Amended And Restated Loan And Security Agreement

Amended and Restated Loan and Security Agreement


EXHIBIT 4.1

 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

 

Dated as of March 19, 2008

 

 

Among

 

 

FCP PROPCO, LLC

 

as Borrower

 

 

and

 

 

GERMAN AMERICAN CAPITAL CORPORATION

 

and

 

JPMORGAN CHASE BANK, N.A.,

 

on behalf of the holders of the Notes,

 

 

as Lender

 



 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

I.

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

10

 

1.1

Definitions

10

 

1.2

Principles of Construction

47

 

 

II.

GENERAL TERMS

47

 

2.1

Loan; Disbursement to Borrower

47

 

 

2.1.1

The Loan; Delegation; Novation

47

 

 

2.1.2

Disbursement to Borrower

48

 

 

2.1.3

The Notes, Security Instruments and Loan Documents

48

 

 

2.1.4

Use of Proceeds

48

 

2.2

Interest; Loan Payments; Late Payment Charge

48

 

 

2.2.1

Payment of Principal and Interest

48

 

 

2.2.2

Method and Place of Payment

49

 

 

2.2.3

Late Payment Charge

49

 

 

2.2.4

Usury Savings

49

 

2.3

Prepayments

50

 

 

2.3.1

Prepayments

50

 

 

2.3.2

Prepayments After Event of Default; Application of Amounts Paid

50

 

 

2.3.3

Release of Property upon Repayment of Loan in Full

50

 

 

2.3.4

Release of Individual Properties

51

 

 

2.3.5

Substitution of Properties

53

 

 

2.3.6

Provisions Relating to Individual Properties That Go Dark

59

 

 

2.3.7

Excess Account Collateral

59

 

 

2.3.8

Reserve Requirements

59

 

 

2.3.9

Release of Unimproved Parcels

59

 

2.4

Regulatory Change; Taxes

61

 

 

2.4.1

Increased Costs

61

 

 

2.4.2

Special Taxes

62

 

 

2.4.3

Other Taxes

62

 

 

2.4.4

Indemnity

62

 

 

2.4.5

Change of Office

62

 

 

2.4.6

Survival

62

 

2.5

Conditions Precedent to Closing

62

 

 

2.5.1

Representations and Warranties; Compliance with Conditions

62

 

 

2.5.2

Delivery of Loan Documents; Title Policies; Reports; Leases

63

 

 

2.5.3

Delivery of Organizational Documents

64

 

 

2.5.4

Counsel Opinions

65

 

 

2.5.5

Consummation of the Merger

65

 

 

2.5.6

Payments

65

 

 

2.5.7

Transaction Costs

66

 

 

2.5.8

Material Adverse Effect

66

 

 

2.5.9

Control

66

 



 

 

 

2.5.10

Insolvency

66

 

 

2.5.11

Master Lease and Individual Property Subleases

66

 

 

2.5.12

Equity Contribution

66

 

 

2.5.13

Existing Indebtedness

66

 

 

2.5.14

Ground Lease and Fee Mortgagee Estoppels

67

 

 

2.5.15

Equity and Real Property Transfer Documents

67

 

 

2.5.16

No Competing Financing

67

 

 

2.5.17

Approvals

68

 

 

2.5.18

Searches

68

 

2.6

[Reserved]

68

 

 

 

 

 

III.

CASH MANAGEMENT

68

 

3.1

Cash Management

68

 

 

3.1.1

Establishment of Accounts

68

 

 

3.1.2

Pledge of Account Collateral

69

 

 

3.1.3

Maintenance of Collateral Accounts

70

 

 

3.1.4

Eligible Accounts

70

 

 

3.1.5

Deposits into Sub-Accounts

70

 

 

3.1.6

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

71

 

 

3.1.7

Required Payments from Sub-Accounts

74

 

 

3.1.8

Cash Management Bank

76

 

 

3.1.9

Borrower’s Account Representations, Warranties and Covenants

77

 

 

3.1.10

Account Collateral and Remedies

77

 

 

3.1.11

Transfers and Other Liens

78

 

 

3.1.12

Reasonable Care

78

 

 

3.1.13

Lender’s Liability

79

 

 

3.1.14

Continuing Security Interest

79

 

 

3.1.15

Distributions

79

 

 

 

 

IV.

REPRESENTATIONS AND WARRANTIES

80

 

4.1

Borrower Representations

80

 

 

4.1.1

Organization

80

 

 

4.1.2

Proceedings

80

 

 

4.1.3

No Conflicts

81

 

 

4.1.4

Litigation

81

 

 

4.1.5

Agreements

81

 

 

4.1.6

Title

82

 

 

4.1.7

No Bankruptcy Filing

82

 

 

4.1.8

Full and Accurate Disclosure

82

 

 

4.1.9

All Property

83

 

 

4.1.10

No Plan Assets

83

 

 

4.1.11

Compliance

83

 

 

4.1.12

Financial Information

84

 

 

4.1.13

Condemnation

84

 

 

4.1.14

Federal Reserve Regulations

84

 

 

4.1.15

Utilities and Public Access

84

 

2



 

 

 

4.1.16

Not a Foreign Person

84

 

 

4.1.17

[Reserved]

84

 

 

4.1.18

[Reserved]

84

 

 

4.1.19

[Reserved]

84

 

 

4.1.20

Enforceability

84

 

 

4.1.21

[Reserved

85

 

 

4.1.22

Insurance

85

 

 

4.1.23

Use of Property

85

 

 

4.1.24

Certificate of Occupancy; Licenses

85

 

 

4.1.25

Flood Zone

85

 

 

4.1.26

Physical Condition

85

 

 

4.1.27

Boundaries

85

 

 

4.1.28

Subleases

86

 

 

4.1.29

Filing and Recording Taxes

86

 

 

4.1.30

Single Purpose Entity/Separateness

86

 

 

4.1.31

[Reserved

87

 

 

4.1.32

Illegal Activity

87

 

 

4.1.33

No Change in Facts or Circumstances; Disclosure

87

 

 

4.1.34

[Reserved

87

 

 

4.1.35

Tax Filings

87

 

 

4.1.36

Solvency/Fraudulent Conveyance

87

 

 

4.1.37

Investment Company Act

87

 

 

4.1.38

Interest Rate Protection Agreement

87

 

 

4.1.39

Labor

88

 

 

4.1.40

Brokers

88

 

 

4.1.41

No Other Debt

88

 

 

4.1.42

Taxpayer Identification Number

88

 

 

4.1.43

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

88

 

 

4.1.44

Merger Agreement

89

 

 

4.1.45

Rights of First Refusal or First Offer to Lease or Purchase

89

 

 

4.1.46

Reserved

89

 

4.2

Survival of Representations

89

 

4.3

Borrower’s Knowledge

89

 

 

 

 

 

V.

BORROWER COVENANTS

89

 

5.1

Affirmative Covenants

89

 

 

5.1.1

Performance by Borrower

89

 

 

5.1.2

Existence; Compliance with Legal Requirements; Insurance

90

 

 

5.1.3

Litigation

90

 

 

5.1.4

Single Purpose Entity

90

 

 

5.1.5

Consents

91

 

 

5.1.6

Access to Property

92

 

 

5.1.7

Notice of Default

92

 

 

5.1.8

Cooperate in Legal Proceedings

92

 

 

5.1.9

[Reserved

92

 

 

5.1.10

Insurance

92

 

3



 

 

 

5.1.11

Further Assurances; Separate Notes; Loan Resizing

92

 

 

5.1.12

Mortgage Taxes

94

 

 

5.1.13

Operation

94

 

 

5.1.14

Business and Operations

94

 

 

5.1.15

Title to the Property

95

 

 

5.1.16

Costs of Enforcement

95

 

 

5.1.17

Estoppel Statements

95

 

 

5.1.18

Loan Proceeds

96

 

 

5.1.19

No Joint Assessment

96

 

 

5.1.20

No Further Encumbrances

96

 

 

5.1.21

[Reserved

96

 

 

5.1.22

Master Lease

96

 

5.2

Negative Covenants

98

 

 

5.2.1

Incur Debt

98

 

 

5.2.2

Encumbrances

98

 

 

5.2.3

Engage in Different Business

98

 

 

5.2.4

Make Advances

98

 

 

5.2.5

Subdivision

98

 

 

5.2.6

Commingle

98

 

 

5.2.7

Guarantee Obligations

98

 

 

5.2.8

Transfer Assets

98

 

 

5.2.9

Amend Organizational Documents

98

 

 

5.2.10

Dissolve

99

 

 

5.2.11

Bankruptcy

99

 

 

5.2.12

ERISA

99

 

 

5.2.13

Distributions

99

 

 

5.2.14

[Reserved

99

 

 

5.2.15

[Reserved

99

 

 

5.2.16

[Reserved;]

99

 

 

5.2.17

Modify Account Agreement

99

 

 

5.2.18

Zoning Reclassification

99

 

 

5.2.19

Change of Principal Place of Business

100

 

 

5.2.20

Debt Cancellation

100

 

 

5.2.21

Misapplication of Funds

100

 

 

5.2.22

Single-Purpose Entity

100

 

 

 

VI.

INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

100

 

6.1

Insurance Coverage Requirements

100

 

 

6.1.1

Property Insurance

100

 

 

6.1.2

Liability Insurance

101

 

 

6.1.3

Workers’ Compensation Insurance

101

 

 

6.1.4

Commercial Rents Insurance

101

 

 

6.1.5

Builder’s All-Risk Insurance

101

 

 

6.1.6

Boiler and Machinery Insurance

102

 

 

6.1.7

Flood Insurance

102

 

 

6.1.8

[Reserved

102

 

 

6.1.9

Terrorism Insurance

102

 

4



 

 

 

6.1.10

Other Insurance

102

 

 

6.1.11

Ratings of Insurers

102

 

 

6.1.12

Form of Insurance Policies; Endorsements

103

 

 

6.1.13

Certificates

104

 

 

6.1.14

Separate Insurance

104

 

 

6.1.15

Blanket Policies

104

 

6.2

Condemnation and Insurance Proceeds

105

 

 

6.2.1

Notification

105

 

 

6.2.2

Proceeds

105

 

 

6.2.3

Lender to Take Proceeds

106

 

 

6.2.4

Borrower to Restore

107

 

 

6.2.5

Disbursement of Proceeds

109

 

 

 

 

 

VII.

IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS

110

 

7.1

Borrower to Pay Impositions and Other Charges

110

 

7.2

No Liens

110

 

7.3

Contest

111

 

 

 

 

 

VIII.

TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS

111

 

8.1

General Restriction on Transfers

111

 

8.2

Sale of Building Equipment

112

 

8.3

Immaterial Transfers and Easements, etc.

112

 

8.4

[Reserved.]

113

 

8.5

Permitted Equity Transfers

113

 

8.6

Deliveries to Lender

114

 

8.7

Loan Assumption

114

 

8.8

Subleases

115

 

 

8.8.1

Master Lease and Existing Subleases

115

 

 

8.8.2

Leasing Conditions

115

 

 

8.8.3

Delivery of New Sublease or Sublease Modification

115

 

 

8.8.4

Sublease Amendments

116

 

 

8.8.5

Security Deposits

116

 

 

8.8.6

No Default Under Subleases

116

 

 

8.8.7

Subordination

116

 

 

8.8.8

Attornment

116

 

 

8.8.9

Non-Disturbance Agreements

117

 

 

8.8.10

Recognition Agreements

117

 

 

 

 

 

IX.

INTEREST RATE PROTECTION AGREEMENT

118

 

9.1

Interest Rate Protection Agreement

118

 

9.2

Pledge and Collateral Assignment

118

 

9.3

Covenants

119

 

9.4

Powers of Borrower Prior to an Event of Default

120

 

9.5

Representations and Warranties

120

 

9.6

Payments

121

 

9.7

Remedies

121

 

9.8

Sales of Rate Protection Collateral

123

 

5



 

 

9.9

Public Sales Not Possible

124

 

9.10

Receipt of Sale Proceeds

124

 

9.11

Replacement Interest Rate Protection Agreement

124

 

9.12

Swap Gain

124

 

9.13

Prepayment of Interest Rate Swap Notional Amount

124

 

 

 

X.

MAINTENANCE OF PROPERTY; ALTERATIONS

124

 

10.1

Maintenance of Property

124

 

10.2

Conditions to Alteration

125

 

10.3

Costs of Alteration

125

 

 

 

 

 

XI.

BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

126

 

11.1

Books and Records

126

 

11.2

Financial Statements

126

 

 

11.2.1

Monthly Reports

126

 

 

11.2.2

Quarterly Reports

127

 

 

11.2.3

Annual Reports

128

 

 

11.2.4

Disclosure Restrictions

128

 

 

11.2.5

Capital Expenditures Summaries

128

 

 

11.2.6

Master Lease

128

 

 

11.2.7

Annual Budget; Operating Agreement Annual Budgets

128

 

 

11.2.8

Other Information

129

 

 

11.2.9

Proprietary Information

129

 

 

 

 

 

XII.

ENVIRONMENTAL MATTERS

129

 

12.1

Representations

129

 

12.2

Covenants

130

 

 

12.2.1

Compliance with Environmental Laws

130

 

 

12.2.2

Notices Regarding Environmental Events

130

 

 

12.2.3

Other Notices

130

 

12.3

Environmental Reports

130

 

12.4

Environmental Indemnification

131

 

12.5

Recourse Nature of Certain Indemnifications

132

 

 

 

 

 

XIII.

THE OPERATING AGREEMENTS

132

 

13.1

Operating Agreement Representations, Warranties

132

 

13.2

Cure by Lender

133

 

13.3

Option to Renew or Extend the Ground Lease

134

 

13.4

Operating Agreement Covenants

134

 

 

13.4.1

Waiver of Interest In New Ground Lease

134

 

 

13.4.2

No Election to Terminate

134

 

 

13.4.3

Notice Prior to Rejection

134

 

 

13.4.4

Lender Right to Perform

135

 

 

13.4.5

Lender Attorney in Fact

135

 

 

13.4.6

Payment of Sums Due Under Operating Agreements

135

 

 

13.4.7

Performance of Covenants

135

 

6



 

 

 

13.4.8

[Reserved

136

 

 

13.4.9

No Modification or Termination

136

 

 

13.4.10

Notices of Default

136

 

 

13.4.11

Delivery of Information

136

 

 

13.4.12

No Subordination

136

 

 

13.4.13

Further Assurances

136

 

 

13.4.14

Estoppel Certificates

136

 

 

13.4.15

Common Area/Common Elements Insurance

137

 

 

13.4.16

[Reserved.]

137

 

13.5

Lender Right to Participate

137

 

13.6

No Liability

137

 

 

 

 

 

XIV.

SECURITIZATION AND PARTICIPATION

137

 

14.1

Sale of Notes and Securitization

137

 

14.2

Securitization Financial Statements

139

 

14.3

Securitization Indemnification

139

 

 

14.3.1

Disclosure Documents

139

 

 

14.3.2

Indemnification Certificate

139

 

14.4

Retention of Servicer

141

 

14.5

Lender’s Securitization Expenses

142

 

 

 

 

 

XV.

ASSIGNMENTS AND PARTICIPATIONS

142

 

15.1

Assignment and Acceptance

142

 

15.2

Effect of Assignment and Acceptance

142

 

15.3

Content

143

 

15.4

Register

143

 

15.5

Substitute Notes

143

 

15.6

Participations

144

 

15.7

Disclosure of Information

144

 

15.8

Security Interest in Favor of Federal Reserve Bank

144

 

 

 

 

 

XVI.

RESERVE ACCOUNTS

145

 

16.1

Tax Reserve Account

145

 

16.2

Insurance Reserve Account

145

 

16.3

Ground Rent Reserve Account

146

 

 

 

 

 

XVII.

DEFAULTS

147

 

17.1

Event of Default

147

 

17.2

Remedies

151

 

17.3

Remedies Cumulative; Waivers

152

 

17.4

Costs of Collection

153

 

 

 

 

 

XVIII.

SPECIAL PROVISIONS

153

 

18.1

Exculpation

153

 

 

18.1.1

Exculpated Parties

153

 

 

18.1.2

Carveouts From Non-Recourse Limitations

154

 

18.2

Pro Rata Share

155

 

7



 

XIX.

MISCELLANEOUS

156

 

19.1

Survival

156

 

19.2

Lender’s Discretion

156

 

19.3

Governing Law

156

 

19.4

Modification; Waiver in Writing

157

 

19.5

Delay Not a Waiver

157

 

19.6

Notices

158

 

19.7

TRIAL BY JURY

159

 

19.8

Headings

160

 

19.9

Severability

160

 

19.10

Preferences

160

 

19.11

Waiver of Notice

160

 

19.12

Expenses; Indemnity

160

 

19.13

Exhibits and Schedules Incorporated

162

 

19.14

Offsets, Counterclaims and Defenses

162

 

19.15

Liability of Assignees of Lender

163

 

19.16

No Joint Venture or Partnership; No Third Party Beneficiaries

163

 

19.17

Publicity

163

 

19.18

Waiver of Marshalling of Assets

163

 

19.19

Waiver of Counterclaim and other Actions

164

 

19.20

Conflict; Construction of Documents; Reliance

164

 

19.21

Prior Agreements

164

 

19.22

Counterparts

164

 

8



 

EXHIBITS AND SCHEDULES

 

EXHIBIT A

TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS AND AFFIRMATIVE COVERAGES

EXHIBIT B

SURVEY REQUIREMENTS

EXHIBIT C

INTENTIONALLY DELETED

EXHIBIT D

INTENTIONALLY DELETED

EXHIBIT E

INTENTIONALLY DELETED

EXHIBIT F

FORM OF MASTER LEASE

EXHIBIT G

FORM OF TENANT ESTOPPEL LETTER

EXHIBIT H

FORM OF GROUND LESSOR ESTOPPEL CERTIFICATE

EXHIBIT H-1

FORM OF FEE MORTGAGEE ESTOPPEL CERTIFICATE

EXHIBIT I

[RESERVED]

EXHIBIT J

INTENTIONALLY DELETED

EXHIBIT K

BORROWER ORGANIZATIONAL STRUCTURE

EXHIBIT L

INTEREST RATE PROTECTION AGREEMENT

EXHIBIT M

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

EXHIBIT N

FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

EXHIBIT O

INTENTIONALLY DELETED

EXHIBIT P

FORM OF RENT PAYMENT DIRECTION LETTER

EXHIBIT Q

RATE HEDGE COUNTERPARTY ACKNOWLEDGMENT

EXHIBIT R

INTENTIONALLY DELETED

EXHIBIT S

INTENTIONALLY DELETED

EXHIBIT T

FORM OF INDEPENDENT MANAGER/MEMBER CERTIFICATE

 

 

SCHEDULE I

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

SCHEDULE II

LITIGATION SCHEDULE

SCHEDULE III

DEFERRED MAINTENANCE AND REMEDIATION

SCHEDULE IV

UNIMPROVED PARCELS

SCHEDULE 4.1.11

COMPLIANCE QUALIFICATIONS

SCHEDULE V

ALLOCATED LOAN AMOUNTS

SCHEDULE VI

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

SCHEDULE VII

EXISTING MATTERS OF RECORD

SCHEDULE VIII

[Reserved]

SCHEDULE IX

SUCCESSOR PRINCIPAL CONTROL PERSONS

 

9


 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of March 19, 2008 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), among FCP PROPCO, LLC, a Delaware limited liability company (“Borrower”) having an office at 1505 South Pavilion Center Drive, Las Vegas, Nevada 89135, GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation (“GACC” and together with its successors and assigns, “Noteholder I”), having an address at 60 Wall Street, New York, New York 10005, and JPMORGAN CHASE BANK, N.A., a national banking association, having an address at 270 Park Avenue, New York, New York 10017 (“JPMC”  and together with its successors and assigns, “Noteholder II”) (Noteholder I and Noteholder II, individually or collectively as the context indicates, “Lender”).

 

RECITALS:

 

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

 

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

 

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

 

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

 

NOW, THEREFORE, in consideration of the covenants, agreements, representations and warranties set forth in this Agreement, the parties hereto hereby amend and restate the Original Agreement in its entirety and covenant, agree, represent and warrant as follows:

 

I.                                       DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

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

 

80% Trigger Approval Period” shall mean any period (a) commencing on the Payment Date following the conclusion of any two (2) consecutive Fiscal Quarters for which the LCR is

 

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less than 80% of Closing Date LCR and (b) ending on the day immediately preceding the Payment Date following the conclusion of any two (2) consecutive Fiscal Quarters for which the LCR exceeds 80% of Closing Date LCR, provided that no Noticed Default or Event of Default is then continuing, and that Borrower shall then have delivered an Officer’s Certificate certifying to the best of the signer’s actual knowledge without investigation that as of the date of such Officer’s Certificate no Default or Event of Default exists; and, for avoidance of doubt, subject to resumption of the 80% Trigger Approval Period upon any subsequent occurrence of the conditions set forth in clause (a) above.

 

90% Cash Sweep Period” shall mean any period (a) commencing on the Payment Date following the conclusion of any two (2) consecutive Fiscal Quarters for which the LCR is less than 90% of Closing Date LCR and (b) ending on the day immediately preceding the Payment Date following the conclusion of any two (2) consecutive Fiscal Quarters for which the LCR exceeds 90% of Closing Date LCR, provided that no Noticed Default or Event of Default is then continuing, and that Borrower shall then have delivered an Officer’s Certificate certifying to the best of the signer’s actual knowledge without investigation that as of the date of such Officer’s Certificate no Default or Event of Default exists; and, for avoidance of doubt, subject to resumption of the 90% Cash Sweep Period upon any subsequent occurrence of the conditions set forth in clause (a) above.

 

Account Agreement” shall mean (a) the side letter agreement dated November 7, 2007 between Cash Management Bank and Collateral Agent or (b) at any time when Lender or Servicer is not the Cash Management Bank, an Account Control Agreement, in form reasonably acceptable to Lender and acceptable to the Rating Agencies among Collateral Agent, Borrower and Cash Management Bank.

 

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

 

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

 

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

 

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

 

Affiliate” shall mean, with respect to any specified Person, any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common control with, or any general partner or managing member in, such specified Person.  An Affiliate of a Person includes, without limitation, (i) any officer or director of such Person, (ii) any record or beneficial owner of more than 20% (or, solely for purposes of the definition of “Independent Purchaser” herein, 10%) of any class of ownership interests of such Person and (iii) any Affiliate of the foregoing.

 

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

 

Agreement” shall have the meaning set forth in the preamble hereof.

 

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

 

Allocated Loan Amount” shall mean with respect to each Individual Property, the designated allocated portion of the Loan applicable to such Individual Property that is set forth on Schedule V-1 attached hereto.

 

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

 

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

 

Amendment Effective Date” means March 19, 2008.

 

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

 

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

 

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

 

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

 

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

 

Architect” shall mean an architect, engineer or construction consultant selected by Borrower (which can be an employee of Borrower or an Affiliate), licensed to practice in the

 

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relevant State, if required by the laws of such State, and has at least five (5) years of architectural or construction management experience and which is approved by Lender, which approval shall not be unreasonably withheld, delayed or conditioned.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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any day on which dealings in deposits in U.S. Dollars are transacted in the London interbank market.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Closing Date” shall mean November 7, 2007.

 

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

 

Closing Date LTV” shall mean 79.7%.

 

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

 

Collateral Accounts” shall have the meaning set forth in Section 3.1.1.

 

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

 

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

 

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

 

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

 

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

 

Combined Release Price Percentage” shall mean, as of any Release Date, (a) if the Release Property is the Individual Property commonly known as “Red Rock”, (i) 120% if the transferee of such Release Property is a bona fide Independent Purchaser of such Individual Property, and (ii) otherwise, 135%; and (b) if the Release Property is any other Individual Property, the percentage applicable to the range of the aggregate of the Combined Allocated Loan Amounts of the Individual Properties subject to a Security Instrument that would be outstanding immediately following such Release, as set forth in the following table:

 

Range of Outstanding Aggregate Combined Allocated Loan
Amounts Following Release

 

Combined Release Price
Percentage

 

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

 

100

%

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

 

110

%

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

 

120

%

 

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

 

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

 

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of any remedies by Lender or Mezzanine Lender, and (vi) following Lender’s or its designee’s succession in title to any Property, the transfer of any such Property by Lender or such designee.

 

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

 

Counterparty” shall mean, with respect to the Interest Rate Cap Agreement, JPMorgan Chase Bank, N.A., with respect to the Interest Rate Swap Agreement, Deutsche Bank AG, and with respect to any Replacement Interest Rate Protection Agreement, any substitute Approved Counterparty.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Environmental Law” shall mean any federal, state or local statute, regulation or ordinance or any judicial or administrative decree or decision, whether now existing or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Excusable Delay” shall mean a delay due to strikes, lockouts, inability to procure materials, power failure, acts of God, governmental restrictions, enemy or terrorist action, civil commotion, fire, unavoidable casualty or other causes beyond the control of the Borrower Party

 

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responsible for performing an obligation hereunder, provided that lack of funds shall not be deemed a cause beyond the control of any Borrower Party.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Fitch” shall mean Fitch Ratings Inc.

 

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

 

Funding Letter Agreement” shall mean that certain letter agreement, dated as of November 7, 2007, between Borrower and Lender with respect to conditions precedent to funding the Loan and Mezzanine Loan.

 

GAAP” shall mean the generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such entity as may be in general use by significant segments of the U.S. accounting profession as of the Closing Date, to the extent such principles are applicable to the facts and circumstances on the date of determination.

 

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

 

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

 

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

 

Go Dark” shall mean, with respect to any Individual Property, if such Individual Property is not open for business to the public, unless such closure (i) is a result of a Taking of or casualty or other damage or injury to such Individual Property or some other Excusable Delay or (ii) is in connection with an Alteration permitted hereunder (and provided that not more than one Individual Property may be closed in connection with an Alteration at any one time unless such concurrent closure is expressly pre-approved by Lender in writing or is unavoidable in order for Borrower, Master Lessee or Tenant, to comply with Legal Requirements) and, in either such case, the period of closure does not in any event exceed (A) solely with respect to a closure due to casualty for which business interruption insurance proceeds are payable to Master Lessee (or Borrower or Lender) under the policy of business interruption insurance maintained by Master Lessee pursuant to the terms of the Master Lease, the period of time for which such business interruption insurance proceeds are payable, or (B) as to any other closure, thirty (30)

 

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consecutive days, provided that if in connection with a Material Alteration, Borrower shall have disclosed to Lender in the notice required for such Material Alteration pursuant to Section 10.2 hereof that the Material Alteration will require the affected Individual Property to be closed to the public for a specified period exceeding thirty (30) consecutive days and Lender shall have approved such Material Alteration, the Individual Property may be closed to the public for such specified period of closure without being deemed to have “Gone Dark.”

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Guarantors” shall mean Holdco, FP and VoteCo.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Impositions” shall mean all taxes (including all ad valorem, sales (including those imposed on lease rentals), use, single business, gross receipts, value added, intangible transaction, privilege or license or similar taxes), governmental assessments (including all assessments for public improvements or benefits, whether or not commenced or completed prior to the Closing Date and whether or not commenced or completed within the term of this Agreement), water, sewer or other rents and charges, excises, levies, fees (including license, permit, inspection, authorization and similar fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Property and/or any Rents (including all interest and penalties thereon), which at any time prior to, during or in respect of the term hereof may be assessed or imposed on or in respect of or be a Lien upon (a) Borrower (including all income, franchise, single business or other taxes imposed on Borrower for the privilege of doing business in the jurisdiction in which the Property is located), (b) the Property, or any other collateral delivered or pledged to Lender in connection with the Loan, or any part thereof, or any Rents therefrom or any estate, right, title or interest therein, or (c) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with the Property or the leasing or use of all or any part thereof.  Nothing contained in this Agreement shall be construed to require Borrower to pay any tax, assessment, levy or charge imposed on (i) Master Lessee, (ii) any Tenant or (iii) Lender in the nature of a capital levy, estate, inheritance, succession, income or net revenue tax.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Land Loan” shall mean indebtedness incurred pursuant to a senior secured delayed-draw term loan in an aggregate amount not to exceed $250 million that was entered into on February 7, 2008.

 

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

 

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

 

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

 

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

 

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

 

Legal Requirements” shall mean all present and future laws, statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations and requirements, and irrespective of the nature of the work to be done, of every Governmental Authority including, without limitation, Environmental Laws and all covenants, restrictions and conditions now or hereafter of record which may be applicable to Borrower or to the Property and the Improvements and the Building Equipment thereon, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or reconstruction of the Property and the Improvements and the Building Equipment thereon including, without limitation, building and zoning codes and ordinances and laws relating to handicapped accessibility.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

License and Reservation Service Agreement” shall mean the License and Reservation Service Agreement regarding the branding rights, reservation system and primary customer data base, by and between Borrower and Master Lessee, dated as of November 7, 2007.

 

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

 

Loan” shall mean the loan in the amount of the Loan Amount made by Lender to Borrower pursuant to the Original Agreement as reduced to such Loan Amount pursuant to Section 2.1 hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Master Lessee Parties” shall mean the Master Lessee and each Individual Property Sublessee.

 

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

 

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

 

Material Alteration Collateralization Thresholdshall 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

 

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Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Non-Disqualification Opinion”  shall mean an opinion of outside tax counsel reasonably acceptable to the Lender or the Rating Agencies to whom such opinion is addressed that a contemplated action will neither cause any trust formed as a Real Estate Mortgage Investment Conduit (a “REMIC”) pursuant to a Securitization to fail to qualify as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code at any time that any “regular interests” in the REMIC are outstanding nor cause a “prohibited transaction” tax (within the meaning of Section 860F(a)(2) of the Code) or “prohibited contribution” tax (within the meaning of Section 860G(d) of the Code) to be imposed on any such REMIC.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Obligations” shall have meaning set forth in the recitals of the Security Instruments.

 

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

 

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

 

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

 

Opinion of Counsel” shall mean an opinion of counsel of a law firm selected by Borrower and reasonably acceptable to Lender, which opinion of counsel shall include (without

 

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limitation) opinions re due formation, due authorization, due execution, enforceability and 10b-5 negative assurances.

 

Other Charges” shall mean, collectively, maintenance charges, impositions other than Impositions, and any other charges, including, without limitation, vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed against the Property or any part thereof by any Governmental Authority, other than those required to be paid by a Tenant pursuant to its respective Sublease.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

PML” shall mean probable maximum loss.

 

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

 

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

 

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

 

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

 

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

 

Principal Control Persons” shall mean (a) one or more affiliates of Colony Capital, LLC (or, subject to such Persons being licensed as and when required in accordance with applicable Gaming Laws, its five most senior executive officers, including, without limitation, Thomas J. Barrack, Jr.’s successor as Chief Executive Officer of Colony Capital, LLC), (b) Frank J. Fertitta III, (c) Lorenzo J. Fertitta, (d) Thomas J. Barrack, Jr., (e) any other Person expressly agreed to in writing by Lender, in Lender’s reasonable discretion, to be a Principal Control Person, and (f) in the event that both Fertitta Brothers are deceased or incapacitated, one of the Persons identified

 

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on Schedule IX designated by Borrower (subject to compliance with applicable Gaming Laws and provided that the Person so designated shall not be a Disqualified Transferee) as a Principal Control Person in lieu of the Fertitta Brothers.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Proscribed Assignee” shall mean Highland Capital Partners.

 

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

 

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

 

PZR” shall mean The Planning Zoning Resource Corporation.

 

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

 

Rate Protection Collateral” shall have the meaning set forth in Section 9.2.

 

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

 

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

 

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

 

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

 

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

 

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

 

Release” shall have the meaning provided in Section 2.3.4.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Replacement Interest Rate Protection Agreementshall 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).

 

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

 

Revolving/Term Credit Facility” shall mean that certain Credit Agreement, dated as of November 7, 2007, among Station Casinos, Inc., as borrower, Deutsche Bank Trust Company Americas, as administrative agent, Deutsche Bank Securities Inc. and J. P. Morgan Securities Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., as syndication agent, and the other lenders party thereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, and any refinancing thereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Agreement, the Account Agreement or otherwise, together with such other powers as are reasonably incidental thereto.

 

Single Purpose Entity” shall mean a Person, other than an individual, which (i) is formed or organized solely for the purpose of acquiring, owning, holding, developing, using, operating and financing directly, or, in the case of Mezzanine Borrower, indirectly, an ownership interest in the Property, (ii) does not engage in any business unrelated to the Property (or in the case of Mezzanine Borrower, its subsidiary) and the ownership, development, use, operation, and financing thereof, (iii) has not and will not have any assets other than those related to its interest in the Property (or in the case of Mezzanine Borrower, its subsidiary) or the operation, management and financing thereof or any indebtedness other than the Permitted Debt (as applicable), (iv) maintains its own separate books and records and its own accounts, in each case which are separate and apart from the books and records and accounts of any other Person, (v) holds itself out as being a Person, separate and apart from any other Person, (vi) does not and will not commingle its funds or assets with those of any other Person, (vii) conducts its own business in its own name; (viii) maintains separate financial statements, (ix) pays its own liabilities out of its own funds, (x) observes all partnership, corporate or limited liability company formalities, as applicable, (xi) pays the salaries of its own employees, if any, and maintains a sufficient number of employees, if any, in light of its contemplated business operations, (xii) does not guarantee or otherwise obligate itself with respect to the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person, (xiii) does not acquire obligations or securities of its partners, members or shareholders, (xiv) allocates fairly and reasonably shared expenses, including, without limitation, any overhead for shared office space, if any, (xv) uses separate stationery, invoices, and checks, (xvi) maintains an arms-length relationship with its Affiliates, (xvii) does not and will not pledge its assets for the benefit of any other Person (except as permitted pursuant to the Mezzanine Loan) or make any loans or advances to any other Person, (xviii) does and will continue to use commercially reasonable efforts to correct any known misunderstanding regarding its separate identity, (xix) maintains adequate capital in light of its contemplated business operations, (xx) files its own tax returns, if any, as may be required under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division for tax purposes of another taxpayer, and pays any taxes so required to be paid under applicable law, and (xxi) has not and will not engage in, seek, or consent to the dissolution, winding up, liquidation, consolidation or merger and except as otherwise permitted in this Agreement, has not and will not engage in, seek or consent to any asset sale, transfer of partnership, membership or shareholder interests, or amendments of its partnership or operating agreement, certificate of incorporation, articles of organization or other organizational document.  In addition, if such Person is a partnership, (1) all general partners of such Person shall be Single Purpose Entities; and (2) if such Person has more than one general partner, then the organizational documents shall provide that such Person shall continue (and not dissolve) for so long as a solvent general partner exists.  In addition, if such Person is a corporation, then, at all times: (a) such Person shall have at least two (2) Independent Directors and (b) the board of directors of such Person may not take any action requiring the unanimous affirmative vote of 100% of the members of the board of directors unless all of the directors, including the Independent Directors, shall have participated in such vote.  In addition, if such Person is a limited liability company, (a) such Person shall have at least two (2) Independent Managers, Independent Directors or Independent Members, (b) if such Person is managed by a board of managers or directors, the board of managers or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Swap Fixed Rate” shall mean 5.279%.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Unimproved Parcels” shall mean (a) those portions of the Property identified on Schedule IV attached hereto and made a part hereof and (b) any undeveloped portion of an Individual Property as to which Lender has reasonably determined (x) that such portion is not required for the primary intended use of such Individual Property, and (y) that neither the release of such portion nor the intended use of such portion following such release will adversely affect either the “as leased” appraised value or the net operating income of the remaining portion of such Individual Property.

 

U.S. Government Obligations” shall mean any direct obligations of, or obligations guaranteed as to principal and interest by, the United States Government or any agency or

 

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

 

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

 

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

 

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

 

II.           GENERAL TERMS

 

2.1           Loan; Disbursement to Borrower.

 

2.1.1        The Loan; Delegation; Novation.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.1.2        Disbursement to Borrower.  Borrower has requested and received only one borrowing hereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect of the Loan may not be reborrowed.  Borrower acknowledges and agrees that the full proceeds of the Loan have been disbursed by Lender to Borrower as of the Closing Date.

 

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

 

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

 

2.2           Interest; Loan Payments; Late Payment Charge.

 

2.2.1        Payment of Principal and Interest.

 

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

 

(ii)                   Upon the occurrence and during the continuance of an Event of Default and from and after the Maturity Date if the entire Principal Amount is not repaid on the Maturity Date, interest on the outstanding principal balance of the Loan and, to the extent permitted by law, overdue interest and other amounts due in respect of the Loan shall accrue at the Default Rate calculated from the date such payment was due without regard to any grace or cure periods contained herein.  Interest at the Default Rate shall be computed from the

 

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occurrence of the Event of Default until the actual receipt and collection of the Indebtedness (or that portion thereof that is then due).  To the extent permitted by applicable law, interest at the Default Rate shall be added to the Indebtedness, shall itself accrue interest at the same rate as the Loan and shall be secured by the Security Instruments.  This paragraph shall not be construed as an agreement or privilege to extend the date of the payment of the Indebtedness, nor as a waiver of any other right or remedy accruing to Lender by reason of the occurrence of any Event of Default, and Lender retains its rights under the Notes to accelerate and to continue to demand payment of the Indebtedness upon the happening of any Event of Default.

 

2.2.2        Method and Place of Payment.

 

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

 

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

 

(c)           The Maturity Date Payment shall be due and payable in full on the Maturity Date.  The Maturity Date Payment shall be applied, first, pro rata and pari passu, to the outstanding balances of Note A-1 and Note A-2 until Note A-1 and Note A-2 are paid in full, and second, pro rata and pari passu, to the outstanding balances of Note B-1 and Note B-2.

 

2.2.3        Late Payment Charge.  If any principal, interest or any other sums due under the Loan Documents (other than the outstanding Principal Amount due and payable on the Maturity Date) is not paid by Borrower on or prior to the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of three percent (3%) of such unpaid sum or the Maximum Legal Rate (the “Late Payment Charge”) in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment.  Any such amount shall be secured by this Agreement, the Security Instruments and the other Loan Documents to the extent permitted by applicable law.

 

2.2.4        Usury Savings.  This Agreement and the Notes are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate.  If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due under the Notes at a rate in excess of the Maximum Legal Rate, then the LIBOR Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the

 

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interest due under the Notes.  All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

 

2.3           Prepayments.

 

2.3.1        Prepayments.  No prepayments of the Indebtedness shall be permitted except as set forth in Section 4 of the Notes and this Section 2.3.  If Borrower tenders payment of any part of the Indebtedness other than in accordance with Sections 2.3.2, 2.3.3 or 2.3.4, (a) such payment may be made only on the next occurring Payment Date together with all unpaid interest thereon as calculated through the end of the Interest Period during which such Payment Date occurs (even if such period extends beyond such Payment Date and calculated as if such payment had not been made on such Payment Date), and (b) Borrower shall pay, in addition to the Indebtedness, an amount equal to the Prepayment Fee and all other fees and sums payable hereunder or under the Loan Documents, including without limitation, Swap Breakage.  All prepayments of the Indebtedness shall be applied, first, pro rata and pari passu, to the outstanding balances of Note A-1 and Note A-2 until Note A-1 and Note A-2 are paid in full, and second, pro rata and pari passu, to the outstanding balances of Note B-1 and Note B-2.

 

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

 

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

 

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

 

2.3.4        Release of Individual Properties.  Subject to satisfaction of each of the conditions set forth below with respect to any Individual Property or Individual Properties (collectively, the “General Release Conditions”), Lender shall (i) release such Individual Property or Individual Properties (a “Release” and each Individual Property subject to a Release, a “Release Property”) from the Lien of the applicable Security Instrument and related Loan Documents (or to the extent so requested by Borrower, assign the Lien of the applicable Security Instrument to a new lender without representation, warranty or recourse) (each release under this Section 2.3.4 or Section 2.3.5, a “Property Release”), (ii) authorize a reduction in the notional amounts of the Interest Rate Protection Agreements in proportion to the reduction of the Principal Amount (which may be pro rata to the notional amounts thereof or otherwise as reasonably determined by Borrower), (iii) instruct the Cash Management Bank to return to Borrower any Excess Account Collateral subject to and in accordance with Section 2.3.7 except to the extent otherwise provided in such Section, (iv) comply with Section 2.3.8 with regard to adjusting the ongoing reserve requirements hereunder, (v) authorize a reduction in the Master Lease Base Rent in an amount, which shall equal the product of (x) the initial Master Lease Base Rent multiplied by (y) a fraction, the numerator of which is the Combined Allocated Loan Amount for the Release Property, and the denominator of which is the original Combined Principal Amount, and (vi) require Borrower to enter into an amendment to the Master Lease with Master Lessee (A) to effect such authorized reduction in the Master Lease Base Rent, (B) to cause such Release Property to be released from the Master Lease, (C) to terminate the Master Lease with respect to such Release Property as of the date that such Release Property is released from the Lien of the applicable Security Instrument and related Loan Documents, (D) to amend the legal description of the “Leased Property” (as defined in the Master Lease) to delete the Release Property, and (E) make such other amendments consistent with the release of the Release Property from the Leased Property.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            Prior to the Release Date, Borrower shall deliver to Lender evidence reasonably satisfactory to Lender that all amounts owing to any parties in connection with the transaction relating to the proposed Property Release have been paid in full, or will simultaneously be paid in full on the Release Date or adequate reserves therefor are established by Borrower in cash with respect to contingent or other liabilities that may arise out of such

 

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

 

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

 

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

 

2.3.5        Substitution of Properties.

 

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

 

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

 

(i)            be subject to the Master Lease;

 

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

 

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

 

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

 

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

 

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

 

(vi)          if the Substitute Property is ground leased (such that Borrower will hold a leasehold interest rather than fee title), the ground lease shall be financeable (as reasonably determined by Lender, including, without limitation, having a memorandum of lease of record in the applicable real property records, not containing rental adjustments that reset the ground lease rent to fair market rent, and otherwise containing terms and conditions and having a state of title that comports with then-current guidelines of the Rating Agencies for ground leases in commercial mortgage-backed security transactions); and

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)          Financial and Other Tests.

 

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

 

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Individual Properties subject to the Liens of the Security Instruments immediately prior to the Substitution Date;

 

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

 

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

 

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

 

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

 

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

 

(vi)          Opinions of Counsel.  Delivery to Lender of the following favorable original Opinions of Counsel or updates thereto in connection with the Substitute Property similar in form and substance to the opinions which were delivered on the Closing Date in connection with the Replaced Property, reasonably satisfactory to Lender and addressed to the Lender on behalf of the holders of the Notes: (a) if requested by the Rating Agencies, a True Lease Opinion and a Non-Consolidation Opinion, (b) a local counsel enforceability opinion as to matters governed by local law, (c) an enforceability opinion under New York law, (d) an opinion

 

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to the effect that each of Borrower, Master Lessee and Guarantor is duly organized and validly existing under the laws of the state of its formation and is qualified or licensed to do business in each jurisdiction where the nature of its business in which it is engaged makes such qualification or licensing necessary and (e) an opinion to the effect that the Loan Documents or amendments thereto have been duly authorized, executed and delivered by Borrower, Master Lessee and Guarantor and are the valid and binding obligations and agreements of such party, enforceable in accordance with their terms, in each case with the same exceptions as made on Closing Date;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.3.6        Provisions Relating to Individual Properties That Go Dark.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.3.9        Release of Unimproved Parcels.  Subject to satisfaction of each of the conditions set forth below with respect to any Unimproved Parcel, at the request of Borrower, Lender shall

 

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

 

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

 

(b)           No Noticed Default or Event of Default shall exist and be continuing on the date Borrower delivers its notice to Lender or on the date on which the release of the Unimproved Parcel is to become effective, and on each such date Borrower shall have delivered an Officer’s Certificate certifying to the best of the signer’s actual knowledge without investigation that as of such date no Default or Event of Default exists.

 

(c)           Each of the Unimproved Parcel and the remainder of the related Individual Property shall constitute separate tax lots and comply with all applicable Legal Requirements, including all zoning and subdivision laws and including, without limitation, applicable requirements for parking following the intended development of each such Unimproved Parcel.

 

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

 

(e)           Borrower shall submit to Lender, concurrently with its request for release, Release Instruments for the Unimproved Parcel together with an Officer’s Certificate certifying that (i) the Release Instruments are in compliance with all Legal Requirements, (ii) the release and conveyance to be effected will not violate the terms of this Agreement, (iii) the release to be effected will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the Property subject to the Loan Documents not being released) and (iv) the requirements described in the other clauses of this Section 2.3.9 have been satisfied in connection with the release and conveyance of the Unimproved Parcel (together with calculations and supporting documentation demonstrating the same in reasonable detail).

 

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

 

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

 

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

 

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

 

2.4           Regulatory Change; Taxes.

 

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

 

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

 

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

 

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

 

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

 

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

 

2.5           Conditions Precedent to Closing.  The following conditions precedent to the obligation of Lender to make the Loan hereunder were either fulfilled by, or on behalf of, Borrower or waived by Lender as of the Closing Date; provided, however, that unless a condition precedent expressly survived the Closing Date pursuant to a separate agreement, by funding the Loan and recording the Security Instruments, Lender is deemed to have waived any such conditions not theretofore fulfilled or satisfied; and provided that the funding of the Loan was further subject to the terms and conditions set forth in the Funding Letter Agreement:

 

2.5.1        Representations and Warranties; Compliance with Conditions.  The representations and warranties of Borrower contained in this Agreement and the other Loan

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            Insurance.  Lender shall have received valid certificates of insurance for the policies of insurance required hereunder, satisfactory to Lender in its sole discretion, and evidence of the payment of all insurance premiums currently due and payable for the existing policy period.

 

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

 

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

 

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

 

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2.5.4        Counsel Opinions.

 

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

 

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

 

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

 

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

 

(e)           [Reserved]

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.5.13      Existing Indebtedness.  After giving effect to the consummation of the Contemplated Transactions, (a) Master Lessee and its subsidiaries shall have no outstanding preferred equity or indebtedness, except for  (i) indebtedness incurred pursuant to (A) the 6 1/2% Senior Subordinated Notes due 2014, the 6 7/8% Senior Subordinated Notes due 2016, the 6% Senior Notes due 2012, the 6 5/8% Senior Subordinated Notes due 2018 and the 7.75% Senior Notes due 2016 (the “Existing Notes”), in an aggregate principal amount of approximately $2,300 million, (B) the Revolving/Term Credit Facility, (C) the Mezzanine Loan, and (D) the Loan; (ii) preferred equity held by Holdco in its subsidiaries and preferred equity held by one

 

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Borrower Party in another Borrower Party, so long as such preferred equity does constitute “disqualified stock,” is not otherwise entitled to any mandatory dividends or redemptions, and contains terms that are otherwise reasonably satisfactory to Lender (provided that Lender shall approve such terms so long as they are not adverse to the interests of Lender); (iii) indebtedness evidenced by a note in the principal amount of $100 million dated February 16, 2007 issued by GV Ranch Station Capital Holdings, LLC and indebtedness evidenced by a series of notes in an aggregate principal amount of $9.2 million issued by a subsidiary of Master Lessee having a weighted average interest rate of 7.1% and maturity dates ranging from  2009 to 2026; (iv) a capital lease of the office building in which Master Lessee’s executive offices are located adjacent to the Red Rock Resort (the “Executive Office Capital Lease”); (v) indebtedness evidenced by that certain Credit Agreement dated as of October 4, 2007 providing to Aliante Gaming, LLC, a Nevada limited liability company, construction loans in the aggregate amount of $410 million and revolving loans in the aggregate amount of $20 million, and a completion guaranty by Master Lessee in respect thereof (the “Aliante Financing”) and (vi) such other existing indebtedness and preferred equity, if any, as shall be agreed by Lender (together with the Existing Notes, and the indebtedness described in clauses (iii), (iv) and (v), the “Existing Indebtedness”), and (b) all stock of the Master Lessee shall be owned by Guarantors free and clear of Liens (other than those securing the Revolving/Term Credit Facility)

 

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

 

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

 

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

 

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

 

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

 

2.6           [Reserved].

 

III.           CASH MANAGEMENT

 

3.1           Cash Management.

 

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

 

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of the UCC) and (iv) shall each be an Eligible Account to which certain funds shall be allocated and from which disbursements shall be made pursuant to the terms of this Agreement:

 

(a)           a sub-account for the retention of Account Collateral in respect of Impositions and Other Charges for the Property (the “Tax Reserve Account”);

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.1.3        Maintenance of Collateral Accounts.

 

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

 

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

 

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

 

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

 

(ii)                   $0.00 into the Insurance Reserve Account;

 

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

 

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

 

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(v)                   $0.00 into the Swap Payment Account;

 

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

 

(vii)                 $0.00 into the Proceeds Reserve Account;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.1.8        Cash Management Bank.

 

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

 

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

 

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

 

3.1.9       Borrower’s Account Representations, Warranties and Covenants.

 

(a)           Borrower represents, warrants and covenants that as of the Closing Date, Borrower irrevocably directed the Master Lessee pursuant to a letter substantially in the form of the Master Lease Rent Payment Direction Letter to make all payments of Master Lease Scheduled Rent directly to the Holding Account at all times during the term of the Loan and Borrower shall cause all such sums to be deposited in the Holding Account.

 

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

 

3.1.10     Account Collateral and Remedies.

 

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

 

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priority as Lender shall determine in its sole and absolute discretion; and (ii) all payments to the Mezzanine Lender pursuant to Section 3.1.6 shall immediately cease. Notwithstanding anything to the contrary contained herein, except to the extent that Borrower is entitled to such funds under the terms and provisions of the Master Lease due to the continuance of a Master Lease Event of Default thereunder or otherwise, funds deposited into the Tax Reserve Account, the Insurance Reserve Account, and the Ground Rent Reserve Account (i) may not be applied by Lender in satisfaction of the Obligations and (ii) shall continue to be disbursed by Lender as provided in Article XVI and this Article III as if no Event of Default has occurred.

 

(b)           Upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably constitutes and appoints Lender as Borrower’s true and lawful attorney-in-fact, with full power of substitution, to execute, acknowledge and deliver any instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower with respect to the Account Collateral, and do in the name, place and stead of Borrower, all such acts, things and deeds for and on behalf of and in the name of Borrower, which Borrower could or might do or which Lender may deem necessary or desirable to more fully vest in Lender the rights and remedies provided for herein and to accomplish the purposes of this Agreement.  The foregoing powers of attorney are irrevocable and coupled with an interest.  Upon the occurrence and during the continuance of an Event of Default, Lender may perform or cause performance of any such agreement, and any reasonable out-of-pocket expenses of Lender incurred in connection therewith shall be paid by Borrower as provided in Section 5.1.16.

 

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

 

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

 

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

 

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

 

3.1.13      Lender’s Liability.

 

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

 

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

 

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

 

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

 

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

 

IV.           REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.1.10      No Plan Assets.

 

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

 

(b)           Borrower is not an employee benefit plan, as defined in Section 3(3) of ERISA, subject to Title I of ERISA, none of the assets of Borrower constitutes or will constitute plan assets of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101 and Borrower is not a governmental plan within the meaning of Section 3(32) of ERISA and Borrower is not subject to state statutes regulating investment of, and fiduciary obligations with respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Agreement.

 

4.1.11      Compliance.  Subject to Schedule 4.1.11, Borrower and the Property and the use thereof comply in all material respects with all applicable Legal Requirements, including, without limitation, building and zoning ordinances and codes (except for any non-compliance that individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect).  To the best of Borrower’s knowledge, Borrower is not in default or in violation of any order, writ, injunction, decree or demand of any Governmental Authority.  To the best of Borrower’s knowledge, there has not been committed by Borrower any act or omission affording the federal government or any other Governmental Authority the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents.

 

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4.1.12      Financial Information.  The information set forth in the certificate of Borrower regarding financial information dated as of the Closing Date (i) is true, complete and correct in all material respects and (ii) fairly represents the financial condition of the Master Lessee and the Property as of the Closing Date.  Borrower does not have any material contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and could reasonably be expected to have a Material Adverse Effect.

 

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

 

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

 

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

 

4.1.16      Not a Foreign Person.  Borrower is not a foreign person within the meaning of § 1445(f)(3) of the Code.

 

4.1.17      [Reserved].

 

4.1.18      [Reserved].

 

4.1.19      [Reserved].

 

4.1.20      Enforceability.  The Loan Documents to which each of Borrower, Mezzanine Borrower, Guarantors and Master Lessee is a party have been duly executed and delivered by, or on behalf of, Borrower, Mezzanine Borrower, Guarantors and Master Lessee, as applicable, and constitute legal, valid and binding obligations of such Persons, as applicable, enforceable against such Persons, as applicable, in accordance with their respective terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject, as to

 

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

 

4.1.21      [Reserved.]

 

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

 

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

 

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

 

4.1.25      Flood Zone.  None of the Improvements on the Property are located in an area as identified by the Federal Emergency Management Agency as an area having special flood hazards except as identified on the flood certifications delivered to Lender prior to the Closing Date, and Borrower has obtained the insurance required under Article VI with respect to any Improvements located in any such special flood hazards.

 

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

 

4.1.27      Boundaries.  Except as set forth in and insured pursuant to the Title Policies, to the best of Borrower’s knowledge and, where applicable, in reliance on the Surveys (a) all of the Improvements lie wholly within the boundaries and building restriction lines of the Real

 

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

 

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

 

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

 

4.1.30      Single Purpose Entity/Separateness.

 

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

 

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

 

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

 

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

 

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

 

4.1.31      [Reserved.]

 

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

 

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

 

4.1.34      [Reserved.]

 

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

 

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

 

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

 

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

 

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enforcement of creditors’ rights and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.1.46      Reserved.

 

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

 

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

 

V.            BORROWER COVENANTS

 

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

 

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

 

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5.1.2        Existence; Compliance with Legal Requirements; Insurance.  Subject to Borrower’s right of contest pursuant to Section 7.3 and Schedule 4.1.11, Borrower shall at all times comply and cause the Property to be in compliance in all material respects with all Legal Requirements applicable to the Borrower, any SPE Entity and the Property and the uses permitted upon the Property.  Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits and franchises necessary to comply with all material Legal Requirements applicable to it and the Property.  There shall never be committed by Borrower, and Borrower shall not knowingly permit any other Person in occupancy of or involved with the operation or use of the Property to commit, any act or omission affording the federal government or any state or local government the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents.  Borrower hereby covenants and agrees not to commit, knowingly permit or suffer to exist any act or omission affording such right of forfeiture.  Borrower shall at all times maintain, preserve and protect all franchises and trade names where the failure to so preserve and protect would be reasonably likely to have a Material Adverse Effect, and preserve all the remainder of its property used in and necessary for the conduct of its business and shall keep the Property in good working order and repair (reasonable wear and tear excepted, and subject to Excusable Delays, casualty and Taking, as to the latter two of which Section 6.2 shall apply), and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully set forth in the Security Instruments.  Borrower shall keep the Property insured at all times to such extent and against such risks, and maintain liability and such other insurance, as is more fully set forth in this Agreement.

 

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

 

5.1.4        Single Purpose Entity.

 

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

 

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

 

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

 

(d)           To the extent that Borrower jointly contracts with any of its Affiliates, to do business with vendors or service providers or to share overhead expenses, the costs incurred in so

 

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

 

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

 

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

 

(g)           In addition, Borrower shall: (i) maintain books and records separate from those of any other Person; (ii) maintain its assets in such a manner that it is not more costly or difficult to segregate, identify or ascertain such assets; (iii) hold regular meetings of its board of directors, shareholders, partners or members, as the case may be; (iv) hold itself out to creditors and the public as a legal entity separate and distinct from any other entity; (v) prepare separate tax returns (unless part of a consolidated group) and financial statements (unless part of a consolidated group), or if part of consolidated group it will be shown as a separate member of such group or such consolidated tax returns or financial statements will contain a note indicating that it and its Affiliate are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person; (vi) transact all business with its Affiliates on an arm’s-length basis and pursuant to enforceable agreements; (vii) conduct business in its name and use separate stationery, invoices and checks; (viii) not commingle its assets or funds with those of any other Person; and (ix) not assume, guarantee or pay the debts or obligations of any other Person.

 

5.1.5        Consents.  If Borrower is a corporation, the board of directors of such Person may not take any action requiring the unanimous affirmative vote of 100% of the members of the board of directors unless all of the directors, including the Independent Directors, shall have participated in such vote.  If Borrower is a limited liability company, (a) if such Person is managed by a board of managers or directors, the board of managers or directors of such Person may not take any action requiring the unanimous affirmative vote of 100% of the members of the board of managers or directors unless all of the managers or directors, including the Independent Managers or Independent Directors, shall have participated in such vote, (b) if such Person is not managed by a board of managers or directors, the members of such Person may not take any action requiring the affirmative vote of 100% of the members of such Person unless all of the members, including the Independent Members, shall have participated in such vote.  An affirmative vote of 100% of the directors, managers or members, as applicable, of Borrower shall

 

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be required to (i) file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings or to authorize Borrower to do so or (ii) file an involuntary bankruptcy petition against any Affiliate, Manager, or any Affiliate of Manager.  Furthermore, Borrower’s formation documents shall expressly state that for so long as the Loan is outstanding, Borrower shall not be permitted to (i) dissolve, liquidate, consolidate, merge or sell all or substantially all of Borrower’s assets other than in connection with the repayment of the Loan or (ii) engage in any other business activity and such restrictions shall not be modified or violated for so long as the Loan is outstanding.

 

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

 

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

 

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

 

5.1.9        [Reserved.]

 

5.1.10      Insurance.

 

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

 

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

 

5.1.11      Further Assurances; Separate Notes; Loan Resizing.

 

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

 

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property of Borrower intended by the terms of any one or more of the Loan Documents to be encumbered by the Loan Documents, or otherwise carry out the purposes of the Loan Documents and the transactions contemplated thereunder.  Borrower agrees that it shall, upon request and at Lender’s cost (including, without limitation, any costs related to the modification or replacement of the Interest Rate Protection Agreement (but not including any breakage costs associated with or arising under the Interest Rate Protection Agreement), reasonably cooperate with Lender in connection with any request by Lender to sever one or more of the Notes into two (2) or more separate substitute notes in an aggregate principal amount equal to the Principal Amount and to reapportion the Loan among such separate substitute notes, including, without limitation, by executing and delivering to Lender new substitute notes to replace the applicable Note or Notes, amendments to or replacements of existing Loan Documents to reflect such severance and/or Opinions of Counsel with respect to such substitute notes, amendments and/or replacements, provided that Borrower shall bear no costs or expenses in connection therewith (other than internal administrative costs and expenses of Borrower).  Any such substitute notes may have varying principal amounts and economic terms, provided, however, that (i) the maturity date of any such substitute note shall be the same as the scheduled Maturity Date of the Notes immediately prior to the issuance of such substitute notes, (ii) the initial weighted average LIBOR Margin for the term of the substitute notes shall not exceed the LIBOR Margin under the Note being substituted immediately prior to the issuance of such substitute notes; and (iii) the economics of the Loan shall not change in a manner which is adverse to Borrower.  Upon the occurrence and during the continuance of an Event of Default, Lender may apply payment of all sums due under such substitute notes (and in respect of any other Indebtedness and Obligations) in such order and priority as Lender shall elect in its sole and absolute discretion.

 

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

 

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

 

(c)           Any amounts recovered from the Property or any other collateral delivered or pledged to Lender in connection with the Loan, or any part thereof, after an Event of Default may be applied by Lender toward the payment of any interest and/or principal of the Loan and/or any other amounts due under the Loan Documents or the Interest Rate Swap Agreement in such order, priority, or proportions as Lender in its sole discretion shall determine.

 

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

 

5.1.13      Operation.

 

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

 

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

 

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

 

5.1.15      Title to the Property.

 

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

 

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

 

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

 

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

 

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Borrower shall also state either that, to the best of Borrower’s knowledge, no Default exists hereunder or, if any Default shall exist hereunder, specify such Default and the steps being taken to cure such Default and the estoppel certificate from Lender shall state whether Lender has delivered notice of a Default or an Event of Default.

 

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

 

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

 

5.1.20      No Further Encumbrances.  Subject to Section 7.3, Borrower shall do, or cause to be done, all things necessary to keep and protect the Property and all portions thereof unencumbered from any Liens, easements or agreements granting rights in or restricting the use or development of the Property, except for Permitted Encumbrances.

 

5.1.21      [Reserved.]

 

5.1.22      Master Lease.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5.2           Negative Covenants.

 

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

 

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

 

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

 

5.2.3        Engage in Different Business.  Engage, directly or indirectly, in any business other than that of entering into this Agreement and the other Loan Documents to which Borrower is a party and the use, ownership, management, leasing, renovation, financing, development, operation and maintenance of the Property and activities related thereto;

 

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

 

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

 

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

 

5.2.7        Guarantee Obligations.  Guarantee any obligations of any Person;

 

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

 

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

 

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pursuant to Article VIII or to reflect any change in capital accounts, contributions, distributions, allocations or other provisions that do not and could not reasonably be expected to have a Material Adverse Effect and provided that Borrower remains a Single Purpose Entity;

 

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

 

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

 

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

 

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

 

5.2.14      [Reserved;]

 

5.2.15      [Reserved;]

 

5.2.16      [Reserved;]

 

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

 

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

 

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

 

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

 

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

 

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

 

VI.                                 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6.1.8        [Reserved.]

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6.2           Condemnation and Insurance Proceeds.

 

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

 

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

 

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

 

6.2.3        Lender to Take Proceeds.

 

(a)           If (i) a Monetary Default or an Event of Default shall have occurred and be continuing, (ii) a Total Loss with respect to the Property shall have occurred, (iii) the Work is not capable of being completed before the earlier to occur of the date which is six (6) months prior to the earlier of the Maturity Date (as the same may be extended pursuant to the terms of the Notes) and the date on which the business interruption insurance carried by Borrower with respect to the Property shall expire (the “Cut-Off Date”), unless on or prior to the Cut-Off Date the Borrower shall deliver to the Lender and there shall remain in effect a binding written offer, subject only to customary conditions, of an Approved Bank or such other financial institution or investment bank reasonably satisfactory to Lender for a loan from such Approved Bank or such other financial institution or investment bank to the Borrower in a principal amount of not less than the then Principal Amount and which shall, in the Lender’s reasonable judgment, enable the Borrower to refinance the Loan prior to the Maturity Date, (iv) the Property is not capable of being restored substantially to its condition prior to such Taking or casualty and such incapacity shall have a Material Adverse Effect, (v) Subleases demising in the aggregate less than 40% of the total rentable space in the Property which has been demised under executed and delivered Subleases in effect as of the date of the occurren