licenses

  	
  71

  
	
   

  	
   

  	
  4.1.25

  	
  Flood
  Zone

  	
  72

  
	
   

  	
   

  	
  4.1.26

  	
  Physical
  Condition

  	
  72

  
	
   

  	
   

  	
  4.1.27

  	
  Boundaries

  	
  72

  
	
   

  	
   

  	
  4.1.28

  	
  Subleases

  	
  72

  
	
   

  	
   

  	
  4.1.29

  	
  Filing
  and Recording Taxes

  	
  73

  
	
   

  	
   

  	
  4.1.30

  	
  Single
  Purpose Entity/Separateness

  	
  73

  
	
   

  	
   

  	
  4.1.31

  	
  Reserved

  	
  73

  
	
   

  	
   

  	
  4.1.32

  	
  Illegal
  Activity

  	
  73

  
	
   

  	
   

  	
  4.1.33

  	
  No
  Change in Facts or Circumstances; Disclosure

  	
  74

  
	
   

  	
   

  	
  4.1.34

  	
  Reserved

  	
  74

  
	
   

  	
   

  	
  4.1.35

  	
  Tax Filings

  	
  74

  
	
   

  	
   

  	
  4.1.36

  	
  Solvency/Fraudulent
  Conveyance

  	
  74

  
	
   

  	
   

  	
  4.1.37

  	
  Investment
  Company Act

  	
  74

  
	
   

  	
   

  	
  4.1.38

  	
  Interest
  Rate Protection Agreement

  	
  74

  
	
   

  	
   

  	
  4.1.39

  	
  Labor

  	
  74

  
	
   

  	
   

  	
  4.1.40

  	
  Brokers

  	
  75

  
	
   

  	
   

  	
  4.1.41

  	
  No
  Other Debt

  	
  75

  
	
   

  	
   

  	
  4.1.42

  	
  Taxpayer
  Identification Number

  	
  75

  
	
   

  	
   

  	
  4.1.43

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

  	
  75

  
	
   

  	
   

  	
  4.1.44

  	
  Merger
  Agreement

  	
  75

  
	
   

  	
   

  	
  4.1.45

  	
  Rights
  of First Refusal or First Offer to Lease or Purchase

  	
  75

  
	
   

  	
   

  	
  4.1.46

  	
  Reserved

  	
  76

  
	
   

  	
  4.2

  	
  Survival of
  Representations

  	
  76

  
	
   

  	
  4.3

  	
  Borrower’s Knowledge

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  BORROWER COVENANTS

  	
  76

  
	
   

  	
  5.1

  	
  Affirmative Covenants

  	
  76

  
	
   

  	
   

  	
  5.1.1

  	
  Performance
  by Borrower

  	
  76

  
	
   

  	
   

  	
  5.1.2

  	
  Existence;
  Compliance with Legal Requirements; Insurance

  	
  76

  
	
   

  	
   

  	
  5.1.3

  	
  Litigation

  	
  77

  
	
   

  	
   

  	
  5.1.4

  	
  Single
  Purpose Entity

  	
  77

  
	
   

  	
   

  	
  5.1.5

  	
  Consents

  	
  78

  
	
   

  	
   

  	
  5.1.6

  	
  Access
  to Property

  	
  79

  
	
   

  	
   

  	
  5.1.7

  	
  Notice
  of Default

  	
  79

  
	
   

  	
   

  	
  5.1.8

  	
  Cooperate
  in Legal Proceedings

  	
  79

  
	
   

  	
   

  	
  5.1.9

  	
  Reserved

  	
  79

  
	
   

  	
   

  	
  5.1.10

  	
  Insurance

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1.11

  	
  Further
  Assurances; Separate Notes; Loan Resizing

  	
  79

  
	
   

  	
   

  	
  5.1.12

  	
  Mortgage
  Taxes

  	
  81

  
	
   

  	
   

  	
  5.1.13

  	
  Operation

  	
  81

  
	
   

  	
   

  	
  5.1.14

  	
  Business
  and Operations

  	
  81

  
	
   

  	
   

  	
  5.1.15

  	
  Title
  to the Property

  	
  81

  
	
   

  	
   

  	
  5.1.16

  	
  Costs
  of Enforcement

  	
  82

  
	
   

  	
   

  	
  5.1.17

  	
  Estoppel
  Statements

  	
  82

  
	
   

  	
   

  	
  5.1.18

  	
  Loan
  Proceeds

  	
  82

  
	
   

  	
   

  	
  5.1.19

  	
  No
  Joint Assessment

  	
  83

  
	
   

  	
   

  	
  5.1.20

  	
  No
  Further Encumbrances

  	
  83

  
	
   

  	
   

  	
  5.1.21

  	
  Reserved

  	
  83

  
	
   

  	
   

  	
  5.1.22

  	
  Master
  Lease

  	
  83

  
	
   

  	
  5.2

  	
  Negative Covenants

  	
  85

  
	
   

  	
   

  	
  5.2.1

  	
  Incur
  Debt

  	
  85

  
	
   

  	
   

  	
  5.2.2

  	
  Encumbrances

  	
  85

  
	
   

  	
   

  	
  5.2.3

  	
  Engage
  in Different Business

  	
  85

  
	
   

  	
   

  	
  5.2.4

  	
  Make
  Advances

  	
  85

  
	
   

  	
   

  	
  5.2.5

  	
  Subdivision

  	
  85

  
	
   

  	
   

  	
  5.2.6

  	
  Commingle

  	
  85

  
	
   

  	
   

  	
  5.2.7

  	
  Guarantee
  Obligations

  	
  85

  
	
   

  	
   

  	
  5.2.8

  	
  Transfer
  Assets

  	
  85

  
	
   

  	
   

  	
  5.2.9

  	
  Amend
  Organizational Documents

  	
  85

  
	
   

  	
   

  	
  5.2.10

  	
  Dissolve

  	
  86

  
	
   

  	
   

  	
  5.2.11

  	
  Bankruptcy

  	
  86

  
	
   

  	
   

  	
  5.2.12

  	
  ERISA

  	
  86

  
	
   

  	
   

  	
  5.2.13

  	
  Distributions

  	
  86

  
	
   

  	
   

  	
  5.2.14

  	
  Reserved

  	
  86

  
	
   

  	
   

  	
  5.2.15

  	
  Reserved

  	
  86

  
	
   

  	
   

  	
  5.2.16

  	
  Reserved

  	
  86

  
	
   

  	
   

  	
  5.2.17

  	
  Modify
  Account Agreement

  	
  86

  
	
   

  	
   

  	
  5.2.18

  	
  Zoning
  Reclassification

  	
  86

  
	
   

  	
   

  	
  5.2.19

  	
  Change
  of Principal Place of Business

  	
  86

  
	
   

  	
   

  	
  5.2.20

  	
  Debt
  Cancellation

  	
  86

  
	
   

  	
   

  	
  5.2.21

  	
  Misapplication
  of Funds

  	
  86

  
	
   

  	
   

  	
  5.2.22

  	
  Single-Purpose
  Entity

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE;
  CASUALTY; CONDEMNATION; RESTORATION

  	
  87

  
	
   

  	
  6.1

  	
  Insurance Coverage
  Requirements

  	
  87

  
	
   

  	
   

  	
  6.1.1

  	
  Property Insurance

  	
  87

  
	
   

  	
   

  	
  6.1.2

  	
  Liability Insurance

  	
  88

  
	
   

  	
   

  	
  6.1.3

  	
  Workers’
  Compensation Insurance

  	
  88

  
	
   

  	
   

  	
  6.1.4

  	
  Commercial Rents Insurance

  	
  88

  
	
   

  	
   

  	
  6.1.5

  	
  Builder’s
  All-Risk Insurance

  	
  88

  
	
   

  	
   

  	
  6.1.6

  	
  Boiler
  and Machinery Insurance

  	
  88

  
	
   

  	
   

  	
  6.1.7

  	
  Flood
  Insurance

  	
  89

  
	
   

  	
   

  	
  6.1.8

  	
  Reserved

  	
  89

  
	
   

  	
   

  	
  6.1.9

  	
  Terrorism
  Insurance

  	
  89

  

 

 

 

iv

 

	
   

  	
   

  	
  6.1.10

  	
  Other
  Insurance

  	
  89

  
	
   

  	
   

  	
  6.1.11

  	
  Ratings
  of Insurers

  	
  89

  
	
   

  	
   

  	
  6.1.12

  	
  Form
  of Insurance Policies; Endorsements

  	
  90

  
	
   

  	
   

  	
  6.1.13

  	
  Certificates

  	
  91

  
	
   

  	
   

  	
  6.1.14

  	
  Separate
  Insurance

  	
  91

  
	
   

  	
   

  	
  6.1.15

  	
  Blanket
  Policies

  	
  91

  
	
   

  	
  6.2

  	
  Condemnation and Insurance
  Proceeds

  	
  92

  
	
   

  	
   

  	
  6.2.1

  	
  Notification

  	
  92

  
	
   

  	
   

  	
  6.2.2

  	
  Proceeds

  	
  92

  
	
   

  	
   

  	
  6.2.3

  	
  Lender
  to Take Proceeds

  	
  93

  
	
   

  	
   

  	
  6.2.4

  	
  Borrower
  to Restore

  	
  94

  
	
   

  	
   

  	
  6.2.5

  	
  Disbursement
  of Proceeds

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  IMPOSITIONS,
  OTHER CHARGES, LIENS AND OTHER ITEMS

  	
  97

  
	
   

  	
  7.1

  	
  Borrower to Pay
  Impositions and Other Charges

  	
  97

  
	
   

  	
  7.2

  	
  No Liens

  	
  97

  
	
   

  	
  7.3

  	
  Contest

  	
  98

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  TRANSFERS,
  INDEBTEDNESS AND SUBORDINATE LIENS

  	
  98

  
	
   

  	
  8.1

  	
  General Restriction on
  Transfers

  	
  98

  
	
   

  	
  8.2

  	
  Sale of Building Equipment

  	
  99

  
	
   

  	
  8.3

  	
  Immaterial Transfers and
  Easements, etc.

  	
  99

  
	
   

  	
  8.4

  	
  Reserved.

  	
  100

  
	
   

  	
  8.5

  	
  Permitted Equity Transfers

  	
  100

  
	
   

  	
  8.6

  	
  Deliveries to Lender

  	
  101

  
	
   

  	
  8.7

  	
  Loan Assumption

  	
  101

  
	
   

  	
  8.8

  	
  Subleases

  	
  102

  
	
   

  	
   

  	
  8.8.1

  	
  Master
  Lease and Existing Subleases

  	
  102

  
	
   

  	
   

  	
  8.8.2

  	
  Leasing
  Conditions

  	
  102

  
	
   

  	
   

  	
  8.8.3

  	
  Delivery
  of New Sublease or Sublease Modification

  	
  102

  
	
   

  	
   

  	
  8.8.4

  	
  Sublease
  Amendments

  	
  102

  
	
   

  	
   

  	
  8.8.5

  	
  Security
  Deposits

  	
  102

  
	
   

  	
   

  	
  8.8.6

  	
  No
  Default Under Subleases

  	
  103

  
	
   

  	
   

  	
  8.8.7

  	
  Subordination

  	
  103

  
	
   

  	
   

  	
  8.8.8

  	
  Attornment

  	
  103

  
	
   

  	
   

  	
  8.8.9

  	
  Non-Disturbance
  Agreements

  	
  103

  
	
   

  	
   

  	
  8.8.10

  	
  Recognition Agreements

  	
  104

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  INTEREST
  RATE PROTECTION AGREEMENT

  	
  104

  
	
   

  	
  9.1

  	
  Interest Rate Protection
  Agreement

  	
  104

  
	
   

  	
  9.2

  	
  Pledge and Collateral
  Assignment

  	
  104

  
	
   

  	
  9.3

  	
  Covenants

  	
  105

  
	
   

  	
  9.4

  	
  Powers of Borrower Prior
  to an Event of Default

  	
  106

  
	
   

  	
  9.5

  	
  Representations and
  Warranties

  	
  106

  
	
   

  	
  9.6

  	
  Payments

  	
  107

  
	
   

  	
  9.7

  	
  Remedies

  	
  107

  
	
   

  	
  9.8

  	
  Sales of Rate Protection
  Collateral

  	
  109

  

 

 

 

v

 

	
   

  	
  9.9

  	
  Public Sales Not Possible

  	
  110

  
	
   

  	
  9.10

  	
  Receipt of Sale Proceeds

  	
  110

  
	
   

  	
  9.11

  	
  Replacement Interest Rate Protection
  Agreement

  	
  110

  
	
   

  	
  9.12

  	
  Swap Gain

  	
  110

  
	
   

  	
  9.13

  	
  Prepayment of Interest
  Rate Swap Notional Amount

  	
  110

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  MAINTENANCE
  OF PROPERTY; ALTERATIONS

  	
  110

  
	
   

  	
  10.1

  	
  Maintenance of Property

  	
  110

  
	
   

  	
  10.2

  	
  Conditions to Alteration

  	
  111

  
	
   

  	
  10.3

  	
  Costs of Alteration

  	
  111

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  BOOKS
  AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

  	
  112

  
	
   

  	
  11.1

  	
  Books and Records

  	
  112

  
	
   

  	
  11.2

  	
  Financial Statements

  	
  112

  
	
   

  	
   

  	
  11.2.1

  	
  Monthly
  Reports

  	
  112

  
	
   

  	
   

  	
  11.2.2

  	
  Quarterly
  Reports

  	
  113

  
	
   

  	
   

  	
  11.2.3

  	
  Annual
  Reports

  	
  114

  
	
   

  	
   

  	
  11.2.4

  	
  Disclosure
  Restrictions.

  	
  114

  
	
   

  	
   

  	
  11.2.5

  	
  Capital
  Expenditures Summaries

  	
  114

  
	
   

  	
   

  	
  11.2.6

  	
  Master
  Lease

  	
  114

  
	
   

  	
   

  	
  11.2.7

  	
  Annual
  Budget; Operating Agreement Annual Budgets

  	
  114

  
	
   

  	
   

  	
  11.2.8

  	
  Other Information

  	
  115

  
	
   

  	
   

  	
  11.2.9

  	
  Proprietary
  Information

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  ENVIRONMENTAL
  MATTERS

  	
  115

  
	
   

  	
  12.1

  	
  Representations

  	
  115

  
	
   

  	
  12.2

  	
  Covenants

  	
  116

  
	
   

  	
   

  	
  12.2.1

  	
  Compliance
  with Environmental Laws

  	
  116

  
	
   

  	
   

  	
  12.2.2

  	
  Notices
  Regarding Environmental Events

  	
  116

  
	
   

  	
   

  	
  12.2.3

  	
  Other
  Notices

  	
  116

  
	
   

  	
  12.3

  	
  Environmental Reports

  	
  116

  
	
   

  	
  12.4

  	
  Environmental
  Indemnification

  	
  117

  
	
   

  	
  12.5

  	
  Recourse Nature of Certain
  Indemnifications

  	
  118

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  THE
  OPERATING AGREEMENTS

  	
  118

  
	
   

  	
  13.1

  	
  Operating Agreement
  Representations, Warranties

  	
  118

  
	
   

  	
  13.2

  	
  Cure by Lender

  	
  119

  
	
   

  	
  13.3

  	
  Option to Renew or Extend
  the Ground Lease

  	
  120

  
	
   

  	
  13.4

  	
  Operating Agreement
  Covenants

  	
  120

  
	
   

  	
   

  	
  13.4.1

  	
  Waiver
  of Interest In New Ground Lease

  	
  120

  
	
   

  	
   

  	
  13.4.2

  	
  No
  Election to Terminate

  	
  120

  
	
   

  	
   

  	
  13.4.3

  	
  Notice
  Prior to Rejection

  	
  120

  
	
   

  	
   

  	
  13.4.4

  	
  Lender
  Right to Perform

  	
  121

  
	
   

  	
   

  	
  13.4.5

  	
  Lender
  Attorney in Fact

  	
  121

  
	
   

  	
   

  	
  13.4.6

  	
  Payment
  of Sums Due Under Operating Agreements

  	
  121

  
	
   

  	
   

  	
  13.4.7

  	
  Performance
  of Covenants

  	
  121

  

 

 

vi

 

	
   

  	
   

  	
  13.4.8

  	
  [Reserved]

  	
  122

  
	
   

  	
   

  	
  13.4.9

  	
  No
  Modification or Termination

  	
  122

  
	
   

  	
   

  	
  13.4.10

  	
  Notices
  of Default

  	
  122

  
	
   

  	
   

  	
  13.4.11

  	
  Delivery
  of Information

  	
  122

  
	
   

  	
   

  	
  13.4.12

  	
  No
  Subordination

  	
  122

  
	
   

  	
   

  	
  13.4.13

  	
  Further
  Assurances

  	
  122

  
	
   

  	
   

  	
  13.4.14

  	
  Estoppel
  Certificates

  	
  122

  
	
   

  	
   

  	
  13.4.15

  	
  Common
  Area/Common Elements Insurance

  	
  123

  
	
   

  	
   

  	
  13.4.16

  	
  Reserved

  	
  123

  
	
   

  	
  13.5

  	
  Lender Right to
  Participate

  	
  123

  
	
   

  	
  13.6

  	
  No Liability

  	
  123

  
	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
  SECURITIZATION
  AND PARTICIPATION

  	
  123

  
	
   

  	
  14.1

  	
  Sale of Notes and
  Securitization

  	
  123

  
	
   

  	
  14.2

  	
  Securitization Financial
  Statements

  	
  125

  
	
   

  	
  14.3

  	
  Securitization
  Indemnification

  	
  125

  
	
   

  	
   

  	
  14.3.1

  	
  Disclosure Documents

  	
  125

  
	
   

  	
   

  	
  14.3.2

  	
  Indemnification
  Certificate

  	
  125

  
	
   

  	
  14.4

  	
  Retention of Servicer

  	
  127

  
	
   

  	
  14.5

  	
  Lender’s Securitization
  Expenses

  	
  128

  
	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS

  	
  128

  
	
   

  	
  15.1

  	
  Assignment and Acceptance

  	
  128

  
	
   

  	
  15.2

  	
  Effect of Assignment and
  Acceptance

  	
  128

  
	
   

  	
  15.3

  	
  Content

  	
  129

  
	
   

  	
  15.4

  	
  Register

  	
  129

  
	
   

  	
  15.5

  	
  Substitute Notes

  	
  129

  
	
   

  	
  15.6

  	
  Participations

  	
  130

  
	
   

  	
  15.7

  	
  Disclosure of Information

  	
  130

  
	
   

  	
  15.8

  	
  Security Interest in Favor
  of Federal Reserve Bank

  	
  130

  
	
   

  	
   

  	
   

  	
   

  
	
  XVI.

  	
  RESERVE
  ACCOUNTS

  	
  130

  
	
   

  	
  16.1

  	
  Tax Reserve Account

  	
  130

  
	
   

  	
  16.2

  	
  Insurance Reserve Account

  	
  131

  
	
   

  	
  16.3

  	
  Ground Rent Reserve
  Account

  	
  132

  
	
   

  	
   

  	
   

  	
   

  
	
  XVII.

  	
  DEFAULTS

  	
  133

  
	
   

  	
  17.1

  	
  Event of Default

  	
  133

  
	
   

  	
  17.2

  	
  Remedies

  	
  137

  
	
   

  	
  17.3

  	
  Remedies Cumulative;
  Waivers

  	
  138

  
	
   

  	
  17.4

  	
  Costs of Collection

  	
  139

  
	
  XVIII.

  	
  SPECIAL
  PROVISIONS

  	
  139

  
	
   

  	
  18.1

  	
  Exculpation

  	
  139

  
	
   

  	
   

  	
  18.1.1

  	
  Exculpated
  Parties

  	
  139

  
	
   

  	
   

  	
  18.1.2

  	
  Carveouts
  From Non-Recourse Limitations

  	
  140

  
	
   

  	
  18.2

  	
  Pro Rata Share

  	
  141

  

 

vii

 

	
  XIX.

  	
  MISCELLANEOUS

  	
  142

  
	
   

  	
  19.1

  	
  Survival

  	
  142

  
	
   

  	
  19.2

  	
  Lender’s Discretion

  	
  142

  
	
   

  	
  19.3

  	
  Governing Law

  	
  142

  
	
   

  	
  19.4

  	
  Modification; Waiver in
  Writing

  	
  143

  
	
   

  	
  19.5

  	
  Delay Not a Waiver

  	
  143

  
	
   

  	
  19.6

  	
  Notices

  	
  144

  
	
   

  	
  19.7

  	
  TRIAL BY JURY

  	
  145

  
	
   

  	
  19.8

  	
  Headings

  	
  146

  
	
   

  	
  19.9

  	
  Severability

  	
  146

  
	
   

  	
  19.10

  	
  Preferences

  	
  146

  
	
   

  	
  19.11

  	
  Waiver of Notice

  	
  146

  
	
   

  	
  19.12

  	
  Expenses; Indemnity

  	
  146

  
	
   

  	
  19.13

  	
  Exhibits and Schedules
  Incorporated

  	
  148

  
	
   

  	
  19.14

  	
  Offsets, Counterclaims and
  Defenses

  	
  148

  
	
   

  	
  19.15

  	
  Liability of Assignees of
  Lender

  	
  149

  
	
   

  	
  19.16

  	
  No Joint Venture or
  Partnership; No Third Party Beneficiaries

  	
  149

  
	
   

  	
  19.17

  	
  Publicity

  	
  149

  
	
   

  	
  19.18

  	
  Waiver of Marshalling of
  Assets

  	
  149

  
	
   

  	
  19.19

  	
  Waiver of Counterclaim and
  other Actions

  	
  150

  
	
   

  	
  19.20

  	
  Conflict; Construction of
  Documents; Reliance

  	
  150

  
	
   

  	
  19.21

  	
  Prior Agreements

  	
  150

  
	
   

  	
  19.22

  	
  Counterparts

  	
  150

  

 

 

viii

 

EXHIBITS AND SCHEDULES

 

	
  EXHIBIT A

  	
   

  	
  TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS AND
  AFFIRMATIVE COVERAGES

  
	
  EXHIBIT B

  	
   

  	
  SURVEY REQUIREMENTS

  
	
  EXHIBIT C

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT D

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT E

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT F

  	
   

  	
  FORM OF MASTER LEASE

  
	
  EXHIBIT G

  	
   

  	
  FORM OF TENANT ESTOPPEL LETTER

  
	
  EXHIBIT H

  	
   

  	
  FORM OF GROUND LESSOR ESTOPPEL CERTIFICATE

  
	
  EXHIBIT H-1

  	
   

  	
  FORM OF FEE MORTGAGEE ESTOPPEL
  CERTIFICATE

  
	
  EXHIBIT I

  	
   

  	
  [RESERVED]

  
	
  EXHIBIT J

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT K

  	
   

  	
  BORROWER ORGANIZATIONAL STRUCTURE

  
	
  EXHIBIT L

  	
   

  	
  INTEREST RATE PROTECTION AGREEMENT

  
	
  EXHIBIT M

  	
   

  	
  FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

  
	
  EXHIBIT N

  	
   

  	
  FORM OF SUBORDINATION, NON-DISTURBANCE AND
  ATTORNMENT AGREEMENT

  
	
  EXHIBIT O

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT P

  	
   

  	
  FORM OF RENT PAYMENT DIRECTION LETTER

  
	
  EXHIBIT Q

  	
   

  	
  RATE HEDGE COUNTERPARTY ACKNOWLEDGMENT

  
	
  EXHIBIT R

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT S

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT T

  	
   

  	
  FORM OF INDEPENDENT MANAGER/MEMBER CERTIFICATE

  
	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
   

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

  
	
  SCHEDULE II

  	
   

  	
  LITIGATION SCHEDULE

  
	
  SCHEDULE
  III

  	
   

  	
  DEFERRED
  MAINTENANCE AND REMEDIATION

  
	
  SCHEDULE IV

  	
   

  	
  UNIMPROVED PARCELS

  
	
  SCHEDULE
  V

  	
   

  	
  ALLOCATED
  LOAN AMOUNTS

  
	
  SCHEDULE
  VI

  	
   

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

  
	
  SCHEDULE
  VII

  	
   

  	
  EXISTING
  MATTERS OF RECORD

  
	
  SCHEDULE
  VIII

  	
   

  	
  [Reserved]

  
	
  SCHEDULE
  IX

  	
   

  	
  SUCCESSOR
  PRINCIPAL CONTROL PERSONS

  

 

 

ix

 

LOAN AND SECURITY AGREEMENT

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

RECITALS:

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

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

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

I.              DEFINITIONS;
PRINCIPLES OF CONSTRUCTION

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

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

“90% Cash Sweep Period” shall mean any
period (a) commencing on the Payment Date following the conclusion of any two
(2) consecutive Fiscal Quarters for which the LCR is less than 90% of Closing
Date LCR and (b) ending on the day immediately preceding the Payment Date
following the conclusion of any two (2) consecutive Fiscal Quarters for which
the LCR exceeds 90% of Closing Date LCR, provided that no Noticed
Default or Event of Default is then continuing, and, for avoidance of doubt,
subject to resumption of the 90% Cash Sweep Period upon any subsequent
occurrence of the conditions set forth in clause (a) above.

2

“Account Agreement” shall mean (a) the
side letter agreement dated the date hereof between Cash Management Bank and
Collateral Agent or (b) at any time when Lender or Servicer is not the Cash
Management Bank, an Account Control Agreement, in form reasonably acceptable to
Lender and acceptable to the Rating Agencies among Collateral Agent, Borrower
and Cash Management Bank.

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

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

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

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

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

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

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

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

“Allocated Loan Amount” shall mean with
respect to each Individual Property, the designated allocated portion of the
Loan applicable to such Individual Property that is set forth on Schedule
V-1 attached hereto.

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

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

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

3

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

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

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

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

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

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

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

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

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

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

 

4

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

5

 

Person owns, directly or indirectly, at least 75% of all of the legal,
beneficial and/or equitable interest in such Second Person, or (c) a third
Person owns, directly or indirectly, at least 75% of all of the legal,
beneficial and/or equitable interest in both the First Person and the Second
Person.

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

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

“Closing Date LTV” shall mean 79.7%.

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

“Collateral Accounts” shall have the meaning
set forth in Section 3.1.1.

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

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

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

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

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

	
  Range of Outstanding Aggregate
  Combined Allocated Loan

  Amounts Following Release

  	
   

  	
  Combined Release Price

  Percentage

  	
   

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

  	
   

  	
  100

  	
  %

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

  	
   

  	
  110

  	
  %

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

  	
   

  	
  120

  	
  %

  

 

6

 

“Contemplated Transactions” shall mean,
collectively, (i) the transactions consummated pursuant to the Merger
Agreement, including but not limited to the acquisition of Station Casinos,
Inc. by the Guarantors and the various equity transfers in connection with the
related restructuring, (ii) the merger of FCP MezzCo Parent Merger Sub, LLC
into FCP MezzCo Parent, LLC, (iii) Borrower’s acquisition of the Property from
subsidiaries of Master Lessee and the various equity transfers and merger
related to such acquisition, (iv) the leasing or subleasing of the Property
from Borrower to Master Lessee pursuant to the Master Lease, (v) the execution
and delivery of the Loan Documents or the Mezzanine Loan Documents, Borrower’s
or Mezzanine Borrower’s performance thereunder, the recordation of the Security
Instruments, and the exercise of any remedies by Lender or Mezzanine Lender,
and (vi) following Lender’s or its designee’s succession in title to any
Property, the transfer of any such Property by Lender or such designee.

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

“Counterparty” shall mean, with respect to
the Interest Rate Cap Agreement, JPMorgan Chase Bank, N.A., with respect to the Interest Rate Swap
Agreement, Deutsche Bank AG, and with respect to any Replacement Interest Rate
Protection Agreement, any substitute Approved Counterparty.

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

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

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

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

 

7

 

not the obligations have been assumed by such
Person; or (g) obligations of such Person under any interest rate or
currency exchange agreement.

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

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

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

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

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

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

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

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

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

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

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

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

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

 

8

 

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

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

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

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

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

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

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

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

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

“Excluded Personal Property” shall mean,
collectively, (a) all of the personal property of Master Lessee (including,
without limitation, all inventory and equipment, but excluding any items that
constitute fixtures), and (b) any personal property of Tenants under Subleases.
For purposes of this definition, the terms “inventory,” “equipment” and “fixtures”
shall have the 

 

9

 

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.

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

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

 

10

 

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

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

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

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

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

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

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

“First Mezzanine Loan Default Revocation Notice”
shall have the meaning set forth in Section 3.1.6(a)(ix) hereof.

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

“First Mezzanine Note” shall mean,
collectively, (i) that certain First Mezzanine Note A-1 in the principal amount
of $93,750,000 dated as of the date hereof, from First Mezzanine Borrower to
Noteholder I, and (ii) that certain First Mezzanine Note A-2 in the principal
amount of $56,250,000 dated as of the date hereof, from First Mezzanine
Borrower to Noteholder II.

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

 

11

 

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

 “Fitch”
shall mean Fitch Ratings Inc.

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

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

“GAAP” shall mean the generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the accounting profession), or in such other statements by
such entity as may be in general use by significant segments of the U.S.
accounting profession as of the Closing Date, to the extent such principles are
applicable to the facts and circumstances on the date of determination.

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

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

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

“Go Dark” shall mean, with respect to any
Individual Property, if such Individual Property is not open for business to
the public, unless such closure (i) is a result of a Taking of or casualty or
other damage or injury to such Individual Property or some other Excusable
Delay or (ii) is in connection with an Alteration permitted hereunder (and
provided that not more than one Individual Property may be closed in connection
with an Alteration at any one time unless such concurrent closure is expressly
pre-approved by Lender in writing or is unavoidable in order for Borrower,
Master Lessee or Tenant, to comply with Legal Requirements) and, in either such
case, the period of closure does not in any event exceed (A)
solely with respect to a closure due to casualty for which business
interruption insurance proceeds are payable to Master Lessee (or Borrower or
Lender) under the policy of business interruption insurance maintained by
Master Lessee pursuant to the terms of the Master Lease, the period of time for
which such business interruption insurance proceeds are payable, or (B) as to
any other closure, thirty (30) consecutive days, provided that if in connection
with a Material Alteration, Borrower shall have disclosed to Lender in the
notice required for such Material Alteration pursuant to Section 10.2
hereof that the Material Alteration will require the affected Individual
Property to be closed to the public for a specified period exceeding thirty
(30) 

 

12

 

consecutive days and Lender shall have approved such Material
Alteration, the Individual Property may be closed to the public for such
specified period of closure without being deemed to have “Gone Dark.”

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

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

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

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

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

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

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

“Guarantors” shall mean Holdco, FP and
VoteCo.

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

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

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

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

 

13

 

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

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

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

“Impositions” shall mean all taxes (including
all ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible transaction, privilege
or license or similar taxes), governmental assessments (including all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Agreement), water, sewer or other rents and charges,
excises, levies, fees (including license, permit, inspection, authorization and
similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property and/or any Rents (including all interest
and penalties thereon), which at any time prior to, during or in respect of the
term hereof may be assessed or imposed on or in respect of or be a Lien upon
(a) Borrower (including all income, franchise, single business or other taxes
imposed on Borrower for the privilege of doing business in the jurisdiction in
which the Property is located), (b) the Property, or any other collateral
delivered or pledged to Lender in connection with the Loan, or any part
thereof, or any Rents therefrom or any estate, right, title or interest
therein, or (c) any occupancy, operation, use or possession of, or sales from,
or activity conducted on, or in connection with the Property or the leasing or
use of all or any part thereof.  Nothing
contained in this Agreement shall be construed to require Borrower to pay any
tax, assessment, levy or charge imposed on (i) Master Lessee, (ii) any Tenant
or (iii) Lender in the nature of a capital levy, estate, inheritance,
succession, income or net revenue tax.

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

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

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

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

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

 

14

 

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

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

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

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

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

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

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

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

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

“Interest Rate Cap Agreement” shall mean the
Confirmation and Agreement (together with the confirmation and schedules
relating thereto) between the Counterparty and Borrower, obtained by Borrower
and collaterally assigned to Lender pursuant to this Agreement.  After delivery of a Replacement Interest Rate
Cap Agreement to Lender, the term “Interest Rate Cap Agreement” shall be deemed
to mean such Replacement Interest Rate Cap Agreement.  The Interest Rate Cap 

 

15

 

Agreement shall be governed by the laws of
the State of New York and shall contain each of the following:

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

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

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

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

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

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

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

“Interest
Rate Protection Agreement” shall mean, collectively, (a) an Interest Rate
Cap Agreement and (b) a Interest Rate Swap Agreement.  After delivery of a Replacement Interest Rate
Protection Agreement to Lender, the term “Interest Rate Protection Agreement”
shall be deemed to mean such Replacement Interest Rate Protection Agreement.

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

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

 

16

 

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

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

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

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

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

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

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

“Legal Requirements” shall mean all present
and future laws, statutes, codes, ordinances, orders, judgments, decrees,
injunctions, rules, regulations and requirements, and irrespective of the
nature of the work to be done, of every Governmental Authority including,
without limitation, Environmental Laws and all covenants, restrictions and
conditions now or hereafter of record which may be applicable to Borrower or to
the Property and the Improvements and the Building Equipment thereon, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of the Property and the Improvements and the Building
Equipment thereon including, without limitation, building and zoning codes and
ordinances and laws relating to handicapped accessibility.

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

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

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

“Letter of Credit” shall mean an irrevocable,
unconditional, transferable, clean sight draft letter of credit (either an
evergreen letter of credit or one which does not expire until at least sixty
(60) days after the Maturity Date (the LC Expiration Date)), in favor of
Lender and entitling 

 

17

 

Lender to draw thereon in New York, New York,
based solely on a statement executed by an officer or authorized signatory of
Lender and issued by an Approved Bank. 
If at any time (a) the institution issuing any such Letter of Credit
shall cease to be an Approved Bank or (b) the Letter of Credit is due to expire
prior to the LC Expiration Date, Lender shall have the right immediately to
draw down the same in full and hold the proceeds thereof in accordance with the
provisions of this Agreement, unless Borrower shall deliver a replacement
Letter of Credit from an Approved Bank within (i) as to (a) above, twenty (20)
days after Lender delivers written notice to Borrower that the institution
issuing the Letter of Credit has ceased to be an Approved Bank or (ii) as to
(b) above, at least twenty (20) days prior to the expiration date of said
Letter of Credit.

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

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

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

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

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

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

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

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

“Loan Amount” shall mean the original
principal amount of the Loan equal to $2,050,000,000.

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

 

18

 

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

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

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

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

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

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

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

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

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

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

“Master Lease SNDA” shall mean that certain
Subordination, Non-Disturbance and Attornment agreement among Borrower, Master
Lessee and Lender dated of even date herewith.

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

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

 

19

 

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

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

“Master Lessee Parties” shall mean the Master
Lessee and each Individual Property Sublessee.

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

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

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

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

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

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

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

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

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

“Mezzanine Account” shall mean the First
Mezzanine Account, Second Mezzanine Account, Third Mezzanine Account, and/or
such other mezzanine accounts that may be opened 

 

20

 

in connection with a Mezzanine Loan, or all
such accounts collectively, as the context may require.

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

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

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

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

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

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

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

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

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

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

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

 

21

 

 

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

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

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

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

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

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

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

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

“Non-Disqualification Opinion”  shall mean an opinion of outside tax counsel
reasonably acceptable to the Lender or the Rating Agencies to whom such opinion
is addressed that a contemplated action will neither cause any trust formed as
a Real Estate Mortgage Investment Conduit (a “REMIC”) pursuant to a
Securitization to fail to qualify as a “real estate mortgage investment conduit”
within the meaning of Section 860D of the Code at any time that any “regular
interests” in the REMIC are outstanding nor cause a “prohibited transaction”
tax (within the meaning of Section 860F(a)(2) of the Code) or “prohibited
contribution” tax (within the meaning of Section 860G(d) of the Code) to be
imposed on any such REMIC.

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

“Note
A-1” shall mean that certain Promissory Note of even date herewith in the
principal amount of up to $1,281,250,000, made by Borrower in favor of
Noteholder I, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

“Note
A-2” shall mean that certain Promissory Note of even date herewith in the
principal amount of up to $768,750,000, made by Borrower in favor of Noteholder
II, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

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

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

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

22

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

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

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

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

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

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

“Other Charges” shall mean, collectively,
maintenance charges, impositions other than Impositions, and any other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Property, now or hereafter
levied or assessed or imposed against the Property or any part thereof by any
Governmental Authority, other than those required to be paid by a Tenant
pursuant to its respective Sublease.

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

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

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

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

23

Mezzanine Notes and the other Mezzanine Loan Documents, as applicable)
or other instrument for borrowed money.

“Permitted Encumbrances” shall mean
collectively, (a) the Liens and security interests created or permitted by the
Loan Documents; (b) all Liens, encumbrances and other matters disclosed in the
Title Policies; (c) Liens, if any, for Impositions imposed by any Governmental
Authority not yet due or delinquent; (d) Liens arising after the
date hereof which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted in accordance with Article VII
hereof; (e) in the case of Liens arising after the date hereof, statutory Liens
of carriers, warehousemen, mechanics, materialmen and other similar Liens
arising by operation of law, which are incurred in the ordinary course of
business  or in connection with any Alteration permitted hereunder for  sums which are not delinquent or are being contested in
good faith in accordance with Article VII hereof; (f) easements,
rights-of-way, restrictions and other similar charges or non-monetary
encumbrances against real property which would not individually or in the
aggregate be reasonably likely to have a Material Adverse Effect; (g) any
judgment Lien provided that the judgment it secures shall have been discharged
of record or the execution thereof stayed pending appeal within 30 days after
the entry thereof or within 30 days after the expiration of any stay, as
applicable; (h) any matters that would be disclosed by an accurate survey of an
Individual Property other than the Surveys, provided that in the case of
Substitute Properties, the survey-related coverage under the Title Policies is
provided with respect to such Substitute Properties; (i) any of the Existing
Matters of Record, provided that (1) the amounts secured by such Liens have
been paid in full, or, in the case of an existing contested lien is being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted in accordance with Article VII hereof and (2) such
Liens are insured over in the Title Policies in a manner satisfactory to
Lender, whether such insurance is made available in consideration of payment,
bonding or indemnity by Borrower (but without limiting Borrower’s obligations
under Article VII with respect to the existing contested lien and
provided that any such indemnity or other consideration shall be in a form
reasonably satisfactory to Lender); (j) the Owner’s Title Policy Loss Payment
Direction Letter; (k) any Sublease
permitted under Section 8.8.2 below; and (l) such other Liens as Lender
may approve in writing in Lender’s sole discretion.

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

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

“PML” shall mean probable maximum loss.

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

24

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

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

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

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

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

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

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

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

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

25

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

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

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

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

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

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

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

“Proscribed Assignee” shall mean Highland
Capital Partners.

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

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

“PZR” shall mean The Planning Zoning Resource
Corporation.

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

“Rate Protection Collateral” shall have the
meaning set forth in Section 9.2.

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

26

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

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

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

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

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

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

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

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

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

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

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

“Rents” shall mean all rents, rent
equivalents, moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, without limitation, all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or 

27

for the account of or benefit of Borrower
from any and all sources arising from or attributable to the Property,
including, but not limited to the Master Lease and, upon termination thereof, the
Subleases, and Proceeds, if any, from business interruption or other loss of
income insurance.

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

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

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

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

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

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

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

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

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

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

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

28

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

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

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

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

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

“Second Mezzanine Loan Default Revocation Notice”
shall have the meaning set forth in Section 3.1.6(a)(x) hereof.

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

“Second Mezzanine Note” shall mean,
collectively, (i) that certain Second Mezzanine Note A-1 in the principal
amount of $93,750,000 dated as of the date hereof, from Second Mezzanine
Borrower to Noteholder I, and (ii) that certain Second Mezzanine Note A-2 in
the principal amount of $56,250,000 dated as of the date hereof, from Second
Mezzanine Borrower to Noteholder II.

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

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

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

“Security Instrument” shall mean each of
those certain first priority Deeds of Trust, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Master Lease, Subleases, Rents and
Security Deposits, dated the date hereof, executed and delivered by Borrower to
Lender (or to a trustee for the benefit of lender, as applicable) and
encumbering a 

29

portion of the Property, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

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

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

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

30

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 are paid in full such entity will not
dissolve.  In addition, the
organizational documents of such Person shall provide that such Person (1)
without the unanimous consent of all of the partners, directors or members, as
applicable, shall not with respect to itself or to any other Person in which it
has a direct or indirect legal or beneficial interest (a) seek or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or other similar official for the benefit of the creditors of such
Person or all or any portion of such Person’s properties, or (b) petition or
otherwise institute insolvency proceedings or otherwise seek any relief under
any laws relating to the relief from debts or the protection of debtors
generally, (2) has and will maintain its books, records, resolutions and
agreements as official records, (3) has held and will hold its assets in its
own name, (4) has not and will not identify its partners, members or
shareholders, or any affiliates of any of them as a division or part of it, and
(5) except as provided in the Loan Documents, has not and will not enter into
or be a party to any transaction with its partners, members, shareholders, or
its Affiliates except in the ordinary course of business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a comparable
arms-length transaction with a third party.

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

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

31

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

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

“Strike Price” shall
mean a rate for the Interest Rate Cap Notional Amount and the Mezzanine Loan
Notional Amount when calculated as the weighted average of (X) the Swap Fixed
Rate; (Y) the strike rate under the Cap Agreement, and (Z) the strike rate
under the Mezzanine Cap Agreements and weighted by the respective notional
amounts of the Interest Rate Swap Notional Amount, Interest Rate Cap Notional
Amount, and Mezzanine Notional Amount, shall not exceed 5.50% (which rate shall
be maintained regardless of any prepayments of the Loan made hereunder)

 

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

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

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

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

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

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

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

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

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

32

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

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

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

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

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

“Swap
Fixed Rate” shall mean 5.279%.

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

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

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

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

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

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

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

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

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

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

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

33

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

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

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

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

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

“Third Mezzanine Loan Default Revocation Notice”
shall have the meaning set forth in Section 3.1.6(a)(xi) hereof.

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

“Third Mezzanine Note” shall mean,
collectively, (i) that certain Third Mezzanine Note A-1 in the principal amount
of $78,125,000 dated as of the date hereof, from Third Mezzanine Borrower to
Noteholder I, and (ii) that certain Third Mezzanine Note A-2 in the principal
amount of $46,875,000 dated as of the date hereof, from Third Mezzanine
Borrower to Noteholder II.

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

34

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

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

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

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

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

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

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

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

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

“Unimproved Parcels” shall mean (a) those
portions of the Property identified on Schedule IV attached hereto and
made a part hereof and (b) any other undeveloped portion of an Individual
Property as to which Lender has reasonably determined that such portion is not
is not required for the primary intended use of such Individual Property and
that the release of such portion will not adversely affect either the “as
leased” appraised value or the net operating income of the remaining portion of
such Individual Property.

“U.S. Government Obligations” shall mean any
direct obligations of, or obligations guaranteed as to principal and interest
by, the United States Government or any agency or instrumentality thereof,
provided that such obligations are backed by the full faith and credit of 

35

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

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

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

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

II.                                     GENERAL TERMS

 

2.1           Loan; Disbursement to Borrower.

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

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

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

36

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

2.2           Interest; Loan Payments; Late
Payment Charge.

2.2.1        Payment
of Principal and Interest.

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

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

2.2.2        Method
and Place of Payment.

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

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

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

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

 

37

 

 

the Maximum Legal Rate (the “Late Payment Charge”)
in order to defray the expense incurred by Lender in handling and processing
such delinquent payment and to compensate Lender for the loss of the use of
such delinquent payment.  Any such amount
shall be secured by this Agreement, the Security Instruments and the other Loan
Documents to the extent permitted by applicable law.

 

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

2.3           Prepayments.

2.3.1        Prepayments.  No prepayments of the Indebtedness shall be
permitted except as set forth in Section 4 of the Notes and this Section
2.3.  If Borrower tenders payment of any
part of the Indebtedness other than in accordance with Sections 2.3.2, 2.3.3 or
2.3.4, (a) such payment may be made only on the next occurring Payment Date
together with all unpaid interest thereon as calculated through the end of the
Interest Period during which such Payment Date occurs (even if such period
extends beyond such Payment Date and calculated as if such payment had not been
made on such Payment Date), and (b) Borrower shall pay, in addition to the
Indebtedness, an amount equal to the Prepayment Fee and all other fees and sums
payable hereunder or under the Loan Documents, including without limitation,
Swap Breakage.

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

 

 

38

 

 

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

2.3.4        Release of Individual Properties. 
Subject to satisfaction of each of the conditions set forth below with
respect to any Individual Property or Individual Properties (collectively, the “General
Release Conditions”), Lender shall (i) release such Individual Property or
Individual Properties (a “Release” and each Individual Property subject
to a Release, a “Release Property”) from the Lien of the applicable
Security Instrument and related Loan Documents (or to the extent so requested
by Borrower, assign the Lien of the applicable Security Instrument to a new
lender without representation, warranty or recourse) (each release under this Section
2.3.4 or Section 2.3.5, a “Property Release”), (ii) authorize
a reduction in the notional amounts of the Interest Rate Protection Agreements
in proportion to the reduction of the Principal Amount (which may be pro rata
to the notional amounts thereof or otherwise as reasonably determined by
Borrower), (iii) instruct the Cash Management Bank to return to Borrower any
Excess Account Collateral subject to and in accordance with Section 2.3.7
except to the extent otherwise provided in such Section, (iv) comply with Section
2.3.8 with regard to adjusting the ongoing reserve requirements hereunder,
(v) authorize a reduction in the Master Lease Base Rent in an amount, which
shall equal the product of (x) the initial Master Lease Base Rent multiplied by
(y) a fraction, the numerator of which is the Combined Allocated Loan Amount
for the Release Property, and the denominator of which is the original Combined
Principal Amount, and (vi) require Borrower to enter into an amendment to the
Master Lease with Master Lessee (A) to effect such authorized reduction in the
Master Lease Base Rent, (B) to cause such Release Property to be released from
the Master Lease, (C) to terminate the Master Lease with respect to such
Release Property as of the date that such Release Property is released from the
Lien of the applicable Security Instrument and related Loan Documents, (D) to
amend the legal description of the “Leased Property” (as defined in the Master
Lease) to delete the Release Property, and (E) make such other amendments
consistent with the release of the Release Property from the Leased Property.

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

 

39

 

 

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

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

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

 

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

 

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

 

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

 

                                (h)           Borrower shall pay for any Swap
Breakage resulting from any Property Release and any and all reasonable
out-of-pocket costs and expenses incurred in connection with 

 

40

 

 

 

any proposed Property Release, including
Lender’s reasonable attorneys’ fees and disbursements and all title insurance
premiums for any endorsements to any existing Title Policies reasonably
required by Lender in connection with such proposed release.

 

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

 

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

 

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

 

2.3.5        Substitution
of Properties.

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

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

(i)            be subject to the Master Lease;

 

41

 

 

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

(iii)          be free and clear, as evidenced by the
environmental report referred to in paragraph (c) below, of Hazardous
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 Lender in its sole discretion) and be in material compliance with
all Environmental Laws;

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

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

(vi)          if the Substitute Property is ground
leased (such that Borrower will hold a leasehold interest rather than fee
title), the ground lease shall be financeable (as reasonably determined by
Lender, including, without limitation, having a memorandum of lease of record
in the applicable real property records, not containing rental adjustments that
reset the ground lease rent to fair market rent, and otherwise containing terms
and conditions and having a state of title that comports with then-current
guidelines of the Rating Agencies for ground leases in commercial
mortgage-backed security transactions); and

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

(c)           Diligence Process. The
Borrower shall submit to the Lender written notice (a “Substitution Notice”)
setting forth the Business Day no earlier than thirty (30) days after the date
of such Substitution Notice on which Borrower desires to effect such Substitution
(the “Substitution Date”), together with the following materials (the “Substitution
Due Diligence Package”) relating to the proposed Substitute Property:
(i) a description of the proposed Substitute Property sufficient to obtain
a Title Policy for such proposed Substitute Property, (ii) three years of
historical cash flow operating statements, if available, (iii) true,
complete and correct copies of any Material Subleases affecting the proposed
Substitute Property, (iv) a map and site plan, including an existing Survey of
the proposed Substitute Property dated not more than six (6) months prior to
such submission, (v) a copy of the proposed amendment to the Master Lease
and Master Lease SNDA and the License and Reservation Service Agreement to
include the proposed Substitute Property, (vi) copies of all permits, licenses and approvals required with
respect to operation of the proposed Substitute Property, (vii) a Phase I
environmental assessment report, conducted under the ASTM International Standard Practice for Environmental Site Assessments:  Phase I Environmental Site Assessment Process
E1527-05, 

 

42

 

 

issued by a recognized environmental consultant,
(viii) copies of all condominium documents and ground leases, if any, (ix)
an engineer’s inspection report, (x) ground lessor, fee mortgagee, condominium
association and tenant (under Material Subleases) estoppel certificates and
tenant (under Material Subleases) Non-Disturbance Agreements, in each case in
the forms attached hereto and including such variations that are either
immaterial or are reasonably acceptable to Lender, as applicable, together with
any consents required with respect to the Contemplated Transactions,
(xi) a commitment from the Title Company with respect to the issuance of a
Title Policy, together with copies of all exceptions referenced therein and a
copy of the recorded memorandum of ground lease if such Substitute Property
will be a Ground Lease Property, (xii) upon the reasonable request of the
Lender, a PML study, (xiii) a FIRREA appraisal conducted by Cushman &
Wakefield (or another Independent appraiser reasonably acceptable to Lender),
(xiv) if such proposed Substitute Property is not then owned by the
Borrower or its Affiliate, a duly executed copy of the purchase and sale
agreement for such proposed Substitute Property and copies of all proposed
documentation transferring title to the proposed Substitute Property to
Borrower including any interim transfers to its Affiliates, (xv) a copy of
the flood certification, (xvi) either (A) a letter or other evidence with
respect to the proposed Substitute Property from the appropriate Governmental
Authorities concerning compliance with applicable zoning and building laws, (B)
an ALTA 3.1 zoning endorsement for the Title Policy or (C) a zoning report
prepared by PZR indicating that the proposed Substitute Property is in material
compliance with applicable zoning and building laws, (xvii) a copy of the
valid permanent certificate of occupancy (if required by applicable law),
(xviii) calculations of the LTV Ratio and LCR both before and after the
proposed Substitution, (xix) evidence reasonably satisfactory to Lender
and its insurance consultant of insurance policies covering the proposed Substitute
Property satisfying all of the requirements of Article VI, and (xx) UCC,
bankruptcy, state and federal tax lien, litigation and judgment searches
conducted by a search firm reasonably acceptable to the Lender with respect to
the title holder of such proposed Substitute Property on the date immediately
prior to acquisition thereof by Borrower, in each of the locations reasonably
specified by the Lender and not revealing any Liens other than Permitted
Encumbrances.  In addition, Borrower
shall permit the Lender at all reasonable times and upon reasonable prior
notice to make an inspection of such proposed Substitute Property.  Lender shall confirm Borrower’s compliance
with this paragraph (c) with respect to each proposed Substitute Property
within thirty (30) days after Lender’s receipt of the complete applicable
Substitution Due Diligence Package and Lender’s failure to so confirm or deny
Borrower’s compliance within such thirty (30) day period shall be deemed
compliance by Borrower with this paragraph (c), provided that this sentence
appears in bold capital letters in the Substitution Notice accompanying the
Substitution Due Diligence Package.

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

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

 

43

 

 

(ii)           Release Conditions.  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 Lender by Borrower pursuant to clause
(c) of this Section 2.3.5), during each of the three 12-month
periods prior to the Substitution Date shall not have materially declined or
during the prior 12-month period, evidence a material downward trend (as reasonably determined by Lender, applying the
standards of a prudent commercial mortgage loan lender) over such three (3) year period.

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

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

(v)           Transaction Costs.  Borrower shall deliver to Lender evidence
reasonably satisfactory to Lender that all amounts owing to any parties in
connection with the transactions relating to the proposed Substitution have
been paid in full, or will simultaneously be paid in full on the Substitution
Date or adequate reserves therefor are established by Borrower in cash with 

 

44

 

 

respect to contingent or
other liabilities that may arise out of such transaction and for which Borrower
is not adequately indemnified or insured against as reasonably determined by
Lender;

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

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

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

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

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

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

 

45

 

 

Persons authorized to sign
on behalf of such parties, together with the true signatures of each such
Person;

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

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

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

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

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

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

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

 

46

 

 

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

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

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

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

2.3.6        Provisions Relating to Individual
Properties That Go Dark.

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

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

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

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

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

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

 

47

 

 

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

2.3.9        Release of Unimproved Parcels.  Subject to satisfaction of each of the
conditions set forth below with respect to any Unimproved Parcel, at the
request of Borrower, Lender shall release such Unimproved Parcel from the Lien
of the applicable Security Instrument and related Loan Documents without the
payment of any Release Price:

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

 

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

 

                                (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.

 

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

 

                                (e)           Borrower shall submit to Lender,
concurrently with its request for release, Release Instruments for the
Unimproved Parcel together with an Officer’s Certificate certifying that (i)
the Release Instruments are in compliance with all Legal Requirements, (ii) the
release to be effected will not violate the terms of this Agreement, (iii) the
release to be effected will not impair or otherwise adversely affect the Liens,
security interests and other rights of Lender under the Loan Documents not
being released (or as to the Property subject to the Loan Documents not being
released) and (iv) the requirement described in the other clauses of this Section
2.3.9 have been satisfied in connection with the release of the Unimproved
Parcel (together with calculations and supporting documentation demonstrating
the same in reasonable detail).

 

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

 

 

48

 

 

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

 

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

 

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

 

2.4           Regulatory
Change; Taxes.

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

 

49

 

 

through the end of the then current Interest Period), Borrower shall
pay to Lender upon Lender’s written request such additional amount or amounts
as will compensate Lender or any company Controlling Lender for Increased Costs
incurred in the interim to the extent Lender determines that such Increased
Costs are allocable to the Loan.

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

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

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

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

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

2.5           Conditions Precedent to Closing.  The obligation of Lender to make the Loan
hereunder is subject to the fulfillment by, or on behalf of, Borrower or waiver
by Lender of the following conditions precedent no later than the Closing Date;
provided, however, that unless a condition precedent shall expressly survive
the Closing Date pursuant to a separate agreement, by funding the Loan and
recording the Security Instruments, Lender shall be deemed to have 

 

50

 

 

waived any such conditions not theretofore fulfilled or satisfied; and
provided that the funding of the Loan shall be further subject to the terms and
conditions set forth in the Funding Letter Agreement:

2.5.1        Representations
and Warranties; Compliance with Conditions.  The representations and warranties of
Borrower contained in this Agreement and the other 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 or Event of Default shall have occurred
and be continuing; and Borrower shall be in compliance in all material respects
with all terms and conditions set forth in this Agreement and in each other
Loan Document on its part to be observed or performed.  Notwithstanding the foregoing, (i) the breach
or failure of a Property Specific Representation shall not constitute the
failure to satisfy the condition precedent set forth in this Section 2.5.1
unless such breach or failure would result in a “Material Adverse Effect on the
Company” (as such phrase is defined in the Merger Agreement), (ii) in the event
of the breach or failure of a Property Specific Representation that results in
a Portfolio MAE, Lender may require Borrower to effect a Lender-Initiated
Substitution.

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

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

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

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

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

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

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

 

 

51

 

 

(g)           Title
Insurance.  Lender shall have
received the Title Policies issued by the Title Company and dated as of the
Closing Date.  Such Title Policies shall
(i) provide coverage in an amount equal to 100% of the Loan, (ii) insure
Lender that the Security Instruments create a valid, first priority Lien on the
Property, free and clear of all exceptions from coverage other than Permitted
Encumbrances and standard exceptions and exclusions from coverage (as modified
by the terms of any endorsements), (iii) contain the endorsements and
affirmative coverages set forth on Exhibit A and such additional
endorsements and affirmative coverages as Lender may reasonably request to the
extent available in such State, and (iv) name Lender as the insured.  Lender also shall have received evidence that
all premiums in respect of such Title Policies have been paid.  Lender shall have received evidence that all
appropriate releases or discharges of encumbrances necessary for the delivery of
the Title Policies have been delivered for recording.  In addition, Lender shall have received
evidence of Borrower’s ownership of the Property in the form of owner’s title
policies insuring Borrower’s title to the Property, which title policies shall
be in form and substance, and issued by a title insurance company (with
appropriate reinsurance or coinsurance), reasonably satisfactory to Lenders

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

(i)            Insurance.  Lender shall have received valid certificates
of insurance for the policies of insurance required hereunder, satisfactory to
Lender in its sole discretion, and evidence of the payment of all insurance
premiums currently due and payable for the existing policy period.

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

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

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

 

52

 

organizational documents of any SPE Entity shall contain single purpose
entity provisions reasonably approved by Lender prior to the date hereof.

2.5.4        Counsel
Opinions.

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

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

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

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

(e)           [Reserved]

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

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

2.5.5        Consummation
of the Merger.  Borrower shall have
delivered to Lender a true, correct and complete copy of the Merger
Agreement.  The merger transactions
contemplated by the Merger Agreement shall have been consummated in accordance
with the Merger Agreement, and all conditions precedent to such consummation,
as set forth in the Merger Agreement, shall, as of the consummation of the
merger transactions, have been satisfied (and would have been satisfied,
without taking into consideration the application of the last paragraph of
Section 6.1 of the Merger Agreement) or (subject to the following clause)
waived, provided that no item requiring the consent of the Parent (as defined
in the Merger Agreement), including pursuant to Section 6.1 of the Merger
Agreement, that is material to the interest of Lender shall have been given and
no condition material to the interests of the Lender shall have been waived
except, in 

 

53

 

ease such case, with the prior written consent of Lender (which Lender
shall not unreasonably withhold or delay).

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

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

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

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

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

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

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

2.5.13      Existing Indebtedness.  After giving effect to the consummation of
the Contemplated Transactions, (a) Master Lessee and its subsidiaries shall
have no outstanding 

 

54

 

preferred equity
or indebtedness, except for  (i)
indebtedness incurred pursuant to (A) the 6 1/2% Senior Subordinated Notes due
2014, the 6 7/8% Senior Subordinated Notes due 2016, the 6% Senior Notes due
2012, the 6 5/8% Senior Subordinated Notes due 2018 and the 7.75% Senior Notes
due 2016 (the “Existing Notes”), in an aggregate principal amount of
approximately $2,300 million, (B) the Revolving/Term Credit Facility, (C) the
Mezzanine Loan, and (D) the Loan; (ii) preferred equity held by Holdco in its
subsidiaries and preferred equity held by one Borrower Party in another
Borrower Party, so long as such preferred equity does constitute “disqualified
stock,” is not otherwise entitled to any mandatory dividends or redemptions,
and contains terms that are otherwise reasonably satisfactory to Lender (provided
that Lender shall approve such terms so long as they are not adverse to the
interests of Lender);
(iii) indebtedness evidenced by a note in the principal amount of $100 million
dated February 16, 2007 issued by GV Ranch Station Capital Holdings, LLC and
indebtedness evidenced by a series of notes in an aggregate principal amount of
$9.2 million issued by a subsidiary of Master Lessee having a weighted average
interest rate of 7.1% and maturity dates ranging from  2009 to 2026; (iv) a capital lease of the
office building in which Master Lessee’s executive offices are located adjacent
to the Red Rock Resort (the “Executive Office Capital Lease”);
(v) indebtedness evidenced by that certain Credit Agreement dated as of
October 4, 2007 providing to Aliante Gaming, LLC, a Nevada limited liability
company, construction loans in the aggregate amount of $410 million and
revolving loans in the aggregate amount of $20 million, and a completion
guaranty by Master Lessee in respect thereof (the “Aliante Financing”)
and (vi) such other existing indebtedness and preferred equity, if any, as
shall be agreed by Lender (together with the Existing Notes, and the
indebtedness described in clauses (iii), (iv) and (v), the “Existing
Indebtedness”), and (b) all stock of the Master Lessee shall be owned by
Guarantors free and clear of Liens (other than those securing the
Revolving/Term Credit Facility)

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

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

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

 

55

 

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, Borrower and their respective subsidiaries (including shareholder
or member approvals, if any) shall have been obtained on terms reasonably
satisfactory to Lender and shall be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the Contemplated Transactions.  There shall not exist any action, suit,
investigation, litigation or proceeding pending or threatened in any court or
before any arbitrator or Governmental Authority that would permit Sponsor under
the Merger Agreement not to consummate the merger transaction.

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

2.6           [Reserved].

III.           CASH
MANAGEMENT

3.1           Cash Management.

3.1.1        Establishment of Accounts.  Borrower hereby acknowledges that,
simultaneously with the execution of this Agreement, pursuant to the Account
Agreement, Borrower has established with Cash Management Bank a holding account
(the “Holding Account”), which has been established as a non-interest
bearing deposit account with interest-bearing sub-accounts.  The Holding Account and each sub-account of
such account and the funds deposited therein shall serve as additional security
for the Loan.  Pursuant to the Account
Agreement, Borrower shall irrevocably instruct and authorize Cash Management
Bank to disregard any and all orders for withdrawal from the Collateral Accounts
made by, or at the direction of, Borrower. 
Borrower agrees that, prior to the payment in full of the Indebtedness,
the terms and conditions of the Account Agreement shall not be amended or
modified in any material respect without the prior written consent of Lender
(which consent Lender may grant or withhold in its sole discretion), and if a
Securitization has occurred, the delivery by Borrower of a Rating Agency
Confirmation.  In recognition of Lender’s
security interest in the funds deposited into the Collateral Accounts, the
Holding Account shall be named as follows: “FCP PropCo, LLC Holding Account in
favor of German American Capital Corporation, as Collateral Agent” (Account
Number 048818470).  

 

56

 

Borrower confirms
that it has established with Cash Management Bank the following sub-accounts of
the Holding Account (each, a “Sub-Account” and, collectively, the “Sub-Accounts”
and together with the Holding Account, the “Collateral Accounts”), which
(i) may be ledger or book entry sub-accounts and need not be actual
sub-accounts, (ii) shall each be linked to the Holding Account, (iii) shall
each be a “deposit account” (as such term is defined in Section 9-102(a)(29) of
the UCC) and (iv) shall each be an Eligible Account to which certain funds
shall be allocated and from which disbursements shall be made pursuant to the
terms of this Agreement:

(a)           a
sub-account for the retention of Account Collateral in respect of Impositions
and Other Charges for the Property (the “Tax Reserve Account”);

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

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

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

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

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

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

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

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

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

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

 

57

 

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

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

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

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

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

3.1.3        Maintenance of Collateral Accounts.

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

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

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

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

(ii)                   $0.00 into the Insurance
Reserve Account;

 

58

 

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

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

(v)                   $0.00 into the Swap Payment
Account;

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

(vii)                 $0.00
into the Proceeds Reserve Account;

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

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

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

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

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

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

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

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

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

(v)                   (i)
funds in an amount equal to the amount of Debt Service due on the Interest Rate
Swap Notional Amount (as the same may have been reduced in accordance with this
Agreement) on the Payment Date immediately following the date the transfer from
the Holding Account is made to the Debt Service Reserve Account, and (ii) funds
sufficient to pay 

 

59

 

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

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

(vii)                 provided no Event of Default
has occurred and is continuing and to the extent Lender receives a First
Mezzanine Lender Monthly Debt Service Notice, funds in an amount equal to the
First Mezzanine Loan Debt Service Amount for the month in which the Payment
Date immediately following the date of the transfer from the Holding Account
occurs and transfer the same to the First Mezzanine Debt Service Reserve
Account;

(viii)                provided (a) no Event of
Default has occurred and is continuing hereunder, (b) Lender has not received a
First Mezzanine Loan Default Notice, and (c) to the extent Lender receives a
Second Mezzanine Lender Monthly Debt Service Notice, funds in an amount equal
to the Second Mezzanine Loan Debt Service Amount for the month in which the
Payment Date immediately following the date of the transfer from the Holding
Account occurs and transfer the same to the Second Mezzanine Debt Service
Reserve Account; however, if no Event of Default has occurred and is continuing
hereunder and Lender receives a First Mezzanine Loan Default Notice, any
amounts that would otherwise have been distributed to the Second Mezzanine
Account, Third Mezzanine Account or such other Mezzanine Account junior thereto
absent such default shall instead be distributed to the First Mezzanine Account
for application in accordance with the First Mezzanine Loan Documents until
such time as Lender receives a notice from First Mezzanine Lender that such
event of default under the First Mezzanine Loan is no longer continuing (a “First
Mezzanine Loan Default Revocation Notice”);

(ix)                   provided
(a) no Event of Default has occurred and is continuing hereunder, (b) Lender
has not received a First Mezzanine Loan Default Notice or a Second Mezzanine
Loan Default Notice, and (c) to the extent Lender receives a Third Mezzanine
Lender Monthly Debt Service Notice, funds in an amount equal to the Third
Mezzanine Loan Debt Service Amount for the month in which the Payment Date
immediately following the date of the transfer from the Holding Account occurs
and transfer the same to the Third Mezzanine Debt Service Reserve Account;
however, (i) if no Event of Default has occurred and is continuing hereunder
and Lender has not received a First Mezzanine Loan Default Notice, and (ii)
Lender has received a Second Mezzanine Loan Default Notice, any amounts that
would otherwise have been distributed to the Third Mezzanine Account or such
other Mezzanine Account junior thereto absent such default shall instead be
distributed to the Second Mezzanine Account for application in accordance with
the Second Mezzanine Loan Documents until such time as Lender receives a notice
from Second Mezzanine Lender that such event of default under the Second
Mezzanine Loan is no longer continuing (a “Second Mezzanine Loan Default
Revocation Notice”);

 

60

 

(x)                    provided (a) no Event of
Default has occurred and is continuing hereunder, (b) Lender has not received a
First Mezzanine Loan Default Notice, a Second Mezzanine Loan Default Notice, or
a Third Mezzanine Loan Default Notice, and (c) to the extent Lender receives a
comparable Monthly Debt Service Notice from a Mezzanine Lender under any other
Mezzanine Loan, funds in an amount equal to the applicable debt service amount
under such notice for the month in which the Payment Date immediately following
the date of the transfer from the Holding Account occurs and transfer the same
to the applicable Mezzanine Debt Service Reserve Account, in order of priority
of the applicable Mezzanine Loans; however, (i) if no Event of Default has
occurred and is continuing hereunder and Lender has not received a First
Mezzanine Loan Default Notice or Second Mezzanine Loan Default Notice and (ii)
Lender has received a Third Mezzanine Loan Default Notice or a comparable
Mezzanine Loan Default Notice from the another Mezzanine Lender, any amounts
that would otherwise have been distributed to a Mezzanine Lender more junior in
priority to the Third Mezzanine Lender or such other Mezzanine Lender providing
the default notice shall not receive any such sums, but rather such sums shall
instead be distributed to Third Mezzanine Lender or the applicable senior
Mezzanine Lender that delivered such default notice for application in
accordance with Third Mezzanine Lender’s or such senior Mezzanine Lender’s
Mezzanine Loan Documents until such time as Lender receives a notice from Third
Mezzanine Lender or such senior Mezzanine Lender that such event of default
under the Third Mezzanine Loan or such senior Mezzanine Lender’s Mezzanine Loan
is no longer continuing (a “Senior Mezzanine Loan Default Revocation Notice”);

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

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

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

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

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

(i)                    If
there is a Master Lease Rent Shortfall, Lender shall have the right at its
election to direct the Cash Management Bank to transfer (but shall not be
obligated to so direct the Cash Management Bank to transfer) from the Master
Lease Rent Shortfall Reserve Account to the Holding Account, without prior
notice to Borrower or Master Lessee, an amount 

 

61

 

equal to such Master Lease Rent Shortfall.  Lender shall endeavor to give prompt notice
to Borrower of the occurrence of such a transfer from the Master Lease Rent
Shortfall Reserve Account, but it shall not be a breach of this Agreement, and
Lender shall have no liability to Borrower or any other Person, if Lender shall
fail to do so.

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

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

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

(e)           In the event
that Lender has received a Mezzanine Loan Default Notice and no Event of
Default or 90% Cash Sweep Period has occurred and is continuing, Borrower
hereby 

 

62

 

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

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

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

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

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

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

 

63

 

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

(vi)                  provided no Event of Default
has occurred and is continuing, and otherwise in accordance with the provisions
of Section 3.1.6, funds on deposit in the First Mezzanine Debt Service
Reserve Account to the First Mezzanine Account;

(vii)                 provided
no Event of Default has occurred and is continuing, and otherwise in accordance
with the provisions of Section 3.1.6, funds on deposit in the Second
Mezzanine Debt Service Reserve Account to the Second Mezzanine Account;

(viii)                provided no Event of Default has occurred and is continuing, and otherwise
in accordance with the provisions of Section 3.1.6, funds on deposit in the Third Mezzanine Debt Service
Reserve Account to the Third Mezzanine Account; and

(ix)                   provided no Event of Default has occurred and is continuing, and otherwise
in accordance with the provisions of Section 3.1.6, funds on deposit in any other Mezzanine Debt Service
Reserve Account to the Mezzanine Account of the applicable Mezzanine Lender, in
order of priority of the applicable Mezzanine Loans.

3.1.8        Cash Management Bank.

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

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

 

 

64

 

 

3.1.9        Borrower’s
Account Representations, Warranties and Covenants.

(a)           Borrower
represents, warrants and covenants that as of the date hereof, Borrower has
irrevocably directed the Master Lessee pursuant to a letter substantially in
the form of the Master Lease Rent Payment Direction Letter to make all payments
of Master Lease Scheduled Rent directly to the Holding Account at all times
during the term of the Loan and Borrower shall cause all such sums to be
deposited in the Holding Account.

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

3.1.10      Account
Collateral and Remedies.

(a)           Notwithstanding
anything to the contrary contained in this Agreement, upon the occurrence and
during the continuance of an Event of Default, without additional notice from
Lender to Borrower, (i) Lender may, in addition to and not in limitation of
Lender’s other rights, make any and all withdrawals from, and transfers between
and among, the Collateral Accounts as Lender shall determine in its sole and
absolute discretion to pay any Indebtedness, Obligations, operating expenses
and/or capital expenditures for the Property in such order and priority
as Lender shall determine in its sole and absolute discretion; and (ii) all payments to the Mezzanine
Lender pursuant to Section 3.1.6 shall immediately cease. Notwithstanding
anything to the contrary contained herein, except to the extent that Borrower
is entitled to such funds under the terms and provisions of the Master Lease
due to the continuance of a Master Lease Event of Default thereunder or
otherwise, funds deposited into the Tax
Reserve Account, the Insurance Reserve Account, and the Ground Rent Reserve
Account (i) may not be applied by Lender in satisfaction of the Obligations and
(ii) shall continue to be disbursed by Lender as provided in Article XVI
and this Article III as if no Event of Default has occurred.

(b)           Upon
the occurrence and during the continuance of an Event of Default, Borrower
hereby irrevocably constitutes and appoints Lender as Borrower’s true and
lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge and deliver any instruments and to exercise and enforce every
right, power, remedy, option and privilege of Borrower with respect to the
Account Collateral, and do in the name, place and stead of Borrower, all such
acts, things and deeds for and on behalf of and in the name of Borrower, which
Borrower could or might do 

 

65

 

or which Lender may deem necessary or desirable to
more fully vest in Lender the rights and remedies provided for herein and to
accomplish the purposes of this Agreement. 
The foregoing powers of attorney are irrevocable and coupled with an
interest.  Upon the occurrence and during
the continuance of an Event of Default, Lender may perform or cause performance
of any such agreement, and any reasonable out-of-pocket expenses of Lender
incurred in connection therewith shall be paid by Borrower as provided in Section
5.1.16.

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

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

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

3.1.13      Lender’s Liability.

(a)           Lender
shall be responsible for the performance only of such duties with respect to
the Account Collateral as are specifically set forth in this Section 3.1
or elsewhere in the Loan Documents, and no other duty shall be implied from any
provision hereof.  Lender shall not be
under any obligation or duty to perform any act with respect to the Account
Collateral which would cause it to incur any expense or liability or to
institute or defend any suit in respect hereof, or to advance any of its own
monies.  Borrower shall indemnify and
hold Lender, its employees 

 

66

 

and officers harmless from and against any loss,
cost or damage (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Lender in connection with the transactions contemplated
hereby with respect to the Account Collateral except as such may be caused by
the gross negligence or willful misconduct of Lender, its employees, officers
or agents.

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

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

3.1.15      Distributions.  Transfers of Borrower’s funds from any of the
Collateral Accounts to or for the benefit of any of the Mezzanine Borrowers
shall constitute distributions to First Mezzanine Borrower, and deemed
distributions by the First Mezzanine Borrower to the Second Mezzanine Borrower,
by the Second Mezzanine Borrower to the Third Mezzanine Borrower, and by the
Third Mezzanine Borrower to such other Mezzanine Borrower as may be junior
thereto, as applicable, and, in each case, must comply with the requirements as
to distributions of the Delaware Limited Liability Company Act.  The provisions of this Article III
shall not create a debtor-creditor relationship between Borrower and any
Mezzanine Lender.  Notwithstanding
anything to the contrary contained herein, there shall be no restriction or
limitation on Borrower’s ability to make distributions to its members or its or
their Affiliates other than as set forth in Section 5.2.13.

                                IV.           REPRESENTATIONS
AND WARRANTIES

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

4.1.1        Organization.  Borrower is a limited liability company and
has been duly organized and is validly existing and in good standing pursuant
to the laws of the State of Delaware with requisite power and authority to own
its properties and to transact the businesses in which it is now engaged.  Master Lessee is a corporation and has been
duly organized and is validly existing and in good standing pursuant to the
laws of the State of Nevada with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged.  Holdco is a corporation and has been duly
organized and is validly existing and in 

 

67

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

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

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

 

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Material Adverse
Effect, or any other Loan Documents has been obtained and is in full force and
effect.

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

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

4.1.6        Title.  Borrower has good, marketable and insurable
(i) leasehold title to the Land and the Improvements relating to the Ground
Lease Properties, and enjoys the quiet and peaceful possession of the Leasehold
Estate related thereto, and (ii) fee simple title to the Land and the
Improvements relating to all Individual Properties other than the Ground Lease
Properties, in each case free and clear of all Liens whatsoever except the
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents.  Borrower has good and marketable title to the
remainder of the Property (excluding the Excluded Personal Property), free and
clear of all Liens whatsoever except the Permitted Encumbrances.  The Security Instruments, when
properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, perfected first mortgage lien on the Land
and the Improvements or the leasehold estate therein, as applicable, subject
only to Permitted Encumbrances and (ii) perfected security interests in and to,
and perfected collateral assignments 

 

69

 

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

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

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

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

4.1.10      No Plan Assets.

(a)           Borrower
does not maintain an employee benefit plan as defined by Section 3(3) of ERISA,
which is subject to Title IV of ERISA, and Borrower (i) has no knowledge of any
material liability which has been incurred or is expected to be incurred by
Borrower which is or remains unsatisfied for any taxes or penalties with
respect to any “employee benefit plan,” within the meaning of Section 3(3) of
ERISA, or any “plan,” within the meaning of Section 4975(e)(1) of the Code or
any other benefit plan (other than a multiemployer plan) maintained,
contributed to, or required to be contributed to by Borrower or by any entity
that is under common control with Borrower within the meaning of ERISA Section
4001(a)(14) (a “Plan”) or any plan that would be a Plan but for the fact
that it is a multiemployer plan within the meaning of ERISA 

 

70

 

Section 3(37); and (ii) has made and shall continue
to make when due all required contributions to all such Plans, if any.  Each such Plan has been and will be
administered in compliance
with its terms and the applicable provisions of ERISA, the Code, and any other
applicable federal or state law other than such actions or failures to act that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect; and no action shall be taken or fail to be taken that
would result in the disqualification or loss of tax-exempt status of any such Plan
intended to be qualified and/or tax exempt other than such actions or failures
to act that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect; and

(b)           Borrower
is not an employee benefit plan, as defined in Section 3(3) of ERISA, subject
to Title I of ERISA, none of the assets of Borrower constitutes or will
constitute plan assets of one or more such plans within the meaning of 29
C.F.R. Section 2510.3-101 and Borrower is not a governmental plan within the
meaning of Section 3(32) of ERISA and Borrower is not subject to state statutes
regulating investment of, and fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or Section
4975 of the Code currently in effect, which prohibit or otherwise restrict the
transactions contemplated by this Agreement.

4.1.11      Compliance.  Subject to Schedule 4.1.11, Borrower
and the Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes (except for any non-compliance that individually or
in the aggregate would not reasonably be expected to result in a Material
Adverse Effect).  To the best of Borrower’s
knowledge, Borrower is not in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority.  To the best of Borrower’s knowledge, there
has not been committed by Borrower any act or omission affording the federal
government or any other Governmental Authority the right of forfeiture as
against the Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents.

4.1.12      Financial Information.  The information set forth in the certificate
of Borrower regarding financial information dated of even date herewith (i) is
true, complete and correct in all material respects and (ii) fairly represents
the financial condition of the Master Lessee and the Property as of the Closing
Date.  Borrower does not have any
material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and could reasonably be expected to
have a Material Adverse Effect.

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

 

71

 

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

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

4.1.16      Not a Foreign Person.  Borrower is not a foreign person within the
meaning of § 1445(f)(3) of the Code.

4.1.17      [Reserved].

4.1.18      [Reserved].

4.1.19      [Reserved].

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

4.1.21      [Reserved].

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

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

4.1.24      Certificate
of Occupancy; Licenses.  All material
certifications, permits, licenses and approvals,  including without
limitation, certificates of completion and occupancy permits 

 

72

 

required of Borrower for the legal use, occupancy and operation of each
Individual Property for its current use as a hotel and casino (collectively,
the “Licenses”), have been obtained and are in full force and effect
(except to the extent any such failure would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect).  Borrower shall keep and maintain all Licenses
necessary for the operation of each Individual Property in accordance with its
current use as a hotel and casino.  The
use being made of each Individual Property is in conformity with the
certificate of occupancy issued for such Individual Property (except to the
extent any such failure would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect).

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

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

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

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

 

73

 

therein, which will be outstanding following the funding of the Loan,
other than those being assigned to Lender concurrently herewith.

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

4.1.30      Single
Purpose Entity/Separateness.

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

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

 

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

4.1.34      [Reserved.]

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

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

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

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

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

 

75

 

at the Property and no such agreement or contract is currently being
negotiated by the Borrower or Master Lessee.

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

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

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

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

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

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

 

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4.1.46      Reserved.

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

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

                                V.            BORROWER
COVENANTS

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

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

5.1.2        Existence;
Compliance with Legal Requirements; Insurance.  Subject to Borrower’s right of contest
pursuant to Section 7.3 and Schedule 4.1.11, Borrower shall at all
times comply and cause the Property to be in compliance in all material
respects with all Legal Requirements applicable to the Borrower, any SPE Entity
and the Property and the uses permitted upon the Property.  Borrower shall do or cause to be done all
things necessary to preserve, renew and keep in full force and
effect its existence, rights, licenses, permits and franchises necessary to
comply with all material Legal Requirements applicable to it and the
Property.  There shall never be committed
by Borrower, and Borrower shall not knowingly permit any other Person in
occupancy of or involved with the operation or use of the Property to commit,
any act or omission affording the federal government or any state or local
government the right of forfeiture as against the Property or any part thereof
or any monies paid in performance of Borrower’s obligations under any of the
Loan Documents.  Borrower hereby
covenants and agrees not to commit, knowingly permit or suffer to exist any act
or omission 

 

77

 

affording such right of forfeiture. 
Borrower shall at all times maintain, preserve and protect all
franchises and trade names where the failure to so preserve and protect would
be reasonably likely to have a Material Adverse Effect, and preserve all the
remainder of its property used in and necessary for the conduct of its business
and shall keep the Property in good working order and repair (reasonable wear
and tear excepted, and subject to Excusable Delays, casualty and Taking, as to
the latter two of which Section 6.2 shall apply), and from time to time
make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully set forth
in the Security Instruments.  Borrower
shall keep the Property insured at all times to such extent and against such
risks, and maintain liability and such other insurance, as is more fully set
forth in this Agreement.

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

5.1.4        Single
Purpose Entity.

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

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

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

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

 

78

 

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

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

(g)           In
addition, Borrower and each SPE Entity shall each: (i) maintain books and
records separate from those of any other Person; (ii) maintain its assets in
such a manner that it is not more costly or difficult to segregate, identify or
ascertain such assets; (iii) hold regular meetings of its board of directors,
shareholders, partners or members, as the case may be; (iv) hold itself out to
creditors and the public as a legal entity separate and distinct from any other
entity; (v) prepare separate tax returns (unless part of a consolidated group)
and financial statements (unless part of a consolidated group), or if part of
consolidated group it will be shown as a separate member of such group or such
consolidated tax returns or financial statements will contain a note indicating
that it and its Affiliate are separate legal entities and maintain records,
books of account and accounts separate and apart from any other Person; (vi)
transact all business with its Affiliates on an arm’s-length basis and pursuant
to enforceable agreements; (vii) conduct business in its name and use separate
stationery, invoices and checks; (viii) not commingle its assets or funds with
those of any other Person; and (ix) not assume, guarantee or pay the debts or
obligations of any other Person.

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

 

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

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

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

5.1.9        [Reserved.]

5.1.10      Insurance.

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

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

5.1.11      Further
Assurances; Separate Notes; Loan Resizing.

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

 

80

 

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

(b)           Borrower
further agrees that if Lender determines, in its sole discretion, to increase
the principal amount of the Loan and correspondingly decrease the principal
amount of the Mezzanine Loan, or to decrease the principal amount of the Loan
and correspondingly increase the principal amount of the Mezzanine Loan, or to
reallocate the aggregate principal amount of the Mezzanine Loan among the
Mezzanine Notes or among the Mezzanine Notes plus additional tiers of mezzanine
notes, then in any such event, the Borrower shall cooperate with Lender’s “resizing”
of the Mezzanine Loan and the Loan, and such cooperation shall include any one
or more of the following (either individually or in combination): (A) if on the
date of the “resizing” of the Loan, a Mezzanine Lender lends to the applicable
Mezzanine Borrower (by way of a reallocation of the principal amounts of the
Loan and the Mezzanine Loan) such additional amount equal to the amount of the
principal reduction of the Loan, Borrower and each Mezzanine Borrower shall
execute and deliver any and all amendments or modifications to the Loan
Documents and the Mezzanine Loan Documents reasonably required by Lender or
Mezzanine Lender to implement such resizing; (B) if on the date of the “resizing”
of the Loan, Lender lends to the Borrower (by way of a reallocation of the
principal amount of the Loan and the Mezzanine Loan) an additional amount equal
to the amount of principal reduction of the applicable Mezzanine Loan, Borrower
and each Mezzanine Borrower shall execute and deliver any and all modifications
to the Loan Documents and Mezzanine Loan Documents reasonably required by
Lender or Mezzanine Lender to implement such resizing; and/or (C) in the event
of any reallocation of the principal amount of the Mezzanine Loan among the various
Mezzanine Notes, or among the various Mezzanine Notes plus newly created
additional tiers of mezzanine notes, Borrower and Mezzanine Borrower shall
execute and deliver any and all necessary amendments, modifications and/or
supplements to the Loan Documents and Mezzanine Loan Documents  reasonably required by Lender or Mezzanine
Lender to effect such reallocation.  In
connection with the foregoing, Borrower and Lender agree that the execution of
such documents and other agreements reasonably required by Mezzanine Lender
and/or Lender to “re-size” or reallocate the Loan and the Mezzanine Loan shall
be at Lender’s sole cost and expense. If the principal amount of the Loan is
increased, a fully paid endorsement to the Title Policies reflecting an
increase in the insured amount thereunder shall be obtained by Borrower at
Lender’s sole cost and expense and Borrower shall pay any related mortgage
taxes or mortgage recording taxes. 
Notwithstanding the foregoing, Lender agrees that (a) any “resizing” of
the Loan and the Mezzanine Loan (and any reallocation of the Mezzanine Loan)
shall not change the 

 

81

 

economics of the Loan and the Mezzanine Loan taken
as a whole in a manner which is adverse to Borrower and (b) no amendment of any
of the Loan Documents in connection with such “resizing” or reallocation shall
(taken as a whole with the Mezzanine Loan Documents) increase in any respect
the obligations or liabilities of, or decrease the rights of, Borrower, in each
case other than to a de minimis extent.

(c)           Any amounts
recovered from the Property or any
other collateral delivered or pledged to Lender in connection with the Loan, or
any part thereof, after an Event of Default may be applied by Lender
toward the payment of any interest and/or principal of the Loan and/or any
other amounts due under the Loan Documents or the Interest Rate Swap Agreement
in such order, priority, or proportions as Lender in its sole discretion shall
determine.

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

5.1.13      Operation.

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

5.1.14      Business
and Operations.  Borrower
shall continue to engage in the businesses presently conducted by it as and to
the extent the same are necessary for the ownership, maintenance, management
and operation of the Property.  Borrower
shall qualify to do business and shall remain in good standing under the laws
of the State in which the Property is located as and to the extent required for
the ownership, maintenance, management and operation of the Property.

5.1.15      Title
to the Property.

(a)           Borrower shall
warrant and defend (a) its title to the Property and every part thereof,
subject only to Liens permitted hereunder (including Permitted Encumbrances)
and (b) the validity and priority of the Liens of the Security Instruments, the
Assignment of Leases and 

 

82

 

this
Agreement on the Property, subject
only to Liens permitted hereunder (including Permitted Encumbrances), in each
case against the claims of all Persons whomsoever.  Borrower shall reimburse Lender for any
losses, costs, damages or expenses (including reasonable attorneys’ fees and
court costs) incurred by Lender if an interest in the Property, other than
Permitted Encumbrances, is claimed by another Person.

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

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

5.1.17      Estoppel
Statements.  Borrower
shall, from time to time but no more often than once in any calendar quarter so
long as no Event of Default shall exist, upon thirty (30) days’ prior written
request from Lender, execute, acknowledge and deliver to the Lender, an Officer’s
Certificate, stating that this Agreement and the other Loan Documents are
unmodified and in full force and effect (or, if there have been modifications,
that this Agreement and the other Loan Documents are in full force and effect
as modified and setting forth such modifications), stating the amount of
accrued and unpaid interest and the outstanding principal amount of the Notes
and containing such other information with respect to the Borrower, the
Property and the Loan as Lender shall reasonably request.  Lender shall, from time to time, but no more
often than once in any calendar quarter, upon thirty (30) days’ prior written
request from Borrower, execute, acknowledge and deliver to Borrower, a
certificate signed by an officer of Lender, stating that this Agreement and the
other Loan Documents are unmodified and in full force and effect (or, if there
have been modifications, that this Agreement and the other Loan Documents are
in full force and effect as modified and setting forth such
modifications).  The estoppel certificate
from Borrower shall also state either that, to the best of Borrower knowledge,
no Default exists hereunder or, if any Default shall exist hereunder, specify
such Default and the steps being taken to cure such Default and the estoppel
certificate from Lender shall state whether Lender has delivered notice of a
Default or an Event of Default.

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

 

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

5.1.20      No
Further Encumbrances.  Subject to Section
7.3, Borrower shall do, or cause to be done, all things necessary to keep
and protect the Property and all portions thereof unencumbered from any Liens,
easements or agreements granting rights in or restricting the use or
development of the Property, except for Permitted Encumbrances.

5.1.21      [Reserved.]

5.1.22      Master Lease.

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

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

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

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

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

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

 

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Notwithstanding
the foregoing, Master Lessee shall pledge to Borrower its interest in the “FF&E”
as defined in the Master Lease, subject to the Assigned Landlord Lien.

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

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

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

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

 

85

 

5.2           Negative
Covenants.

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

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

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

5.2.3        Engage
in Different Business. 
Engage, directly or indirectly, in any business other than that of
entering into this Agreement and the other Loan Documents to which Borrower is
a party and the use, ownership, management, leasing, renovation, financing,
development, operation and maintenance of the Property and activities related
thereto;

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

5.2.5        Subdivision

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

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

5.2.7        Guarantee
Obligations.  Guarantee
any obligations of any Person;

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

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

 

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

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

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

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

5.2.14      [Reserved;]

5.2.15      [Reserved;]

5.2.16      [Reserved;]

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

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

5.2.19      Change
of Principal Place of Business.  Change its principal place of business and
chief executive office set forth on the first page of this Agreement without
first giving Lender thirty (30) days’ prior written notice (but in any event,
within the period required pursuant to the UCC) and there shall have been taken
such action, reasonably satisfactory to Lender, as may be 

 

87

 

necessary to maintain fully the effect, perfection and priority of the
security interest of Lender hereunder in the Account Collateral and the Rate
Protection Collateral at all times;

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

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

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

VI.                                 INSURANCE; CASUALTY; CONDEMNATION;
RESTORATION

 

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

6.1.1        Property
Insurance.  Insurance
against loss customarily included under so called “All Risk” policies
including flood (subject to a $50 million sublimit), earthquake (subject to a
$50 million sublimit), windstorm, vandalism, and malicious mischief, boiler and
machinery, and such other insurable hazards as, under good insurance practices,
from time to time are insured against for other property and buildings similar
to the Improvements and Building Equipment in nature, use, location, height,
and type of construction.  Such insurance
policy shall also insure the additional expense of demolition and if any of the
Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses, provide coverage for contingent liability
from Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements and containing an “Ordinance or Law Coverage” or “Enforcement”
endorsement. The amount of such “All Risk” insurance shall be not less than one
hundred percent (100%) of the replacement cost value of the Improvements and
the Building Equipment.  Each such
insurance policy shall contain an agreed amount (coinsurance waiver) and replacement
cost value endorsement and shall cover, without limitation, all tenant
improvements and betterments which Borrower is required to insure in accordance
with any Sublease.  If the insurance
required under this paragraph is not obtained by blanket insurance policies,
the insurance policy shall be endorsed to also provide guaranteed building
replacement cost.  Lender shall be named “Loss
Payee” on a “Standard Mortgagee Endorsement” and be provided not less than
thirty (30) days advance notice of cancellation or non-renewal.

 

88

 

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

 

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

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

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

6.1.6        Boiler
and Machinery Insurance. 
Comprehensive boiler and machinery insurance (without exclusion for
explosion) covering all mechanical and electrical equipment against physical
damage, rent loss and improvements loss and covering, without limitation, all
tenant 

 

89

 

improvements and betterments that Borrower or Master Lessee is required
to insure pursuant to the Master Lease or any Sublease on a replacement cost
basis.  The minimum amount of limits to
be provided shall be $10,000,000 per accident. 
Lender shall be named “Loss Payee” on a “Standard Mortgagee Endorsement”
and be provided not less than thirty (30) days advance notice of cancellation
or non-renewal.

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

6.1.8        [Reserved.]

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

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

6.1.11      Ratings
of Insurers.  Borrower
shall maintain the insurance coverage described in Section 6.1 above, in
all cases, with one or more financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of “A” or better by S&P , provided that if five (5) or more
insurance companies issue any of the policies required hereunder, and at least
sixty percent (60%) of the applicable insurance coverage is provided by
insurance companies having a claims paying ability of “A” or better (and the
equivalent thereof), then the remaining forty percent (40%) or less of the
applicable insurance 

 

90

 

coverage required hereunder may be provided by insurance companies
having a claims paying ability of “BBB” or better (and the equivalent thereof).

6.1.12      Form
of Insurance Policies; Endorsements.  All insurance policies shall be in such form
and with such endorsements as are reasonably satisfactory to Lender (and Lender
shall have the right, subject to the provisions of this Agreement, to approve
amounts, form, risk coverage, deductibles, loss payees and insureds).  A certificate of insurance with respect to
all of the above-mentioned insurance policies has been delivered to Lender and
originals or certified copies of all such policies shall be delivered to Lender
when the same are available (but no later than thirty (30) days after the date
hereof) and shall be held by Lender.  All
policies shall name Lender as an additional insured, shall provide that all
Proceeds (except with respect to Proceeds of general liability and workers’
compensation insurance) be payable to Lender as and to the extent set forth in Section
6.2, and shall contain: (i) a standard “non-contributory mortgagee”
endorsement or its equivalent relating, inter  alia, to recovery
by Lender notwithstanding the negligent or willful acts or omissions of
Borrower; (ii) a waiver of subrogation endorsement in favor of Lender; (iii) an
endorsement providing that no policy shall be impaired or invalidated by virtue
of any act, failure to act, negligence of, or violation of declarations,
warranties or conditions contained in such policy by Borrower, Lender or any
other named insured, additional insured or loss payee, except for the willful
misconduct of Lender knowingly in violation of the conditions of such policy;
(iv) an endorsement providing for a deductible per loss of an amount not more
than that which is customarily maintained by prudent owners of properties with
a standard of operation and maintenance comparable to and in the general
vicinity of the Property, but in no event in excess of an amount reasonably
acceptable to Lender; and (v) a provision that such policies shall not be
canceled, terminated or expire without at least thirty (30) days’ prior written
notice to Lender, in each instance.  Each
insurance policy shall contain a provision whereby the insurer: (i) agrees that
such policy shall not be canceled or terminated, the coverage, deductible, and
limits of such policy shall not be modified, other provisions of such policy
shall not be modified if such policy, after giving effect to such modification,
would not satisfy the requirements of this Agreement, and such policy shall not
be canceled or fail to be renewed, without in each case, at least thirty (30)
days prior written notice to Lender, (ii) waives any right to claim any
premiums and commissions against Lender, provided that the policy need not
waive the requirement that the premium be paid in order for a claim to be paid
to the insured, and (iii) provides that Lender at its option, shall be
permitted to make payments to effect the continuation of such policy upon
notice of cancellation due to non-payment of premiums.  In the event any insurance policy (except for
general public and other liability and workers compensation insurance) shall
contain breach of warranty provisions, such policy shall provide that with
respect to the interest of Lender, such insurance policy shall not be
invalidated by and shall insure Lender regardless of (A) any act, failure to
act or negligence of or violation of warranties, declarations or conditions
contained in such policy by any named insured, (B) the occupancy or use of the
Property for purposes more hazardous than permitted by the terms thereof, or
(C) any foreclosure or other action or proceeding taken by Lender pursuant to
any provision of this Agreement. Lender hereby confirms and acknowledges that
Borrower has delivered to Lender certificates of insurance with respect to
Master Lessee’s insurance program, in amount, form and content so as to satisfy
the requirements of this Section 6.1 in all material respects as of the
Closing Date other than with respect to Section 6.1.9, and that any
renewals or modifications that comply with Section 6.1.11 and are
otherwise not, in substance, materially different from the approved program in
place on the Closing Date shall be deemed to be in compliance.

 

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

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

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

 

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6.2           Condemnation and
Insurance Proceeds.

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

6.2.2        Proceeds.  In the event of any Taking of or any casualty
or other damage or injury to the Property, including, but not limited to,
pursuant to the Taking matters set forth on Schedule II, Borrower’s
right, title and interest in and to all compensation, awards, proceeds,
damages, claims, insurance recoveries, causes and rights of action (whether
accrued prior to or after the date hereof) and payments which Borrower may
receive or to which Borrower may become entitled with respect to the Property
or any part thereof other than payments received in connection with any
liability or loss of rental value or business interruption insurance, including
all such right, title and interest in and to all compensation, awards,
proceeds, damages, claims, insurance recoveries, causes and rights of action
under insurance required to be maintained for the benefit of Borrower or Lender
under the Master Lease (collectively, “Proceeds”), in connection with
any such Taking of, or casualty or other damage or injury to, the Property or
any part thereof are hereby assigned by Borrower to Lender and, except as
otherwise herein provided, shall be paid to the Lender.  Borrower shall, in good faith and in a
commercially reasonable manner, file and prosecute the adjustment, compromise
or settlement of any claim for Proceeds and, subject to Borrower’s right to
receive the direct payment of any Proceeds as herein provided, will cause the
same to be paid directly to Lender to be held and applied in accordance with
the provisions of this Agreement.  Except
upon the occurrence and during the continuance of a Monetary Default or an
Event of Default, Borrower may settle any insurance claim with respect to
Proceeds which does not exceed the Casualty Amount as to any Individual
Property.  Whether or not a Monetary
Default or an Event of Default shall have occurred and be continuing, Lender
shall have the right to approve, such approval not to be unreasonably withheld,
any settlement which might result in any Proceeds in excess of the Casualty
Amount as to any Individual Property and Borrower shall deliver or cause to be
delivered to Lender all instruments reasonably requested by Lender to permit
such approval.  Borrower shall pay all
reasonable out-of-pocket costs, fees and expenses reasonably incurred by Lender
(including all reasonable attorneys’ fees and expenses, the reasonable fees of
insurance experts and adjusters and reasonable costs incurred in any litigation
or arbitration), and interest thereon at the Default Rate to the extent not
paid within ten (10) Business Days after delivery of a request for
reimbursement by Lender, in connection with the settlement of any claim for
Proceeds and seeking and obtaining of any payment on account thereof in
accordance with the foregoing provisions. 
If any Proceeds are received by Borrower and may be retained by Borrower
pursuant to this Section 6.2, such Proceeds shall, until the completion
of the related Work, be held in trust for Lender and shall be segregated from
other funds of Borrower to be used to pay for the cost of the Work in
accordance with the terms hereof, and in the event such Proceeds exceed the 

 

 

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

6.2.3        Lender
to Take Proceeds.

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

(b)           Any Proceeds remaining after
reimbursement of Lender’s or its agent’s reasonable out-of-pocket costs and
expenses actually incurred in connection with recovery of any such Proceeds
(including, without limitation, reasonable out-of-pocket administrative costs
and inspection fees) shall, except to the extent required to be applied for
restoration under Section 

 

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

6.2.4        Borrower
to Restore.

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

 

95

 

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

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

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

(ii)                   if, at any time, the
estimated cost of the Work (as estimated by the Architect referred to in clause
(iii) below) shall exceed the Proceeds (a “Deficiency”) and for so long
as such Deficiency shall exist, Lender shall not be required to make any
Proceeds disbursement to Borrower unless Borrower (within a reasonable period
of time after receipt of such estimate), at its election, either deposits with
or delivers to Lender (A) Cash and Cash Equivalents or a Letter or Letters of
Credit in an amount equal to the estimated cost of the Work less the Proceeds
available, or (B) such other evidence of Borrower’s ability to meet such excess
costs and which is satisfactory to Lender and the Rating Agencies;

 

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

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

6.2.5        Disbursement
of Proceeds.

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

 

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priority as to other creditors, encumbrances and
purchasers, as certified pursuant to an Officer’s Certificate, and delivery of
a certificate of occupancy with respect to the Work, or, if not applicable, an
Officer’s Certificate to the effect that a certificate of occupancy is not
required.

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

VII.                             IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER
ITEMS

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

7.2           No Liens.  Subject to its right of contest set forth in Section
7.3 and to Permitted Encumbrances, Borrower shall at all times keep, or
cause to be kept, the Property free from all Liens (other than Permitted
Encumbrances) and shall pay when due and payable (or bond over) all claims and
demands of mechanics, materialmen, laborers and others which, if unpaid, might
result in or permit the creation of a Lien on the Property or any portion
thereof and shall in any event cause the prompt, full and unconditional
discharge of all Liens imposed on or against the Property or any portion
thereof within forty-five (45) days after receiving written notice of the
filing (whether from Lender, the lienor or any other Person) thereof.  Borrower shall do or cause to be done, at the
sole cost of Borrower, everything reasonably necessary to fully preserve the
first priority of the Lien of the Security Instruments against the Property,
subject to the Permitted Encumbrances. 
Upon the occurrence and during the continuance of an Event of Default
with respect to its Obligations as set forth in this Article VII, Lender
may (but shall not be obligated to) make any such payment or discharge any such
Lien (other than Permitted Encumbrances (excluding therefrom any Liens
described in clauses (d) and (e) of the definition of “Permitted Encumbrances”
which are the subject of such Event of Default)), and Borrower shall reimburse
Lender on demand for all such advances pursuant to Section 19.12
(together with interest thereon at the Default Rate).

 

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

VIII.                         TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS

8.1           General
Restriction on Transfers.  Unless
such action is permitted by the provisions of this Article VIII,
Borrower shall not, and shall not permit any other Person holding any direct or
indirect ownership interest in Borrower, Mezzanine Borrower, any Guarantor,
Master Lessee, any SPE Entity or the Property to, except with the prior written
consent of Lender and, if a Securitization has occurred, delivery of a Rating
Agency Confirmation, (i) Transfer all or any part of the Property, or (ii)
except in connection with the Mezzanine Loan or the Revolving/Term Credit
Facility, permit any Transfer (directly or indirectly) of any interest in
Borrower, Mezzanine Borrower, any Guarantor, Master Lessee or any SPE Entity.  For 

 

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avoidance of doubt, the foregoing shall not prohibit (i) the Master
Lessee from granting a Lien to Borrower on portions of the Excluded Personal
Property, subject to the Assigned Landlord Lien, or (ii) the Borrower, Master
Lessee or any Tenant under any Individual Property Sublease or Sublease
permitted under Section 8.8.2 from entering into any Permitted
Encumbrance.

8.2           Sale of Building
Equipment.  Borrower may Transfer or
dispose of Building Equipment which is being replaced or which is no longer
necessary in connection with the operation of an Individual Property free from
the Lien of the applicable Security Instrument provided that such Transfer or
disposal will not have a Material Adverse Effect on the value of such
Individual Property, will not materially impair the utility of such Individual
Property, and will not result in a reduction or abatement of, or right of
offset against, the Rents payable under the Master Lease or any Sublease, in
either case as a result thereof, and provided further that any new Building
Equipment acquired by Borrower (and not so disposed of) shall be subject to the
Lien of the applicable Security Instrument. 
Lender shall, from time to time, upon receipt of an Officer’s
Certificate requesting the same and confirming satisfaction of the conditions
set forth above, execute a written instrument in form reasonably satisfactory
to Lender to confirm that such Building Equipment which is to be, or has been,
sold or disposed of is free from the Lien of the applicable Security
Instrument.

8.3           Immaterial
Transfers and Easements, etc. 
Borrower may, without the consent of Lender, (i) make immaterial
Transfers of portions of the Property to Governmental Authorities for dedication
or public use (subject to the provisions of Section 6.2) or, portions of
the Property to third parties for the purpose of erecting and operating
additional structures whose use is integrated with the use of the Property, and
(ii) grant easements, restrictions, covenants, reservations and rights of way
in the ordinary course of business for access, water and sewer lines, telephone
and telegraph lines, electric lines or other utilities or for other similar
purposes, provided that no such Transfer, conveyance or encumbrance set forth
in the foregoing clauses (i) and (ii) shall materially impair the utility and
operation of the Property or have a Material Adverse Effect on the value of the
Property taken as a whole.  In connection
with any Transfer permitted pursuant to this Section 8.3, Lender shall
execute and deliver any instrument reasonably necessary or appropriate, in the
case of the Transfers referred to in clause (i) above, to release the portion
of the Property affected by such Taking or such Transfer from the Lien of the
applicable Security Instrument or, in the case of clause (ii) above, to
subordinate the Lien of the applicable Security Instrument to such easements,
restrictions, covenants, reservations and rights of way or other similar grants
upon receipt by Lender of:

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

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

(c)           an
Officer’s Certificate stating (x) with respect to any Transfer, the
consideration, if any, being paid for the Transfer and (y) that such Transfer
does not materially impair the utility and operation of the Property or have a
Material Adverse Effect on the value of the Property taken as a whole; and

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

 

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8.4           [Reserved.]

8.5           Permitted Equity
Transfers.

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

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

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

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

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

(iv)          the pledge,
hypothecation, encumbrance or granting of a security interest in or lien on the
direct interest in Master Lessee to an Approved Bank as security for the 

 

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

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

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

8.7           Loan Assumption.  Provided no Event of Default is then
continuing, Borrower shall have the right, with the prior written consent of
Lender, to sell, assign, convey or transfer (but not mortgage, hypothecate or
otherwise encumber or grant a security interest in) legal or equitable title to
all (but not less than all) of the Property only if after giving effect to the
proposed transaction the Property will be owned by a Single Purpose Entity
wholly owned by a Qualified Transferee which shall have executed and delivered
to Lender an assumption agreement in form and substance acceptable to
Lender.  Any such assumption of the Loan
shall be conditioned upon, among other things, (i) the delivery of financial
information, including, without limitation, audited financial statements, for
such purchaser and the direct and indirect owners of such purchaser, (ii) the
delivery of evidence that the purchaser is a Single Purpose Entity and is not a
Disqualified Transferee, (iii) the execution and delivery of all documentation
reasonably requested by Lender, (iv) the delivery of Opinions of Counsel
requested by Lender, including, without limitation, a Non-Consolidation Opinion
with respect to the purchaser and other entities identified by Lender or
requested by the Rating Agencies and opinions with respect to the valid
formation, due authority and good standing of the purchaser and any additional
pledgors and the continued enforceability of the Loan Documents and any other
matters requested by Lender, (v) the delivery of an endorsement to each of the
Title Policies in form and substance acceptable to Lender, insuring the lien of
the Security Instruments, as assumed, subject only to the Permitted
Encumbrances and (vi) the payment of all of Lender’s reasonable out-of-pocket
fees, costs and expenses, including, without limitation, reasonable attorneys’
fees and costs, actually incurred by Lender in connection with such assumption.

 

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8.8           Subleases.

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

8.8.2        Leasing
Conditions.  Except as
otherwise provided in this Section 8.8.2, Borrower shall not, and shall
not permit Master Lessee to (i) enter into any Material Sublease (a “New
Sublease”) or (ii) modify any Material Sublease (including, without
limitation, accept a surrender of any portion of the Property subject to a
Material Sublease (unless otherwise permitted or required by law), allow a
reduction in the term of any Material Sublease or a reduction in the Rent
payable under any Material Sublease, change any renewal provisions of any
Material Sublease, materially increase the obligations of the landlord or materially
decrease the obligations of any Tenant under a Material Sublease) or terminate
any Material Sublease  unless the Tenant under such
Lease is in default (any such action referred to in clause (ii) being referred
to herein as a “Sublease Modification”) without the prior written
consent of Lender. Any New Sublease or Sublease Modification that requires
Lender’s consent shall be delivered to Lender for approval not less than five
(5) Business Days prior to the effective date of such New Sublease or Sublease
Modification.  If Lender fails to respond
to a request for Lender’s consent pursuant to this Section 8.8.2 within
five (5) Business Days of Lender’s receipt of Borrower’s request therefor,
Borrower may deliver to Lender a second request in an envelope or under cover
of a letter marked “URGENT” and including a legend in bold typeface that Lender’s
failure to grant or deny the requested consent within ten (10) Business Days of
the receipt thereof will result in the requested consent being deemed to have
been granted.  If Lender fails to respond
to such second request within ten (10) Business Days of its receipt thereof,
Lender’s consent shall be deemed granted. 
Notwithstanding the foregoing, but subject to terms of Sections 8.8.7
and 8.8.8, provided no Event of Default shall have occurred and be
continuing, Borrower may permit Master Lessee to enter into a New Sublease or
Sublease Modification in accordance with the Subleasing Standards.

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

8.8.4        Sublease
Amendments.  Borrower
agrees that it shall not have the right or power, as against Lender without its
consent (which consent shall not be unreasonably withheld or delayed as
provided herein), to cancel, abridge, amend or otherwise modify any Sublease
unless such modification complies with this Section 8.8.

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

 

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of all lease securities deposited by the Tenants and the location and
account number of the account in which such security deposits are held.

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

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

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

8.8.9        Non-Disturbance
Agreements.  Lender
shall enter into, and, if required by applicable law to provide constructive
notice or requested by a Tenant, record in the county where the subject Property
is located, a subordination, attornment and non-disturbance agreement,
substantially in form and substance substantially similar to the form attached
hereto as Exhibit N (a “Non-Disturbance Agreement”), with any
Tenant (other than an Affiliate of Borrower) entering into a New Sublease or
Sublease Modification, within twenty (20) Business Days after written request
therefor by Borrower; provided that such request is accompanied by an
Officer’s Certificate stating that such Sublease or Sublease Modification (as
applicable) complies in all material respects with this Section 8.8 and
payment of all reasonable out-of-pocket costs and expenses incurred by Lender
in connection with the negotiation, preparation, 

 

104

 

execution and delivery of any Non-Disturbance Agreement, including,
without limitation, reasonable attorneys’ fees and disbursements.

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

IX.                                INTEREST RATE PROTECTION AGREEMENT

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

 

9.2           Pledge and
Collateral Assignment.  As security
for the full and punctual payment and performance of the Obligations when due
(whether upon stated maturity, by acceleration, early termination or
otherwise), Borrower, as pledgor, hereby pledges, assigns, hypothecates,
transfers and delivers to Lender as collateral and hereby grants to Lender a
continuing first priority lien on and security interest in, to and under all of
the following whether now owned or hereafter acquired and whether now existing
or hereafter arising (the “Rate Protection Collateral”): all of the
right, title and interest of Borrower in and to (i) the Interest Rate
Protection Agreement; (ii) all payments, distributions, disbursements or
proceeds due, owing, 

 

105

 

payable or required to be delivered to Borrower in respect of the
Interest Rate Protection Agreement or arising out of the Interest Rate
Protection Agreement, whether as contractual obligations, damages or otherwise;
and (iii) all of Borrower’s claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under or arising out
of the Interest Rate Protection Agreement, in each case including all
accessions and additions to, substitutions for and replacements, products and
proceeds of any or all of the foregoing.

9.3           Covenants.

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

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

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

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

(e)           Borrower
shall not sell, assign, or otherwise dispose of, or mortgage, pledge or grant a
security interest in, any of the Rate Protection Collateral or any interest
therein, and any sale, assignment, mortgage, pledge or security interest
whatsoever made in violation of this 

 

106

 

covenant shall be a nullity and of no force and
effect, and upon demand of Lender, shall forthwith be cancelled or satisfied by
an appropriate instrument in writing.

(f)            Borrower
shall not (i) without the prior written consent of Lender modify, amend or
supplement the terms of the Interest Rate Protection Agreement, (ii) without
the prior written consent of Lender, except in accordance with the terms of the
Interest Rate Protection Agreement, cause the termination of the Interest Rate
Protection Agreement prior to its stated maturity date, (iii) without the prior
written consent of Lender, except as aforesaid, waive or release any obligation
of the Counterparty (or any successor or substitute party to the Interest Rate
Protection Agreement) under the Interest Rate Protection Agreement, (iv)
without the prior written consent of Lender, consent or agree to any act or
omission to act on the part of the Counterparty (or any successor or substitute
party to the Interest Rate Protection Agreement) which, without such consent or
agreement, would constitute a default under the Interest Rate Protection
Agreement, (v) fail to exercise promptly and diligently each and every material
right which it may have under the Interest Rate Protection Agreement, (vi) take
or intentionally omit to take any action or intentionally suffer or permit any
action to be omitted or taken, the taking or omission of which would result in
any right of offset against sums payable under the Interest Rate Protection
Agreement or any defense by the Counterparty (or any successor or substitute
party to the Interest Rate Protection Agreement) to payment or (vii) fail to
give prompt notice to Lender of any notice of default given by or to Borrower
under or with respect to the Interest Rate Protection Agreement, together with
a complete copy of such notice.  If
Borrower shall have received written notice that the Securitization shall have
occurred, no consent by Lender provided for in this Section 9.3 (f)
shall be given by Lender unless Lender shall have received a Rating Agency
Confirmation.

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

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

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

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

 

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

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

(d)           Giving
effect to the aforesaid grant and assignment to Lender, Lender has, as of the
date of this Agreement, and as to Rate Protection Collateral acquired from time
to time after such date, shall have, a valid, and upon proper filing, perfected
and continuing first priority lien upon and security interest in the Rate
Protection Collateral; provided that no representation or warranty is made with
respect to the perfected status of the security interest of Lender in the
proceeds of Rate Protection Collateral consisting of “cash proceeds” or “non-cash
proceeds” as defined in the UCC except if, and to the extent, the provisions of
Section 9-306 of the UCC shall be complied with.

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

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

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

(a)           Lender,
without obligation to resort to any other security, right or remedy granted
under any other agreement or instrument, shall have the right to, in addition
to all rights, powers and remedies of a secured party pursuant to the UCC (all
of which Lender may exercise), at any time and from time to time, sell, resell,
assign and deliver, in its sole discretion, any or all of the Rate Protection
Collateral (in one or more parcels and at the same or different times) and all
right, title and interest, claim and demand therein and right of redemption
thereof, at public or private sale, for cash, upon credit or for future
delivery, and in connection therewith Lender may grant options and may impose
reasonable conditions such as requiring any purchaser to represent that any “securities”
constituting any part of the Rate Protection Collateral are being purchased for
investment only, Borrower hereby waiving and releasing any and all equity or
right of redemption to the fullest extent permitted by the UCC or applicable
law.  If all or any of the Rate
Protection Collateral is sold by Lender upon credit or for future delivery,
Lender shall not be liable for the failure of the purchaser to purchase or pay
for the same and, in the event of any 

 

108

 

such failure, Lender may resell such Rate Protection
Collateral.  It is expressly agreed that
Lender may exercise its rights with respect to less than all of the Rate
Protection Collateral, leaving unexercised its rights with respect to the
remainder of the Rate Protection Collateral, provided, however, that such
partial exercise shall in no way restrict or jeopardize Lender’s right to
exercise its rights with respect to all or any other portion of the Rate
Protection Collateral at a later time or times.

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

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

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

 

109

 

(e)           Pursuant to the powers-of-attorney provided for above,
Lender may take any action and exercise and execute any instrument which it may
deem necessary or advisable to accomplish the purposes hereof; provided,
however, that Lender shall not be permitted to take any action pursuant to said
power-of-attorney that would conflict with any limitation on Lender’s rights
with respect to the Rate Protection Collateral. 
Without limiting the generality of the foregoing, Lender, after the
occurrence of an Event of Default, shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to Borrower representing:  (i)
any payment of obligations owed pursuant to the Interest Rate Protection
Agreement, (ii) interest accruing on any of the Rate Protection Collateral or
(iii) any other payment or distribution payable in respect of the Rate
Protection Collateral or any part thereof, and for and in the name, place and
stead of Borrower, to execute endorsements, assignments or other instruments of
conveyance or transfer in respect of any property which is or may become a part
of the Rate Protection Collateral hereunder.

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

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

 

 

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brokers’ and attorneys’ fees and
disbursements and any tax imposed thereon. 
However, the proceeds of sale of Rate Protection Collateral shall be
available to cover such costs and expenses, and, after deducting such costs and
expenses from the proceeds of sale, Lender shall apply any residue to the
payment of any interest and/or principal of the Loan and/or any other amounts
due under the Loan Documents or the Interest Rate Swap Agreement in such order,
priority, or proportions as Lender in its sole discretion shall determine.

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

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

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

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

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

X.           MAINTENANCE OF PROPERTY; ALTERATIONS

10.1         Maintenance of
Property.  Borrower shall keep and
maintain, or cause to be kept and maintained, the Property and every part
thereof in good condition and repair, subject to ordinary wear and tear, and,
subject to Excusable Delays and the provisions of this Agreement with respect
to damage or destruction caused by casualty events or Takings, shall not permit
or commit any waste of any portion of the Property in any material
respect.  Borrower shall not remove or
demolish any Improvement on the Property except as the same may be necessary in
connection with an Alteration or a restoration in connection with a Taking or
casualty, or as 

 

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otherwise permitted herein, in each case in
accordance with the terms and conditions hereof.  Without limiting the foregoing, within one
(1) year of the Closing Date, Borrower shall, or shall cause Master Lessee, to complete
the items of deferred maintenance and environmental remediation identified on Schedule
III attached hereto.

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

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

 

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

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

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

11.1         Books and Records.  Borrower shall keep and maintain on a Fiscal
Year basis proper books and records separate from any other Person, in which
accurate and complete entries shall be made of all dealings or transactions of
or in relation to the Notes, the Property and the business and affairs of
Borrower relating to the Property which shall reflect all items of income and
expense in connection with the operation of the Property and in connection with
any services, equipment or furnishings provided in connection with the
operation of the Property, in accordance with GAAP.  Subject to Section 11.2.9, Lender and
its authorized representatives shall have the right at reasonable times and
upon reasonable notice to examine the books and records of Borrower relating to
the operation of the Property and to make such copies or extracts thereof as
Lender may reasonably require.

11.2         Financial Statements.

11.2.1      Monthly Reports.  Commencing in November 2007, not later than
thirty (30) days following the end of each calendar month (or, with respect to
calendar months that end on the last day of a Fiscal Quarter, concurrently with
the delivery of the applicable quarterly reports 

 

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pursuant to Section 11.2.2), Borrower
shall cause Master Lessee, pursuant to the Master Lease, to deliver to Lender
monthly revenue reports in respect of the Property for such month, for the
corresponding month of the previous Fiscal Year and for the year to date, and
financial statements, internally prepared on an accrual basis for such month,
reporting Portfolio Four-Wall EBITDAR
as of the end of such month, for the corresponding month of the previous Fiscal
Year and for the year to date, and a comparison of the year to date results
with (i) the results for the same period of the previous year and (ii) the
Annual Budget for such period and the Fiscal Year, and a calculation of the
LCR, LTV Ratio, Master Lease Variable
Additional Rent and Master Lease Recurrent Additional Rent for such
period.  Such statements for each month shall: (A) fairly represent the financial
condition and results of operations of Master Lessee and (B) be
accompanied by an Officer’s Certificate and a Master Lessee Officer’s
Certificate certifying to the best of the signer’s knowledge, (1) that the
requirements in clauses (A) and (B) above have been satisfied; and (2) that as
of the date of such Officer’s Certificate, no Event of Default exists under
this Agreement, the Notes or any other Loan Document or, if so, specifying the
nature and status of each such Event of Default and the action then being taken
by Borrower or proposed to be taken to remedy such Event of Default.  Such financial statements shall contain such
other information as shall be reasonably requested by Lender for purposes of
calculations to be made by Lender pursuant to the terms hereof.  Notwithstanding the foregoing, Borrower shall
deliver promptly to Lender reports detailing any non recurring charges of
Borrower or Master Lessee including, among other things, any charges assessed
under any Operating Agreement.  Subject
to Section 11.2.9(b), revenue reports and Portfolio Four-Wall EBITDAR
shall each be prepared on an aggregate basis for all of the Individual
Properties.

11.2.2      Quarterly Reports.  Commencing not later than forty-five (45)
days following the end of each Fiscal Quarter (commencing with the Fiscal
Quarter ending December 31 2007), Borrower shall cause Master Lessee, pursuant
to the Master Lease, to deliver to Lender quarterly revenue reports in respect
of the Property and unaudited financial statements, internally prepared on an
accrual basis, reporting Portfolio
Four-Wall EBITDAR as of the end of such Fiscal Quarter and for the
corresponding Fiscal Quarter of the previous year, including a statement of net
income (in respect of the Property) for the year to date and a statement of
revenues and expenses for such Fiscal Quarter, and a comparison of the year to
date results with (i) the results for the same period of the previous year and
(ii) the Annual Budget for such period and the Fiscal Year, and a calculation
of the LCR, LTV Ratio, Master Lease
Variable Additional Rent and Master Lease Recurrent Additional Rent for
such period.  Such statements for each Fiscal Quarter shall: (A) fairly represent
the financial condition and results of operations of Master Lessee and
(B) be accompanied by an Officer’s Certificate and a Master Lessee Officer’s
Certificate certifying to the best of the signer’s knowledge, (1) that the
requirements in clauses (A) and (B) above have been satisfied; (2) that as of
the date of such Officer’s Certificate, no Event of Default exists under this
Agreement, the Notes or any other Loan Document or, if so, specifying the
nature and status of each such Event of Default and the action then being taken
by Borrower or proposed to be taken to remedy such Event of Default, and (3)
that as of the date of each Officer’s Certificate, no litigation exists
involving Borrower, Master Lessee or the Property in which the amount involved
is $5,000,000 (in the aggregate) or more or in which all or substantially all
of the potential liability is not covered by insurance, or, if so, specifying
such litigation and the actions being taken in relation thereto.  Such financial statements shall contain such
other information as shall be reasonably requested by Lender for purposes of
calculations to be made by Lender pursuant to the terms hereof.

 

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

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

11.2.5      Capital Expenditures Summaries.  Borrower shall, or shall cause Master Lessee
to, within ninety (90) days after the end of each calendar year during the term
of the Notes, deliver to Lender an annual summary of any and all capital
expenditures made at the Property during the prior twelve (12) month period.

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

11.2.7      Annual Budget; Operating Agreement Annual
Budgets.

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

(b)           Borrower shall or
shall cause Master Lessee to deliver to Lender the Annual Budget and any
modifications thereto under any Operating Agreement for Lender’s review, but
not approval, prior to Borrower’s or Master Lessee’s approval of any such
annual budget or modification. 
Notwithstanding the foregoing, upon the occurrence and during the
continuation of an Event of Default and if there is a Master Lease Tenant
Default, Lender shall have the right to exercise any right of approval that
Borrower may have to approve the annual budgets and any 

 

115

 

amendments thereto under any Operating
Agreements subject to any constraints in the Operating Agreement in question,
in its sole and absolute discretion.

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

11.2.9      Proprietary Information.

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

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

XII.         ENVIRONMENTAL MATTERS

12.1         Representations.  Borrower hereby represents and warrants that
except as set forth in the environmental reports and studies delivered to
Lender prior to the Closing Date (the “Environmental Reports”) or as
would not reasonably be expected to have a Material Adverse Effect, (i)
Borrower has not engaged in or, to the Borrower’s knowledge, permitted any
operations or activities upon, or any use or occupancy of the Property, or any
portion thereof, for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials on, under, in or about the
Property, or transported any Hazardous Materials to, from or across the
Property, except in all cases in compliance with Environmental Laws; (ii) to
Borrower’s 

 

116

 

knowledge, no tenant, occupant or user of the
Property, or any other Person, has engaged in or permitted any operations or
activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any material way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials on, in or about the Property, or
transported any Hazardous Materials to, from or across the Property, except in
all cases in compliance with Environmental Laws; (iii) to the Borrower’s
knowledge, no Hazardous Materials are presently constructed, deposited, stored,
or otherwise located on, under, in or about the Property except in compliance
with Environmental Laws; (iv) to the best of Borrower’s knowledge, no Hazardous
Materials have migrated from the Property upon or beneath other properties
which would reasonably be expected to result in material liability for
Borrower; and (v) to the Borrower’s knowledge, no Hazardous Materials have
migrated or threaten to migrate from other properties upon, about or beneath
the Property which would reasonably be expected to result in material liability
for Borrower.

12.2         Covenants.

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

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

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

12.3         Environmental
Reports.  Upon the occurrence and
during the continuance of an Environmental Event with respect to the Property
or any Event of Default, Lender shall have the right to have its consultants
perform an environmental audit of the Property. 
Such audit shall be conducted by an environmental consultant chosen by
Lender and may include a visual survey, a 
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
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117

 

such further site assessments as Lender may
reasonably require due to the results obtained from the foregoing, provided that if
such audit shall be undertaken with respect to an Environmental Event, such
audit shall be limited to a scope reasonably necessary to assess the subject
matter of the Environmental Event. 
Subject to applicable Gaming Laws, Borrower grants Lender, its agents,
consultants and contractors the right to enter the Property as reasonable or
appropriate for the circumstances, during normal business hours on Business
Days upon reasonable advance written notice, for the purposes of performing
such studies and the reasonable cost of such studies shall be due and payable
by Borrower to Lender upon demand and shall be secured by the Lien of the
Security Instruments.  Lender shall not
unreasonably interfere with, and Lender shall direct the environmental
consultant to use its commercially reasonable efforts not to hinder, Borrower’s,
Master Lessee’s or any Tenant’s or other occupant’s operations upon the
Property when conducting such audit, sampling or inspections.  By undertaking any of the measures identified
in and pursuant to this Section 12.3, Lender shall not be deemed to be
exercising any control over the operations of Borrower or the handling of any
environmental matter or hazardous wastes or substances of Borrower for purposes
of incurring or being subject to liability therefor.

12.4         Environmental
Indemnification.  Borrower, at its
sole cost and expense, shall protect, indemnify, save, defend (at trial and at
appellate levels and with attorneys, consultants and experts selected by
Borrower and reasonably acceptable to Indemnified Parties), and hold harmless
the Indemnified Parties from and against any and all liability, loss, lien,
damage, obligations, settlement payments, penalties, assessments, citations,
directives, litigation, actions, demands, defenses, proceedings, causes of
action, costs, disbursements, or 
expenses of any kind or of any nature whatsoever (including, without
limitation, but subject to the provisions hereof, reasonable attorneys’,
consultants’ and experts’ fees and disbursements reasonably incurred in
investigating, defending against, settling or prosecuting any claim, litigation
or proceeding) and any and all claims, suits and judgments which may at any
time be imposed upon, incurred by or asserted or awarded against any
Indemnified Party or any Individual Property, as a result of or with respect to
or arising from or out of:  (a) any
Environmental Claim relating to or arising from the Property; (b) the violation
of any Environmental Law in connection with the Property; (c) any actual or
threatened release, spill, or the presence of any Hazardous Materials affecting
the Property; (d) the presence at, in, on or under, or the release, escape,
seepage, leakage, discharge or migration at or from, the Property of any
Hazardous Materials, whether or not such condition was known or unknown to
Borrower; (e) the actual or threatened presence, release, seepage, leakage,
discharge or migration of Hazardous Materials at any other location if the
Hazardous Materials were generated, treated, stored, transported or disposed of
by or on behalf of the Borrower; (f) the failure of Borrower to comply fully
with the terms and conditions of this Article XII;  or (g) the enforcement of this Article XII,
including, without limitation, (i) the reasonable costs of assessment,
containment and/or removal of any and all Hazardous Materials from all or any
portion of any Individual Property, any adjacent areas, (ii) the costs of any
actions taken in response to an actual or threatened release, escape, seepage,
leakage, discharge, migration or presence of any Hazardous Materials on, in,
under or affecting all or any portion of any Individual Property, any adjacent
areas, or any other areas to prevent or minimize such actual or threatened
release, escape, seepage, leakage, discharge, migration or presence of any
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 

 

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adjacent areas, or any other areas for
violations; provided that, in each case, Borrower shall be relieved of its
obligation under this subsection if any of the matters referred to in clauses
(a) through (g) above did not occur (but need not have been discovered) prior
to (1) the foreclosure of the Security Instruments, (2) the delivery by
Borrower to Lender or its designee of a deed-in-lieu of foreclosure with
respect to the Property, or (3) Lender’s or its designee’s taking possession
and control of the Property after the occurrence of an Event of Default
hereunder.  If any such action or other
proceeding shall be brought against Lender, upon written notice from Borrower
to Lender (given reasonably promptly following Lender’s notice to Borrower of
such action or proceeding), Borrower shall be entitled to assume the defense
thereof, at Borrower’s expense, with counsel reasonably acceptable to Lender;
provided, however, Lender may, at its own expense, retain separate counsel to
participate in such defense, but such participation shall not be deemed to give
Lender a right to control such defense, which right Borrower expressly
retains.  Notwithstanding the foregoing,
each Indemnified Party shall have the right to employ separate counsel at
Borrower’s expense if, in the reasonable opinion of legal counsel, a conflict
or potential conflict exists between the Indemnified Party and Borrower that
would make such separate representation advisable.  Borrower shall have no obligation under this Section
12.4 to indemnify an Indemnified Party for any liability, loss, lien,
damage, obligations, settlement payments, penalties, assessments, citations,
directives, litigation, actions, demands, defenses, proceedings, causes of
action, costs, disbursements, or 
expenses of any kind or of any nature whatsoever (including, without
limitation, but subject to the provisions hereof, reasonable attorneys’,
consultants’ and experts’ fees and disbursements reasonably incurred in
investigating, defending against, settling or prosecuting any claim, litigation
or proceeding) and any and all claims, suits and judgments resulting from any
Indemnified Party’s gross negligence or willful misconduct.

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

XIII.        THE OPERATING AGREEMENTS

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

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

 

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

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

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

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

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

13.2         Cure by Lender.  In the event of a default by Borrower in the
performance of any of its obligations under any Operating Agreement beyond any
applicable notice and cure periods therein, including, without limitation, any
default in the payment of any sums payable thereunder, then, in each and every
such case, Lender may, at its option, cause the default or defaults to be
remedied and otherwise exercise any and all rights of Borrower thereunder in
the 

 

 

120

 

name of and on behalf of Borrower. 
Borrower shall, on demand, reimburse Lender for all advances made and
reasonable out-of-pocket expenses incurred by Lender in curing any such default
(including, without limitation, reasonable attorneys’ fees and disbursements),
together with interest thereon computed at the Default Rate from the date that
such advance is made to and including the date the same is paid to Lender.

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

13.4         Operating Agreement Covenants.

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

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

13.4.3      Notice
Prior to Rejection.  Borrower
shall give Lender not less than thirty (30) days prior written notice of the
date on which Borrower shall apply to any court or other Governmental Authority
for authority and permission to reject an Operating Agreement in the event that
there shall be filed by or against Borrower any petition, action or proceeding
under the Bankruptcy Code or under any other similar federal or state law now
or hereafter in effect and if

 

121

 

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

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

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

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

13.4.7      Performance
of Covenants.  Borrower
shall promptly perform and observe in all material respects all of the terms,
covenants and conditions required to be performed and observed by Borrower
under the Operating Agreements, the breach of which could permit any party to
an Operating Agreement validly to terminate such Operating Agreement
(including, without limitation, all payment obligations) except in the case of
a Material Sublease where such termination would not have a Material Adverse
Effect, shall do all things commercially

 

122

 

reasonable to preserve and to keep unimpaired its rights under the
Operating Agreements, shall not waive, excuse or discharge any of the material
obligations of Fee Owner or any other party to the Operating Agreements without
Lender’s prior written consent in each instance, and shall diligently and
continuously enforce the material obligations of the Fee Owner and the other
parties to the Operating Agreements except in any such case where same would
not have a Material Adverse Effect.

13.4.8      [Reserved.]

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

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

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

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

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

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

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

 

123

 

by Lender setting forth, among other things,
(i) the name of the parties thereunder, (ii) that the Operating Agreement is in
full force and effect and has not been modified or, if it has been modified,
the date of each modification (together with copies of each such modification),
(iii) the date to which all rent,
additional rent, common charges, common area maintenance charges and other
charges or assessments reserved in or payable under the Operating Agreements
have been paid thereunder, (iv) whether there are any alleged defaults of the
lessee under the Operating Agreements and, if there are, setting forth the
nature thereof in reasonable detail, (v) if any party under the Operating
Agreements shall be in default, the default, and (vi) such other matters as
Lender shall reasonably request.

 

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

13.4.16      [Reserved.]

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

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

XIV.                        SECURITIZATION AND PARTICIPATION

 

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

 

124

 

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

 

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

 

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

 

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

 

125

 

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

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

14.3         Securitization Indemnification.

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

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

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

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

 

 

126

 

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

 

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

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

 

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

 

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

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

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

 

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

                XV.         ASSIGNMENTS AND PARTICIPATIONS

 

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

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

 

 

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Notes, shall remain
responsible for the proper disposition thereof until such items are delivered
to a party who is qualified as an Approved Bank and agrees to hold the same in
accordance with the terms and provisions of the agreement pursuant to which
such items were deposited.

15.3         Content. By executing and
delivering an Assignment and Acceptance, Lender and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto; (ii) Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of Borrower or the performance or observance by
Borrower of any of its obligations under any Loan Documents or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents; (v) such assignee appoints and
authorizes Lender to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to Lender
by the terms hereof together with such powers and discretion as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform, in
accordance with their terms, all of the obligations which by the terms of this
Agreement and the other Loan Documents are required to be performed by Lender.

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

15.5         Substitute
Notes. Upon its receipt of an Assignment and Acceptance executed by an
assignee, together with any Note or Notes subject to such assignment, Lender
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit M hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register,
and (iii) give prompt written notice thereof to Borrower. Within five (5)
Business Days after its receipt of such notice, Borrower, at Lender’s expense,
shall execute and deliver to Lender in exchange and substitution for the
surrendered Note or Notes a new Note to the order of such assignee in an amount
equal to the portion of the Loan assigned to it and a new Note to the order of
Lender in an amount equal to the portion of the Loan retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate then outstanding principal amount of such surrendered Note or Notes,
shall be dated

 

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

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

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

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

                XVI.        RESERVE
ACCOUNTS

16.1         Tax
Reserve Account. In accordance with the time periods set forth in Section
3.1, Borrower shall cause to be deposited into the Tax Reserve Account
(which deposit may be

 

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

16.2         Insurance Reserve Account.

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

 

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

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

16.3         Ground
Rent Reserve Account. In accordance with the time periods set forth in Section
3.1, Borrower shall, on each Payment Date, cause to be deposited into the
Ground Rent Reserve Account (which deposit may be effected by the transfers
contemplated under Section 3.1.6(a)) an amount (without duplication of any
amounts required to be deposited in the Tax Reserve Account in respect of real
estate taxes payable with respect to the Leasehold Estate) equal to one-twelfth
of the annual Ground Rent that Lender reasonably estimates will be payable
during the next ensuing twelve (12) months, or if such Ground Rent is
payable monthly, the sum of the next month’s Ground Rent due, in order to
accumulate with Lender sufficient funds to pay all such Ground Rent at least
thirty (30) days prior to the imposition of any interest, charges or
expenses for the non-payment thereof (said monthly amounts above hereinafter
called the “Monthly Ground Rent Reserve Amount,” and the aggregate
amount of funds held in the Ground Rent Reserve Account being the “Ground
Rent Reserve Amount”). The Monthly Ground Rent Reserve Amount shall be
subject to adjustment by Lender upon notice to Borrower. The Monthly Ground
Rent Reserve Amount shall be paid by Borrower to Lender on each Payment Date. Subject
to the terms hereof, Lender will apply the Ground Rent Reserve Amount to
payments of Ground Rent required to be made by Borrower pursuant to the Ground
Lease. In making any payment relating to the Ground Rent Reserve Account,
Lender may do so according to any bill, statement or estimate procured from the
Fee Owner, without inquiry into the accuracy of such bill, statement or
estimate or into the validity thereof. If the amount of funds in the Ground
Rent Reserve Account shall exceed the amounts due as Ground Rent pursuant to
the Ground Lease, Lender shall credit such excess against future payments to be
made to the Ground Rent Reserve Account. If at any time Lender reasonably
determines that the Ground Rent Reserve Amount is not or will not be sufficient
to pay Ground Rent by the dates set forth above, Lender shall notify Borrower
of such determination and Borrower shall increase its monthly payments to Lender
by the amount that Lender reasonably estimates is sufficient to make up the
deficiency at least

 

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thirty (30) days
prior to the imposition of any interest, charges or expenses for the
non-payment of Ground Rent.

                XVII.       DEFAULTS

17.1         Event of Default.

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

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

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

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

(iv)          if,
except as expressly permitted pursuant to Article VIII or the other
provisions hereof, any of the following shall occur: (a) any Transfer of any
direct or indirect legal, beneficial or equitable interest in all or any
portion of the Property, (b) any Transfer of any direct or indirect interest in
Borrower, Mezzanine Borrower, Master Lessee, any Guarantor or any SPE Entity,
(c) Borrower grants any Lien or encumbrance against all or any portion of the
Property, (d) any pledge, hypothecation, creation of a security interest in or
other encumbrance of any direct or indirect interests in Borrower, Mezzanine
Borrower, Master Lessee, any

 

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Guarantor or any SPE
Entity or (e) Borrower’s filing of a declaration of condominium with respect to
the Property;

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

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

(vii)         if a receiver, liquidator or trustee
shall be appointed for Borrower, Mezzanine Borrower, a Master Lessee Party, any
Guarantor or any SPE Entity or Borrower, Mezzanine Borrower, a Master Lessee
Party, any Guarantor or any SPE Entity shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in by, Borrower, Mezzanine
Borrower, a Master Lessee Party, any Guarantor or any SPE Entity, or if any
proceeding for the dissolution or liquidation of Borrower, Mezzanine Borrower,
a Master Lessee Party, any Guarantor or any SPE Entity shall be instituted;
provided, however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower, Mezzanine Borrower, a Master
Lessee Party, any Guarantor or any SPE Entity upon the same not being
discharged, stayed or dismissed within ninety (90) days;

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

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

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

 

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

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

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

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

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

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

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

(xviii)      [Reserved];

(xix)         if
there shall occur any default by Borrower, as lessee under any Ground Lease, in
the observance or performance of any term, covenant or condition of such Ground
Lease on the part of Borrower to be observed or performed, and said default is
not cured prior to the expiration of any applicable grace or cure period
therein provided, or if any one or more of the events referred to in a Ground
Lease shall occur which would cause such Ground Lease to terminate without
notice or action by the related Fee Owner under such Ground Lease or if any
Leasehold Estate shall be surrendered or any Ground Lease shall be lawfully
terminated or cancelled for any reason or under any circumstances whatsoever,
or if any of the terms, covenants or conditions of any Ground Lease shall in
any manner be modified, changed, supplemented, altered or amended in
contradiction of the provisions of Article XIII without the prior
written consent of Lender, which consent shall not be unreasonably withheld,
conditioned or delayed, or if Borrower or Master Lessee shall fail to exercise
any option to renew the Ground Lease or shall fail to or neglect to pursue
diligently all actions necessary to exercise such renewal rights pursuant to
the terms of the Ground Lease, provided, that if a default by Borrower under a

 

136

 

Ground Lease is a Ground
Rent payment default, the occurrence or failure to cure such default shall not
be deemed to be in default hereunder in the event funds sufficient for a
required transfer under Section 3.1.6(a)(iii) are held in the Ground
Rent Reserve Account and Lender or Cash Management Bank fails to timely make
any transfer from such Sub-Account as contemplated by this Agreement unless due
to the negligence or willful misconduct of Borrower;

(xx)          [Reserved];

(xxi)         [Reserved];

(xxii)        [Reserved];

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

(xxiv)       [Reserved];

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

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

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

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

(b)           Unless
waived in writing by Lender, upon the occurrence and during the continuance of
an Event of Default (other than an Event of Default described in subsections
(a)(vi), (vii) or (viii) above in respect of Borrower) Lender may, without
notice or demand, in addition to any other rights or remedies available to it
pursuant to this Agreement and the other Loan Documents or at law or in equity,
take such action that Lender deems advisable to protect and enforce its rights
against Borrower and in the Property, including, without limitation, (i)
declaring immediately due and payable the entire Principal Amount together with
interest

 

137

 

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

17.2         Remedies.

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

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

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

 

138

 

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

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

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

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

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

 

139

 

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

                XVIII.     SPECIAL
PROVISIONS

18.1         Exculpation.

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

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

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

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

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

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

 

140

 

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

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

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

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

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

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

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

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

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

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

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

 

141

 

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

(k)           all
of the Indebtedness and the Obligations in the event of: (i) any
Borrower Party or any Master Lessee Party filing a voluntary petition under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(ii) any Borrower Party or Master Lessee Party filing an answer consenting to
or otherwise acquiescing in or joining in any involuntary petition filed
against it, by any other Person under the Bankruptcy Code or any other Federal
or state bankruptcy or insolvency law, or soliciting or causing to be
solicited, or colluding with (or any of such Borrower Party’s or Master Lessee
Party’s Affiliates colluding with) petitioning creditors to file any such
involuntary petition from any Person; (iii) any Borrower Party or Master Lessee
Party consenting to or acquiescing in or joining in an application for the
appointment of a custodian, receiver, trustee, or examiner for any Borrower
Party or Master Lessee Party or any portion of the Property; (iv) any Borrower
Party or Master Lessee Party making an assignment for the benefit of creditors,
or admitting, in writing or in any legal proceeding, that it is insolvent;

(l)            any
and all liabilities, obligations, losses, damages, costs and expenses
(including, without limitation, reasonable attorneys’ fees, causes of action,
suits, claims, demands and adjustments of any nature or description whatsoever)
which may at any time be imposed upon, incurred by or awarded against Lender,
in the event (and arising out of such circumstances) that Borrower should raise
any defense, counterclaim and/or allegation in any foreclosure action by Lender
relative to the Property, the Account Collateral or the Rate Protection
Collateral or any part thereof which is found by a court to have been raised by
Borrower in bad faith or to be without basis in fact or law; or

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

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

 

142

 

XIX.        MISCELLANEOUS

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

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

19.3         Governing Law.

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

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

 

143

 

AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING.  BORROWER DOES
HEREBY DESIGNATE AND APPOINT:

CORPORATION SERVICE COMPANY

80 STATE STREET

ALBANY, NEW YORK  12207-2543

 

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

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

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

 

144

 

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

	
  If
  to Lender:

  	
   

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

  
	
   

  	
   

  	
  60
  Wall Street, 10th floor

  
	
   

  	
   

  	
  New
  York, NY 10005

  
	
   

  	
   

  	
  Attention:
  Todd Sammann and General Counsel

  
	
   

  	
   

  	
  Telecopy
  No.: (212) 797-4489

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  270 Park Avenue

  New York, New York 10017

  Attention: Michael Mesard

  Telecopy No.: (212) 834-6592

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Midland
  Loan Services, as Servicer, at such notice address as shall be designated by
  notice delivered in accordance with this Section.

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Centerline
  Servicing Inc.

  
	
   

  	
   

  	
  5221
  N. O’Connor Boulevard, Suite 600

  
	
   

  	
   

  	
  Irving,
  Texas 75039

  
	
   

  	
   

  	
  Attention:
  Wesley Wolf, SVP, Asset Management

  
	
   

  	
   

  	
  Telecopy
  No.: (972) 868-5493

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Latham
  & Watkins LLP

  
	
   

  	
   

  	
  633
  West Fifth Street, Suite 4000

  
	
   

  	
   

  	
  Los
  Angeles, California 90071

  
	
   

  	
   

  	
  Attention:
  Donald I. Berger, Esq.

  
	
   

  	
   

  	
  Telecopy
  No.: (213) 891-8763

  
	
   

  	
   

  	
   

  
	
  If
  to Borrower:

  	
   

  	
  FCP
  PropCo, LLC

  1505 South Pavilion Center Drive

  Las Vegas, Nevada 89135

  Attention: General Counsel

  Telecopy No.: (702) 495-4260

  
	
   

  	
   

  	
   

  

 

145

 

	
  With
  a copy to:

  	
   

  	
  Milbank, Tweed, Hadley
  & McCloy LLP

  601 S. Figueroa Street, 30th Floor

  Los Angeles, California 90017

  Attention: Kenneth J. Baronsky

  Telecopy No.: (213) 892-4733

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Colony Capital
  Acquisitions, LLC

  1999 Avenue of the Stars, Suite 1200

  Los Angeles, California 90067

  Attention: Jonathan H. Grunzweig

  Telecopy No.: (310) 407-7407

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Willkie Farr &
  Gallagher LLP

  787 Seventh Avenue

  New York, New York 10019

  Attention: Thomas Cerabino

  Telecopy No.: (212) 728-9208

  
	
   

  	
   

  	
   

  

 

All notices, elections, requests and demands
under this Agreement shall be effective and deemed received upon the earliest
of (i) the actual receipt of the same by personal delivery or otherwise, (ii)
one (1) Business Day after being deposited with a nationally recognized
overnight courier service as required above, (iii) three (3) Business Days
after being deposited in the United States mail as required above or (iv) on
the day sent if sent by facsimile with confirmation on or before 5:00 p.m. New
York time on any Business Day or on the next Business Day if so delivered after
5:00 p.m. New York time or on any day other than a Business Day.  Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given as
herein required shall be deemed to be receipt of the notice, election, request,
or demand sent.

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

 

146

 

BORROWER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL
REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN
ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN.  THIS WAIVER SHALL SURVIVE THE REPAYMENT OF
THE LOAN.

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

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

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

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

19.12       Expenses; Indemnity

(a)           Borrower
covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender
upon receipt of written notice from Lender for all reasonable out-of-pocket
costs and expenses (including reasonable attorneys’ fees and disbursements),
except as may be otherwise expressly provided in Article XIV or elsewhere in
this Agreement or the Loan Documents, 
incurred by Lender in connection with (i) the preparation, negotiation,
execution and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby and all the
costs of furnishing all opinions by counsel for Borrower (including without
limitation any opinions requested by Lender pursuant to this Agreement); (ii)
Lender’s ongoing performance of and compliance with all agreements and
conditions contained in this Agreement and the other Loan Documents on its part
to be performed or complied with after the Closing Date; (iii) the negotiation,
preparation, execution, delivery and administration of any consents,
amendments, waivers or other modifications to this Agreement and the other Loan
Documents and any other documents or matters as required herein

 

147

 

or under the other Loan Documents; (iv) securing
Borrower’s compliance with any requests made pursuant to the provisions of this
Agreement; (v) the filing and recording fees and expenses, mortgage recording
taxes, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to
this Agreement and the other Loan Documents; (vi) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of
any action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Property, or
any other security given for the Loan; (vii) enforcing any obligations of or
collecting any payments due from Borrower under this Agreement, the other Loan
Documents or with respect to the Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in
the nature of a work-out or of any insolvency or bankruptcy proceedings and
(viii) procuring insurance policies pursuant to Section 6.1.11; provided,
however, that Borrower shall not be liable for the payment of any such
costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender. Any cost and
expenses due and payable to Lender may be paid from any amounts in the Holding
Account subject to the provisions of Section 3.1.10(a).

(b)           Subject
to the non-recourse provisions of Section 18.1, Borrower shall protect,
indemnify and save harmless Lender, and all officers, directors, stockholders,
members, partners, employees, agents, successors and assigns thereof
(collectively, the “Indemnified Parties”) from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including all reasonable attorneys’ fees and expenses actually
incurred) imposed upon or incurred by or asserted against the Indemnified
Parties or the Property or any part of its interest therein, by reason of the
occurrence or existence of any of the following (to the extent Proceeds payable
on account of the following shall be inadequate; it being understood that in no
event will the Indemnified Parties be required to actually pay or incur any
costs or expenses as a condition to the effectiveness of the foregoing
indemnity) prior to (i) the acceptance by Lender or its designee of a
deed-in-lieu of foreclosure with respect to the Property, or (ii) an
Indemnified Party or its designee taking possession or control of the Property
or (iii) the foreclosure of the Security Instruments, except to the extent
caused by the actual willful misconduct or gross negligence of the Indemnified
Parties (other than such willful misconduct or gross negligence imputed to the
Indemnified Parties because of their interest in the Property):  (1) ownership of Borrower’s interest in the
Property, or any interest therein, or receipt of any Rents or other sum
therefrom, (2) any accident, injury to or death of any persons or loss of or
damage to property occurring on or about the Property or any appurtenances
thereto, (3) any design, construction, operation, repair, maintenance, use,
non-use or condition of the Property or Appurtenances thereto, including claims
or penalties arising from violation of any Legal Requirement or Insurance
Requirement, as well as any claim based on any patent or latent defect, whether
or not discoverable by Lender and any claim the insurance as to which is
inadequate, (4) any Default under this Agreement or any of the other Loan
Documents or any failure on the part of Borrower to perform or comply with any
of the terms of any Operating Agreement within the applicable notice or grace
periods, (5) any performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof, (6)
any negligence or tortious act or omission on the part of Borrower or any of
its 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,

 

148

 

covenants and conditions of the landlord contained
in the Subleases or the Master Lease. 
Any amounts the Indemnified Parties are legally entitled to receive
under this Section which are not paid within fifteen (15) Business Days after
written demand therefor by the Indemnified Parties or Lender, setting forth in
reasonable detail the amount of such demand and the basis therefor, shall bear
interest from the date of demand at the Default Rate, and shall, together with
such interest, be part of the Indebtedness and secured by the Security
Instruments.  In case any action, suit or
proceeding is brought against the Indemnified Parties by reason of any such occurrence,
Borrower shall at Borrower’s expense resist and defend such action, suit or
proceeding or will cause the same to be resisted and defended by counsel at
Borrower’s reasonable expense for the insurer of the liability or by counsel
designated by Borrower (unless reasonably disapproved by Lender promptly after
Lender has been notified of such counsel); provided, however,
that nothing herein shall compromise the right of Lender (or any Indemnified
Party) to appoint its own counsel at Borrower’s expense for its defense with
respect to any action which in its reasonable opinion presents a conflict or
potential conflict between Lender and Borrower that would make such separate
representation advisable; provided further that if Lender shall have appointed
separate counsel pursuant to the foregoing, Borrower shall not be responsible
for the expense of additional separate counsel of any Indemnified Party unless
in the reasonable opinion of Lender a conflict or potential conflict exists
between such Indemnified Party and Lender. 
So long as Borrower is resisting and defending such action, suit or
proceeding as provided above in a prudent and commercially reasonable manner,
Lender and the Indemnified Parties shall not be entitled to settle such action,
suit or proceeding without Borrower’s consent which shall not be unreasonably
withheld or delayed, and claim the benefit of this Section 19.2 with
respect to such action, suit or proceeding and Lender agrees that it will not
settle any such action, suit or proceeding without the consent of Borrower; provided,
however, that if Borrower is not diligently defending such action, suit
or proceeding in a prudent and commercially reasonable manner as provided
above, and Lender has provided Borrower with thirty (30) days’ prior written
notice, or shorter period if mandated by the requirements of applicable law,
and opportunity to correct such determination, Lender may settle such action,
suit or proceeding and claim the benefit of this Section 19.12 with
respect to settlement of such action, suit or proceeding.  Any Indemnified Party will give Borrower
prompt notice after such Indemnified Party obtains actual knowledge of any
potential claim by such Indemnified Party for indemnification hereunder.  The Indemnified Parties shall not settle or
compromise any action, proceeding or claim as to which it is indemnified under
this Section 19.12 without prior notice to and reasonable consent of
Borrower.

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

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

 

149

 

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

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

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

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

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

19.18       Waiver of Marshalling of Assets.  To the fullest extent permitted by law,
Borrower, for itself and its successors and assigns, waives all rights to a
marshalling of the assets of Borrower, Borrower’s members and others with
interests in Borrower and of the Property, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Property for the
collection of the Indebtedness without any prior or different resort for
collection or of the right of Lender to the payment of the Indebtedness out of
the net proceeds of the Property in preference to every other claimant whatsoever.

 

150

 

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

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

19.21       Prior Agreements. 
This Agreement and the other Loan Documents contain the entire agreement
of the parties hereto and thereto in respect of the transactions contemplated
hereby and thereby, and all prior agreements among or between such parties,
whether oral or written, are superseded by the terms of this Agreement and the
other Loan Documents and unless specifically set forth in a writing
contemporaneous herewith the terms, conditions and provisions of any and all
such prior agreements do not survive execution of this Agreement.

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

 

 

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151

 

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

	
   

  	
  BORROWER:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FCP PROPCO LLC, a Delaware limited liability
  company

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/
  Thomas M. Friel

  
	
   

  	
  Name: Thomas M.
  Friel

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:   Authorized
  Signatory

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

 

[Lender’s
signature appears on following page]

 

 

 

 

 

 

 

 

 

 

 

Borrower’s
Execution Page

 

152

 

	
  LENDER:

  	
   

  
	
   

  	
   

  
	
  GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
  corporation, on behalf of the holders of the Notes

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Todd O. Sammann

  
	
   

  	
  Name: Todd O. Sammann

  
	
   

  	
  Title:   Vice President

  
	
   

  	
   

  
	
  By: 

  	
  /s/ John K. Beacham

  
	
   

  	
  Name: John K. Beacham

  
	
   

  	
  Title:   Vice President

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A., a national banking
  association, on behalf of the holders of the Notes

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Kunal K. Singh

  
	
   

  	
  Name: Kunal K. Singh

  
	
   

  	
  Title:   Vice
  President

  
	
   

  	
   

  
					

 

 

 

153

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