Avenue CLO Fund, Ltd. et al v. Bank of America, N.A., et al

Filing 79

CERTIFIED REMAND ORDER. MDL No. 2106. Signed by MDL (FLSD) on 1/14/14. (Attachments: # 1 Transmittal from FLSD, # 2 1 09-md-02106 Designation of Record, # 3 1 09-md-02106 Dkt. Sheet - flsd, # 4 09-MD-2106 DE 1, 2, 4-30, # 5 0 9-MD-2106 DE 32-36, # 6 09-MD-2106 DE 37 part 1 of 3, # 7 09-MD-2106 DE 37 part 2 of 3, # 8 09-MD-2106 DE 37 part 3 of 3, # 9 09-MD-2106 DE 38, 39, 41-47, 49, 50, # 10 09-MD-2106 DE 51, # 11 09-MD-2106 DE 52-59, 61-65, 68, 70, 72-76, # (1 2) 09-MD-2106 DE 78-84, 86-91, # 13 09-MD-2106 DE 93, 95-103, 106-108, # 14 09-MD-2106 DE 110-115, # 15 09-MD-2106 DE 116-125, 127-129, 132-134, # 16 09-MD-2106 DE 136-140, 142-158, # 17 09-MD-2106 DE 160-162, 164-167, 170-175, 177-190, # ( 18) 09-MD-2106 DE 191-199, 201-215, # 19 09-MD-2106 DE 217-229, 232-247, # 20 09-MD-2106 DE 248, # 21 09-MD-2106 DE 249 part 1 of 2, # 22 09-MD-2106 DE 249 part 2 of 2, # 23 09-MD-2106 DE 251-253, 262-266, 284-287, 300, 301, 310, 319, 326-3 31, # 24 09-MD-2106 DE 335, 336, 338-344, 346-349, # 25 09-MD-2106 DE 350, # 26 09-MD-2106 DE 351-358, # 27 09-MD-2106 DE 360-366, 368-374, # 28 09-MD-2106 DE 375 part 1 of 3, # 29 09-MD-2106 DE 375 part 2 of 3, # 30 09-MD-2106 DE 375 p art 3 of 3, # 31 09-MD-2106 DE 376 part 1, # 32 09-MD-2106 DE 376 part 2, # 33 09-MD-2106 DE 376 part 3, # 34 09-MD-2106 DE 376 part 4, # 35 09-MD-2106 DE 376 part 5, # 36 09-MD-2106 DE 376 part 6, # 37 09-MD-2106 DE 376 part 7, # 38 09-MD-2106 DE 376 part 8, # 39 09-MD-2106 DE 376 part 9, # 40 09-MD-2106 DE 377 part 1, # 41 09-MD-2106 DE 377 part 2, # 42 09-MD-2106 DE 378, # 43 09-MD-2106 DE 379, # 44 09-MD-2106 DE 380, # 45 09-MD-2106 DE 381 part 1, # 46 09-MD-2 106 DE 381 part 2, # 47 09-MD-2106 DE 382 part 1, # 48 09-MD-2106 DE 382 part 2, # 49 09-MD-2106 DE 382 part 3, # 50 09-MD-2106 DE 382 part 4, # 51 09-MD-2106 DE 383 part 1, # 52 09-MD-2106 DE 383 part 2, # 53 09-MD-2106 DE 383 part 3, # 54 09-MD-2106 DE 383 part 4, # 55 09-MD-2106 DE 383 part 5, # 56 09-MD-2106 DE 383 part 6, # 57 09-MD-2106 DE 383 part 7, # 58 09-MD-2106 DE 383 part 8, # 59 09-MD-2106 DE 383 part 9, # 60 09-MD-2106 DE 383 part 10, # 61 09-MD-2106 DE 383 part 11, # 62 09-MD-2106 DE 384 part 1, # 63 09-MD-2106 DE 384 part 2, # 64 09-MD-2106 DE 384 part 3, # 65 09-MD-2106 DE 384 part 4, # 66 09-MD-2106 DE 384 part 5, # 67 09-MD-2106 DE 384 part 6, # 68 09-MD-2106 DE 384 part 7, # ( 69) 09-MD-2106 DE 384 part 8, # 70 09-MD-2106 DE 384 part 9, # 71 09-MD-2106 DE 384 part 10, # 72 09-MD-2106 DE 384 part 11, # 73 09-MD-2106 DE 385 part 1, # 74 09-MD-2106 DE 385 part 2, # 75 09-MD-2106 DE 386 part 1, # 76 09-MD-2106 DE 386 part 2, # 77 09-MD-2106 DE 386 part 3, # 78 09-MD-2106 DE 386 part 4, # 79 09-MD-2106 DE 386 part 5, # 80 09-MD-2106 DE 386 part 6, # 81 09-MD-2106 DE 386 part 7, # 82 09-MD-2106 DE 387 part 1, # 83 09-MD-2106 DE 387 part 2, # 84 09-MD-2106 DE 388, # 85 09-MD-2106 DE 389 part 1, # 86 09-MD-2106 DE 389 part 2, # 87 09-MD-2106 DE 389 part 3, # 88 09-MD-2106 DE 389 part 4, # 89 09-MD-2106 DE 390, 392-394, # 90 1 10-cv-20236 Dkt. Sheet - flsd, # 91 10cv20236 DE #1-27, 29-31, 45, 53, 60-65, 67-70, 73, # 92 1 09-cv-23835 Dkt. Sheet - flsd, # 93 09cv23835 DE 112, 115-126, # 94 09cv23835 DE 130, 134, 135 and 145)(Copies have been distributed pursuant to the NEF - MMM)

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United States, or an Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuing
Lender, appoint a successor Administrative Agent meeting the qualifications set forth above;
provided that if the Administrative Agent shall notify Borrowers and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (a) the retiring Administrative Agent shall
be discharged from its duties and obligations heretmder and under the other Loan Documents
(except that in the case of any collateral security held by the Administrative Agent on behalf of
the Lenders or the Issuing Lender under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collat~ral security until such time as a successor
Administrative Agent is appointed) and (b) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be made by or to
each Lender and the Issuing Lender directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the acceptance of a
successor's appointment as Administrative Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its
duties and obligations hereunder or tmder the other Loan Documents (if not already discharged
therefrom as provided above in this Section). The fees payable by Borrowers to a successor
Administrative Agent shall be the same as those payable to its predecessor unless otherwise
agreed between Borrowers and such successor. After the retiring Administrative Agent's
resignation hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.5 shall continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as Administrative
Agent.
Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as Issuing Lender and Swing Line Lender. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, (i) such successor
shall succeed to and become vested with all of the rights, powers, privileges and duties of the
retiring Issuing Lender and Swing Line Lender, (ii) the retiring Issuing Lender and Swing Line
Lender shall be discharged from all of their respective duties and obligations hereunder or under
the other Loan Documents, and (iii) the successor Issuing Lender shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory to the retiring Issuing Lender to effectively assume the
obligations of the retiring Issuing Lender with respect to such Letters of Credit.
9.7
Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and the Issuing Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and the Issuing Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and information as it shall
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from time to time deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any other Loan Document or any related agreement
or any document furnished hereunder or thereunder.
9.8
No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Managers, Arrangers, Documentation Agents or Syndication Agents listed on the
cover page hereof shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent,
a Lender or the Issuing Lender hereunder.
9.9
Administrative Agent May File Proofs of Claim. In case of the pendency
of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any
of the Companies, the Administrative Agent (irrespective of whether the principal of any Loan or
lJC Obligation shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Administrative Agent shall have made any demand on
Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise
(a)
to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, UC Obligations and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or advisable in order to
have the claims of the Lenders, the Issuing Lender and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Lender and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders, the Issuing Lender and the Administrative Agent under Sections
2.8,3.9,3.10, and 10.5) allowed in such judicial proceeding; and
(b)
to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in
any such judicial proceeding is hereby authorized by each Lender and the Issuing Lender to
make such payments to the Administrative Agent and, if the Administrative Agent shall consent
to the making of such payments directly to the Lenders and the Issuing Lender, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of the Administrative Agent and its agents and counsel, and any other amounts due
the Administrative Agent under Sections 2.8 and 10.4.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the Issuing Lender any
plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the
rights of any Lender or the Issuing Lender to authorize the Administrative Agent to vote in
respect of the claim of any Lender or the Issuing Lender or in any such proceeding.
9.10 Collateral and Guarantee Matters. The Lenders and the Issuing Lender
irrevocably authorize the Administrative Agent, at its option and in its discretion,
(a)
to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the Commitments and
payment in full of all Obligations (other than contingent indemnification obligations) and the
expiration or termination of all Letters of Credit, (ii) that is sold or otherwise transferred as part
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of or in connection with any sale or other disposition permitted heretmder or under any other
Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with
Section 10.1;
(b)
to release any Guarantor from its Guarantee Obligations if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder;
(c)
to subordinate any Lien on any Property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such Property that
is permitted by Section 7.3 and which is entitled to priority over the Liens securing the
Obligations pursuant to the terms of this Agreement or any other Loan Document or to the extent
such Property may be Disposed of in accordance with Section 7.5 to the Person acquiring such
Property thereunder;
(d)
to release or subordinate any Lien on any Property granted to or held by
the Administrative Agent under any Loan Document which is disposed of in accordance with
Section 7.5;
(e)
to release the Parent Guaranty in accordance with its terms on following
the Parent Guaranty Release Date, or to confirm the release of any Completion Guaranty in
accordance with the terms of the Disbursement Agreement;
(f)
to consent to (and execute, where appropriate) (i) adjustments to the
configuration, location and size of the parcels which collectively constitute the Site (via
subdivision, lot line adjustment or the like), (ii) the grant of easements or other similar rights to
accommodate the Access Road, (iii) the creation of air rights parcels in connection with the
creation of the Condo Units and to the grant of easements and covenants, conditions, restrictions
and declarations in favor of the ultimate purchasers of the Condo Units; (iv) non-disturbance
agreements in favor of tenants under leases or subleases in respect of portions of the Site, and
(iv) conveyance of strips or gores of land required to be conveyed to public agencies or quasipublic agencies for pedestrian walkways, sky bridges, roads, or other public purposes, in each
cas.e to the extent approved by the Administrative Agent in its discretion;
(g)
to amend the Deed of Trust to accommodate any amendments to the
parcels described therein based upon adjustments described in clause (f)(i) above or any
inaccuracies or adjustments to such parcels which result from the failure of the Project (as
constructed) to conform to the exact dimensions of the Retail Air Space Parcels as configured on
the Closing Date (either because the floors constructed in the Project are of a higher or lower
elevation, the outer walls are in a different location, or the parcels with respect thereto are in a
different configuration than the parcels so described on the Closing Date), so long as the square
footage or dimensions of the Retail Air Space Parcels are not increased by more than 5%; and
(h)
to subordinate the Deed of Trust to any reciprocal easement agreements,
covenants, and other similar rights reasonably acceptable to the Administrative Agent which are
requested by the Companies to accommodate the creation of the Access Road -or the declaration
or any easements, covenants, conditions or restrictions associated with the Condo Units and
related common areas.
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Upon request by the Administrative Agent at any time, the Lenders will confirm
in writing the Administrative Agent's authority to release or subordinate its interest in particular
types or items of property, or to release any Guarantor from its Guarantee Obligations pursuant
to this Section 9.10. In each case as specified in this Section 9.10, the Administrative Agent will,
at Borrowers' expense, execute and deliver to the applicable Loan Party such documents as such
Loan Party may reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted under the Security Documents or to subordinate its
interest in such item, or to release such Guarantor from its Guarantee Obligations, in each case in
accordance with the terms of the Loan Documents and this Section 9.10.
9.11

Withholdings.

(a)
To the extent required by any applicable law, the Administrative Agent
may withhold from any interest payment to any Lender an amount equivalent to any applicable
withholding tax. If the forms or other documentation required by Section 2.18(f) are not
delivered to the Administrative Agent, then the Administrative Agent may withhold from any
interest payment to any Lender not providing such forms or other documentation, an ammmt
equivalent to the applicable withholding tax.
(b)
If the Internal Revenue Service or any authority of the United States or
other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify the Administrative
Agent of a change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason), such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative
Agent as tax or otherwise, including penalties and interest, together with all expenses incurred,
including legal expenses, allocated staff costs and any out of pocket expenses.
(c)
If any Lender sells, assigns, grants a participation in, or otherwise transfers
its rights under this Agreement, the purchaser, assignee, participant or transferee, as applicable,
shall comply and be bound by the terms of Section 2.18(f) and this Section 9.11.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 10.1 or as permitted by Section 9.1 (c). The
Required Lenders and each other Person party to the relevant Loan Document may, or (with the
written consent of the Required Lenders) the Administrative Agent and each other Person party
to the relevant Loan Document may, from time to time, (x) enter into written amendments,
supplements or modifications hereto and to the other Loan Documents (including amendments
and restatements hereof or thereof) for the purpose of adding any provisions to this Agreement or
the other Loan Documents or changing in any manner the rights of the Lenders or of the other
Persons hereunder or thereunder or (y) waive, on such terms and conditions as may be specified
in the instmment of waiver, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its conseqliences.

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Notwithstanding the foregoing provisions of this Section 10.1, no such waiver and
no such amendment, supplement or modification shall:
(i) forgive or reduce the principal amount or extend the final scheduled date of
maturity of any Loan or Reimbursement Obligation, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any interest
or fee payable hereunder or forgive the payment of any interest or fee payable hereunder
(including any fee under Section 2.1O(b)) or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Commitment of any
Lender, in each case without the consent of each Lender (other than a Defaulting Lender)
directly affected thereby (such consent being in lieu of the consent of the Required
Lenders required pursuant to the second sentence of this Section 10.1); provided that with
the consent of the Required Lenders, the initial application of the Condo Sales
Performance Adjustment may be deferred by up to three months;
(ii) amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders, Required Facility Lenders, or
Applicable Facility Lenders, consent to the assignment or transfer by any Person (other
than a Lender) of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or release a significant
Guarantor from its guarantee obligations under the Loan Documents, in each case
without the consent of all Lenders (other than Defaulting Lenders); provided that any
Completion Guaranty may be released with the consent of the Required Lenders at any
time following the Opening Date;
(iii) amend, modify or waive any provision of Section 9 without the consent of
Administrative Agent (in addition to the consent of the Required Lenders required
pursuant to the second sentence of this Section 10.1);
(iv) amend, modify or waive any provision of Section 2.5 or 2.6 without the
written consent of the Swing Line Lender (in addition to the consent of the Required
Lenders required pursuant to the second sentence of this Section 10.1);
(v) amend, modify or waive any provision of Section 2.11 or Section 2.23
without the consent of the Required Facility Lenders with respect to the Facility directly
affected thereby (such consent being in lieu of the consent of the Required Lenders
required pursuant to the second sentence of this Section 10.1);
(vi) amend, modify or waive any provision of Section 3 without the consent of
the Issuing Lender (in addition to the consent of the Required Lenders required pursuant
to the second sentence of this Section 10.1);
(vii) except to the extent permitted by the Disbursement Agreement on the
Closing Date, amend, modify or waive the provisions of the Disbursement Agreement to
the extent such provisions require the full expenditure of amounts on deposit in the
Equity Funding Account and Second Mortgage Proceeds Account in advance of
expenditures from the Bank Proceeds Account without the prior written consent of all
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Lenders; or
(viii) amend the provisions of Section 2.24 without the consent of each Lender
directly affected thereby (such consent being in lieu of the consent of the Required
Lenders required pursuant to the second sentence of this Section 10.1).
Any such waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Companies, the Lenders, the Administrative
Agent, the Arrangers, the Managers and all future holders of the Loans and Letters of Credit. In
the case of any waiver, the Companies, the Lenders, the Arrangers, the Managers and the
Administrative Agent shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or other Default or
Event of Default, or impair any right consequent thereon. Any such waiver, amendment,
supplement or modification shall be effected by a written instmment signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided, that delivery of an
executed signature page of any such instmment by facsimile transmission shall be effective as
delivery of a manually executed counterpart thereof.
Subject to subsection (vii) above, to the extent the Administrative Agent is entitled or required to
make any determinations (whether a consent, waiver or otherwise) under the Intercreditor
Agreements or the Disbursement Agreement, the Administrative Agent shall be entitled make
any determinations in the exercise of its discretion, provided that the Administrative Agent shall
not waive the conditions to Advances pursuant to Section 3.3 of the Disbursement Agreement
other than 3.3.1, 3.3.4 (in respect of attachments to or certifications made in the Advance
Request), 3.3.5, 3.3.6, 3.3.14, 3.3.15, 3.3.16, 3.3.17, 3.3.19, and 3.3.22 without the consent of the
Required Lenders.
10.2

Notices;.Effectiveness; Electronic Communications.

(a)
Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:
(i)
if to Borrowers, the Administrative Agent, the Issuing Lender or
the Swing Line Lender, to the address, telecopier number, electronic mail address or
telephone number specified for such Person on Schedule 10.2; and
(ii)
if to any other Lender, to the address, telecopier number, electronic
mail address or telephone number specified in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have
been given when sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next Banking Day for the
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recipient). Notices delivered through electronic communications to the extent provided in
subsection (b) below shall be effective as provided in such subsection (b). Each Borrower (and
by executing the each of the respective Loan Documents to which it is a party, each other Party)
hereby irrevocably appoints either of the other Borrower as its agent for the purpose of receiving
notices required hereunder, and agrees that Borrowers conclusively shall be deemed to have
received any such notice when notice has been given to any Borrower.
(b)
Electronic Communications. Notices and other communications to the
Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender or the Issuing Lender pursuant to Section 2 if such Lender or the Issuing Lender, as
applicable, has notified the Administrative Agent that it is incapable of receiving notices under
such Section by electronic communication. The Administrative Agent or Borrowers may, in its
discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the sender's receipt of
an acknowledgement from the intended recipient (such as by the "return receipt requested"
function, as available, return e-mail or other written acknowledgement), provided that if such
notice or other communication is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of business on the
next Banking Day for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.
(c)
The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS
AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF FONTAINEBLEAU MATERIALS OR THE
ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM FONTAINEBLEAu MATERIALS. NO WARRANTY
OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH
FONTAINEBLEAU MATERIALS OR THE PLATFORM. In no event shall the Administrative
Agent or any of its Related Parties (collectively, the "Agent Parties") have any liability to any
Borrower, any Lender, the Issuing Lender or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of
Borrowers' or the Administrative Agent's transmission of Fontainebleau Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or expenses are
determined by a court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party; provided,
however, that in no event shall any Agent Party have any liability to any Borrower, any Lender,
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the Issuing Lender or any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).
(d)
Change of Address, Etc. Borrowers, the Administrative Agent, the Issuing
Lender and the Swing Line Lender may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to Borrowers, the Administrative Agent, the Issuing Lender
and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent
from time to time to ensure that the Administrative Agent has on record (i) an effective address,
contact name, telephone number, telecopier number and electronic mail address to which notices
and other communications may be sent and (ii) accurate wire instmctions for such Lender.
Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such
Public Lender to at all times have selected the "Private Side Information" or similar designation
on the content declaration screen of the Platform in order to enable such Public Lender or its
delegate, in accordance with such Public Lender's compliance procedures and applicable Law,
including United States Federal and state securities Laws, to make reference to Fontainebleau
Materials that are not made available through the "Public Side Information" portion of the
Platform and that may contain material non-public information with respect to Borrowers or their
securities for purposes of United States Federal or state securities laws.
(e)
Reliance by Administrative Agent, Issuing Lender and Lenders. The
Administrative Agent, the Issuing Lender and the Lenders shall be entitled to rely and act upon
any notices (including telephonic Advance Requests) purportedly given by or on behalf of any
Borrower even if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof. Each Borrower
shall, absent gross negligence and willful misconduct, indemnify the Administrative Agent, the
Issuing Lender, each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each notice purportedly
given by or on behalf of any Borrower. All telephonic notices to and other telephonic
communications with the Administrative Agent may be recorded by the Administrative Agent,
and each of the parties hereto hereby consents to such recording.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, any Arranger, any Manager or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have been or will be relied
upon by the Administrative Agent and each Lender, regardless of any investigation made ,by the
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Administrative Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default at the
time of any Loan or UC Borrowing, and shall continue in full force and effect as long as any
Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding (other than Letters of Credit that have been Cash Collateralized).
10.5

Expenses; Indemnity; Damage Waiver.

(a)
Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent, any Arranger, any Manager and any of their respective Affiliates
(including the reasonable fees, charges and disbursements of counsel for each such party), in
connection with the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the other Loan
Documehts or any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all .
reasonable out-of-pocket expenses incurred by the Issuing Lender in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any
Arranger, any Manager, any Lender or the Issuing Lender (including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Arranger, any Manager, any
Lender or the Issuing Lender), and shall pay all fees and time charges for attorneys who may be
employees of the Administrative Agent, any Arranger, any Manager, any Lender or the Issuing
Lender, in connection with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section, or (B) in
connection with Loans made or Letters of Credit issued hereunder, including all such out-ofpocket expenses incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
(b)
Indemnification by Borrowers. Each Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Arranger, each Manager, each Lender
and the Issuing Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all fees and time charges and disbursements for attorneys who may be
employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by any Borrower or any other Loan Party arising out of, in connection with, or
as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent
thereof) and its Related Parties only, the administration of this Agreement and the other Loan
Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand dq not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Substances on or from any property owned or operated by the Project Entities, or
(iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the
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foregoing, whether based on contract, tort or any other theory, whether brought by a third party
or by any Borrower or any other Loan Party or any such Borrowers' or such Loan Party's
directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto,
in all cases, whether or not caused by or arising, in whole or in part, out of the comparative,
contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses (x) are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by any Borrower or any other Loan Party against an Indemnitee
for breach in bad faith of such Indemnitee's obligations hereunder or under any other Loan
Document, if such Borrower or such Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent jurisdiction.
(c)
Reimbursement by Lenders. To the extent that Borrowers for any reason
fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid
by them to the Administrative Agent (or any sub-agent thereof), the Issuing Lender or any
Related Party of any of the foregoing (and without limiting their obligation to do so), each
Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing
Lender or such Related Party, as the case may be (but without affecting the Borrowers'
obligation to make such payments), such Lender's Aggregate Exposure Percentage (determined
as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount, provided that (i) the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the Issuing Lender in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative Agent (or any
such sub-agent) or Issuing Lender in connection with such capacity, and (ii) to the extent
indemnification of the Issuing Lender is required pursuant to this Section 1O.05(c), such
obligation will be limited to Revolving Lenders only. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.23(g).
(d)
Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, Borrowers shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.
No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from
the use by unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such Indemnitee as
determined by a final and nonappealable judgment of a court of competent jurisdiction.
(e)
Payments. All amounts due under this Section shall be payable not later
than ten Banking Days after demand therefor.

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(f)
Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the Issuing Lender and the Swing Line Lender, the replacement of any
Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all
the other Obligations.
10.6

Successors and Assigns.

(a)
Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that Borrowers and their Affiliates may not assign or
otherwise transfer any of its rights or obligations under the Loan Documents without the prior
written consent of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of Section 10.6(b), (ii) by way of participation in accordance with
the provisions of Section 1O.6(d), or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 1O.6(f) (and any other attempted assignment or transfer by
any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section
and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Lender and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b)
Assignments by Lenders. Any Lender may at any time assign to one or
more assignees all or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment(s) and the Loans (including for purposes of this Section 1O.6(b),
participations in UC Obligations and in Swing Line Loans) at the time owing to it); provided
that any such assignment shall be subject to the following conditions:
(i)

Minimum Amounts.

(A)
in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment under any Facility and the Loans at the time
owing to it under such Facility or in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund, no minimum amount need be assigned; and
(B)
in any case not described in subsection (b)(i)(A) of this
Section, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect to
such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified
in the Assignment and Assumption, as of the Trade Date, shall not be less than
$1,000,000, in the case of any assignment in respect of any Facility; provided, however,
that concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or to an
Eligible Assignee and members of its Assignee Group) will be treated as a single
assignment for purposes of determining whether such minimum amount has been met;
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(ii)
Proportionate Amounts. Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned, except that
this clause (ii) shall not (A) apply to the Swing Line Lender's rights and obligations in
respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of
its rights and obligations among separate Facilities on a non-pro rata basis;
(iii)
Required Consents. No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:
(A)
the consent of Borrowers (such consent not to be
unreasonably withheld or delayed) shall be required unless (1) an Event of Default has
occurred and is continuing at the time of such assignment or (2) such assignment is to a
Person that is a Lender with a Commitment in respect of the Revolving Facility or Delay
Draw Term Loans, an Affiliate of such Lender or an Approved Fund with respect to such
Lender (or, in the case of assignments of Term Loans, Conversion Term Loans or funded
Delay Draw Term Loans, any Lender);
(B)
the consent of the Administrative Agent (such consent not
to be unreasonably withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender with a Commitment in respect of the Revolving Facility or
Delay Draw Term Loans, an Affiliate of such Lender or an Approved Fund with respect
to such Lender (or, in the case of assignments of Term Loans, Conversion Term Loans or
funded Delay Draw Term Loans, any Lender); and
(C)
the consent of the Issuing Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding); and
(D)
the consent of the Swing Line Lender (such consent not to
be unreasonably withheld or delayed) shall be required for any assignment in respect of
the Revolving Credit Facility.
(iv)
Assignment and Assumption. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500 (but such fee shall not be
duplicative as to any concurrent assignments to two or more Approved Funds of the same
Lender); provided, however, that the Administrative Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any assignment. The
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
(v)
No Assignment to Borrowers. No such assignment shall be made
to any Borrower or any of Borrowers' Affiliates or Subsidiaries.
(vi)
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made to a natural person.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in each Assignment and
Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its obligations under
this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations tmder this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.17, 2.18, 2.19, and 10.5 with
respect to facts and circumstances occurring prior to the effective date of such assignment).
Upon request, Borrowers (at their expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in accordance with Section
1O.6(d).

(c)
Register. The Administrative Agent, acting solely for this purpose as an
agent of Borrowers, shall maintain at the Administrative Agent's Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and UC
Obligations owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive absent manifest error, and Borrowers,
the Administrative Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by any
Borrower and any Lender, at any reasonable time and from time to time uponreasonable prior
notice.
(d)
Participations. Any Lender may at any time, without the consent of, or
notice to, Borrowers or the Administrative Agent, sell participations to any Person (other than a
natural person or any Borrower or any of Borrowers' Affiliates or Subsidiaries) (each, a
"Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such Lender's
participations in UC Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such obligations and
(iii) Borrowers, the Administrative Agent, the Lenders and the Issuing Lender shall continue to
deal solely and directly with such Lender in connection with such Lender's rights and obligations
under this Agreement. Any agreement or instmment pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instmment may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification described in
Sections 10.1(i) and (ii) that affects such Participant. Subject to subsection (e) of this Section,
each Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.17, 2.18
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(so long as such Participant has complied with the requirements thereof), and 2.19 to the same
extent as if it were a Lender and had acquired its interest by assignment pursuant to Section
10.6(b). To the extent permitted by law, each Participant also shall be entitled to the benefits of
Section 1O.7(b) as though it were a Lender, provided such Participant agrees to be subject to
Section 2.24 as though it were a Lender.
(e)
Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 2.18 or 2.19 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such Participant, unless the sale
of the participation to such Participant is made with Borrowers' prior written consent. A
Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the
benefits of Section 2.18 unless Borrowers are notified of the participation sold to such
Participant and such Participant agrees, for the benefit of Borrowers, to comply with Sections
2. 18(f) and (g) as though it were a Lender.
(f)
Certain Pledges. Any Lender may, without the consent of the Borrowers
or the Administrative Agent, at any time pledge or assign a security interest in all or any portion
of its rights under this Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank:;
provided that no such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g)
Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment and Assumption shall be deemed to
include electronic signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed signature or the use of
a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other similar state laws
based on the Uniform Electronic Transactions Act.
(h)
Resignation as Issuing Lender or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank: of America
assigns all of its Revolving Commitments and Revolving Loans pursuant to Section 10.6(b),
Bank: of America may, (i) upon 30 days' notice to Borrowers and the Lenders, resign as Issuing
Lender and/or (ii) upon 30 days' notice to Borrowers, resign as Swing Line Lender. In the event
of any such resignation as Issuing Lender or Swing Line Lender, Borrowers shall be entitled to
appoint from among the Lenders a successor Issuing Lender or Swing Line Lender hereunder;
provided, however, that no failure by Borrowers to appoint any such successor shall affect the
resignation of Bank: of America as Issuing Lender or Swing Line Lender, as the case may be. If
Bank: of America resigns as Issuing Lender, it shall retain all the rights, powers, privileges and
duties of the Issuing Lender hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as Issuing Lender and all UC Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 3.3. If Bank: of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect
to Swing Line Loans made by it and outstanding as of the effective date of such resignation,
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including the right to require the Lenders to make Base Rate Loans or fund risk participations in
outstanding Swing Line Loans pursuant to Section 2.6. Upon the appointment of a successor
Issuing Lender and/or Swing Line Lender, (a) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring Issuing Lender or Swing Line
Lender, as the case may be, and (b) the successor Issuing Lender shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory to Bank of America to effectively assume the obligations of
Bank of America with respect to such Letters of Credit.
10.7

Adjustments; Set-off.

(a)

[Reserved] I

(b)
In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to Borrowers, any such notice being
expressly waived by Borrowers to the extent permitted by applicable law, upon any amount
becoming due and payable by Borrowers hereunder (whether at the stated maturity, by
acceleration or otherwise), to (when any Event of Default has occurred and remains continuing)
set off and appropriate and apply against such amount any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured
or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or
for the credit or the account of Borrowers. Each Lender agrees to notify promptly Borrowers
and the Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of such setoff and
application.
10.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery of an
executed signature page of this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed
by all the parties shall be lodged with Borrowers and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
.
10.10 Integration. Other than the promises, undertakings, representations or
warranties set forth in the Administrative Agent Fee Letter and the Facility Fee Letter, this
Agreement and the other Loan Documents represent the agreement of Borrowers, the
Administrative Agent, the Arrangers, the Managers and the Lenders with respect to the subject
matter hereof, and there are no promises, undertakings, representations or warranties by the
Administrative Agent, any Arranger, any Manager, or any Lender relative to the subject matter

1

Note to readers -- this Section deleted as duplicative of Section 2.24.

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hereof not expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. TillS AGREEMENT AND THE RIGHTS

AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALl. BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF I.AW RULES THEREOF OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS I.AW.
10.12 Submission To Jurisdiction; Waivers. Each Borrower hereby irrevocably
and unconditionally:
(a)
submits for itself and its Property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b)
consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c)
agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to that Borrower at its address set forth in Section 10.2 or at such
other address of which the Administrative Agent shall have been notified pursuant thereto;
(d)
agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and
(e)
waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.
10.13 Certain Matters Affecting Lenders.
(a)
If (i) the Nevada Gaming Authorities determine that any Lender does not
meet suitability standards prescribed under the Nevada Gaming Laws or (ii) any other gaming
authority with jurisdiction over the gaming business of Borrowers determines that any Lender
does not meet its suitability standards (in any such case, a "Former Lender"), the Administrative
Agent shall have the right (but not the duty) to a substitute Person (in each case, a "Substitute
Lender)" which may be any Lender or Lenders or Approved Fund of a Lender that agrees to
become a Lender and to assume the rights and obligations of the Former Lender, subject to
receipt by the Administrative Agent of evidence that such Substitute Lender (if not a Lender or
Lenders or Approved Fund of a Lender) is an Eligible Assignee. The Substitute Lender shall
assume the rights and obligations of the Former Lender under this Agreement. Borrowers shall
bear the reasonable costs and expenses of any Lender required by the Nevada Gaming
Authorities, or any other gaming authority with jurisdiction over the gaming business of
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Borrowers, to file an application for a finding of suitability in connection with the investigation
of an application by Borrowers for a license to operate a gaming establishment.
(b)
Notwithstanding the provisions of subsection (a) of this Section 10.13, if
any Lender becomes a Former Lender, and if the Administrative Agent fails to find a Substitute
Lender pursuant to subsection (a) of this Section 10.13 within any time period specified by the
appropriate gaming authority for the withdrawal of a Former Lender (the "Withdrawal Period"),
Borrowers shall immediately prepay in full the outstanding amount of all Revolving Extensions
of Credit, Conversion Term Loans and Term Loans of such Former Lender, together with
accrued interest thereon to the earlier of (x) the date of payment or (y) the last day of the
applicable Withdrawal Period.
10.14 Acknowledgments. In connection with all aspects of each transaction
contemplated hereby (including in connection with any amendment, waiver or other modification
hereof or of any other Loan Document), each Borrower acknowledges and agrees, and
acknowledges its Affiliates' understanding, that:
(a)
(i) the arranging and other services regarding this Agreement provided by
the Administrative Agent and the Arrangers, are arm's-length commercial transactions between
Borrowers and their Affiliates, on the one hand, and the Administrative Agent, the Lenders, the
Arrangers and the Managers, on the other hand, (ii) Borrowers have consulted legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (iii) Borrowers are
capable of evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents;
(b)
(i) the Administrative Agent, the Arrangers, and the Managers each is and
has been acting solely as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Loan
Parties or any other Person and (ii) neither the Administrative Agent, the Lenders, the Arrangers,
nor the Managers has any obligation to the Loan Parties or any other Person with respect to the
transactions contemplated hereby except those obligations expressly set forth herein and in the
other Loan Documents;
(c)
the Administrative Agent, the Lenders, the Arrangers, the Managers and
their respective Affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Companies and the other Loan Parties, and neither the
Administrative Agent, any of the Lenders, any of the Arrangers, nor any of the Managers has any
obligation to disclose any of such interests to any Person; and
(d)
no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the Arrangers, the
Administrative Agent, the Managers and the Lenders or among the Loan Parties and the Lenders.
To the fullest extent permitted by law, each of Borrowers, hereby waives and releases any claims
that it may have against the Administrative Agent, the Lenders, the Arrangers, the Managers and
their respective Affiliates with respect to any breach or alleged breach of agency or fiduciary
duty in connection with any aspect of any transaction contemplated hereby.

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10.15 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the Issuing Lender agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates' respective partners, directors, officers, employees, agents
and advisors (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instmcted to keep such Information
confidential), (b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same
as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction relating to
Borrowers and their obligations, (g) with the consent of Borrowers or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of
their respective Affiliates on a nonconfidential basis from a source other than the Loan Parties.
For purposes of this Section, "Information" means all information received from
any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or
their respective businesses, other than any such information that is available to the
Administrative Agent, any Lender or the Issuing Lender on a nonconfidential basis prior to
disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case of information
received from a Loan Party or any such Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.
Each of the Administrative Agent, the Lenders and the Issuing Lender
acknowledges that (a) the Information may include material non-public information concerning a
Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such material nonpublic information in accordance with applicable Requirement of Law, including United States
Federal and state securities laws.
10.16 Release of Collateral and Guarantee Obligations.
(a)
Notwithstanding anything to the contrary contained herein or in any other
Loan Document, upon request of Borrowers in connection with any Disposition of Property
permitted by the Loan Documents, the Administrative Agent shall (without the consent of any
Lender, or any affiliate of any Lender that is a party to any Specified Hedge Agreement) take
such actions as shall be required to release its security interest in any Collateral being Disposed
of in such Disposition, and to release any guarantee obligations of any Person being Disposed of
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Case 1:09-md-02106-ASG Document 37-4 Entered on FLSD Docket 02/18/2010 Page 15 of 21

in such Disposition, to the extent necessary to permit consummation of such Disposition in
accordance with the Loan Documents, provided that Borrowers have delivered to the
Administrative Agent, at least five Banking Days prior to the date of the proposed release (or
such shorter period as is agreed to by the Administrative Agent in its sole discretion), a written
request for release identifying the relevant Collateral being Disposed of in such Disposition and
the terms of such Disposition in reasonable detail. including the date thereof, the price thereof
and any expenses in connection therewith, together with a certification by Borrowers stating that
such transaction is in compliance with this Agreement and the other Loan Documents and that
the proceeds of such Disposition will be applied in accordance with this Agreement and the other
Loan Documents.
(b)
Notwithstanding anything to the contrary contained herein or any other
Loan Document, when all Obligations (other than Obligations consisting of contingent
reimbursement or indemnification obligations and Obligations in respect of any Specified Hedge
Agreement or Specified Cash Management Agreement) have been paid in full, all Commitments
have terminated or expired and no Letter of Credit or Reimbursement Obligation shall be
outstanding (other than Letters of Credit which have been Cash Collateralized), upon request of
Borrowers, the Administrative Agent shall (without notice to or vote or consent of any Lender,
or any affiliate of any Lender that is a party to any Specified Hedge Agreement or Specified
Cash Management Agreement) take such actions as shall be required to release the security
interest of the Loan Documents in all Collateral, and to release all guarantee obligations provided
for in any Loan Document, whether or not on the date of such release there may be outstanding
Obligations in respect of Specified Hedge Agreements or Specified Cash Management
Agreements.
10.17 Accounting Changes. In the event that any "Accounting Change" (as
defined below) shall occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then Borrowers and the
Administrative Agent agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Companies' financial condition (including the requirements and
restrictions associated with the provisions of this Agreement applicable thereto) shall be the
same after such Accounting Changes as if such Accounting Changes had not been made. Until
such time as such an amendment shall have been executed and delivered by Borrowers, the
Administrative Agent and the Required Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such Accounting Changes had
not occurred. "Accounting Changes" refers to changes in accounting principles required or
permitted by the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified Public Accountants
or, if applicable, the SEC.
10.18 Delivery of Lender Addenda. Each initial Lender shall become a party to
this Agreement by delivering to the Administrative Agent a Lender Addendum duly executed by
such Lender, Borrowers and the Administrative Agent.
10.19 Construction. Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant contained herein,
so that compliance with anyone covenant shall not (absent such an express contrary provision)
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Case 1:09-md-02106-ASG Document 37-4 Entered on FLSD Docket 02/18/2010 Page 16 of 21

be deemed to excuse compliance with any other covenant. Where any provision herein refers to
action to be taken by any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by such Person.
10.20 Payments Set Aside. To the extent that any payment by or on behalf of
Borrower is made to the Administrative Agent, the Issuing Lender or any Lender, or the
Administrative Agent, the Issuing Lender or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent, the Issuing Lender or such Lender in its discretion) to
be repaid to a trustee, receiver or any other party, in connection with any proceeding under any
Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (b) each Lender and
the Issuing Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders and the Issuing Lender under clause (b) of the preceding sentence
shall survive the payment in full of the Obligations and the termination of this Agreement.
10.21 Replacement of Lenders. Borrowers may, at their sole expense and effort~
upon notice to any affected Lender and the Administrative Agent, require a Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.6), all of its interests, rights and obligations under this
Agreement and the related Loan Documents at par (including all of its outstanding Loans and
Commitments, if any) to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment) if any of the following occur:
(a)
such Lender requests compensation under Section 2.17, or if Borrowers
are required to pay any additional amount to such Lender or any Governmental Authority for the
account of such Lender pursuant to Section 2.18 or Section 2.20;
(b)

such Lender is a Defaulting Lender; or

(c)
such Lender does not consent to any proposed amendment, modification,
termination, waiver or consent as contemplated by clauses (i), (ii) or (vii) of the second
paragraph of Section 10.1 where the consent of the Required Lenders has been obtained;
in each case provided that:
(i)
the Borrowers shall concurrently exercise their rights under this
Section 10.21 in respect of all Lenders in respect of which they are entitled to exercise
such rights (and, in the case of clause (c), to assignee Lenders which will approve the
requested amendment, modification waiver or consent);
(ii)
Borrowers shall have paid to the Administrative Agent the
assignment fee specified in Section 1O.6(b)(iv) and, in the case of any Lender holding
Term Loans that is being required to assign its interest, rights and obligations under this
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Case 1:09-md-02106-ASG Document 37-4 Entered on FLSD Docket 02/18/2010 Page 17 of 21

Agreement pursuant to clause (c) above as a result of a proposed amendment,
modification, termination, waiver or consent that would result in the reduction of the
interest rate than applicable to the Term Loans, and to the extent prior to the first
anniversary of the Opening Date, the prepayment premium required by Section 2.1 O(b);
(iii)
such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and UC Advances, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 2.19) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or Borrowers (in the case of all other
amounts);
(iv)
in the case of any such assignment resulting from a claim for
compensation under Section 2.17 or payments required to be made pursuant to
Section 2.18, such assignment will result in a reduction in such compensation or
payments thereafter;
(v)

such assignment does not conflict with applicable Requirements of

(vi)

no Default or Event of Default shall have occurred and remain

Law; and

continuing.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling
Borrowers to require such assignment and delegation cease to apply.
10.22 WAIVERS OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
REI~ATING TO TillS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER
TillNGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.23 Gaming Authorities. The Arrangers, the Administrative Agent and each
Lender agree to cooperate with the Nevada Gaming Authorities in connection with the
administration of their regulatory jurisdiction over the other Loan Parties, including, without
limitation, to the extent not inconsistent with the internal policies of such Lender, Arranger,
Agent or Manager and any applicable legal or regulatory restrictions, the provision of such
documents or other information as may be requested by any such Nevada Gaming Authorities
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Case 1:09-md-02106-ASG Document 37-4 Entered on FLSD Docket 02/18/2010 Page 18 of 21

relating to the Administrative Agent, the Arrangers, any of the Lenders, or arty Loan Party, or the
Loan Documents. The obligations of the Administrative Agent, the Arrangers and the Lenders
under this Section are subject to the receipt by them of any requested authorization from the
Loan Parties to cooperate with the Nevada Gaming Authorities as described above.
10.24 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies Borrowers that pursuant to the requirements of the USA PATRIOT Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify
and record information that identifies each Loan Party, which information includes the name and
address of each Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act.
10.25 Joint and Several.
(a)
Borrowers shall be obligated for all of the Obligations outstanding under
the Commitments, Loans and the related Notes, Letters of Credit and Swing Line Loans from
time to time on a joint and several basis, notwithstanding which of Borrowers may have directly
received the proceeds of any particular Loan.
(b)
Each Borrower acknowledges and agrees that, for purposes of the Loan
Documents, Borrowers constitute a single integrated financial enterprise and that each receives a
benefit from the availability of credit under this Agreement to all of Borrowers. Each Borrowers
waives all defenses arising under the laws of suretyship, to the extent such laws are applicable, in
connection with its joint and several obligations under this Agreement. Without limiting the
foregoing, each of the Borrowers agrees to the Joint Borrower Provisions set forth in Exhibit J,
incorporated by this reference.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Case 1:09-md-02106-ASG Document 37-4 Entered on FLSD Docket 02/18/2010 Page 19 of 21

IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be duly executed and delivered by their proper and duly authorized officers as of the day and
year first above written.
FONTAINEBLEAU LAS VEGAS, LLC,
a Nevada limited liability company
and
FONTAINEBLEAU LAS VEGAS II, LLC,
a Florida limited liability company
By: Fontainebleau Las Vegas Holdings, LLC,
Managing Member of each of the foregoing
By: Fontainebleau Resort Properties I, LLC, its
Managing Member
By: Fontainebleau Resort Holdings, LLC, its
Managing Member
By: Fontainebleau Res

LLC, its

Managing Member

i ~
~.ame:-···j£0f~~? f~~=---~

By:

1ttle:

I

E'( ecuftvc:.

ChC'A.UMC""y}

.

[Credit Agreement
(Senior Bank Facility)

Case 1:09-md-02106-ASG Document 37-4 Entered on FLSD Docket 02/18/2010 Page 20 of 21

BANK OF AMERICA, N.A.,
as Administrative Agent

"1·, HM~~.

By:

.d1pA1/t1(}j

Name:

~~---IloJuulLKim6ro~

Title:

... -~~--_ _~~~ftaidmtc-. __._..-

ICledil Agreement
(Senior Bank Facility)

Case 1:09-md-02106-ASG Document 37-4 Entered on FLSD Docket 02/18/2010 Page 21 of 21

BANK OF AMERICA, N.A., as a Lender, as Issuing Lender,
and as Swing Line Lender

By:
Name:
Title:

---

--r-""--&,,-~-P'- _ - - . - - - - - - - ..

--J-n,.e'"ff-t"oS=us""'mAiiia=n-··· ._----_._._----_.. .
------8$1'1101 ~iG1tJ"iR1<\!£ii.tltflvt1

[Credit Agreement
(Senior Bank facility)

Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 1 of 39

Exhibit B

Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 2 of 39

EXECUTION

MASTER DISBURSEMENT AGREEMENT
among
FONTAINEBLEAU LAS VEGAS HOLDINGS, LLC,
FONTAINEBLEAU LAS VEGAS CAPITAL CORP.,
FONTAINEBLEAU LAS VEGAS RETAIL, LLC,
FONTAINEBLEAU LAS VEGAS, LLC,
and
FONTAINEBLEAU LAS VEGAS II, LLC,
BANK OF AMERICA, N.A., as the Bank Agent,
WELLS FARGO BANK, N.A., as the Trustee,
LEHMAN BROTHERS HOLDINGS INC., as the Retail Agent,
and
BANK OF AMERICA, N.A.,
as the Disbursement Agent

W02-WEST:LAR\400308993 14

Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 3 of 39

TABLE OF CONTENTS

2
ARTICLE 1 DEFINITIONS; RULES OF INTERPRETATION ....................................................
1.1
1.2
1.3

2
Definitions ................................................................................................................
2
Rules of Interpretation .............................................................................................
2
Conflict with Facility Agreements and Intercreditor Agreements ...........................

3
ARTICLE 2 FUNDING - THE. ACCOUNTS .................................................. ...............................
3
2.1
General Mechanics ...................................................................................................
:
2.2
The Accounts ........................................... ...............................................................3
5
Grant of Liens and Control in respect of the Accounts ...........................................
2.3
7
2.4
Advance Requests ....................................................................................................
10
2.5
Stop Funding Notices .............................................................................................
12
2.6
Provision of Advances by the Funding Agents and Account Transfers ................
14
Requested Cost Reports .........................................................................................
2.7
14
2.8
Shared Cost Allocation Reports .............................................................................
15
2.9
Current Available Sources Reports ........................................................................
16
2.10 Fnnding Order Reports ..........................................................................................
19
2.11 Advance Request Transfer Reports .......................................................................
19
2.12 Final Completion Reserve Package .......................................................................
20
2.13 Requested Cost to Final Completion Report .........................................................
20
2.14 Shared Cost to Final Completion Allocation Report .............................................
20
2.15 Available Sources to Final Completion Report .....................................................
21
2.16 Funding Order to Final Completion Report ...........................................................
2.17 23
2.18 23
2.19 23
2.20 23
23
2.21 Opening Date Procedures ......................................................................................
24
2.22 Completion Date Procedures .................................................................................
25
2.23 Final Completion Date Procedures ........................................................................
26
2.24 No Approval of Work ............................................................................................
26
2.25 Security ..................................................................................................................
ARTICLE 3 CONDITIONS PRECEDENT TO THE CLOSING DATE AND
2
ADVANCES ...................................................................................................................... 6
3.1
3.2
3.3
3.4

’~
2
Conditions Precedent to the Closing Date .................................. .......................... 6
32
Equity Advances ....................................................................................................
33
Conditions Precedent to Advances by the Trustee and the Bank Agent ................
41
Concerning the Letters of Credit ............................................................................

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 4 of 39

3.5
3.6
3.7
3.8
3.9

Conditions Precedent to Advances by the Retail Agent and the Retail
Lenders ...................................................................................................................
41
No Waiver or Estoppel ..............., ................ : .......................................................... 8
4
49
Waiver of Conditions .............................................................................................
Previously Paid Project Costs ................................................................................
49
Loss Proceeds .........................................................................................................50

50
ARTICLE 4 REPRESENTATIONS AND WARRANTIES .........................................................
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.26
4.27
4.28
4.29
4.30
4.31

50
Organization ...........................................................................................................
51
Authorization; No Conflict ....................................................................................
Legality, Validity and Enforceability ....................................................................
51
51
Compliance with Law, Permits and Operative Documents ...................................
Permits ................................................................................................................... 1
5
52
Litigation ................................................................................................................
Financial Statements ..............................................................................................
52
53
Security Interests ....................................................................................................
5
Defaults .................................................................................................................. 4
5
Taxes ...................................................................................................................... 5
Representations and Warranties ............................................................................ 5
i
5
55
Environmental Laws ..............................................................................................
56
Utilities ...................................................................................................................
56
In Balance Test ......................................................................................................
Sufficiency of Interests and Contracts ...................................................................
56
Intellectual Property ...................... ........................................................................57
~
58
Budgets and Remaining Cost Reports ...................................................................
59
Fees and E~fforcement ............................................................................................
5
ERISA .................................................................................................................... 9
59
Subsidiaries ............................................................................................................
59
Labor Disputes and Acts of God ............................................................................
5
Liens ....................................................................................................................... 9
6
Title........................................................................................................................ 0
60
Investment Company Act ......................................................................................
60
Project Schedule .....................................................................................................
60
Legal Parcel ...........................................................................................................
60
Location of Accounts and Records ........................................................................
60
Margin Regulations ................................................................................................
60
Governmental Regulation ......................................................................................
6
Solvency ................................................................................................................. 1
61
Plans and Specifications ........................................................................................

61
ARTICLE 5 AFFIRMATIVE COVENANTS ...............................................................................
5.1
5.2
5.3
5.4

61
Use of Proceeds ......................................................................................................
62
Diligent Construction of the Project ......................................................................
62
Reports; Cooperation; Financial Statements ..........................................................
62
’ ....
Notices ..............................................................................................................

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 5 of 39

5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
5.13
5.14
5.15

Material Contracts and Permits ..............................................................................
63
64
Storage Requirements for Off-Site Materials and Deposits ..................................
64
Plans and Specifications ........................................................................................
6
Payment and Performance Bonds ......................................................................... 4
:
64
Retainage Amounts ................................................................................................
65
Construction Consultant .........................................................................................
6
Insnrance ................................................................................................................ 5
65
Application of Insurance and Condemnation Proceeds .........................................
: ..................... 6
6
Compliance with Material Contracts ...............................................
Utility Easement Modifications ............................................................
, ................66
67
Retail Leasing Arrangements .................................................................................

67
ARTICLE 6 NEGATIVE COVENANTS .....................................................................................
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9

67
Waiver, Modification and Amendment .................................................................
6
Scope Changes ....................................................................................................... 9
71
Amendment to Operative Documents ....................................................................
71
Resort Budget and Project Schedule Amendments ...............................................
72
Opening Date .........................................................................................................
73
Zoning and Contract Changes and Compliance .....................................................
73
Unincorporated Materials ......................................................................................
73
Deposit Account Arrangements .............................................................................
73
In Balance Test ......................................................................................................

75
ARTICLE 7 EVENTS OF DEFAULT ..........................................................................................
7.1
7.2

75
Events of Default ...................................................................................................
79
Remedies ................................................................................................................

ARTICLE 8 THE CONSTRUCTION CONSULTANT ...............................................................

8.1
8.2
8.3

80

80
Removal and Fees ..................................................................................................
8
Duties ................................................................................................................ 0
80
Acts of Disbursement Agent ..................................................................................

80
ARTICLE 9 THE DISBURSEMENT AGENT .............................................................................
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10

:
Appointment and Acceptance ...............................................................................80
80
Duties and Eiabilities of the Disbursement Agent Generally ................................
82
Particular Duties and Liabilities of the Disbursement Agent ................................
84
Segregation of Funds and Property Interest ...........................................................
85
Compensation and Reimbursement of the Disbursement Agent ...........................
85
Qualification of the Disbursement Agent ..............................................................
85
Resignation and Removal of the Disbursement Agent ..........................................
: .....
Merger or Consolidation of the Disbursement Agent ......................................86
86
Statements; Information .........................................................................................
~ ........................87
Limitation of Liability ...................................................................
ooo

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 6 of 39

ARTICLE 10 SAFEKEEPING OF ACCOUNTS .........................................................................
88
10.1
10.2
10.3
10.4
10.5
10.6

Application of Funds in Accounts .........................................................................
88
Event of Default .....................................................................................................
88
Perfection ............................................................................................................... 8
8
Second Mortgage Proceeds Account .............. ........................................., ..........88
:,
Bank Proceeds Account .........................................................................................
88
Retail Funding Account and Retail Payments Account .........................................
88

ARTICLE 11 MISCELLANEOUS ............................................................................................... 9
8
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11.8
11.9
11.10
11.11
11.12
11.13
11.14
11.15
11.16
11.17
11.18
11.19
11.20
11.21

8
Addresses ............................................................................................................... 9
Further Assurances .................................................................................................
90
90
Delay and Waiver ..................................................................................................
91
Additional Secnrity; Right to Set-Off ....................................................................
Entire Agreement ...................................................................................................
91
Governing Law ......................................................................................................
91
91
Severability ............................................................................................................
91
Headings ................................................................................................................
~ ............................91
Limitation on Liability ..............................................................
92
Waiver of Jury Trial ...............................................................................................
Consent to Jurisdiction ...........................................................................................
92
92
Successors and Assigns ..........................................................................................
93
Reinstatement .........................................................................................................
93
No Partnership; Etc ................................................................................................
9
Costs and Expenses ................................................................................................ 3
96
Agreements Among Funding Agents and Other Secured Parties ..........................
Counterparts ........................................................................................................... 6
9
96
Termination ............................................................................................................
97
Amendments ..........................................................................................................
97
[Intentionally Omitted] ..........................................................................................
Confidentiality ........................................................................................................
97

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 7 of 39

EXHIBITS
A
B-1
B-2
B-3
C-1
C-2
C-3
C-4
D
E
F
G
H
I
J
K
L
M-1
M-2
M-3
M-4
N
O
P-1
P-2
P-3
P-4
Q-1

Q-2

Q-3
Q-4
R-1
R-2
R-3
R-4
S
T
U
V-1
V-2
V-3
V-4
W

Defined Terms
Project Entity Closing Certificate
Construction Consultant Closing Certificate
Insurance Advisor Closing Certificate
Prqject Entities’ Advance Certificate
Construction Consultant Advance Certificate
Architect Advance Certificate
General Contractor Advance Certificate
Insurance Requirements
Advance Confirmation Notice
Project Schedule
Required Permits
Project Consents
Conditional Waiver and Release Upon Progress Payment
List of Contracts
Organizational Chart
Form of Performance Bond
Minor Scope Changes
Scope Change Requirements
Contract Amendment Certificate
Budget!Schedule Amendment Certificate
Realized Savings Certificate
Existing Guarantee Obligations
Project Entities Completion Certificate
Construction Consultant Completion Certificate
Architect Completion Certificate
General Contractor Completion Certificate
Project Entities’ Opening Date Certificate
Construction Consultant Opening Date Certificate
Architect Opening Date Certificate
General Contractor Opening Date Certificate
Project Entities Final Completion Certificate
Construction Consultant Final Completion Certificate
Architect Final Completion Certificate
General Contractor Final Completion Certificate
Additional Contract Certificate
Flow of Funds Memo
Closing Date Plans and Specifications
Project Description
[Reserved]
Project Site
Retail Airspace Parcels
Subcontractors to be Bonded

W02-WES’T:LAR\400308993 14

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 8 of 39

THIS MASTER DISBURSEMENT AGREEMENT (the "Agreement"), dated as of
June 6, 2007, is among:

FONTAINEBLEAU LAS VEGAS HOLDINGS, LLC, a Delaware limited
liability company CLas Vegas Holdings"), FONTAINEBLEAU LAS VEGAS
CAPITAL CORP., a Delaware corporation, a ("Las Vegas Capital" and
collectively with Las Vegas Holdings, the "Issuers");
FONTAINEBLEAU LAS VEGAS RETAIL, LLC, a Delaware limited liability
company ("Retail Affiliate");
FONTAINEBLEAU LAS VEGAS, LLC, a Nevada limited liability company
("Las Vegas"), FONTAINEBLEAU LAS VEGAS II, LLC, a Florida limited
liability company ("Las Vegas II" and collectively with Las Vegas, the
"Borrowers");
BANK OF AMERICA, N.A., as the initial Bank Agent, WELLS FARGO
BANK, N.A., as the initial Trustee, LEHMAN BROTHERS HOLDINGS
INC., as the initial Retail Agent, and BANK OF AMERICA, N.A, as the initial
Disbursement Agent.
Capitalized terms used herein have the meanings set forth on Exhibit A hereto.
RECITALS
A. The Project Entities propose to develop, construct and operate the Project on the Site.
The Borrowers shall own and operate the Project other than certain retail elements thereof to be
located in the Retail Air Space Parcels, which shall be owned and operated by the Retail
Affiliate.
B.
To finance the expenditures associated with the Project, concurrently herewith, the
partiesthereto have entered into the following financing arrangements:
(1) the Bank Credit Agreement pursuant to which revolving and term
credit facilities in an aggregate principal amonnt not to exceed $1,850,000,000
will be provided to the Borrowers (including $700,000,000 in Initial Term Loans,
the proceeds of which shall be deposited into the Bank Proceeds Account);
(2) the Second Mortgage Indenture, pursuant to which the Issuers will
issue $675,000,000 of Second Mortgage Notes due 2015 (the net proceeds of
which shall be deposited into the Second Mortgage Proceeds Account); and
(3) the Retail Facility Agreement pnrsuant to which the Retail Lenders
shall provide credit facilities in the principal amount of $315,000,000 to the Retail
Affiliate. For the avoidance of doubt, all Debt Service and other amounts payable
to the Retail Lender shall not be fimded through this Agreement, but rather shall
be financed by the making of advances outside of this Agreement by the Retail
W02-WEST:LAR\400308993.14

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 9 of 39

Lenders.
C. While the bulk of the costs of the Project are to be financed using the Companies’ equity,
the proceeds of the Second Mortgage Notes and the Bank Credit Agreement, a portion of such
costs ,(i.e., the "Shared Costs") described herein, will be financed using the proceeds of Advances
made pursuant to the Retail Facility. The Resort Budget includes the costs of all elements of the
Project (other than tenant allowances to be made by the Retail Affiliate to its tenants, leasing
commissions and related expenses of the Retail Affiliate reflected in the Retail Budget),
including all of the Shared Costs (including the $83,000,000 portion of the Shared Costs to be
paid for by the Retail Affiliate and financed by means of drawings under the Retail Facility).
The Retail Budget excludes the Shared Costs.
D. Substantially concurrently with the closing of the Financing Agreements, it is anticipated
that Fontainebleau Resorts, LLC, a Delaware corporation which is the indirect owner of the
Project Entities, will enter into certain other financing and equity issuance transactions which are
described in the Flow of Funds Memo.
E. The parties are entering into this Agreement in order to set forth (a) the mechanics for
and allocation of the Project Entities’ requests for Advances under the Facilities and the making
of payments from the Payment Accounts, (b) the conditions precedent to the Closing Date, to the
initial Advances and to subsequent Advances, (c)certain common representations, warranties
and covenants of the Project Entities in favor of the Funding Agents and the Lenders and
(d) certain common Events of Default.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:
ARTICLE 1

DEFINITIONS; RULES OF INTERPRETATION
1.1 Definitions. Except as otherwise expressly provided herein, capitalized terms
used in this Agreement and its exhibits shall have the meanings given in Exhibit A hereto. To
the extent such terms are defined by reference to the Financing Agreements, snch terms shall
continue to have their original definitions notwithstanding any termination, expiration or
amendment of such agreements unless (i) each of the parties hereto is a signatory to any such
amendment or (ii) the signatories to such amendment have the right to amend this Agreement
without the consent of the other parties hereto, in which case all references herein shall be to
such terms or provisions as so amended.
1.2 Rules of Interpretation. Except as otherwise expressly provided herein, the
rifles of interpretation set forth in Exhibit A hereto shall apply to this Agreement.
1.3 Conflict with Facility Agreements and Intercreditor Agreements. This
Agreement and each of the Facility Agreements is being drafted concurrently and are each
intended to cover the respective matters specifically set forth therein. In the case of any express
W02-WEST:LAR\400308993 14

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 10 of 39

conflict between the terms of this Agreement and the terms of any Facility Agreement, the terms
of this Agreement shall control. In the case of any conflict involving this Agreement and any
Intercreditor Agreement, the terms of the related Intercreditor Agreement shall control as
between the parties to that Intercreditor Agreement.
ARTICLE 2

FUNDING - THE ACCOUNTS
2.1

General Mechanics.
2.1.1 Closing Date Advances. On the Closing Date, subject to the applicable
conditions set forth herein and in each of the Financing Agreements, each of the
Funding Agents shall cause the Advances contemplated by the Flow of Fnnds
Memo to be made by it, and the proceeds of such Advances shall be deposited to
the various Accounts as described in the Flow of Funds Memo and, in the case of
amounts deposited into the Resort Payment Account, for further payment to the
applicable Contractors in respect of Project Costs due and payable in accordance
with the Flow of Funds Memo.
2.1.2 Subsequent Advances. Following the Closing Date each of the Funding
Agents shall cause Advances to be made to the Disbursement Agent for
disbursement pursuant to the terms of this Agreement upon the satisfaction of
only the applicable conditions set forth in Article 3. For the avoidance of doubt, it
is agreed that following the Closing Date, the applicable conditions precedent set
forth in this Agreement (rather than any conditions precedent set forth in the
Facility Agreements) shall govern and control the making of Advances until the
termination of this Agreement in accordance with Section 11.18.

2.1.3 Timing and Availability. Unless the Controlling Person otherwise
agrees, and except for Advances made pursuant to Section 2.23, Advances shall
be made no more frequently than once in any calendar month, provided that
notwithstanding any such agreement by the Controlling Person, (a) the Retail
Agent and the Retail Lenders shall not be obligated to make Advances more
frequently than monthly unless the Retail Agent otherwise agrees and (b) the
Trustee shall not be obligated to make Advances from the Second Mortgage
Proceeds Account more frequently than monthly (provided that the Trnstee shall
also debit the Second Mortgage Proceeds Account when and as required for the
payment of Debt Service as contemplated by Section 2.6.5(b)).
The Accounts.
2.2.1 Generally. The Project Entities have, and, in the case of the Completion
Guaranty Proceeds Acconnt, Turnberry Residential has, heretofore established
the following Accounts, with the depositories listed below, the account numbers
for which are set forth in the chart directly below:

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 11 of 39

Proceeds Accounts

Funding Accounts

Payment Accounts

Depository
Disbursement
Agent

Retail Funding Account;
Account No. 1233057335
Retail Payment
Account; Account No.
501001205390

W02-WEST:LAR\400308993.14

’-4-

Bank Agentand
Trustee

Disbursement
Agent
Resort Payment
Account: Account No~
501001203813
Interest Account;
Account No.
1233055973
Cash Management
Account; Account No.
4968332450

Bank Agentand
Trustee

Disbursement
Agent

Liquidity Account;
Account No. 01555090110382

Retail Agent

Disbursement
Agent

Resort Loss
Proceeds Account;
Account No.
1233055959
Retail Loss Proceeds
Account; Account
No. 1233057330
Bonded Condo
Proceeds Account:
Account No.
233055997
Completion
Guaranty Proceeds
Account
Account No.
1233056968

Bank Agent and
Trustee
Bank Agent and
Trustee

Disbursement
Agent

Bank Funding Account;
Account No. 1233056005

Bank Agent

Disbursement
Agent
Disbursement
Agent

Bank Proceeds
Account; Account
No. 02385090110384

Bank Agent and
Trustee

Bank Agent

Second Mortgage Funding
Account; Account No.
1233055954

Trustee

Disbursement
Agent

Second Mortgage
Proceeds Account;
Account No.
1038377

Bank Agent and
Trustee

Trustee

Equity Funding Account;
Account No.
0238-5090110385

Bank Agent and
Trustee

Disbursement
Agent

Bank Agent and
Trustee

Disbursement
Agent

Bank Agent and
Trustee

Disbursement
Agent

Bank Agent and
Trustee

Disbursement
Agent
Disbursement
Agent

Retail Agent
Retail Agent

Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 12 of 39

Each of the Accounts listed in the matrix above has been established in the name
of Las Vegas, other than (a) the Completion Guaranty Proceeds Account, which
has been established in the name of Turnberry Residential, and (b) the Retail
Accounts, each of which have been established in the name of the Retail Affiliate.
2.2.2 Liens and Control Agreements. Each of the Accounts is subject to the
exclusive liens, granted in accordance with Section 2.3 (and as the same may be
more generally granted in the Bank Security Documents, the Second Mortgage
Security Documents, or the Retail Security Documents) or, in the case of the
Completion Guaranty Proceeds Account, granted in accordance with the terms
of each Completion Guaranty, in favor of the Pledgees listed above opposite the
name of the related account (in the case of any such account where both the
Bank Agent and the Trustee are listed as Pledgees, in favor of both the Bai~k
Agent and the Trustee with the priority set forth in the Project Lenders
Intercreditor Agreement). The Project Entities shall not be permitted to make
withdrawals from, or otherwise access, any of the Accounts other than the Cash
Management Account, the Resort Payment Account and the Retail Payment
Account (and then only for the payment of Project Costs). The Project Entities
may request that any Account be converted to a securities account ill order to
facilitate the investment of amounts contained therein and the Bank Agent, the
Retail Agent and the Disbursement Agent agree to amend any Control
Agreement in any respect reasonably required to conform the same to the
converted Account, and the Trustee shall sign such Control Agreement pursuant
to Section 4.4.2 of the Project Lender Intercreditor Agreement.
2.2.3 Investment of the Accounts. The Companies shall be entitled to direct
the investment of the anlounts contained in the Accounts (other than the Retail
Accounts and the Completion Guaranty Proceeds Account) from time to time ill
Cash Equivalents. The Retail Affiliate shall be entitled to direct the investment
of the amounts contained in the Retail Accounts from time to time in Cash
Equivalents. Each Completion Guarantor shall be entitled to direct the
investment of amounts contained in its Completion Guaranty Proceeds Account
from time to time in Cash Equivalents.
2.3

Grant of Liens and Control in respect of the Accounts.

W02-WEST:LAR\400308993~ 14

(a) To secure the payment and performance of each Borrower’s
obligations arising under the Bank Credit Agreement and each Issuer’s
obligations arising under the Second Mortgage Indenture, each Borrower
hereby grants to the Bank Agent for the ratable benefit of the Lenders
represented by the Bank Agent and the Trustee for the ratable benefit of
the Lenders represented by the Trustee a security interest in all if its right,
title and interest to and under the (i) Equity Funding Account, maintained
at the Disbursement Agent, (ii) Bank Funding Account, maintained at the
Disbursement Agent, (iii) Resort Loss Proceeds Account, maintained at
the Disbursement Agent, (iv) Bonded Condo Proceeds Account,
maintained at the Disbursement Agent, (v) Liquidity Account, maintained
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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 13 of 39

at the Disbursement Agent, (vi) Resort Payment Account, maintained at
the Disbursement Agent, (vii) Interest Account, maintained at the
Disbursement Agent, and (viii) Cash Management Account, maintained at
the Disbursement Agent, together with all present and fi~ture deposit
accounts, securities entitlements, securities accounts, and investment
property related to any of the foregoing accounts (whether arising under a
sweep or similar arrangement or arising in any other manner whatsoever)
and all present and fi~ture proceeds of any of the foregoing;
(b) To secure the payment and performance of each Issuer’s
obligations arising under the Second Mortgage Indenture, each Issuer and
each Borrower hereby grants to the Trustee for the ratable benefit of the
Lenders represented by the Trustee a security interest in all of its right,
title and interest to and under the Second Mortgage Proceeds Account,
maintained at the Trustee, together with all present and furore deposit
accounts, securities entitlements, securities accounts, and investment
property related to the foregoing account (whether arising under a sweep
or similar arrangement or arising in any other maimer whatsoever) and all
present and future proceeds of any of the foregoing;
(c) To secure the payment and performance of each Borrower’s
obligations arising under the Bank Credit Agreement and each Issuer’s
obligations arising under the Second Mortgage Indenture, each Issuer
hereby grants to the Bank Agent for the ratable benefit of the Lenders
represented by the Bank Agent and the Trustee for the ratable benefit of
the Lenders represented by the Trustee a security interest in all of its right,
title and interest to and under the Second Mortgage Funding Account,
maintained at the Disbursement Agent, together with all present and future
deposit accounts, securities entitlements, securities accounts, and
investment property related to the foregoing account (whether arising
under a sweep or similar arrangement or arising in any other manner
whatsoever) and all present and future proceeds of any of the foregoing;
(d) To secure the payment and performance of each Borrower’s
obligations arising under the Bank Credit Agreement, each Borrower
hereby grants to the Bank Agent for the ratable benefit of the Lenders
represented by the Bank Agent a security interest in the Bank Proceeds
Account. maintained at the Bank Agent, together with all present and
future deposit accounts, securities entitlements, securities accounts, and
investment property related to any of the foregoing accounts (whether
arising under a sweep or similar arrangement or arising in any other
manner whatsoever) and all present and fi~ture proceeds of any of the
foregoing; and
(el To secure the payment and performance of the Retail Affiliate’s
obligations arising under the Retail Facility Agreement, the Retail
Affiliate hereby grants to the Retail Agent for the ratable benefit of the
W02 WEST:LAR\400308993.14

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 14 of 39

Lenders represented by the Retail Agent a security interest in all of its
right, title and interest to and under the Retail Accounts, together with all
present and future deposit accounts, securities entitlements, securities
accounts, and investment property related to any of the foregoing accounts
(whether arising under a sweep or similar arrangement or arising in any
other manner whatsoever) and all present and future proceeds of any of the
foregoing.
Concurrently herewith, (i) the Project Entities shall execute the Control
Agreements with respect to each Account (other than the Completion Guaranty
Proceeds Account and the Second Mortgage Proceeds Account) in favor of the
Disbursement Agent and the Pledgees listed opposite the name of that Account in
Section 2.2, and (ii)Turnberry Residential shall execute a Control Agreement
with respect to the Completion Guaranty Proceeds Account. The Project Entities
shall not be per~nitted to withdraw fi~nds from any of the Accounts except to the
extent expressly set forth in this Agreement. Once funds are deposited therein, no
Completion Guarantor may withdraw fi~nds from a Completion Guaranty
Proceeds Account, but may direct the Disbursement Agent to make any
withdrawals and transfers contemplated by this Agreement or its Completion
Guaranty. Upon the occurrence and during the continuance of an Event of
Default under its respective Facility Agreement, and subject to the Intercreditor
Agreetnents but as to each Funding Agent, only to the extent that it is a party to
such Intercreditor Agreement, each Funding Agent may deliver to the
Disbursement Agent a notice of exclusive control pursuant to the Control
Agreements in respect of the Accounts (other than the Completion Guaranty
Proceeds Account) with respect to which it is a Pledgee, and the Disbursement
Agent shall thereafter accept instructions with respect to the relevant Account
solely from that Funding Agent.
2.4

Advance Requests.

2.4.1 Each Advance under this Agreement shall be requested jointly by the
Borrowers, the Issuers and the Retail Affiliate pursuant to an Advance Request
substantially in the form of Exhibit C-1 (except as provided in clause (i) of the
definition thereof), provided that any Advances which are made solely to finance
Other Retail Costs may be requested solely by the Retail Affiliate pursuant to an
Advance Request described in clause (ii) of the definition thereof and (ii) any
Advances under the Resort Budget that do not involve Advances under the
Retail Facility for Shared Costs may be requested solely by the Companies.
Each Advance Request shall be delivered to the Disbursement Agent, each
Funding Agent and the Construction Consultant not later than the 1 lth day of
each calendar month, but in any event not later than ten Banking Days prior to
the Scheduled Advance Date.
2.4.2 Without limitation upon the other elements of the Resort Request and
Retail Request set forth in any such Advance Request, the Project Entities shall
include in each Advance Request delivered by them a request that Advances be
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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 15 of 39

made in amounts sufficient to pay:
(a) Debt Service that will become due and payable under each of the
Bank Credit Agreement and the Second Mortgage Notes on or after the
requested Advance Date and prior to the immediately succeeding Advance
Date (other than Debt Service on the Second Mortgage Notes to be paid
directly out of the Second Mortgage Notes Proceeds Account and Debt
Service on the Bank Credit Facility to be paid directly out of the Bank
Proceeds Account, in each case as provided in Section 2.6.4 and Section
3.3, and only to the extent that such interest accrues prior to the Opening
Date);
(b) without duplication as to (a), and ex¢ept to the extent that a portion
of the requested Advance will be fi~nded by drawing on the Bank
Revolving Facility, the amount of any drawings made under the Bank
Revolving Facility after the immediately preceding Advance Date to
reimburse the issuing bank for any draws made under Letters of Credit
issued under the Bank Credit Agreement; and
(c) such amounts as the Companies desire to replenish the Cash
Management Account (but an amount which will not canse the balance
thereof to exceed $6,000,000).
2.4.3 Each Advance Request shall attach each of the applicable Appendices
(except that in the period prior to the date of the initial Advances from the
Second Mortgage Proceeds Account Advance Requests will not be required to
be accompanied by any General Contractor’s Advance Certificate or Architect’s
Advance Certificate or any other certificates or attachments set forth on Exhibit
C-1; it being understood that Advance Requests issued prior to such date will not
take the form of Exhibit C-1 or otherwise contain certifications or any other
information other than as set forth in Section 3.2).
2.4.4

Promptly after delivery of the Advance Request:
(a) General Review. The Disbursement Agent and the Construction
Consultant shall review the Advance Request and attachments thereto to
determine whether all required documentation has been provided, and
shall use commercially reasonable efforts to notify the Project Entities of
any deficiency within three Banking Days after delivery thereof by the
Project Entities, it being acknowledged that any failure to notify the
Project Entities of any deficiency in the Advance Request so delivered
within the aforesaid time period shall not be deemed an approval thereof.
(b) Construction Consultant Work Review and Certificate. In respect
of the Advance Request for the initial Advance from the Second Mortgage
Proceeds Account and each subsequent Advance, the Construction
Consultant shall review the work referenced in the Requested Cost Report,

W02-WEST:LAR\400308993 14

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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 16 of 39

including work estimated to be completed through the applicable Advance
Date as such work is being performed. Not later than four Banking Days
prior to the requested Advance Date for any such Advance, the
Construction Consultant shall deliver to the Disbursement Agent (with a
copy to the Project Entities) a Construction Consultant Advance
Certificate either approving or disapproving the Advance Request;
provided that if the Construction Consnltant disapproves one or more
particular payments or disbursements to any Contractor or Subcontractor
requested by the Advance Request, but the Advance Request otherwise
complies with the requirements hereof, then the Advance Request shall be
deemed approved with respect to all payments and disbursements
requested therein other than the particular payments or disbursements so
disapproved. If the Construction Consultant disapproves the Advance
Request or any one or more particular payments requested therein, the
Construction Consultant shall provide the Project Entities, in reasonable
detail, its reasons for such disapproval, however the failure of the
Construction Consultant to do so shall not be deemed approval of any such
payment.
(c) Debt Service Notifications. The Bank Agent and the Trustee may
deliver notices correcting the amount of the Debt Service due to each of
them on the relevant Advance Date to the Disbursement Agent.
The Disbursement Agent shall use reasonable diligence to assure that the
Construction Consultant performs its review of the materials required by this
Section 2.4 and delivers its Construction Consultant Advance Certificate, and that
the Disbursement Agent’s own review of the materials required by this Section 2.4
is finalized, in each case not less than three Banking Days prior to the Scheduled
Advance Date. In the event that the Construction Consultant approves only a
portion of the payments or disbursements requested by the Advance Request or
the Disbursement Agent finds any minor or purely mathematical errors or
inaccuracies in the Advance Request or supporting materials, the Disbursement
Agent may require the Project Entities to revise and resubmit the same.
2.4.5 Su_RRplementation of Advance Requests. In the event that the Project
Entities obtain additional infor~nation or documentation or discover any errors in
or updates required to be made to any Advance Request prior to the Schednled
Advance Date, the Project Entities may, with the approval of the Disbursement
Agent and the Construction Consultant, revise and resubmit such Advance
Request to the Disbursement Agent and the Construction Consultant, provided
that the Disbursement Agent shall not be required to accept any such updates or
revisions, but shall consider their submission in good faith. The Disbursement
Agent shall use reasonable diligence to review and approve such supplemental
Advance Request and to cause the Construction Consultant to review and
approve the same not less than three Banking Days prior to the Scheduled
Advance Date.
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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 17 of 39

2.4.6 Advance Confirmation Notice. When the applicable conditions
precedent set forth in Article 3 have been satisfied, the Disbursement Agent shall
notify the Project Entities and the Project Entities and the Disbursement Agent
shall execute an Advance Confirmation Notice setting forth the amount of the
Advances to be made pnrsuant to each Financing Agreement on the Advance
Date and, if requested by any Funding Agent, attaching to the Advance
Confirmation Notice to be submitted to such Funding Agent a finalized Advance
Request, including all Exhibits, which will reflect any amendments made to the
Advance Request since its initial submission. When executed by the Pro.ject
Entities and the Disbursement Agent (and, to the extent of any Advances for
which the conditions precedent set forth in Section 3.5 apply, by the Retail
Agent), the Disbursement Agent shall deliver the Advance Confirmation Notice
to the Project Entities and each of the Funding Agents. On the Scheduled
Advance Date, (a) each of the Funding Agents shall make the Advances
contemplated by that Advance Confirmation Notice to the relevant Accounts and
(b) the Disbursement Agent shall make the resulting transfers amongst the
Accounts described in the Advance Confirmation Notice.
2.5

Stop Funding Notices.
2.5.1 Stop Funding Notices. In the event that (i) the conditions precedent to an
Advance have not been satisfied, or (ii)the Controlling Person notifies the
Disbursement Agent that a Default or an Event of Default has occurred and is
continuing, then the Disbursement Agent shall notify the Project Entities and
each Funding Agent thereof as soon as reasonably possible (a "Stop Fundin~
Notice"). Each Stop Funding Notice shall specify, in reasonable detail, the
conditions precedent which the Disbursement Agent has determined have not
been satisfied and!or shall attach a copy of any notice of default received by the
Disbursement Agent. The Disbursement Agent shall have no liability to the
Project Entities arising from any Stop Funding Notice except to the extent
arising out of the gross negligence or willfi~l misconduct of the Disbursement
Agent.
2.5.2 Effect of Issuance. Upon the issuance of a Stop Funding Notice, unless
and until:
(a) the Controlling Person waives the related conditions under Section
3.3 pursuant to Section 3.7:
(i) the Bank Agent and the Trustee shall have no obligation to
make Advances;
(ii) subject to the penultimate sentence of this Section 2.5.2, the
Disbursement Agent shall not withdraw, transfer or release any
funds on deposit in the Accounts (other than the Retail Accounts);
and

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(iii) any Advance Confirmation Notice issued to the Bank
Agent or the Trustee prior to the issuance of a Stop Funding Notice
(if the Advance to which such Advance Confirmation Notice
relates has not been made) shall become null and void and of no
force or effect as it relates to the Bank Agent or the Trustee; and
(b) the Retail Agent waives the related conditions under Section 3.5
pursuant to Section 3.7:
(i) the Retail Lenders shall have no obligation to make
Advances to which the conditions set forth in Section 3.5 apply;
(ii) subject to the penultimate sentence of this Section 2.5.2, the
Disbursement Agent shall not withdraw, transfer or release any
funds on deposit in the Retail Loss Proceeds Account, the Retail
Funding Account or the Retail Payment Account; and
(iii) any Advance Confirmation Notice issued to the Retail
Agent prior to the issuance of a Stop Funding Notice (if the
Advance to which such Advance Confirmation Notice relates has
not been made) shall become null and void and of no force or
effect as it relates to the Retail Agent.
Notwithstanding the foregoing provisions of this Section 2.5.2, unless the
Stop Funding Notice resulted from notice by the Controlling Person that
an Event of I)efault has occurred:
Advances for Debt Service shall continue to be made to the
(i)
limitedextent set forth in the last paragraph of Section 3.3; and
(ii) the Project Entities may continue to make withdrawals
from the Cash Management Account, the Resort Payment Account
and the Retail Payment Account, and all scheduled transfers from
the Interest Payment Account and, to the extent provided in
Section 2.6.4 or Section 3.3, the Second Mortgage Proceeds
Account and the Bank Proceeds Account for the payment of Debt
Service shall continue to be made.
Any nullification of any such Advance Confirmation Notice shall not
affect the obligations of the Project Entities for break funding costs under
the Bank Credit Facility and the Retail Facility.
2.5.3 Retractions. If the Disbursement Agent (w)later determines that the
conditions precedent giving rise to a Stop Funding Notice have been satisfied,
(x) receives a notice from the Funding Agent who issued the notice of default
that the related Default or Event of Default no longer exists, (y) receives notice
from the Controlling Person retracting a Stop Funding Notice, or (z) receives
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notice from the Controlling Person or the Retail Agent, as applicable, of its
waiver of conditions pursuant to Section 3.7, then the Disbursement Agent shall
deliver an Advance Confirmation Notice to the Project Entities and each of the
applicable Funding Agents (modified, if required, to apply only to amounts to be
advanced under such Funding Agent’s Facility unless all Funding Agents entitled
to waive conditions with respect to such Advance Request have waived the
conditions, in which case the Disbursement Agent shall deliver an Advance
Confirmation Notice with respect to all Advances requested by the Project
Entities).
2.6

Provision of Advances by the Funding Agents and Account Transfers.
2.6.1 Advances and Timing. With respect to each Advance Confirmation
Notice issued pursuant to Section 2.4 or Section 2.5, on before 12:00 p.m., New
York, New York time on the Advance Date referred to therein:
(a) the Trustee shall remit the required Advance from the Second
Mortgage Proceeds Account to the Second Mortgage Funding Account;
(b) the Bank Agent shall (i) cause the Bank Lenders to remit any
required Loans under the Bank Credit Agreement to the Bank Proceeds
Account, and (ii) the Bank Agent shall thereafter remit any required
Advances under the Bank Credit Agreement from the Bank Proceeds
Account to the Bank Funding Account; and
(c) the Retail Agent shall cause the Retail Lenders to make loans and
shall remit any required Advances under the Retail Facility into the Retail
Funding Account;
in each case in immediately available funds and as detailed in the AdvaJ~ce
Request Transfer Report and Funding Order Report.
2.6.2 Account Transfers. Promptly following its confirmation that the
remittances required by Section 2.6.1 have been made, the Disbursement Agent
shall make each of the transfers detailed in the final Funding Order Report and
Advance Request Transfer Report.
2.6.3 Concurrent Advances. Neither the Disbursement Agent nor any of the
Funding Agents shall be responsible for the failure of any other Funding Agent
to make any required Advance. The Disbursement Agent shall not release any
Advances to the Project Entities until the Trustee has remitted any required
Advances from the Second Mortgage Proceeds Account, the Bank Agent has
remitted any required Advances from the Bank Proceeds Account, and the Retail
Lenders have made any requested Loans under the Retail Facility, provided that
(a) the Retail Agent may waive this Section 2.6.3 in respect of Advances to be
provided by the Retail Lenders, and (b) the Controlling Person may waive this
Section 2.6.3 in respect of Advances to be provided from the Second Mortgage

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Proceeds Account or under the Bank Credit Agreement.
2.6.4 The Interest Account & Proceeds Accounts .. Payments of Debt Service.
(a) Unless a Pledgee has previously delivered a Stop Funding Notice
asserting that an Event of Default has occurred, the Disbursement Agent
shall apply amounts on deposit in the Interest Account to the payment of
Debt Service under the relevant Facility on the date that the Disbursement
Agent is advised such amounts will become due and payable.
(b) Unless the Trustee has previously delivered a Stop Funding Notice
asserting that an Event of Default has occurred, from and after the
Exhaustion of proceeds in the Equity Funding Account, the Trustee shall
apply amounts on deposit in the Second Mortgage Proceeds Account, if
any, to the payment of Debt Service on the Second Mortgage Notes on the
date and at such time that such amounts become due and payable pursuant
to the Second Mortgage Indenture.
(c) At all times from and after the Exhaustion of proceeds in the
Equity Funding Account and prior to the Initial Bank Advance Date,
unless the Bank Agent has previously delivered a Stop Funding Notice
asserting that an Event of Default has occurred, the Bank Agent shall
apply amounts on deposit in the Bank Proceeds Account, if any, to the
payment of Debt Service on the Bank Credit Facility on the date that such
amounts become due and payable pursuant to the Bank Credit Agreement.
2.6.5 Loss Proceeds Accounts. All flinds remitted from time to time to the
Resort Loss Proceeds Account shall be remitted to the Resort Payment Account
on each Scheduled Advance Date upon which the applicable conditions
precedent set forth in Section 3 are satisfied. Upon notice from the Retail Agent
that the applicable conditions set forth in the Retail Facility Agreement to the
release of Loss Proceeds have been satisfied, the Disbursement Agent shall
transfer the relevant amounts contained in the Retail Loss Proceeds Account to
the Retail Payment Account.
2.6.6 Completion Guaranty Proceeds Account. All fi~nds remitted from time
to time to the Completion Guaranty Proceeds Account pursuant to any
Completion Guaranty shall be held in such Account as security for the
performance of the applicable Completion Guarantor’s obligations under such
Completion Guaranty. In the event that such Completion Guaranty is required to
fund a portion of an Advance Request hereunder in accordance with its terms
and such Completion Guarantor does not otherwise cause any required amounts
to be deposited into the Resort Payment Account pursuant to such Completion
Guaranty, such amounts shall be transferred by the Disbursement Agent from the
Completion Guaranty Proceeds Account to the Resort Payment Account in
satisfaction of such Completion Guarantor’s obligations under such Completion
Guaranty; provided that, notwithstanding anything to the contrary herein, the
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proceeds of any drawing under any Completion Guaranty shall be used solely to
pay Applicable Project Costs (as such term is defined in the Completion
Guaranties).
2.6.7 Account Access. Unless a Pledgee has previously exercised its rights as
a secured party with respect to the relevant Account following an Event of
Default, the Projeqt Entities shall be entitled to write checks upon, or otherwise
transfer monies contained in the Retail Payment Account, the Resort Payment
Account and the Cash Management Account from time to time for the payment
of Project Costs, provided that, notwithstanding anything to the contrary set
forth herein, (a) only the Companies may write checks upon or otherwise
transfer monies contained in the Resort Payment Account and the Cash
Managem.ent Account, and (b) only the Retail Affiliate may write checks upon
or otherwise transfer monies contained in the Retail Payment Account (or
authorize any payments or transfers from any of the Retail Accounts). The
Project Entities shall not be entitled to write checks upon, access, or otherwise
transfer funds from, the other Accounts.
2.6.8 S_~ecial Procedures for Direct Payments to Contractors and Vendors.
Notwithstanding Section 2.6.1 and Section 2.6.3, at the direction of any Funding
Agent (but only in respect of an Account containing monies advanced by that
Funding Agent), the Disbursement Agent shall transfer monies in such Account
directly to Contractors or other vendors for invoices for Project Costs. The right
of the Disbursement Agent to make direct transfers in this manner may be
exercised without further authorization from the Project Entities, however the
Disbursement Agent shall use reasonable efforts to minimize any resulting
disruption. Each of the Project Entities hereby constitutes and appoints the
Disbursement Agent its true and lawful attorney-in-fact to make such direct
payments. This power of attorney shall be deemed to be a power coupled with
an interest and shall be irrevocable. The Disbursement Agent shall not exercise
the rights provided under this Section 2.6.8 in respect of any invoices which
Project Entities have notified the Disbursement Agent and the Construction
Consultant are in dispute, and the Construction Consultant concurs are
reasonably disputed by the Project Entities.
2.7 Requested Cost Reports. Each Advance Request shall be accompanied by a
Requested Cost Report detailing the Resort Request and the Retail Request (as applicable) as of
the relevant Advance Date. There are four versions of the Requested Cost Report attached as
Appendix 1 to Exhibit C-l, and the Project Entities shall attach the appropriate version to each
Advance Request: Each Requested Cost Report shall summarize costs reflected in the Budgets
for which Advances are requested to be made on the relevant Advance Date provided Requested
Cost Reports delivered prior to the Initial Bank Advance Date shall not include requests for Debt
Service (which shall be directly debited by the Trustee and the Bank Agent from the Second
Mortgage Proceeds Account and Bank Proceeds Account, respectively).
2.8 Shared Cost Allocation Reports. The Advance Request submitted by the Project
Entities in respect of the Initial Bank Advance Date and each subsequent Advance Date shall
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also be accompanied by a Shared Cost Allocation Report. Each Shared Cost Allocation Report
shall describe the portion of the Retail Lenders Shared Cost Commitment which will be funded
on the relevant Advance Date. There are three versions of the Shared Cost Allocation Report
attached as Appendix 2 to Exhibit C-l, and the Project Entities shall attach the appropriate
version to each such Advance Request. Each Shared Cost Allocation Report shall set forth:
2.8.1 in row A, the Retail Lenders Shared Cost Commitment which is to be
fundedby the Retail Lenders during the term of this Agreement;
2.8.2 in row B, the Retail Shared Cost Percentage on the relevant Advance
Date;
2.8.3 in row C, the cumulative amount of the Retail Lenders Shared Cost
Commitment which is allocable to the Resort Facility through the relevant
Advance Date (i.e., row A times row B);
2.8.4 in row D, the amount of the Retail Lenders Shared Cost Commitment
funded to date; and
2.8.5 in row E, the amount of the Retail Lenders Shared Cost Commitment
which is to be fimded on that date (i.e., row C minus row D).
In no instance will the Retail Shared Cost Percentage be reduced from the prior
Shared Cost Allocation Report.
2.9 Current Available Sources Reports. Each Advance Request shall be
accompanied by a Current Available Sources Report which shall detail the funds which are
available to satisfy the Resort Request and the Retail Request. There are four versions of the
Current Available Sources Report attached as Appendix 3 to Exhibit C-1, and the Project Entities
shall attach the appropriate version to each Advance Request. For each Current Available
Sources Report, the "Current Available Retail Sources" and the "Current Available Resort
Sources" are the amounts reflected in such report in the appropriate rows in the column headed
"Balance."
In each Current Available Sources Report, the Retail Payment Account balance
and the Resort Payment Account balance will each be adjusted to reflect payments to be made
trom those Accounts pursuant to any previously submitted Advance Request.
In addition thereto:
(a) in each Current Available Sources Report submitted prior to the
hfitial Bank Advance Date, the balance of the Second Mortgage Proceeds
Account and the Bank Proceeds Account shall be adjusted to reflect Debt
Service to be paid directly from those Accounts; and
(b) in each Current Available Sources Report submitted on or after the
Initial Ba~kk Advance Date, the balance of the Interest Account shall be
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adjusted to reflect payments of Debt Service to be made from the Interest
Account pursuant to any previously submitted Advance Request.
2.10 Funding Order Reports. Each Advance Request shall be accompanied by a
Funding Order Report which shall detail the order in which the funds described in the relevant
Current Available Sources Report will be applied to satisfy the Resort Request and the Retail
Request. There are four versions of the Funding Order Report attached as Appendix 4 to Exhibit
C-1, and the Project Entities shall attach the appropriate version to each Advance Request.
2.10.1 In each Funding Order Report submitted prior to the Completion Reserve
Calculation Date, the Project Entities shall detail the manner in which
(a) the Current Available Retail Sources as of the Advance Date shall
be applied to the payment of the Retail Request in the following order of
priority and in each case until the relevant Retail Source is Exhausted:
(i)
First, from fi~nds then on deposit in the Retail Loss
Proceeds Account;
(ii) then from funds then on deposit in the Retail Payment
Account (as adjusted in the relevant Current Available Sources
Report to reflect any payments therefrom); and
(iii) then from amounts available to be drawn under the Retail
Facility.
(b) the Current Available Resort Sources as of the Advance Date shall
be applied to the Resort Request by applying the following order of
priority and in each case until the relevant Resort Source is Exhausted
(except to the extent otherwise limited below):
(i) First (and only on and after the Initial Bank Advance Date),
from funding required under the Retail Lenders Shared Cost
Commitment (as calculated in the relevant Shared Cost Allocation
Report);
(ii) then from funds then on deposit in the Resort Loss
Proceeds Account;
(iii) then from funds then on deposit in the Resort Payment
Account (as adjusted in the relevant Current Available Sources
Report to reflect any payments therefrom);
(iv) then (but only on or after the Initial Bank Advance Date)
from funds then on deposit in the Interest Account (as adjusted in
the relevant Current Available Sources Report to reflect any
payments therefrom);
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(v) then from funds then on deposit in the Liquidity Account,
but only to the extent that the balance thereof exceeds
$50,000,000;
(vi) then from funds then on deposit in the Bonded Condo
Proceeds Account;
(vii) then from funds then on deposit in the Equity Funding
Account;
(viii) then from funds then on deposit in the Second Mortgage
Proceeds Account;
(ix) then, from fllnds then on deposit in the Bank Proceeds
Account prior to giving effect to the requested Advance;
(x) then, from funds available to be drawn under the Bank
Credit Facility, until the aggregate amount of the Bank Revolving
Availability has been reduced to $55,000,000;
(xi) then, only on and after the Initial Bank Advance Date, from
the making of draws under the Completion Guaranties (subject to
the proviso in Section 2.6.6);
(xii) then, only on and after the Initial Bank Advance Date, from
the Liquidity Account; provided that to the extent that any Project
Costs that are not Applicable Project Costs (as defined in the
Completion Guaranties) are due and payable, the amount of such
Project Costs will be paid from the Liquidity Account regardless of
whether the Completion Guaranties have been flflly drawn; and
(xiii) then, only on and after the Initial Bank Advance Date, from
the remainder of the Bank Credit Facility; provided that to the
extent that any Project Costs that are not Applicable Project Costs
(as defined in the Completion Guaranties) are due and payable and
have not been satisfied pursuant to clause (j), the amount of such
Project Costs will be paid from the Bank Credit Facility regardless
of whether the Completion Guaranties have been fl~lly drawn.

2.10.2 In each Funding Order Report submitted for the Completion Reserve
Calculation Date and for each subsequent Advance Date, the Project.Entities
shall detail the manner in which:
(a) the Current Available Retail Sources as of the Advance Date shall
be applied to the payment of the Retail Request in the following order of
priority and in each case until the relevant Retail Source is exhm~sted:

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(i) First from fi~nds then on deposit in the Retail Loss Proceeds
Account;
(ii) then from fi~nds then on deposit in the Retail Payment
Account (as adjusted in the relevant Current Available Sources
Report to reflect any payments therefrom); and
(iii) then from amounts available to be drawn under the Retail
Facility.
(b) the Current Available Resort Sources as of the Advance Date shall
be applied to the Resort Request by applying the following order of
priority and in each case nntil the relevant Resort Source is exhausted
(except to the extent otherwise limited below):
(i) First, from funding required under the Retail Lenders
Shared Cost Commitment (as calculated in the relevant Shared
Cost Allocation Report);
(ii) then to the extent that such Project Costs constitute Debt
Service, from the amounts transferred to the Interest Account
pursuant to Section 2.16.2(h)(B)(i);
(iii) then from funds then on deposit in the Resort Loss
Proceeds Account;
(iv) then from fi~nds then on deposit in the Resort Payment
Account (as adjusted in the relevant Current Available Sources
Report to reflect any payments therefrom);
(v) then from funds then on deposit in the Interest Account (as
adjusted in the relevant Current Available Sources Report to reflect
any payments therefrom);
(vi) then from funds then on deposit in the Liquidity Account,
but only to the extent that the balance thereof exceeds $50,000,000
less any amounts theretofore applied to the payment of Debt
Service pursuant to Section 7.24 of the Credit Agreement;
(vii) then frown funds then on deposit in the Bonded Condo
Proceeds Account;
(viii) then from fl~nds then on deposit in the Equity Funding
Account;
(ix) then from funds then on deposit in the Second Mortgage
Proceeds Account;
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(x) then from funds then on deposit in the Bank Proceeds
Account;
(xi) then from the Bank Revolving Facility Completion Reserve
Amount;
(xii) then from Completion Guaranty Availability (but not for
Debt Service);
(xiii) then from the Liquidity Account Remainder; provided that
to the extent that any Project Costs that are not Applicable Project
Costs (as defined in the Completion Guaranties) are due and
payable, the amount of such Project Costs will be paid from the
whether the
Liquidity Account Remainder regardless of
Completion Guaranties have been fully drawn; and
(xiv) then from the Residual Bank Revolving Facility
Completion Reserve Amount; provided that to the extent that any
Project Costs that are not Applicable Project Costs (as defined in
the Completion Guaranties) are due and payable, the amount of
such Project Costs will be paid from the Residual Bank Revolving
Facility Completion Reserve Amount regardless of whethei" the
Completion Guaranties have been exhausted,
2.11 Advance Request Transfer Reports. Each Advance Request shall be
accompanied by an Advance Request Transfer Report which details how and the order in which
the amounts determined by the Funding Order Report are to be deposited into the various
Accounts established pursuant to this Agreement (or, in the appropriate case, to reimburse the
Bank Agent for drawings made under Project Letters of Credit). There are four versions of the
Advance Request Transfer Report attached as Appendix 5 to Exhibit C-l, and the Project
Entities shall attach the appropriate version to each Advance Request.
2.12 Final Completion Reserve Package. In addition to the reports described in
Section 2.7 through 2.11, in respect of the Completion Reserve Calculation Date, the Project
Entities shall also submit:
2.12.1 a Requested Cost to Final Completion Report in the form of Appendix 1
to Exhibit Q-. 1 calculating the Retail Request to Final Completion and the Resort
Request to Final Completion in the manner set forth in Section 2.13;
2.12.2 a Shared Cost to Final Completion Allocation Report in the form of
Appendix 2 to Exhibit Q-1 calculating the remaining amount of the Advances
Required under the Retail Lenders Shared Cost Commitment in order to achieve
Final Completion in the manner set forth in Section 2.14;
2.12.3 an Available Sources to Final Completion Report in the form of
Appendix 3 to Exhibit Q-1 detailing the funds which are available to satisfy the
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Resort Request to Final Completion and the Retail Request to Final Completion
in the manner set forth in Section 2.15; and
2.12.4 a Funding Order to Final Completion Report in the form of Appendix 4
to Exhibit Q-1 detailing the order in which the funds described in the Available
Sources to Final Completion Report will be applied to satisfy the Resort Request
to Final Completion and the Retail Request to Final Completion in the manner
set forth in Section 2.16.
2.13 Requested Cost to Final Completion Report. The Requested Cost to Final
Completion Report will detail the amount of the Retail Request to Final Completion and the
Resort Request to Final Completion (as defined below in this Section). The Project Entities’
calculation of the Requested Cost to Final Completion is subject to final approval by the
Construction Consultant. This report shall set forth:
2.13.1 in the Retail Budget section, withont duplication, (i) the amount of Other
Retail Costs paid to date through the Cash Management Account and not
reflected in any prior Advance Request, (ii) the amount of the Other Retail Costs
to be paid through Final Completion that have not been requested in a previous
Advance Request, and (iii) the amount of any disputed claims with contractors
or vendors in respect of costs under the Retail Budget (the sum of these amounts
being the "Retail Request to Final Completion");
2.13.2 in the Resort Budget section, without duplication, (i) 100% of the amount
of all Project Costs under the Resort Budget paid to date through the Cash
Management Account and not reflected in any prior Advance Request, (ii) 100%
of all Debt Service in respect of Indebtedness of the Companies which will
accrue through the Opening Date, (iii) 120% of all other Project Costs of the
types which will accrue pursuant to the Resort Budget through the Opening
Date, (iv) 120% of all other Project Costs not otherwise reflected in this Section
2.13.2 which will accrue and be payable pursuant to the Resort Budget through
the Final Completion Date that have not been requested in a previous Advance
Request and (v) 120% of the amount of any disputed claims with contractors or
vendors in respect of costs under the Resort Budget (the sum of these amounts
being the "Resort Request to Final Completion").
2.14 Shared Cost to Final Completion Allocation Report. The Shared Cost to Final
Completion Allocation Report shall calcnlate the amount of the Retail Lenders Shared Cost
Commitment which has not been funded prior to the Completion Reserve Calculation Date.
2.15 Available Sources to Final Completion Report. The Available Sources to
Final Completion Report shall detail the funds which are available to satisfy the Retail Request
to Final Completion and the Resort Request to Final Completion.
In the Available Sonrces to Final Completion Report:
(a)
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the balance of the Cash Management Account shall be adjusted to
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reflect any checks or other outstanding items with respect thereto; and
(b) the balances of the Retail Payment Account, the Resort Payment
Account and the Interest Account shall be adjusted to reflect any payments
to be made from these Accounts pursuant to any previously submitted
Advance Request.
The "Available Retail Sources to Final Completion" and the "Available Resort
Sources to Final Completion" are the amounts reflected in the Available Sources to Final
Completion Report in the appropriate rows in the colunm headed the "Balance."
2.16 Funding Order to Final Completion Report. The Funding Order to Final
Completion Report shall detail the order in which the funds described in the relevant Current
Available Sources Report will be applied to satisfy the Resort Request to Final Completion and
the Retail Request to Final Completion. It is agreed that:
2.16.1 the Available Retail Sources to Final Completion shall be applied to the
payment of the Retail Request to Final Completion in the following order of
priority and in each case until the relevant Retail Source is Exhausted:
(a) First from flmds then on deposit in the Retail Loss Proceeds
Account;
(b)

then from funds then on deposit in the Retail Payment Account;

and
(c)

then from amounts available to be drawn under the Retail Facility.

2.16.2 the Available Resort Sources to Final Completion shall be applied to the
Resort Request to Final Completion by applying the following order of priority
and in each case until the relevant Resort Source is Exhausted (except to the
extent otherwise limited below):
(a) First from funding required under the Retail Lenders Shared Cost
Commitment (as calculated in the Shared Cost to Final Completion
Allocation Report);
(b) then from funds then on deposit in the Resort Loss Proceeds
Account;
(c)

then from the Resort Payment Account (including interest income);

(d)

then from funds then on deposit in the Interest Account;

(e) then from fl~nds then on deposit in the Liquidity Account, but only
to the extent that the balance thereof exceeds $50,000,000;

then from funds then on deposit in the Bonded Condo Proceeds
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Case 1:09-md-02106-ASG Document 37-5 Entered on FLSD Docket 02/18/2010 Page 29 of 39

Account;
(g)

then from funds then on deposit in the Equity Funding Accotmt;

(h) then from funds then on deposit in the Second Mortgage Proceeds
Account;
(i)

then from funds on deposit in the Bank Proceeds Account;

(j) then from funds available to be drawn under the Bank Credit
Facility, until the aggregate amount of the Bank Revolving Availability
has been reduced to $55,000,000 (the aggregate amount required pursuant
to this clause (h), is the "Bank Revolving Facility Completion Reserve
Amount" on the Completion Reserve Calculation Date);
then from the balance of the Cash Management Account net of any
(k)
checks or other outstanding items with respect thereto; and
(1) then from the making of draws under the Completion Guaranties,
from the Liquidity Account and from the remainder of the Bank Credit
Facility (as described below):
(A) To the extent that the Resort Request to Final Completion is
fully satisfied by application of amounts available pursuant to clauses (a)
through (g), then the Liquidity Account shall thereafter be made available
to fi~nd Debt Service which accrues following the Opening Date or applied
to the payment of Revolving Loans to the extent permitted by Section 7.24
of the Bank Credit Agreement.
(B) To the extent that the Resort Request to Final Completion
is not fully satisfied by application of amounts available pursuant to
clauses (a) through (i), then:
(i) the amount of any Debt Service which is included
in the remaining amount of the Resort Request to Final Completion
shall be immediately transferred from the Liquidity Account to the
Interest Account and reserved for the payment of such Debt
Service;
(ii) following the transfer described in clause (B)(i), any
remaining portion of the Resort Request to Final Completion shall
thereafter be satisfied from the making of draws under the
Completion Guaranties:
lift) following the exhaustion of the amount available
under the Completion Guaranties. any remaining portion of the
Resort Request to Final Completion shall thereafter be satisfied
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from the remaining balance of the Liquidity Account (the amounts
described in clause (i) above and this clause (iii) being the
"Liquidity Account Remainder"); and
(iv) finally, to the extent that any portion of the Resort
Request to Final Completion remains after steps (i), (ii) and (iii),
such remainder shall be satisfied from the remainder of the funds
available to be drawn under the Bank Credit Facility (any amount
determined pursuant to this clause (iv), rounded upwards to the
nearest increment of $1,000,000, is the "Residual Bmtk Revolving
Facility Completion Reserve Amount" on the Completion Reserve
Calculation Date).
Except to the extent of any Liquidity Account Remainder, the Companies
shall thereafter be entitled to apply any remaining balances in the
Liquidity Account to the payment of Debt Service accruing following the
Opening Date (or, to the extent permitted by Section 7.24 of the Bank
Credit Agreement, to prepay Revolving Loans under the Bank Credit
Agreement).
[Sections 2.17 through 2.20 intentionally reserved]
2.21

Opening Date Procedures.
2.21.1 The Opening Date Certificates. Immediately prior to the Opening Date,
the Pro.ject Entities shall deliver to the Construction Consultant, the
Disbursement Agent, and each Funding Agent the Project Entities Opening Date
Certificate indicating the date upon which the Project Entities believe the
conditions to the Opening Date will be satisfied and appropriately completed and
duly executed by a Responsible Officer of the Project Entities with all
attachments thereto (including the reports required by Section 2.12, a Remaining
Cost Report and the Opening Certificates of the Architect and the General
Contractor).
2.21.2 The Bank Revolving Facility Completion Reserve Amount and the
Residual Bank RevolvinCFacility Completion Reserve Amount. In the event
that the Disbursement Agent or the Construction Consultant discovers any errors
in the Project Entities Opening Certificate or its attachments, the Disbursement
Agent or Construction Consultant, as appropriate, shall request that the Project
Entities revise and resubmit the certificate. Promptly after receipt of a final and
correct Pro.ject Entities Opening Certificate, the Construction Consultant shall
deliver to the Disbursement Agent, each Funding Agent and the Project Entities,
the Construction Consultant Opening Certificate. On the basis of the Opening
Date Certificates, and in consultation with the Construction Consultant, the Bank
Revolving Facility Completion Reserve Amount and the Residual Bank
Revolving Facility Completion Reserve Amount shall be determined in
accordance with Section 2.16.2, and shall notify the Disbursement Agent and the

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Project Entities thereof.
2,21.3 Application of Completion Reserve Amount, Bank Revolving Facility
Completion Reserve Amount and Residual Bank Revolving Facility Completion
Reserve Amount - Direct Advances under the Credit Agreement. Following the
Opening Date:
(a) The Borrowers shall be entitled to request Loans, Letters of Credit
and other credit accommodations under the Bank Credit Agreement for
working capital needs (other than Project Costs) directly from the Bank
Agent, and the Lenders under the Bank Credit Agreement shall make such
advances directly to the Borrowers, subject to the terms and conditions set
forth in the Bank Credit Agreement (without the requirement that the
proceeds thereof be fi~nded to the Disbursement Agent and without
satisfaction of the conditions set forth herein), provided that the Bank
Revolving Facility Completion Reserve Amount and Residual Bank
Revolving Facility Completion Reserve Amount shall be reserved from
the amounts otherwise available for drawing under the Bank Credit
Agreement, and shall be used to fired Pro.ject Costs through the
disbursement program established by this Agreement.
(b) Each Resort Request shall be satisfied by the application of the
amounts contained in the various Accounts and from the Bank Revolving
Facility Reserve Amotmt, the Completion Guaranties, the Liquidity
Account Remainder and the Residual Bank Re)olving Facility Reserve
Amount in the order described in the Funding Order Report described in
Section 2.10.2 and in each case shall diminish the same.

2.22

Completion Date Procedures.
2122.1 Immediately prior to the Completion Date, the Project Entities shall
deliver to the Construction Consultant, the Disbursement Agent, and each
Funding Agent the Project Entities Completion Certificate appropriately
completed and duly executed by a Responsible Officer of the Project Entities
with all attachments thereto. The Project Entities Completion Certificate shall
indicate the date the Project Entities believe the conditions to Completion will be
satisfied, shall include the Completion Certificates of the Architect and the
General Contractor, and shall set forth all other information required thereby.

2.22.2 In the event that the Disbursement Agent or the Construction Consultant
discovers any errors in the Project Entities Completion Certificate, the
Disbursement Agent or Construction Consultant, as appropriate, shall request
that the Project Entities revise and resubmit the certificate. Promptly after
receipt of a final and correct Project Entities Completion Certificate, the
Construction Consultant shall deliver to the Disbursement Agent, each Funding
Agent and the Project Entities, the Construction Consultant Completion
Certificate.
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2.22.3 Promptly after receipt by the Disbursement Agent of the Construction
Consultant Completion Certificate, the Disbursement Agent shall, subject to its
determination that each of the applicable conditions to the Completion Date has
been satisfied, countersign the Project Entities Completion Certificate and
forward it to each of the Funding Agents. The Disbursement Agent may rely on
the certifications set forth in the Completion Certificates in determining whether
the Completion Date has occurred. The Completion Date shall be deemed to
occur on the date the Disbursement Agent countersigns the Project Entities
Completion Certificate.
2.23

Final Completion Date Procedures.
2.23.1 Immediately prior to the Final Completion Date, the Project Entities shall
deliver to the Construction Consultant, the Disbursement Agent, and each
Funding Agent the Pro.ject Entities Final Completion Certificate appropriately
completed and duly executed by a Responsible Officer of the Project Entities
with all attachments thereto. The Project Entities Final Completion Certificate
shall indicate the date the Project Entities believe the conditions to Final
Completion will be satisfied, shall include the Final Completion Certificates of
the Architect and the General Contractor, and shall set forth all other information
required thereby.
2.23.2 In the event that the Disbursement Agent or the Construction Consultant
discovers any errors in the Project Entities Final Completion Certificate, the
Disbursernent Agent or Construction Consultant, as appropriate, shall request
that the Project Entities revise and resubmit the certificate. Promptly after
receipt of a final and correct Project Entities Final Completion Certificate, the
Construction Consultant shall deliver to the Disbursement Agent, each Funding
Agent and the Project Entities, the Construction Consultant Final Completion
Certificate.
2.23.3 Promptly after receipt by the Disbursement Agent of the Construction
ConsuLtant Final Completion Certificate, the Disbursement Agent shall, in the
following order:
(a) subject to its determination that each of the applicable conditions
to the Final Completion Date has been satisfied, countersign the Project
Entities Final Completion Certificate and forward it to each of the Funding
Agents.
~b) release to the Retail Affiliate any amounts then contained in the
Retail Funding Account and the Retail Payment Account;
(c) release to the Borrowers all other amounts on deposit in the Resort
Accounts (other than the Completion Guaranty Proceeds Account and the
Liquidity Account), and terminate the Control Agreements with respect to
such Accounts. Thereafter, the Liquidity Account shall remain subject to

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the Control Agreements in favor of the Bank Agent and the Trustee
contemplated by this Agreement, however funds in the Liquidity Account
shall be released therefrom in the manner contemplated by Section 7.24 of
the Bank Credit Agreement; and
(d) deliver to each Completion Guarantor a written release of its
Completion Guaranty and release any Cash Support to the relevant
Completion Guarantor (in each case, subject to the proviso in clause (h) of
the definition of "Final Completion Date").
The Final Completion Date shall be deemed to occur on the date the
Disbursement Agent countersigns the Project Entities Completion Certificate. The
Disbursement Agent may rely on the certifications set forth in the Final
Completion Certificates in determining whether the Final Completion Date has
occurred.
2.24 No Approval of Work. The making of any Advance shall not be deemed an
approval or acceptance by the Disbursement Agent, any Funding Agent, any Lender or the
Construction Consultant (except to the extent set forth in the Construction Consultant
Engagement Agreement, and then only for the benefit of the Lenders) of any work, labor,
supplies, materials or equipment furnished or supplied with respect to the Project.
2.25 Security. The Obligations shall be secured by the Prqject Security in accordance
with the Security Documents. Further, all funds advanced by the Bank Lenders or the Retail
Lenders to complete the Project or to protect the rights and interests of the Secured Parties under
the Financing Agreements are deemed to be obligatory advances and are to be added to the total
indebtedness secured by the Bank Deed of Trust or the deed of trust or other security documents
executed in connection with the Retail Facility (the "Retail Security Documents"), as applicable:
All sums so advanced by the Bank Lenders shall be secured by the Bank Deed of Trust and all
sums so advanced by the Retail Lenders shall be secured by the Retail Security Documents, in
each case with the same priority of lien as the security for any other obligations secured
thereunder.
ARTICLE 3
CONDITIONS PRECEDENT TO
TIlE CLOSING DATE AND ADVANCES
3.1 Conditions Precedent to the Closing Date. The occurrence of the Closing Date
is subject to the prior satisfaction of each of the conditions precedent hereinafter set forth in this
Section 3.1 in form and substance satisfactory to each of the Funding Agents (or, in the case of
the Trustee, Banc of America Securities LLC, as Representative), each in its sole discretion. It is
acknowledged that the Representative has been appointed as the representative of the initial
purchasers of the Second Mortgage Notes for the purpose of determining the satisfaction of the
conditions set forth in this Section 3.1, and that the Trustee shall have no responsibility for
determining the satisfaction of the conditions set forth in this Section. Subject to the preceding
sentence, by executing this Agreement and by executing its respective Facility Agreement or
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making its initial Advances thereunder (or, in the case of the Representative, by the purchase of
the Second Mortgage Notes by the Representative), each of the Funding Agents (or, in the case
of the Trustee, Banc of America Securities LLC, as Representative) shall be deemed to have
confirmed that it has become satisfied that each of the following conditions precedent applicable
to its Facility in this Section 3.1 has been satisfied.
3.1.1 Financing Agreements and Material Contracts. Delivery to each of the
Funding Agents and the Disbursement Agent of (a) executed originals of each
Financing Agreement which is required to be delivered on the Closing Date
(collectively, the "Closing Financing Agreements"), (b) true and correct copies
of each Material Contract then in effect and any supplements or amendments
thereto then in effect, all of which shall be in form and substance satisfactory to
each of the Funding Agents, shall have been duly authorized, executed and
delivered by the parties thereto, certified by a Responsible Officer of the Project
Entities as of the Closing Date as being true, complete and correct and in full
force and effect, and (c) evidence satisfactory to each of the Funding Agents that
each such Material Contract and each such Closing Financing Agreement is in
full force and effect and that no party to any such Material Contract or Closing
Financing Agreement is or, but for the passage of time or giving of notice or
both will be, in breach of any obligation thereunder.

3.1.2 Authority of the Loan Parties. Delivery to each of the Funding Agents
and the Disbursement Agent of (a)a certified copy of the Articles of
Incorporation, Certificates of Formation or other similar formation documents of
the each of the Loan Parties, (b) good standing certificates for each of the Loan
Parties issued by the state of incorporation or organization, (c) a certified copy of
the bylaws or a copy of the Operating Agreement of each of the Loan Parties,
certified by the Secretary or a Responsible Officer of each such Loan Party, and
(d) resolutions or other authorizations of the Loan Parties certified by the
Secretary or a Responsible Officer of each such Loan Party acceptable to the
Funding Agents.
3.1.3 Incumbency of the Loan Parties. Delivery to the Funding Agents of an
incumbency certificate from each of the Loan Parties.

3.1.4 Other Parties. Delivery to each of the Funding Agents and the
Disbursement Agent of (i) a certified copy of the articles of incorporation and
bylaws of the General Contractor; (ii) a certificate of the Nevada Secretary of
State to the effect that the General Contractor is in good standing in Nevada;
(iii) a fully executed certificate as to the incumbency of the Persons authorized
to execnte and deliver on behalf of the General Contractor the Operative
Documents and any other instruments or agreements contemplated hereby to
which the General Contractor is a party; (iv) certified resolution authorizing the
execution and delivery by the General Contractor of the Operative Documents to
which such entity is a party; (v) an incumbency certificate setting forth specimen
signatures of each individual authorized to execute certifications hereunder on
behalf of the General Contractor; and (vi) an incumbency certificate setting forth
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specimen signatures of each individual authorized to execnte certifications
hereunder on behalf of the Architect.
3.1.5 Closing Certificates. Delivery to each of the Funding Agents and the
Disbursement Agent of the Project Entity Closing Certificate, the Construction
Consultant Closing Certificate and the Insurance Advisor Closing Certificate,
substantially in the forms of Exhibits B-1, B-2 and B-3 (certifying that insurance
complying with the requirements of Exhibit D shall be in place and in full force
and effect).
3.1.6 Insurance Brokers’ Insurance Certificates. Delivery to each of the
Funding Agents and the Disbursement Agent of certified copies of all policies
evidencing insurance (or a binder, commitment or certificates signed by the
insurer or a broker authorized to bind the insurer along with a commitment to
deliver certified copies of the policies within 45 days after the Closing Date)
meeting the requirements of Exhibit D.
3.1.7 Project Security. All actions necessary or desirable, including all filings,
in the opinion of the Funding Agents party thereto to perfect the security
interests granted in the Security Documents having the priority contemplated
therefor by this Agreement, the Intercreditor Agreements and the Security
Documents shall have been taken or made.
3.1.8 Opinions. Each of the Funding Agents and the Disbursement Agent shall
have received legal opinions addressed to them of Buchanan, Ingersoll &
Rooney, PC and Snell and Wilmer L.L.P.
3.1.9 Construction Consultant Report. The Funding Agents and the
Representative shall have received the Construction Consultant Report in a form
which is acceptable to them.
3.1.10 Fees. All amounts required to be paid to or deposited with the Funding
Agents, the Disbursement Agent and the Construction Consultant and all taxes,
fees and other costs payable in connection with the execution, delivery,
recordation and filing of the documents and instruments referred to in this
Section 3.1, shall have been paid or deposited, as the case may be, in full. The
Project Entities shall have paid or arranged for payment out of the requested
Advance of all fees, expenses and other charges then due and payable by it under
this Agreement or other Financing Agreements or under any agreements
between the Project Entities and the Construction Consultant.
3.1.11 Budgets. The Budgets shall be acceptable to each of the Funding Agems.
3.1.12 Control Agreements. The Project Entities shall have executed the
Control Agreements in respect of the Accounts in favor of the Pledgees referred
to in Section 2°2.

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3.1.13 Project Schedule. The Project Schedule attached hereto as Exhibit F
shall be acceptable to each of the Funding Agents.
3.1.14 Financial Statements. Delivery to the Disbursement Agent and the
Funding Agents of:
(a) the andited consolidated and consolidating financial statements of
Parent as of December 31, 2005 and as of December 31, 2006 and for the
fiscal years then ended;
(b) the audited consolidated financial statements of [,as Vegas
Holdings and its Subsidiaries as of December 31, 2005 and as of
December 31, 2006 and for the fiscal years then ended;
(c) a pro forma consolidated balance sheet of Las Vegas Holdings and
its Subsidiaries as of the Closing Date (and giving effect to the
transactions contemplated to occur on the Closing Date);
(d) the audited consolidated financial statements of Turnberry
Residential as of December 31, 2006 and for the fiscal year then ended;
m~d
(e) certificates of a Responsible Officer of Parent, Las Vegas Holdings
and Turnberry Residential certifying such financial statements and, in the
case of Parent and Las Vegas Holdings, stating that no Material Adverse
Effect has occurred since December 31, 2006.
Each audit shall be unqualified and otherwise acceptable to the Disbursement
Agent and the Funding Agents.
3.1.15 Material Adverse Effect. Since December 31, 2006, there shall not have
occurred any Material Adverse Effect.
3.1.16 Permits.
(a) All Permits described in Exhibit G as required to have been
obtained by the Project Entities or any other Person by the Closing Date
shall have been issued and be in full force and effect and not subject to
current legal proceedings or to any unsatisfied conditions ~that are
required to be satisfied by the Closing Date) that could reasonably be
expected to materially adversely modify any Permit. to revoke any Permit.
to restrain or prevent the construction or operation of the Project or
otherwise impose adverse conditions on the Project or the financing
contemplated under the Financing Agreements and all applicable appeal
periods with respect thereto shall have expired: and
(b)
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With respect to any of the Permits described in Exhibit G as not
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yet required to be obtained (other than gaming and liquor license and
findings of suitability to own an interest in a licensee), (i)each such
Permit is of a type that is routinely granted on application and compliance
with the conditions for issuance and (ii)no facts or circumstances exist
which indicate that any such Permit will not be timely obtainable without
undue expense or delay by the Project Entities or the applicable Person,
respectively, prior to the time that it becomes required.
3.1.17 Third Party Consents. Delivery to the Disbursement Agent and each of
the Funding Agents of Consents from (a) General Contractor, and (b) Architect;
each in form of Exhibit H or otherwise in form and substance satisfactory to the
Funding Agents.
3.1.18 Representations and Warranties. Each representation and warranty of:
(a) each Project Entity set forth in Article 4 or in any of the other
Operative Documents shall be true and correct in all material respects; and
(b) to the Project Entities’ knowledge, each Major Project Participant
(other than any Project Entity) set forth in any of the Operative Documents
shall be true and correct in all material respects (except that any
representation and warranty that relates expressly to an earlier date shall
be deemed made only as of such earlier date) unless the failure of any such
representation and warranty referred to in this clause (b) to be true and
correct could not reasonably be expected to have a Material Adverse
Effect, in each case, as certified by the Project Entities in the Project
Entities Closing Certificate.
3.1.19 Utility Availability. The Construction Consultant shall have become
satisfied that arrangements for the provision of all utilities necessary for the
construction, operation and maintenance of the Project as contemplated by the
Operative Documents and the Final Plans and Specifications shall have been or
will be made under the Material Contracts or otherwise on commercially
reasonable terms.
3.1.20 Flow of Funds. Each of the transactions contemplated by the Flow of
Funds Memo shall be concurrently consummated.
3.1.21 Completion Guaranty Letter of Credit. Turnberry Residential shall have
caused the delivery to the Disbursement Agent of a letter of credit in the amount
of $50,000,000 supporting payments under its Completion Guaranty in a form,
and by an issuing financial institution, which is acceptable to the Disbursement
Agent, the Bank Agent and the Representative.
3.1.22 ALTA Survey. The Disbursement Agent and each of the Funding
Agents shall have received an ALTA survey of the Site and the Site Easements
with (i) an overlay showing the locations of the Retail Air Space Parcels, and
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(ii) an overlay showing the proposed perimeters within which all of the
foundations for the Project are to be located pursuant to the Plans and
Specifications, in each case satisfactory in form and substance to the Title
Insurer and each of the Funding Agents.
3.1.23 Title Policies. The Project Entities shall have delivered to (a)the Bank
Agent, a lender’s ALTA policy of title insurance, or a commitment to issue such
policy, in the amount of $1,850,000,000, (b) the Trustee, a lender’s ALTA policy
of title insurance, or a commitment to issue such policy, in the amount of
$675,000,000, and (c)the Retail Agent a lender’s ALTA policy of title
insurance, or a commitment to issue such policy, in the amount of $315,000,000,
in each case (i) with exceptions to coverage as are acceptable to the Bank Agent
and the Representative, (ii) with such endorsements as are required by the
beneficiary of such policy, (iii) with snch reinsurance as is satisfactory to such
beneficiary, and (iv) issued by Title Insurer in form and substance satisfactory to
such beneficiary.
3.1.24 Fee Letters. Letters regarding the fees of the Funding Agents, the
Disbursement Agent and the Construction Cdnsultant, shall have been executed
and delivered and the Project Entities shall have complied with all of their
obligations thereunder then required to be complied with.
3.1.25 Plans and Specifications. The Project Entities shall have delivered to the
Construction Consultant Plans and Specifications in form and substance
satisfactory to the Construction Consultant, as certified to in the Construction
Consultant Closing Certificate.
3.1.26 Corporation and Capital Structure; Management. The corporate
organization structure, capital structure and ownership of the Project Entities and
Tumberry Residential shall be satisfactory to each of the Funding Agents.

3.1.27 Real Estate Appraisals. Each of the Funding Agents (other than the
Retail Agent) and the Disbursement Agent shall have received a FIRREA
appraisal of the Site from an independent real estate appraiser reasonably
satisfactory to them, in form, scope and substance satisfactory to them, satisfying
the reqtfirements of any applicable laws and regulations, and showing projected
gross sales revenues (less costs of sales) of not less $727,000,000 for the Condo
Units.
3.1.28 Environmental Reports. Each of the Funding Agents and the
Disbursement Agent shall have received the Phase I Report.
3.1.29 In Balance Requirement. The In Balance Test shall be satisfied.
3.1.30 No Restrictions. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any of the Lenders
from making the Advances to be made by them on the Closing Date.
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3.1.31 Due Diligence. The Lenders shall have completed their due diligence
review of each Loan Party and Turnberry Residential and their respective
affiliates and operations, and shall be satisfied with the results thereof.
3.1.32 Acceptable Rating. On or before the Closing Date, the Companies shall
have obtained a rating of the Companies’ long term, senior debt securities by a
"nationally recognized statistical rating organization" (as such term is defined by
the Securities and Exchange Commission for purposes of Rule 436(g)(2) under
the Securities Act of 1933, as amended) that is satisfactory to the Bank Lenders
and the Representative.
3.1.33 Construction Arrangements. The Project Entities shall have entered into
contracts and other arrangements for the development, equipage and
construction of the Project that have been approved in all respects by the
Construction Consultant and the Funding Agents. Without limitation on the
foregoing, the Prime Construction Agreement shall have been collaterally
assigned to the Bank Agent and the Trustee, and Contractors acceptable to the
Bank Agent shall have provided fixed price or guaranteed maximum price
contracts in respect of not less than 60% of the Total Hard Costs. In addition,
the Project Entities shall have delivered to the Construction Consultant, the Bank
Agent and the Disbursement Agent, in respect of each of the Contractors
identified on Exhibit W, either (a) a Payment and Performance Bond or, where
acceptable to the Disbursement Agent, a guaranty of the corporate parent of such
Contractor of its performance under its contract, or (b) letters in form and
substance acceptable to the Construction Consultant and the Funding Agents
issued by (i) bonding companies acceptable to the Disbursement Agent in
consultation with the Construction Consultant to the effect that each such
Contractor has applied for a Payment and Performance Bond with such bonding
company and indicating the amount of the Payment and Performance Bond
applied for and (ii) from such Contractor agreeing to promptly provide a
Payment and Performance Bond.
3.1.34 Retail Arrangements. The Borrowers and the Retail Affiliate shall have
entered into the Reciprocal Easement Agreement and the Retail Air Space Lease.
3.1.35 Tax Analysis. The Companies shall have delivered to the Bank Agent
and the Representative an analysis memo prepared by their tax counsel, based
upon financial and tax information provided by the Companies, validating the
Companies’ conclusion that no federal income taxes will become due by reason
of the sale of the Condo Units, in a form acceptable to the Bank Agent and the
Representative.
3.2 Equity Advances. Notwithstanding any other provision hereof to the contrary,
prior to the date of the initial disbursement of funds from the Second Mortgage Proceeds
Account, the Disbursement Agent shall make Advances from the Equity Funding Account at the
written direction of the Companies without conditions.
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3.3 Conditions Precedent to Advances by the Trustee and the Bank Agent. The
obligation (a) of the Trustee to make Advances from the Second Mortgage Proceeds Account to
the Second Mortgage Funding Account, and (b) of the Bank Agent to make Advances from the
Bank Proceeds Account are each subject to the prior satisfaction of each of the conditions
precedent set forth in this Section 3.3:
3.3.1 Certain Operative Documents.
(a) Each Material Contract shall be in full force and effect except
(i) for amendments to Material Contracts not prohibited by Section 6.1 or
by the Financing Agreements, (ii)to the extent the Project Entities have
entered into a replacement Material Contract to the extent required or
permitted by Section 7.1.6, and (iii) to the extent terminated in accordance
with their respective terms; and
(b) Each Financing Agreement shall be in full force and effect,
without amendment since the date of its execution and delivery, and in a
form which was provided to the Bank Agent and the Trustee prior to the
Closing Date, except for amendments to the Financing Agreements to the
extent permitted under the Facility Agreements or to the extent terminated
in accordance with their respective terms.
3.3.2 Representations and Warranties. Each representation and warranty of:
(a) Each Project Entity set forth in Article 4 or in any Material
Contract shall be true and correct in all material respects as if made on
such date (except that any representation and warranty that relates
expressly to an earlier date shall be deemed made only as of such earlier
date), unless, with respect to any Advance prior to the Initial Bank
Advance Date, the fail~re of any such representation and warranty referred
to in this clause (a) to be true and correct could not reasonably be expected
to result in a Material Adverse Effect; and
(b) To the Project Entities’ knowledge, each Major Project Participant
(other than any Project Entity) set forth in any of the Material Contracts
shall be true and correct in all material respects as if made on such date
(except that any representation and warranty that relates expressly to an
earlier date shall be deemed made only as of such earlier date) unless the
failure of any such representation and warranty referred to in this
clause (b) to be true and correct could not reasonably be expected to result
in a Material Adverse Effect, in each case, as certified by the Project
Entities in the relevant Advance Request.
3.3.3 Default. No Default or Event of Default shall have occurred and be
continuing.
3.3.4 Advance Request and Advance Confirmation Notice:
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(a) Delivery to the Disbursement Agent, each Funding Agent and the
Construction Consultant of an Advance Request, together with all then
required attachments, exhibits and certificates. Such Advance Request
shall request an Advance in an amount sufficient to pay all amounts due
and payable for work performed on the Project through the last day of the
period covered by such Advance Request and sufficient to pay the
amounts required by Section 2.4.2.
(b) Delivery to the Funding Agents of an executed Advance
Confirmation Notice, provided that the Trustee shall not receive copies of
the Advance Confirmation Notices following the Exhaustion of the
Second Mortgage Proceeds Account.
3.3.5 Consultant Certificates and Reports. Delivery to each of the applicable
Funding Agents and the Disbursement Agent, of (a) the Construction Consultant
Advance Certificate approving the corresponding Advance Request, and (b) the
Architect’s Advance Certificate with respect to the Advance, and (c) the General
Contractor Advance Certificate with respect to the Advance.
3.3.6 As-Built Survey. At the time of the first Advance Request occurring
more than 45 days after completion of the foundation work for each phase of the
Project, the Project Entities shall cause an updated as-built survey to be
delivered to the Construction Consultant and the Disbursement Agent
satisfactory in form and snbstance to the Title Insurer and the Bank Agent.
3.3.7 Project Securit2~. All of the Security Documents shall continue to be in
fifll force and effect and all actions necessary or desirable (including all filings)
to perfect the security interests granted therein as a valid security iuterest over
the Project Security thereunder having the priority contemplated therefor by this
Agreement and the Security Docurrients shall have been taken or made. All
property., rights and assets required for the Project shall be free and clear of all
encumbrances except for Permitted Liens.
3.3.8 In Balance Requirement. The Project Entities shall have submitted an In
Balance Report demonstrating that the In Balance Test is satisfied.
3.3.9 No Restriction. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Bank Lenders or
the Trustee from making the Advances to be made by them on the requested
Advance Date.
3.3.10 Violation of Law. The making of the requested Advance shall not
violate any law.
3.3.11 Material Adverse Effect. Since the Closing Date, there shall not have
occurred any change in the economics or feasibility of constructing and!or
operating the Project, or in the financial condition, business or property of the
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Project Entities, any of which could reasonably be expected to have a Material
Adverse Effect.
3.3.12 No Suspension of Performance. Construction of the Project is
proceeding materially in accordance with the Project Schedule and the plans and
specifications for the Project (including any Final Plans and Specifications then
delivered) and no Major Project Participant or first tier Subcontractor under the
Prime Construction Agreement or party to a Subcontract with a total contract
amount or value in excess of $25,000,000 has suspended performance or
otherwise repudiated its obligation to perform any duty or obligation under its
respective Material Contract or Subcontract (unless such suspended or
repudiated Material Contract or Subcontract is permitted to be, and actually has
been, replaced, or a replacement is determined not to be necessary, pursuant to
Section 7.1.5 or Section 7.1.6).
3.3.13 Funding of Equity. Solely with respect to the initial Advance of funds
from the Second Mortgage Proceeds Account, the entire amount of the Equity
Proceeds Account has been, or shall concurrently be, applied to the payment of
Project Costs.
3.3.14 Updated Consultant Certificates and Reports. Solely with respect to the
initial Advance of funds from the P~ank Proceeds Account made concurrently
with or after Exhaustion of the Second Mortgage Proceeds Account, each of the
Funding Agents and the Disbursement Agent shall have received an updated
Construction Consultant Report which is consistent with the Construction
Consultant Engagement Agreement and in form and substance satisfactory to the
Bank Agent which will address (i) construction progress for the period from the
Closing Date through the Initial Bank Advance Date and (ii) the Final Plans and
Specifications that have been completed through such period to the extent not
theretofore delivered.
3.3.15 Subcontracts.

(a) Solely with respect to the initial Advance of fimds from the Second
Mortgage Proceeds Account (other than any Advance made solely to pay
interest on the Second Mortgage Notes), there shall be in place fixed price
or guaranteed maximum price Contracts with Subcontractors in respect of
75% of the Total Hard Costs.
(b) Solely with respect to the first Advance which occurs following
October 1, 2007, there shall be in place fixed price or guaranteed
maximum price Contracts with Subcontractors in respect of 85% of the
Total Hard Costs.
(c) Solely with respect to the Initial Bank Advance Date, there shall be
in place (i)fixed price or guaranteed maximum price Coutracts with
Subcontractors in respect of 95% of the Total Hard Costs, and (ii) fixed
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price contracts in respect of not less than 50% of the Costed FF&E.
(d) In each case specified in clauses (a) through (c) above, the Project
Entities shall have certified in the Project Entities’ Advance Certificate
that such Subcontracts and Contracts are consistent with the Resort
Budget, the Project Schedule and the plans and specifications for the
Project then in effect.
(e) In the case of each Advance from the Bank Proceeds Account
made concurrently with or after Exhaustion of the Second Mortgage
Proceeds Account, the Project Entities shall have delivered a copy of
(i)each Contract or series of related Contracts with the same Person
entered into between the Project Entities and any Contractor with a
contract price (or expected aggregate amount to be paid in the case of
"cost plus" contracts) in excess of $25,000,000, (ii)each first tier
Subcontract with a contract price (or expected aggregate amount to be
paid in the case of "cost plus" contracts) in excess of $25,000,000 (or any
or series of related Contracts with the same person), and (iii) a copy of any
Payment and Performance Bond required pursuant to Section 5.8 to the
Disbursement Agent, the Construction Consultant and Bank Agent
promptly after mutual execution and delivery thereof.
3.3.16 Liens. In the case of each Advance from the Bank Proceeds Account
made concurrently with or after Exhanstion of the Second Mortgage Proceeds
Account, the Project Entities shall have delivered to the Disbursement Agent an
updated lien release summary chart substantially in the form of Appendix 11 to
the Advm~ce Request and duly executed acknowledgments of payments and
releases of mechanics’ and materialmen’s liens substantially in the form of
Exhibit I (with modifications required by Nevada law) frown the required
Contractors described below for all work, services and materials, including
equipment and fixtures of all kinds, done, performed or furnished for the
construction of the Project from the last day covered by the inunediately
preceding Advance Request through the last day covered by the current Advance
Request except for such work, services and materials the payment for which
does nol exceed, in the aggregate $50,000,000 and is being disputed in good
faith pursuant to NRS Chapter 624, so long as (1)such proceedings shall not
involve any substantial danger of the sale, forfeiture or loss of the Project or the
Site. as the case may be, title thereto or any interest therein and shall not
interfere in any material respect with the Project or the Site, and (2)adequate
cash reserves have been provided therefor through an allocation in the relevant
Remaining Cost Report. The Contractors required to provide such lien releases
are those party to a Contract with a Project Entity and each of such direct
Contractor’s first tier trade subcontractors and materialmen, in each case
performing work with a contract price (or expected aggregate amount to be paid
in the case of "cost-plus" Contracts) in excess of $500,000.
Notwithstanding the foregoing, if the Project Entities or any Contractor do not
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obtain any of the waivers and releases of liens required under the foregoing
provisions of this Section 3.3.16 (collectively, "Outstanding Releases"), then
instead of delivering such Outstanding Releases and as a condition to any
progress or other payment from the proceeds of the requested Advance, the
Project Entities may obtain and provide to the Disbursement Agent from the Title
Insurer bonds or endorsements to the title insurance policies insuring the lien free
status of the work; provided, however, that at no time shall the aggregate of all
Outstanding Releases represent work with an aggregate value in excess of
$50,000,000.
3.3.17 Title Policy Endorsements. The Disbursement Agent shall have received
a commitment from the Title Insurer, attached to the Advance Request,
evidencing the Title Insurer’s unconditional commitment to issue an
endorsement to the Bank Agent’s and!or Trustee’s Title Policy in the form of a
122 CLTA Endorsement insuring the continuing priority of the Lien of its Deed
of Trust as security for the requested Advance and confirming and/or insuring
that there are no intervening liens or encumbrances which may then or thereafter
take priority over the Lien of such Deed of Trust other than (i) Permitted
Encumbrances, (ii) such intervening liens or encumbrances securing amounts the
payment of which is being disputed in good faith by the Borrowers pursuant to
NRS Chapter 624, so long as (A) in the case of disbursements from the Second
Mortgage Notes Proceeds Account, the Company has certified that the Title
Insurer has delivered to the Trustee an endorsement to its title policy to assure
against loss due to the priority of such lien or encumbrance or (B) in the case of
Advances under the Bank Credit Facility, the Disbursement Agent has received
confirmation from the Bank Agent that the Title Insurer has delivered to the
Bank Agent any endorsement to its Title Policy required or desirable to assure
against loss due to the priority of such lien or encumbrance, and (iii) Permitted
Mechanics Liens.
3.3.18 [ Intentionally Omitted].
3.3.19 Plans and Specifications. In the case of each Advance from the Bank
Proceeds Account made concurrently with or after Exhaustion of the Second
Mortgage Proceeds Account, the Construction Consultant shall to the extent set
forth in the Construction Consultant Advance Certificate have approved all Plans
and Specifications which, as of the date of the relevant Advance Request,
constitute Final Plans and Specifications to the extent not theretofore approved.
3.3.20 Litiggtion. In the case of each Advance from the Bank Proceeds Account
made concurrently with or after Exhaustion of the Second Mortgage Proceeds
Account, no action, suit, proceeding or investigation of any kind shall have been
instituted or, to the Project Entities’ knowledge, pending or threatened, including
actions or proceedings of or before any Governmental Authority, to which any
Project Entity, the Project or, to the knowledge of the Project Entities, any Major
Project Participant (other than any Project Entity), is a party or is subject, or by
which any of them or any of their properties or the Project are bound that could
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reasonably be expected to have a Material Adverse Effect nor are the Project
Entities aware of any reasonable basis for any such action, suit, proceeding or
investigation and no injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining order to be issued shall
be pending or noticed with respect to any action, suit or proceeding if the same
could reasonably be expected to have a Material Adverse Effect.
3.3.21 Adverse information. In the case of each Advance from the Bank
Proceeds Account made concurrently with or after Exhaustion of the Second
Mortgage Proceeds Account, the Bank Agent shall not have become aware after
.the date hereof of any information or other matter affecting any Loan Party,
Turnberry Residential, the Project or the transactions contemplated hereby that
taken as a whole is inconsistent in a material and adverse manner with the
information or other matter disclosed to them concerning such Persons and the
Project, taken as a whole.
3.3.22 Unincorporated Materials. In the case of each Advance from the Bm~k
Proceeds Account made concurrently with or after Exhaustion of the Second
Mortgage Proceeds Account, delivery to the Disbursement Agent and the
Construction Consultant of a written inventory substantially in the form of
Appendix 13 to the Advance Request (but in any event with such changes as are
reasonably acceptable to the Disbursement Agent) identifying all
Unincorporated Materials and stating the value thereof, together with evidence
reasonably satisfactory to the Construction Consultant and the Disbursement
Agent that the following conditions have been satisfied:
(a) all Unincorporated Materials for which fllll payment has
previously been made or is being made with the proceeds of the Advance
to be disbursed are, or will be upon full payment, owned by the Project
Entities, as evidenced by the bills of sale, certificates of title or other
evidence reasonably satisfactory to the Construction Consultant, and all
lien rights or claims of the supplier have been or will be released
simultaneously with such full payment and all amounts, if any, required to
be paid to the suppl!er thereof with respect to the installation of such
Unincorporated Materials (including any Retainage Amounts);
(b) the Project Entities believe that the Unincorporated Materials
consist of components that conform to the Plans and Specifications and
that will be ready for incorporation into the Project reasonably promptly
following delivery thereof:
(c) all Unincorporated Materials are properly inventoried, securely
stored, protected against theft and damage at the Site or at such other
location which has been specifically identified by its address to the
Construction Consultant and the Disbursement Agent (or if the Project
Entities cannot provide the address of the current storage location, the
Project Entities shall list the name and address of the applicable
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contracting party supplying or manufacturing such Unincorporated
Materials);
(d) with respect to any Unincorporated Materials as to which deposit
or other partial payments have been made or will be made out of the
requested Advance (but which have not been and will not be fully paid
after giving effect to the requested Advance), the Project Secured Parties
have, or will have upon payment with the proceeds of the requested
Advance, a perfected security interest in the Project Entities’ rights to the
Unincorporated Materials and the Contracts therefor, with the priority
therein contemplated by the Security Documents;

(e) with respect to (i) Unincorporated Materials not stored at the Site
from a single or Affiliated suppliers (of which the Project Entities are
aware that such suppliers is my Affiliate) with a contract price (or expected
aggregate amount to be paid in the case of "cost-plus" Contracts) in excess
of $5,000,000, and (ii) any Contracts for Unincorporated Materials with a
contract price (or expected aggregate amount to be paid in the case of
"cost plus" Contracts) in excess of $5,000,000 (excluding, in the case of
both clauses (i) and (ii) above, items located outside of the United States
or in transit from jurisdictions outside of the United States or vendors
located outside of the United States), the Project Entities shall have
executed and delivered to the Disbursement Agent such additional security
documents (including, without limitation, financing statements, security
agreements, collateral access agreements, consents of manufacturers,
vendors, warehousemen and bailees) reasonably requested by the
Disbursement Agent necessary to grant the Secured Parties such security
interest in the Project Entities’ rights to such Unincorporated Materials or
Contracts;
(f) are insured against casualty, loss and theft for an amount equal to
their replacement costs in accordance with Exhibit D;
(g) the value of Unincorporated Materials located at the Site but not
expected to be incorporated into the Project within the ensuing calendar
month at any time is not more than $25,000,000 (or any greater amount
approved on a case by case basis pursuant to clause (k) below);
(h) the amounts paid by the Project Entities in respect of
Unincorporated Materials not at the Site at any one time is not more than
$50,000,000 (or any greater amount approved on a case by case basis
pursuant to clause (k) below);
(i) the amount of contract deposits paid by the Project Entities in
respect of Unincorporated Materials at any one time is not more than
$50,000,000 (or any greater amount approved on a case by case basis
pursuant to clause (k) below);
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(j) the Construction Consultant shall have confirmed the accuracy of
the certification required in subparagraph (c), and in connection therewith
the Construction Consultant may, but shall not be required to, visit the site
of and inspect the Unincorporated Materials at the Prqject Entities’
expense; and
(k) The Disbursement Agent and the Construction Consultant, at the
request of the Borrowers, may from time to time mutually agree to
increase the thresholds set forth in Sections 3.3.22 (e), (g), (h) and (i).
3.3.23 Retail Advances. In the case of each Advance from the Bank Proceeds
Account made concurrently with or after Exhaustion of the Second Mortgage
Proceeds Account, the Retail Agent and the Retail Lenders shall, on the date
specified in the relevant Advance Request, make any Advances required of them
pursuant to that Advance Request.
3.3.24 Other Documents. In the case of each Advance from the Bank Proceeds
Account, the Bank Agent shall have received such other documents and
evidence as are customary for transactions of this type as the Bank Agent may
reasonably request in order to evidence the satisfaction of the other conditions
set forth above.
Notwithstanding the foregoing provisions of this Section 3.3, even if the conditions set
forth in this Section 3.3 have not been satisfied in respect of any particular Advance Date
then, unless a Stop Funding Notice stating that an Event of Default has occurred has been
delivered by the Controlling Person:
(i) on the next date upon which any Debt Service is due in
respect of the Second Mortgage Notes (but not on any subsequent
dates), the Trustee shall apply any remaining balances in the
Second Mortgage Proceeds Account to pay such Debt Service;
(ii) the Bank Agent shall apply the remaining balances
contained in the Bank Proceeds Account (or, shall cause the
making of Loans under the Bank Credit Facility) to the extent
required (x) to pay Debt Service on the Bank Credit Facility on the
next date upon which such Debt Service is due if such due date is
prior to the Initial Bank Advance Date and (y) in all other cases, on
the dates described below:
(A) first, to pay Debt Service associated with the Bank
Credit Facility during the one month period following such
Scheduled Advance Date (on each date upon which such
Debt Service is required to be paid); and
(B) thereafter, to the making of Advances to the Interest
Account on the Scheduled Advance Date in the amount
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required to pay the portion of the scheduled interest
associated with the Second Mortgage Notes requested on
that Scheduled Advance Date which will not be satisfied
pursuant to clause (i).
3,4 Concerning the Letters of Credit. The Borrowers may request the issuance of
Letters of Credit under the Bank Credit Facility at any time and from time to time following the
Closing Date (and the issuance date thereof need not be on an Advance Date and shall not
constitute an Advance for purposes hereof), provided that:
(a) Prior to the Initial Bank Advance Date, the aggregate effective
amount of such Letters of Credit, and any unreimbursed draws with
respect thereto, shall not exceed $50,000,000;
(b) The amount and terms of such Letters of Credit shall comply with
the provisions of the Bank Credit Agreement;
(c) As of the most recent Advance Date, all of the applicable
conditions precedent set forth in this Section 3 shall have been satisfied;
No Default or Event of Default shall have occurred and shall
(d)
remaincontinuing;
(e) The Construction Consultant shall have concurred that the issuance
of the requested Letter of Credit supports the paYment of Project Costs;
and
(f) The requested Letter of Credit shall comply with the procedural
matters set forth in Section ~ of the Bank Credit Agreement.
3.5
Lenders.

Conditions Precedent to Advances by the Retail Agent and the Retail
3.5.1 Shared Cost Advances. The obligation of the Retail Agent and the Retail
Lenders to make Advances under the Retail Facility for Shared Costs is subject
only to the prior satisfaction of the conditions precedent set forth in this Section
3.5.1:
(1) Advance Request. The Project Entities shall have requested the
payment of amounts payable from the Retail Facility for Shared Costs
pursuant to Article 2 (it being understood that the related Advance
Request may be amended in any fashion, and omit any attachment to the
extent approved by the Controlling Person).
(2) No Prohibited Scope Change. There shall not have been any
Scope Change to items constituting Shared Costs which is inconsistent
with Section 6.2, and the Resort Budget shall not have been amended in a

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manner with respect to Shared Costs which is materially inconsistent with
Section 6.4, except with the consent of the Retail Agent, provided that the
Retail Agent and the Retail Lender shall not be entitled to refilse to fund
pursuant to this Section 3.5.1(2) to the extent that the Project Entities shall
have, from a source of funds other than the Retail Facility (or the Project
Secured Parties on their behalf), paid for or shall concurrently pay or shall
have reserved for payment in the Requested Cost Reports any costs
associated with any such inconsistent Scope Change or change in respect
of Shared Costs.
(3) Advance b7 Bank Lenders. The Initial Bank Advance Date shall
have occurred (or shall concurrently occur) and the Bank Agent shall, on
the date specified in the relevant Advance Request, make any Advances
required of it pursuant to that Advance Request, (i) without having waived
any condition precedent to such Advances, or (ii) to the extent that the
Bank Agent waives any such condition, without having received any
additional benefit as consideration for such waiver for which the Retail
Agent and the Retail Lenders did not receive a pro rata share of the same
benefit (it being agreed that the continued progress of the Project shall not,
in and of itself, constitute such a benefit).
(4) Advance Within Limits. The aggregate principal amount of
Advances made to the Retail Affiliate under the Retail Facility for Shared
Costs shall not exceed the Retail Lenders Shared Cost Commitment.
(5) Documents Enforceable. The Retail Facility Agreement and the
Retail Security Documents shall continue to be enforceable in accordance
with their respective terms.
(6) No Prohibition. No order, .judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin or restrain the
Retail Lenders from making the Advances to be made by them on the
Advance Date.
(7) Retail Air Space Lease. The Retail Air Space Lease shall not have
been surrendered and shall remain in full force and effect, and the Retail
Air Space Lease shall not have been terminated or cancelled for any
reason or any circumstances whatsoever (except, in each such case, to the
extent converted to a valid fee interest in accordance with the terms
thereof).
Notwithstanding any other provision of this Agreement or the Operative
Documents to the contrary, (a) there shall be no other conditions to the
making of Advances for Shared Costs by the Retail Agent and the Retail
Lenders pursuant to the Retail Facility, and the Retail Agent and the Retail
Lenders shall make all requested Advances for Shared Costs pursuant to the
Retail Facility upon satisfaction of the conditions set forth in this Section
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3.5.1 and (b) the Disbursement Agent and the other parties hereto shall not
purport to waive the conditions set forth in this Section 3.5 without the prior
consent of the Retail Agent.
3.5.2 Other Retail Costs Advances. The obligation of the Retail Agent and the
Retail Lenders to make Advances under the Retail Facility for Other Retail Costs
is subject only to the prior satisfaction of the conditions precedent set forth in
this Section 3.5.2:
(1) Advance Request: Delivery to the Disbursement Agent and
Construction Consultant of an Advance Request requesting the payment of
amounts payable from the Retail Facility for Other Retail Costs, together
with all then required attachments, exhibits and certificates.
(2) Miscellaneous Conditions. The conditions set forth in Section 3.5.1
(other than the conditions set forth in clauses (1), (2) (3) and (4) thereof
shall be satisfied in respect of the requested Advance.
(3) Advance Within Limits. After giving effect to the requested
Advance, the aggregate principal amount of Advances made to Retail
Affiliate under the Retail Facility for Other Retail Costs shall not exceed
$62,000,000.
(4) No Defaults. No Default or Event of Default shall have occurred
and be continuing.
(5) Absence of Liens. Other than in comaection with any Advance or
portion thereof made for the payment of Leasing Commissions, the
Disbursement Agent shall have received duly executed acknowledgments
of payments and releases of mechanics’ and materialmen’s liens
substantially in the form of Exhibit I (with any modifications required by
Nevada Law or, in the case of an Advance or portion thereof made for the
payment of Tenant Allowances, in such form as is permitted under the
applicable retail lease) from the parties listed in clauses (i) and (ii) below
for all work, services and materials, including equipment and fixtures of
all kinds, done, performed or furnished with respect to Other Retail Costs
(other than Leasing Commissions) from the last day covered by the
immediately preceding Advance Request delivered under this Section
3.5.2 through the last day covered by the current Advance Request except
for such work, services and materials the payment for which is being
disputed in good faith in accordance with NRS Chapter 624 and not
otherwise prohibited by the terms of the Retail Facility Agreement. The
Persons required to provide such lien releases are each laborer, supplier,
contractor, subcontractor or material furnisher party to a fixed price or
guaranteed maximum price contract in privity with the Retail Affiliate or,
in the case of an Advance or portion thereof made for the payment of
Tenant Allowances, the applicable retail tenant, and each of such laborer’s,
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supplier’s, contractor’s, subcontractor’s or material filrnisher’s first tier
trade subcontractors and materialmen, in each case performing work with
a contract price (or expected aggregate amount to be paid in the case of
"cost-plus" contracts) in excess of $100,000.
Notwithstanding the foregoing, if the Retail Affiliate (or any of the
foregoing Persons) does not obtain any of the waivers and releases of liens
required un~ler the foregoing provisions of this clanse (5) (collectively,
"Retail Outstandin~ Releases"), then instead of delivering such Retail
Outstanding Releases and as a condition to any progress or other payment
from the proceeds of the requested Advance, the Retail Affiliate may
obtain and provide to the Disbursement Agent from the Title Insurer
bonds or endorsements to the title insurance policies insuring the lien free
status of the work; provided, however, that at no time shall the aggregate
of all Retail Outstanding Releases represent work with an aggregate value
in excess of $3,000,000. Notwithstanding anything to the contrary
contained herein, (i) in no event shall Retail Agent make any Advances for
amounts being contested by Retail Affiliate (unless such amounts are
being paid to the applicable laborer, supplier, contractor or material
furnisher with whom the Retail Affiliate is contesting the amounts owed)
and (ii) in the case of an Advance or portion thereof made for the payment
of Tenant Allowances, the lien waivers described in this clause (5) shall
only be required to satisfy this condition to the extent that the retail tenants
receiving such Tenant Allowances are required by the terms of the
applicable retail leases to provide such lien waivers to the Retail Affiliate.
(6) Title Policy Endorsements. The Disbursement Agent shall have
received a commitment from the Title Insurer, attached to the Advance
Request, evidencing the Title Insurer’s unconditional corrm~itment to issue
a CLTA form 122 endorsement to the Retail Lender’s Title Policy insuring
the continuing priority of the Lien of the Retail Security Documents (in
the amount of the then outstanding principal balance of the Loan (after
giving effect to the funding of the applicable Advance)) as security for the
requested Advance and confirming and/or insuring that there are no
intervening liens or encumbrances which may then or thereafter take
priority over the respective Liens of the Deeds of Trust other than
Permitted Encumbrances (as defined in the Retail Facility Agreement) and
such other intervening liens or encumbrances securing amounts the
payment of which is being disputed in good faith by the Retail Affiliate, so
long as the Disbursement Agent has received confirmation from the Retail
Agent that the Title Insurer has delivered to Retail Agent any endorsement
to the Retail Lender’s Title Policy required or desirable to assure against
loss to the Retail Lenders due to the priority of such lien or encumbrance.
(7) Construction Consultant Advance Certificate. With respect to any
Advance the proceeds of which will be applied by (or on behalf of) the
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Retail Affiliate for the payment of tenant improvement work (other than
tenant improvement work funded by means of Tenant Allowances), the
Construction Consultant shall have delivered a Construction Consultant
Advance Certificate approving the corresponding Advance Request.
(8) In Balance Requirement. The Retail Affiliate is in compliance
with (and the Retail Agent has reasonable evidence that, after giving effect
to the funding of the applicable Advance the Retail Agent shall remain in
compliance with) Section 5.1.34 of the Retail Facility Agreement.
(9)
Violation of Law. The making of the requested Advance shall not
violateany law.
(10) Retail Unincorporated Materials. With respect to any Advance the
proceeds of which will be applied by (or on behalf of) the Retail Affiliate
for the payment of tenant improvement work (other than tenant
improvement work performed or contracted for by tenants and funded by
means of Tenant Allowances), delivery of evidence reasonably
satisfactory to the Construction Consultant and the Disbursement Agent
that the following conditions have been satisfied:
(A) all Retail Unincorporated Materials for which full payment
has previously been made or is being made with the proceeds of
the Advance to be disbursed are, or will be upon full payment,
owned by the Retail Affiliate, as evidenced by the bills of sale,
certificates of title or other evidence reasonably satisfactory to the
Construction Consultant, and all lien rights or claims of the
supplier have been or will be released simultaneously with such
full payment and all amounts, if any, reqtfired to be paid to the
supplier thereof with respect to the installation of such Retail
Unincorporated Materials (including any Retainage Amounts);
(B) the Retail Affiliate believes that the Retail Unincorporated
Materials consist of components that conform to any Plans and
Specifications (as defined in the Retail Facility Agreement) and
that will be ready for incorporation into the retail component of the
Project reasonably promptly following delivery thereof;
(C) all Retail Unincorporated Materials are properly
inventoried, securely stored, protected against theft and damage at
the construction site at the Site or at such other location which has
been specifically identified by its address to the Construction
Consultant and the Disbursement Agent (or if the Retail Affiliate
cam~ot provide the address of the current storage location, the
Retail Affiliate shall li~t the name and address of the applicable
contracting party supplying or manufacturing such Retail
Unincorporated Materials);
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(D) with respect to any Retail Unincorporated Materials as to
which deposit or other partial payments have been made or will be
made out of the requested Advance (but which have not been and
will not be fully paid after giving effect to the requested Advance),
the Retail Agent on behalf of the Retail Lenders have, or will have
upon payment with the proceeds of the requested Advance, a
perfected security interest in the Retail Affiliate’s rights to the
Retail Unincorporated Materials and the Contracts therefor, with
the priority therein contemplated by the Retail Security
Documents.
(E) With respect to (i) Retail Unincorporated Materials not
stored at the construction site of the retail component of the Project
from a single or Affiliated suppliers (of which the Retail Affiliate
are aware that such suppliers is an Affiliate) with a contract price
(or expected aggregate amount to be paid in the case of "cost-plus"
Contracts) in excess of $2,000,000, and (ii) any Contracts for
Retail Unincorporated Materials with a contract price (or expected
aggregate amount to be paid in the case of "cost plus" Contracts) in
excess of $2,000,000 (excluding items located outside of the
United States or in transit from jurisdictions outside of the United
States), the Retail Affiliate shall have executed and delivered to the
Disbursement Agent such additional security documents
(including, without limitation, financing statements, security
agreements, collateral access agreements, consents of
manufacturers, vendors, warehousemen and bailees) reasonably
requested by the Disbursement Agent as are necessary to grant the
Retail Agent on behalf of the Retail Lenders such security interest
in the Retail Affiliate’s rights to such Retail Unincorporated
Materials or Contracts;
(F) are insured against casualty, loss and theft for an amount
equal to their replacement costs in accordance with Exhibit D;
(G) the value of Retail Unincorporated Materials located at the
construction site of the retail component within the Project but not
expected to be incorporated into the retail component within the
ensuing calendar month at any time is not more than $4,000,000
(or any greater amount approved on a case by case basis pursuant
to clause (k) below):

I.H) the amounts paid by the Retail Affiliate in respect of Retail
Unincorporated Materials not at the Site at any one time is not
more than $4.000.000 ~or any greater amount approved on a case
by case basis pursuant to clause (k) below):
(I)
W02-W EST:LAR\400308993 14

the amount of contract deposits paid by the Retail Affiliate
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in respect of Retail Unincorporated Materials at any one time is not
more than $4,000,000 (or any greater amount approved on a case
by case basis pursuant to clause (k) below);
(J) the Construction Consultant shall have confirmed the
accuracy of the certification required in subparagraph (c), and in
connection therewith the Construction Consultant may, but shall
not be required to, visit the site of and inspect the Retail
Unincorporated Materials at the Retail Affiliate’s expense; and
(K) The Retail Agent, Disbursement Agent and the
Construction Consultant, at the request of the Retail Affiliate, may
from time to tirade collectively agree to increase the thresholds set
forth in Sections 3.5.2 (10)(e), (g), (h) and (i).
(11) Costs and Expenses. With respect to any Advance for tenant
improvements, Disbursement Agent and/or Retail Agent may require an
inspection of the Site to inspect the progress of the work for which the
Advance Request relates and all materials being used in connection
therewith and to examine all plans and shop drawings relating thereto
which are or may be kept at the Site and are in the possession of the Retail
Affiliate (or for which the Retail Affiliate has the right to make available
to the Retail Agent). Retail Affiliate shall pay all reasonable out.-of-pocket
expenses reasonably incurred by Retail Agent in processing the Advance
Request including, without limitation, any inspection costs (whether
performed by Retail Agent or an independent inspector selected by Retail
Agent) and reasonable legal fees and expenses.
(12) Evidence of Licenses and Permits. If reasonably required by
Retail Agent, Retail Agent shall have received evidence reasonably
satisfactory to Retail Agent that the Retail Affiliate possesses al! rights,
liceuses, permits and anthorizations, governmental or otherwise, necessary
to undertake the Advance.
(13) Satisfactory Leasing with respect to Leasing Commissions. With
respect to any Advance relating to leasing commissions, (a) such leasing
commission shall be (i) market, reasonable and customary for properties
similar to the retail component of the Project and the portion of the retail
component leased for which a commission is due or (ii) being paid
pursuant to the Leasing Agreement (as defined in the Retail Facility
Agreement) previously entered into in accordance with the Retail Facility
Agreement, (b) the amount of such leasing commission is (i) determined
pursuant to an arms length transactions between Retail Affiliate and each
such leasing agent to which a commission is due or (ii) being paid
pursuant to the Leasing Agreement (as defined in the Retail Facility
Agreement) previously entered into in accordance with the Retail Facility
Agreement; (c) the lease for which such leasing commission is due has
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been entered into in accordance with the terms of the Retail Facility
Agreement or, if Retail Agent’s approval is not required, conforms with all
requirements set forth in Section 5.1.17 of the Retail Facility Agreement
and (d) Retail Agent shall have received a certificate from the leasing
agent that, other than as set forth in such certificate (and provided such
sums set forth on such certificate are not delinquent), no further sums are
due to it in connection with the applicable lease.
(14) Satisfactory Leasing with respect to Tenant Improvement
Allowances. With respect to any Advance relating to tenant improvement
allowances, (a) such tenant improvement allowance shall be market,
reasonable and customary for properties similar to the retail component of
the Project and the portion of the Retail Air Space Parcels leased for
which such tenant improvement allowance is due, (b) the amount of such
tenant improvement allowance is determined pnrsuant to arms length
transactions between Retail Affiliate the applicable tenant, (c) the lease for
the tenant receiving such tenant improvement allowance has been
approved by Retail Agent in accordance with the terms of the Retail Credit
Agreement or, if Retail Agent’s approval is not required, conforms with all
requirements set forth in Section 5.1.17 of the Retail Credit Agreement,
(d) to the extent such Advance request is for payment of a Tenant
Allowance to a tenant Retail Agent shall have received evidence
reasonably satisfactory to Retail Agent (including, but not lixnited to,
copies of any items that such tenant is required to deliver pursuant to the
terms of its lease) that such tenant allowance is then due from Retail
Affiliate to such tenant pursuant to the terms of such tenant’s lease and (e)
if requested by Retail Agent for any completed tenant improvements,
Retail Agent shall have received a written certificate from the tenant(s) for
which such tenant improvements have been performed stating that (i) such
tenant improvements have been completed in a manner satisfactory and
acceptable to such tenant(s) and (ii) Retail Affiliate is not in default under
the applicable tenant’s lease.
Notwithstanding anything to the contrary contained herein, Retail Lenders shall only be
obligated to make Advances under this Agreement for Other Retail Costs set forth in the Retail
Budget, as amended from time to time and for Shared Costs (and only then upon satisfaction of
the terms and conditions contained in this Agreement).
3.6

No Waiver or Estoppel.

3.6.1 The occurrence of the Closing Date and making of any Advance
hereunder shall not preclude any Funding Agent from later asserting that (and
enforcing any remedies it may have if) any representation, warranty or
certification made or deemed made by the Project Entities in connection with
such Advance was not true and accurate when made in all material respects (or,
in respect of Advances solely from the Second Mortgage Proceeds Account,
such representation, warranty or certification was not correct in a manner which
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results in a Material Adverse Effect). No course of dealing or waiver by any
Funding Agent or Secured Party in connection with any condition precedent to
any Advance under this Agreement or any Facility Agreement shall impair any
right, power or remedy of any such Funding Agent or Secured Party with respect
to any other condition precedent, or be construed to be a waiver thereof; nor
shall theaction of any Funding Agent or Secured Party in respect of any
Advance affect or impair any right, power or remedy of any Funding Agent or
Secured Party in respect of any other Advance.
3.6.2 Unless otherwise notified to the Project Entities by a Funding Agent or
Secured Party and without prejudice to the generality of Section 3.6.1, the right
of any Funding Agent or Secured Party to require compliance with any condition
under this Agreement or its respective Facility Agreement which may be waived
by such Funding Agent or Secured Party in respect of any Advance is expressly
preserved for the purpose of any subsequent Advance.

3.7

Waiver of Conditions.
3.7.1 At such times as the Trustee is the Controlling Person, the Trustee shall
be entitled to waive (in accordance with the terms of the Indenture) the
conditions precedent under Section 3.3 of this Agreement without consent by
the other Funding Agents.
3.7.2 At such times as the Bank Agent is the Controlling Person, the Bank
Agent shall be entitled to waive the conditions precedent tinder Section 3.3
without the consent of the other Funding Agents.
3.7.3 The Retail Agent shall at all times be entitled to waive the conditions
precedent tinder Section 3.5 without the consent of the other Funding Agents.

3.8 Previously Paid Project Costs. If, at any time and from time to time, the Project
Entities shall be unable to satisfy the conditions precedent to any Advance set forth in Sections
3.3, 3.4 or 3.5 (other than Section 3.3.8), the Project Entities shall be entitled to allow Affiliates
(other than any Project Entity) to pay Project Costs then due and owing (which payment may be
additional equity contributions by such Affiliates to the Project Entities) and to later reimburse
such Affiliates for the payments of such Project Costs (which reimbursement may take the form
of distributions to such Affiliates) from Resort Sources or Retail Sources, as applicable, at the
time (if any) that the Project Entities are able to satisfy the conditions precedent to Advances set
forth in Section 3.3, 3.4 or 3.5, as applicable; provided, however, that with respect to the Retail
Affiliate, any such costs so advanced by an Affiliate thereof (i) may not constitute h~debtedness
of the Retail Affiliate towards such Affiliate unless the same is subordinated to the obligations
under the Retail Facility pursuant to documentation reasonably satisfactory to the Retail Agent
(which shall permit reimbursement of such amounts subject to clause (ii) below but shall also
include a provision to the effect that such Affiliate agrees to forbear from the exercise of any
remedies against the Retail Affiliate for failure to repay the same until payment in full of the
Retail Facility) and (ii) may not be reimbursed to such Affiliate at any time when an Event of
Default has occurred and is continuing or if the Retail Affiliate would be rendered insolvent or
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will be unable to pay its debts as the same become due and payable.
3.9 Loss Proceeds. If, at any time:
(a) an Event of Loss occurs that causes the In Balance Test to no
longer be satisfied; and
(b) as a result thereof, and in order to cause the In Balance Test to be
satisfied pending receipt of any Loss Proceeds in connection with such
Event of Loss and the deposit of such Loss Proceeds into the Loss
Proceeds Account, any Affiliate of the Project Entities (other than any
Project Entity) deposits or causes to be deposited additional eqnity
contributions into the Equity Funding Account;
then, upon deposit of Loss Proceeds in respect of such Event of Loss into the applicable Loss
Proceeds Account and so long as no Default or Event of Default has occurred and is continuing
or would occur after giving effect thereto, the Project Entities shall be entitled to submit a
request for an Advance (in form and substance, and with such attachments, certificates and
exhibits, as reasonably requested by the Disbursement Agent) requesting an Advance to be used
to make a reimbursement to such Affiliate (which reimbursement may take the form of a
distribution to such Affiliate) in an amount equal to the lesser of (i) the amount of the Loss
Proceeds received and deposited into such Loss Proceeds Account and (ii) the amonnt of such
additional cash equity contribution deposited into the Equity Funding Account. Such Advance
shall be made for such purpose so long as the conditions precedent set forth in Section 3.3 are
satisfied.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Project Entities make all of the following representations and warranties to and in favor of
(a) the Funding Agents, the Lenders and the Disbursement Agent as of the Closing Date, (b) the
Disbursement Agent on each Advance Date, and (c) each Project Secured Parties, as of the date
of the making of each Advance by that Project Secured Party, in each case except as such
representations relate to an earlier date (in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date):
4.1

Organization.
4.1.1 As of the Closing Date, each of the Loan Parties is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
Organization, has all requisite corporate or limited liability company power and
authority to carry on its business as now conducted and (i) to own or hold under
lease and operate the properties it purports to own or hold under lease, (ii)to
carry on its business as now being conducted and as now proposed to be
conducted in respect of the Project, (iii) to incur Indebtedness and create a Lien
on its property, and (iv)to execute, deliver and perform under each of the

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Operative Documents to which each is a party.
4.1.2 As of the date of each Advance, each of the Project Entities and each
Completion Guarantor is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite corporate
or limited liability company power and authority to carry on its business as then
conducted and (i)to own or hold under lease and operate the properties it
purports to own or hold under lease, (ii) to carry on its business as then being
conducted and as then proposed to be conducted in respect of the Project, (iii) to
incur Indebtedness and create a Lien on its property, and (iv) to execute, deliver
and perform tinder each of the Operative Documents to which each is a party.
4.2 Authorization; No Conflict. Each of the Loan Parties has taken all necessary
corporate or limited liability company action, as the case may be, to authorize the execution,
delivery and performance of the Financing Agreements and the other Operative Documents to
which each is a party, and neither the execution, delivery or performance thereof nor the
consummation of the transactions contemplated thereby by each such Loan Party,
(a) contravenes the formation documents or any other Legal Requirement then applicable to or
binding on each such Loan Party in any material respect, (b) contravenes or results in any breach
or constitutes any default under, or results in or requires the creation of any Lien upon any of
such Loan Party’s properties or under any security or agreement or instrument to which such
Loan Party is a party or by which it or any of its respective properties may be bound, except for
Permitted Liens or (c) does or will require the consent or approval of any Person other than as set
forth on Exhibits G and H.
4.3 Legality, Validity and Enforceability. Each of the Operative Documents to
which the Loan Parties are a party is a legal, valid and binding obligation of each such Loan
Party, as the case may be, enforceable against the Loan Parties, as the case may be, in
accordance with its terms, subject only to bankruptcy and similar laws and principles of equity.
None of the Operative Documents to which the Loan Parties are a party have been amended or
modified except in accordance with this Agreement.
4.4 Compliance with Law, Permits and Operative Documents. As of the Closing
Date, each Loan Party is in compliance with all Legal Requirements and Permits and Operative
Documents to which it is a party in all material respects, and no notices of violation of any
Permit or Operative Document relating to the Prqiect have been issued, entered or received by
any Loan Party. As of the date of each Advance, each of the Project Entities is in compliance
with all Legal Requirements and Permits and Operative Documents to which it is a party, and no
notices of violation of any Permit or Operative Document relating to the Project have been
issued, entered or received by any of the Prqiect Entities, in each case, except for noncompliance or violations that, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
4.5 Permits. There are no ~naterial Permits that are required or will become required
tinder existing Legal Requirements for the ownership, development, construction, financing or
operation of the Project, other than the Permits described in Exhibit G. Exhibit G accurately
states the stage in construction by which each such Permit is required to be obtained. Each
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Permit described in Exhibit G as required to be obtained by the date that this representation is
deemed to be made is in full force and effect and is not at such time subject to any appeals or
fi~rther proceedings or to any unsatisfied condition (that is required to be satisfied by the date that
this representation is deemed to be made) that could reasonably be expected to materially and
adversely modify any such Permit, to revoke any such Permit, to restrain or prevent the
constnaction or operation of the Project or otherwise impose adverse conditions on the Project or
the financing contemplated under the Financing Agreements. Each Permit described in Exhibit
G as not required to have been obtained by the date that this representation is deemed to be made
(other than the gaming license) is of a type that is routinely granted on application and
compliance with the conditions for issuance. The Project Entities have no reason to believe that
any Permit so indicated will not be obtained before it becomes necessary for the ownership,
development, construction, financing or operation of the Project or that obtaining such Permit
will result in undue expense or delay. Neither the Project Entities nor any of their Affiliates are
in violation of any condition in any Permit the effect of which could reasonably be expected to
have a Material Adverse Effect.
4.6 Litigation. There are no pending or, to the Project Entities’ knowledge,
threatened actions, suits, proceedings or investigations of any kind, including actions or
proceedings of or before any Governmental Authority, to which any Project Entity or Major
Project Participant (other than any Project Entity) is a party or is subject, or by which any of
them or any of their properties or the Project are bound that could reasonably be expected to
have a Material Adverse Effect nor, are the Project Entities aware of any reasonable basis for any
such action, suit, proceeding or investigation.
4.7

Financial Statements.
4.7.1 The financial statements of Parent and its consolidated Subsidiaries, and
Las Vegas Holdings and its consolidated Subsidiaries, delivered to the Lenders
pursuant to Section 3.1 on the Closing Date were prepared in conformity with
GAAP, consistently applied and fairly present in all material respects the
financial position (on a consolidated basis) of the entities described in such
financial statements as of the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to the absence of footnote disclosures and
changes resulting from audit and normal year-end adjustments. As of the
Closing Date, Parent and its Subsidiaries do not have any material "Guarantee
Obligations" (as defined in the Bank Credit Agreement), contingent liabilities
and liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including, without limitation, any interest rate or foreign currency
swap or exchange transaction or other obligation in respect of derivatives, that
are not reflected in the most recent financial statements referred to in this
paragraph and that are required to be reflected in such financial statements (other
than as reflected on Exhibit O).
4.7.2 As of the Closing Date, since December 31, 2006, there has been no
development or event that has or could reasonably be expected to have a

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Material Adverse Effect. As of each Advance Date following the Closing Date,
there has been no development or event that has or could reasonably be expected
to have a Material Adverse Effect since the Closing Date.
4.7.3 With respect to the financial statements required pursuant to Section 6.1
of the Bank Credit Agreement, the audited balance sheets as of the required date
of delivery of (i) Parent and its consolidated Subsidiaries, and (ii) Las Vegas
Holdings and its consolidated Subsidiaries, and the related consolidated and
consolidating statements of income hnd of cash flows for the periods then ended,
present fairly in all material respects the consolidated and consolidating financial
condition of (i) Parent and its consolidated Subsidiaries and (ii) Las Vegas
Holdings and its consolidated Subsidiaries, respectively, as at such date, and the
respective consolidated and consolidating results of its operations and its
consolidated and consolidating cash flows for the period then ended. All such
financial statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein).
4.7.4 The pro forma consolidated balance sheet of Las Vegas Holdings
delivered pursuant to Section 3.1.14 fairly presents the consolidated pro forma
financial position of Las Vegas Holdings as of the Closing Date in accordance
with GAAP, after giving effect to all transactions contemplated to occur on the
Closing Date, except for the absence of footnotes and normal year,end
adjustments, and there are no material contingent liabilities of Las Vegas
Holdings and its Subsidiaries not reflected thereon.
4.8 Security Interests.

W02-WEST:LAR\400308993 14

(a) The security interests granted to the Secured Parties pursuant to the
Security Documents (i) constitute as to personal property included in the
Project Security and, with respect to subsequently acquired personal
property included in the Project Security, will constitute, a perfected
security interest under the UCC and!or other applicable law and (ii) have,
and, with respect to such subsequently acquired property, will have been
perfected under the UCC and/or other applicable law as aforesaid, and
(A) as among the Secured Parties, with the priority contemplated by the
Project Lenders Intercreditor Agreement and the Retail Intercreditor
Agreement but as to each Secured Party only to the extent that it is a party
to the relevant Intercreditor Agreement and (B)as between the Secured
Parties and any third Persons, grant the Secured Parties superior priority
and rights over the rights of any such third Persons now existing or
hereafter arising whether by way of mortgage, lien, security interests,
encumbrance, assignment or otherwise, subject to the rights and priorities
of Permitted Liens. All such action as is necessary has been taken to
establish and perfect the Secured Parties’ rights in and to the Project
Security, including any recording, filing, registration, giving of notice or
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other similar action. As of the Closing Date, no filing, recordation, refiling or re-recording is necessary to perfect and maintain the perfection of
the interest, title or Liens of the Security Documents except those which
have been made, except for any filings or recordings for Liens as to which
the Title Insurer has issned or committed to issue its Title Policies. The
Project Entities have properly delivered or caused to be delivered to the
Disbursement Agent all Project Security that requires perfection of the
Lien and security interest described above by possession.
(b) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority is required for either (i)the
pledge or grant by the Project Entities of the Liens porported to be created
in favor of the Secured Parties pursuant to any of the Security Documents,
or (ii)the exercise by the Disbursement Agent, or the other Secured
Parties of any rights or remedies in respect of any Project Security
(whether specifically granted or created pursuant to any of the Security
Documents or created or provided for by applicable law), except for
filings or recordings contemplated by Section 4.8(a), provided that it is
acknowledged that pursuant to Nevada Gaming Laws, once the companies
are licensed by or registered with the Nevada Gaming Authorities, the
approval of the pledge of the Equity Interests in the Companies by the
Nevada Gaming Authorities will be required in order for such pledge of
the Equity, Interests in the Companies to remain effective and that
foreclosure upon the Eqnity Interests and certain other assets of the
Companies may only be accomplished in accordance with the
requirements of Nevada Gaming Laws.
(c) Except as may have been filed in favor of the Funding Agents or
with respect to UCC financing statements for which termination
statements will be filed in co~mection with the Indebtedness to be
refinanced on the Closing Date, no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or any part
of the Project Security is on file in any filing or recording office other than
in connection with Permitted Liens.
(d) All information supplied to the Disbursement Agent and the
Funding Agents by or on behalf of the Loan Parties or any of their
Affiliates with respect to any of the Project Security is accurate and
complete in all material respects.
4.9

Defaults.
4.9.1 There is no default or event of default under any of the Financing
Agreements; and
4.9.2 There is no Default or Event of Default hereunder.

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4.10 Taxes. The Project Entities have filed, or caused to be filed, all tax and
informational returns that are required to have been filed by them in any jurisdiction, and have
paid all taxes shown to be due and payable on such returns and all other taxes and assessments
payable by them, to the extent the same have become due and payable (other than (a) those taxes
that it is contesting in good faith and by appropriate proceedings and (b) those taxes not yet due,
provided that with respect to each of clause (a) and (b)the Project Entities have established
reserves therefor by allocating, in the relevant Remaining Cost Report, amounts that are adequate
for the payment thereof and are reqtfired by GAAP).
4.11 Representations and Warranties.
4.11.1 All representations and warranties of each Project Entity contained in the
Material Contracts are true and correct as of each date when made or deemed
made, except to the extent that any failure to be true and correct could not
reasonably be expected to have a Material Adverse Effect.
4.11.2 To the best knowledge of the Pro.ject Entities, all representations and
warranties of each party to each Material Contract (other than the Project
Entities), are true and correct as of each date when made or deemed made,
except to the extent that any failure to be true and correct could not reasonably
be expected to have a Material Adverse Effect.
4.12

Environmental Laws.
(a) Except as set forth in the Phase I Report, the Project Entities are,
and within the period of all applicable statutes of limitation have been, in
material compliance with all applicable Environmental Laws.

(b) Except as set forth in the Phase I Report, to the knowledge of the
Project Entities, Hazardous Substances are not present at, on, under, in, or
about the Site, or at any other location (including, without limitation, any
location to which Hazardous Substances have been sent for re-use or
recycling or for treatment, storage or disposal) which could reasonably be
expected to (i) give rise to liability of any of the Project Entities under any
applicable Environmental Law or otherwise result in costs to any of the
Project Entities that could reasonably be expected to have a Material
Adverse Effect, or (ii) materially interfere with any of the Project Entities’
continued operations, or (iii)materially impair the fair saleable value of
the Site.
(c) There is no judicial, administrative or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which any of the Project Entities are, or to the
knowledge of the Project Entities will be, named as a party that is pending
or, to the knowledge of the Pro.ject Entities, threatened (in the case of each
Advance Date after the Closing Date, except as could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
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Effect).
(d) No Project Entity has received any written request for information,
or been notified that it is a potentially responsible party, under or relating
to the federal Comprehensive Environmental Response, Compensation,
and Liability Act or any similar Environmental Law, in each case with
respect to the Site.
(e) No Project Entity has entered into or agreed to any consent, decree,
order, or settlement or other agreement, or is subject to any jndgment,
decree, or order or other agreement, in any judicial, administrative,
arbitral or other forum for dispute resolution, relating to compliance with
or liability under any Environmental Law or Environmental Claim (in the
case of each Advance Date after the Closing Date, in each case with
respect to the Site and except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect).
(f) No Project Entity has assumed or retained, by contract or operation
of law, any liabilities of any kind, fixed or contingent, known or unknown,
under any Environmental Law or with respect to any Hazardous
Substances, in each case with respect to the Site (in the case of each
Advance Date after the Closing Date, except as could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect).
(g) Except as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, or as set forth in the Phase I
Report, (i) Hazardous Materials Activities are not presently occurring,
and, to the Project Entities’ knowledge, have not previously occurred, at,
on, under, in or about the Site, and (ii) none of the Project Entities have
ever engaged in any Hazardous Materials Activities at any location.
4.13 Utilities. All utility services necessary for the construction and the operation of
the Project for its intended purposes are or will be available at the Site as and when required on
commercially reasonable terms.
4.14 In Balance Test. As of each Advance Date which occurs on or following the
initial Advance from the Second Mortgage Proceeds Account, the In Balance Test is satisfied.
4.15

Sufficiency of Interests and Contracts.

4.15.1 The Borrowers own the Retained Site and the Site Easements in fee
simple subject only to the matters described in the Title Policies. Other than
those services to be performed and materials to be supplied that can be
reasonably expected to be commercially available when and as required, the
Borrowers own or hold under lease all of the property interests and have entered
into all documents and agreements necessary to develop, construct, complete,
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own and operate the Project (including access to municipal or other sufficient
water rights) in accordance with all Legal Requirements and the Project
Schedule and as contemplated in the Operative Documents.
4.15.2 Each of the Funding Agents have received a true, complete and correct
copy of each of the Material Contracts in effect or required to be in effect as of
the date this representation is made or deemed made. A list of all Contracts
having a total contract amount or value in excess of $5,000,000 (excluding
Contracts entered into in the ordinary course of business for services or materials
that are easily obtained from replacement contractors or vendors on similar
terms) is attached hereto as Exhibit J. Each Material Contract is in full force and
effect, enforceable against the Persons party thereto in accordance with its terms,
subject only to bankruptcy and similar laws and principles of equity.
4.15.3 All conditions precedent to the obligations of the respective parties (other
than the Project Entities) under the Material Contracts have been satisfied or will
be satisfied on or prior to the required stage in the development, construction or
operation of the Project (except to the extent immaterial to the prosecution of the
completion of the Project), and the Project Entities have no reason to believe that
any such unsatisfied condition precedent which could reasonably be expected to
have a Material Adverse Effect cannot be satisfied on or prior to the appropriate
stage in the development, construction or operation of the Project.
4.16

Intellectual Property.
(a) The Project Entities own or have the right to use all patents,
trademarks, permits, service marks, trade names, copyrights, franchises,
formulas, licenses and other rights with respect thereto, that are necessary
for the operation of their business as contemplated in the Operative
Documents, except where failure to obtain such rights could not
reasonably be expected to have a Material Adverse Effect. Nothing has
come to the attention of the Project Entities to the effect that any product,
process, method, substance, part or other material presently contemplated
to be sold by or employed by the Project Entities in connection with their
business will infringe any license or other right owned by any other
Person.
(b) Pursuant to the Intellectual Property License Agreements, the
Project Entities have valid licenses to use the "Fontainebleau" federal
trademark and associated trademarks and intellectual property reasonably
necessary for and in connection with the operation of the Project. The
Intellectual Property License Agreements are the legal, valid and binding
obligation of the licensor thereunder, enforceable in accordance with its
terms.

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4.17

Budgets and Remaining Cost Reports.
4.17.1 Each of the Budgets delivered on the Closing Date:
(a) are, to the Project Entities knowledge, as of the date of their
delivery, based on reasonable assumptions as to all legal and factual
matters material to the estimates set forth therein;
(b) are, as of the date of their delivery, consistent with the provisions
of the Operative Documents in all material respects;
(c) set forth (for each Line Item Category, and in total), as of the date
of their delivery, the amount of all reasonably anticipated Project Costs
required to achieve Final Completion; and
(d) fairly represent, as of the date of their delivery, the Project Entities
expectations as to the matters covered thereby.
4.17.2 Each Remaining Cost Report delivered hereunder is in the form attached
as Appendix 8 to Exhibit C.-1, and sets forth:
(a)

In column D headed "Resort Budget":
(1) for the "Debt Service Through Scheduled Opening Date"
line item, the total amount of cash Debt Service anticipated to be
accrued in respect of the Indebtedness of the Companies through
the Scheduled Opening Date (as in effect from time to time);
(2) for each Line Item Category, an amount no less than the
total anticipated Project Costs from the commencement through
the completion of the work contemplated by such Line Item
Category, as determined by the Project Entities.
In each other line item, the associated anticipated expenses
(3)
thoughFinal Completion as determined by the Project Entities.
The Disbursement Agent shall be entitled to rely on certifications
to such effect from the Project Entities or the Construction
Consultant in approving any determination made by the Project
Entities;

(b) In column N, headed "Balance to Complete" an aggregate amount
equal to the remaining anticipated Project Costs through the Final
Completion Date (which amount is accurate as to each item set forth in
such column);
(c) In the section headed "In Balance Test Adjustments" for In
Balance calculations:
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(1)

the Unallocated Contingency Balance; and

(2) the Required Minimum Cash Support, Required Minimum
Liquidity Account, and the Required Minimum Excess Revolver
Support Amount and any additional Cash Support delivered for the
Completion Guarantees;
with respect to Project Costs previously incurred, is tree and
(d)
correct in all material respects; and
(e) sets forth, as of the date of their delivery, and based on reasonable
assumptions as to all legal and factual matters material to the estimates set
forth therein, the amount of all reasonably anticipated Project Costs
required to achieve Final Completion.
4.18 Fees and Enforcement. Other than amounts that have been paid in full or will
have been paid in fidl by the dates when due, no fees or taxes, including without limitation
stamp, transaction, registration or similar taxes, are required to be paid by the Project Entities for
the legality, validity, or enforceability of this Agreement or any of the other Operative
Documents.
4.19 ERISA. Either (a)there are no ERISA Plans or Multiemployer Plans for the
Project Entities or any member of the Controlled Group or (b) to the extent that the following
could not reasonably be expected to have a Material Adverse Effect, (i) the Project Entities and
each member of the Controlled Group have fiflfilled in all material respects their obligations (if
any) under the minimum fianding standards of ERISA and the Code for each ERISA Plan and for
contributions to any Multiemployer Plan; (ii) each ERISA Plan is in compliance in all material
respects with the currently applicable provisions of ERISA and the Code; (iii) neither the Project
Entities nor any member of the Controlled Group have incurred any liability to the PBGC or an
ERISA Plan under Title IV of ERISA (other than liability or contributions for premiums due in
the ordinary course).
4.20 Subsidiaries. As of the Closing Date, each of the Subsidiaries of Parent are
shown on Exhibit K and Parent does not have any Subsidiaries or owns the whole or any part of
the issued share capital or other direct ownership interest of any company or corporation or other
Person except as shown on Exhibit K.
4.21 Labor Disputes and Acts of God. Neither the business nor the properties of any
Project Entity, nor, to the knowledge of the Project Entities, any Ma.jor Project Participant are
affected by any Force Majeure Event, that could reasonably be expected to have a Material
Adverse Effect.

4.22

Liens.
4.22.1 As of the Closing Date, except for Permitted Liens, the Project Entities
have not secured or agreed to secure may Indebtedness by any Lien upon any of
their present or future revenues or assets or Equity Interests and the Project

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Entities do not have outstanding any Lien or obligation to create Liens on or
with respect to any of their properties or revenues, other than Permitted Liens
and as provided in the Security Documents.
4.22.2 As of each Advance Date, except for Permitted Liens, the Project Entities
have not secured or agreed to secure any Indebtedness by any Lien upon any of
their present or future revenues or assets or Equity Interests and the Project
Entities do not have outstanding any Lien or obligation to create Liens on or
with respect to any of their properties or revenues, other than Permitted Liens
and as provided in the Security Documents.
4.23 Title. Each of the Project Entities owns and has good, legal and beneficial title to
the property which each company purports to grant Liens pursuant to the Security Documents
free and clear of all Liens, except Permitted Liens.

4.24 Investment Company Act. Neither the Project Entities nor any of their
respective Affiliates are an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940.
4.25 Project Schedule. To the Project Entities’ knowledge, the Project Schedule
accurately specifies in summary form the work that the Project Entities propose to complete in
each calendar quarter from the Closing Date through the Final Completion of the Project, all of
which is expected to be achieved.
4.26 Legal Parcel. The Site has been properly subdivided or is entitled to exception
therefrom, and constitutes a separate legal lot or parcel. The lease of the Retail Air Space
Parcels does not constitute a violation of the Nevada subdivision map act or any similar Nevada
law governing subdivision of real property.
4.27 Location of Accounts and Records. The Project Entities’ books of accounts and
records are located at the address for notices set forth for the Pro.ject Entities in Section 11.1.
The federal employer identification numbers shown on Exhibit K for Parent and each of its
Subsidiaries are accurate.
4.28 Margin Regulations. None of the Project Entities are engaged principally, or as
one of its principal activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (as defined in Regulations T, U or X of the Federal Reserve Board), and
no part of the proceeds of the Advances or the revenues from the Project will be used by the
Project Entities to purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock or otherwise in violation of Regulations
T, U orX.
4.29 Governmental Regulation. No Project Entity is subject to regulation under any
federal or state statute or regulation which may limit or condition its ability to incur Indebtedness
other than (following the granting of Nevada gaming licenses to the Project Entities), as required
by Nevada Gaming Law.

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4.30 Solvency. As of the Closing Date, the Companies are, and after giving effect to
the incurrence of all Indebtedness and obligations being incurred in connection with the
Operative Documents will be and will continue to be, Solvent on a consolidated basis. As of
each Advance Date, the Companies and their respective Subsidiaries are Solvent on a
consolidated basis.
4.31 Plans and Specifications. The Plans and Specifications (a)are, to the Project
Entities’ knowledge, based on reasonable assumptions as to all legal and factual matters material
thereto, (b) are, and except to the extent permitted under Sections 6.1 and 6.2 will be from time
to time, consistent with the provisions of the Operative Documents in all material respects,
(c) have been prepared in good faith with due care, and (d) fairly represent the Project Entities’
expectation as to the matters covered thereby. The Final Plans and Specifications (i) have been
prepared in good faith with due care, and (ii)are accurate in all material respects and fairly
represent the Project Entities’ expectation as to the matters covered thereby.
The parties hereto ackmowledge and agree that all knowledge of Parent and its Subsidiaries shall
be imputed to the Project Entities in the making of the representations set forth herein, both as of
the Closing Date and as of each Advance Date. All of these representations and warranties shall
survive the Closing Date and the making of the Advances until, with respect to each Funding
Agent and the Lenders, the Obligations under such Funding Agent’s and Lenders’ respective
Facilities have been repaid in full in immediately available fixnds and their respective Facility
Agreements and the other respective Financing Agreements and the commitmenl~s thereunder
have terminated.

ARTICLE 5
AFFIRMATIVE COVENANTS
The Pro.ject Entities jointly and severally covenant and agree for the benefit of the Funding
Agents, the Lenders and the Disbursement Agent that until this Agreement is terminated
pursuant to Section 11.18, they shall:
5.1

Use of Proceeds.
5.1.1 Deposits. Except as permitted by Section 6.8, deposit or cause to be
deposited all funds received by or on behalf of the Project Entities prior to the
Opening Date into the applicable Account specified in Article 2 of this
Agreement, provided that:
(a) the Project Entities shall also deposit or canse to be deposited into
the applicable Account all Loss Proceeds received following the Opening
Date but prior to the Final Completion Date;
(b) the Project Entities may establish and maintain other accounts for
the purposes described in Section 6.8; and
(c)

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the income and receipts of the Retail Affiliate shall not be subject

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to this Section 5.1.1.
5.1.2 Project Costs. Apply Advances made hereunder only to (i) pay Project
Costs in accordance with the terms of this Agreement and the Financing
Agreements, (ii) to repay Loans under the Bank Revolving Facility made to
reimburse draws on any Letters of Credit under the Bank Credit Facility or (iii)
to reimburse Affiliates to the extent permitted by Sections 3.8 and 3.9. The
Project Entities shall use the proceeds of Advances made by the Retail Lenders
under Section 3.5.1 solely to pay for Shared Costs and of Advances made by the
Retail Lenders nnder Section 3.5.2 solely to pay for Other Retail Costs.
5.2 Diligent Construction of the Project. Take or cause to be taken all action, make
or cause to be made all contracts and do or cause to be done all things necessary to construct the
Project diligently in accordance with the Prime Construction Agreement, the Final Plans and
Specifications and the other Operative Documents.
5.3

Reports; Cooperation; Financial Statements.
5.3.1 Prior to the Final Completion Date, deliver to the Bank Agent, the Retail
Agent, the Construction Consultant and the Disbursement Agent together with
each month’s Advance Reqnest (or if no Advance Request is submitted during
any calendar month, within 20 days following the end of such calendar month), a
monthly status report describing in reasonable detail the progress of the
construction of the Project since the immediately preceding report hereunder,
including without limitation, the cost incurred to the end of such month, an
estimate of the time and cost required to complete the Project and such other
information which the Bank Agent, the Retail Agent or the Disbursement Agent
may reasonably request including information and reports reasonably reqnested
by the Construction Consultant.
5.3.2 Deliver to the Bank Agent, the Retail Agent and the Disbursement Agent
together with each month’s final Advance Request (or if no Advance Request is
submitted during any calendar month, within 20 days after the end of such
calendar month), a monthly status report describing in reasonable detail the
progress of the leasing activities with respect to the Project, if any, and all leases,
if any, that have been entered into since the immediately preceding report
hereunder.
5.3.3 Deliver to the Bank Agent, the Retail Agent, the Construction Consultant
and the Disbnrse~nent Agent together with each month’s Advance Request (or if
no Advance Reqnest is submitted during any calendar month, within 20 days
after the end of such calendar month), all progress reports provided by each
Contractor pursuant to the Material Contracts and such additional information as
the Funding Agents or the Disbursement Agent may reasonably request.

5.4 Notices. Promptly, upon an officer of such Project Entity acquiring notice or
giving notice, or upon an officer of such Project Entity obtaining knowledge thereof, as the case
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may be, provide to the Disbursement Agent, the Construction Consultant and the Funding
Agents written notice of:
5.4.1 Any Default or Event of Defanlt of which the Project Entities have
knowledge, describing such Default or Event of Default and any action being
taken or proposed to be taken with respect thereto.

5.4.2 Any event, occurrence or circumstance which reasonably could be
expected to cause the In Balance Test to fail to be satisfied or render the Project
Entities incapable of, or prevent the Project Entities from (a) achieving the
Opening Date on or before the Scheduled Opening Date, or (b)meeting any
material obligation of the Project Entities under the Prime Construction
Agreement or the other Material Contracts as and when required thereunder.
5.4.3 Any termination or event of default or notice thereof under any Material
Contract or any notice under NRS 624.610 issued by any Contractor.
5.4.4 Any (a) fact, circumstance, condition or occurrence at the Site that results
in noncompliance with any Environmental Law that has resulted or could
reasonably be expected to result ira a Material Adverse Effect, and (b)pending
or, to the Project Entities’ knowledge, threatened, Environmental Claim against
the Project Entities or any Contractor arising in connection with its occupying or
conducting operations on or at the Project or the Site which could reasonably be
expected to have a Material Adverse Effect.
5.4.5 Any change in the Responsible Officers of the Project Entities, and such
notice shall include a certified specimen signature of any new officer so
appointed and, if requested by any Funding Agent or the Disbursement Agent,
satisfactory evidence of the authority of such new Responsible Officer.

5.4.6 Any proposed material change in the nature or scope of the Project or the
business or operations of the Project Entities.
5.4.7 Any notice of any material schedule delay delivered under the Prime
Construction Agreement and all remedial plans and updates thereof.
5.4.8 Any other event or development which could reasonably be expected to
have a Material Adverse Effect.
5.4.9 Promptly upon any Person becoming a Subsidiary of any of the Project
Entities, written notice thereof.
5.4.10 "Substantial Completion" or "Final Completion" certificates or notices
thereof delivered under any Material Contract.
5.5 Material Contracts and Permits. If requested by the Disbursement Agent or the
Construction Consultant, deliver to the Disbursement Agent, the Funding Agents and the
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Construction Consultant promptly, but in no event later than 20 days after the receipt thereof by
the Project Entities, copies of (a) all Material Contracts and Permits described on Exhibit G that
are obtained or entered into by the Project Entities after the Closing Date, (b) any amendment,
supplement or other modification to any such Permit received by the Project Entities after the
Closing Date.
5.6 Storage Requirements for Off-Site Materials and Deposits. Cause all
Unincorporated Materials to be stored and identified in accordance with the requirements of
Section 3.3.22.
5.7 Plans and Specifications. Maintain at the Site a complete set of Final Plans and
Specifications, as in effect from time to time and provide the Construction Consultant and each
Funding Agent with all reqnested access thereto upon reasonable notice.
5.8 Payment and Performance Bonds. Cause the General Contractor to cause each
Contractor listed on Exhibit W to provide a Payment and Performance Bond prior to the date of
the initial Advance from the Second Mortgage Proceeds Account. The Prqject Entities shall also
cause the General Contractor to cause each Contractor (working tinder any first tier Contracts
with an aggregate value or contract price of more than $25,000,000 entered into following the
Closing Date), within 15 calendar days after execution of its Contract, to provide a Payment and
Performance Bond to secure its obligations tinder that Contract, provided that in consultation
with the Construction Consultant, the Disbursement Agent may agree to eliminate or reduce the
requirement of a Payment Performance Bond with respect to any Contract, or extend the period
for delivery thereof. Each such Payment and Performance Bond shall name the Bank Agent and
the Trustee as additional obligees and shall otherwise be in substantially the form of Exhibit L or
as otherwise approved by the Disbursement Agent. Promptly after receipt thereof, deliver the
originals of such Payment and Performance Bonds to the Disbursement Agent with a copy to the
Construction Consultant.
5.9 Retainage Amounts. Unless the Disbursement Agent otherwise agrees in
consultation with the Construction Consultant, withhold from each payment to the General
Contractor a retainage amount equal to 10% of each payment to be made to each first and second
tier Contractor performing labor at the Site under the General Contractor pursuant to its
respective Subcontract; provided, kowever, that at such time as (i) the applicable Contractor shall
have completed 50% of the work tinder its respective Subcontract and (ii)if a Payment and
Performance Bond is required tinder Section 5.8 or Section 3.1.33 with respect to such
Subcontract and to the extent required pursuant to the terms of the Payment and Performance
Bond and applicable Legal Requirements in order to prevent a suretyship defense to performance
tinder such PaYment and Performance Bond, the Project Entities shall have obtained a "Consent
of Surety to Reduction in or Partial Release of Retainage" (AIA form GT07A) from the surety
that issiled such Payment and Performance Bond and delivered such consent to the Disbursement
Agent with a copy to the Construction Consultant, then the Project Entities may terminate the
requirement of further retainage to the extent that the cumulative retainage is equal to 5% of the
contract value (as adjusted by change orders, if anyL Upon the substantial completion of the
work under each Contract, the Construction Consultant may consent to any redtlction of the
retainage amounts previously retained under that Subcontract and the corresponding amount
required to be withheld under this Section 5.9, or release of any previously retained amount.
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5.10 Construction Consultant.
5.10.1 Cooperate and direct the Architect and the General Contractor to
cooperate with the Construction Consultant in the performance of the
Construction Consultant’s duties hereunder and under the Construction
Consultant Engagement Agreement, provided that the Construction Consultant
shall provide reasonable prior notice to the Project Entities prior to
communicating with the Architect or Contractors. Withont limiting the
generality of the foregoing, the Project Entities shall and shall direct the
Architect and the General Contractor to: (i) communicate with and promptly
provide all invoices, documents, plans and other information reasonably
requested by the Construction Consultant relating to the work, (ii) authorize any
subcontractors or subconsultants of any tier to communicate directly with the
Construction Consultant regarding the progress of the work, (iii)provide the
Construction Consultant with access to the Site and, subject to required safety
precautions, the construction areas, (iv)solely in the case of the General
Contractor, provide the Construction Consultant with reasonable working space
and access to telephone, copying and telecopying equipment and (v) otherwise
facilitate the Construction Consultant’s review of the construction of the Project
and preparation of the certificates required hereby.
5.10.2 Pay or cause to be paid to the Construction Consultant out of the
Advances made hereunder all amounts required hereunder and under the
Construction Consultant Engagement Agreement.
5.10.3 In addition to any other consultation required hereunder, following the
end of each quarter, upon the request of any Funding Agent, consult with any
such Person regarding any adverse event or condition identified in any report
prepared by the Construction Consultant.
5.11 Insurance. At all times maintain in full force and effect the insurance policies
and programs listed on Exhibit D.
5.12

Application of Insurance and Condemnation Proceeds.
5.12.1 If any Event of Loss occurs with respect to the Project, (i) promptly upon
discovery or receipt of notice thereof, provide written notice thereof to the
Disbursement Agent with respect to any Event of Loss over $100,000, and
(ii) diligently pursue all their rights to compensation against all relevant insurers,
reinsurers and/or Governmental Authorities, as applicable, in respect of such
event to the extent that the Project Entities have a reasonable basis for a claim
for compensation or reimbursement, including, without limitation, under any
insurance policy required to be maintained hereunder.
5.12.2 All amounts and proceeds (including instruments) in respect of any Event
of Loss, including the proceeds of any insurance policy required to be
maintained by the Project Entities hereunder (collectively, "Loss Proceeds")

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shall be applied as provided in this Section. All Loss Proceeds shall be paid by
the insurers, reinsurers, Governmental Authorities or other payors directly to the
Disbursement Agent for deposit in the Resort Loss Proceeds Account, provided
that to the extent that such Loss Proceeds are ~payable in respect of property of
the Retail Affiliate, then such Loss Proceeds shall be remitted to the Retail Loss
Proceeds Account.
5.12.3 If any Loss Proceeds are paid directly to the Project Entities or any
Funding Agent or Lender (i) such Loss Proceeds shall be received in trust for the
Disbursement Agent, (ii)such Loss Proceeds shall be segregated from other
funds of the Project Entities or such other Person, and (iii) the Project Entities or
such other Person shall pay (or, if applicable, the Project Entities shall cause
such of its affiliates to pay) such Loss Proceeds over to the Disbursement Agent
in the same form as received (with any necessary endorsement). In the event
that for a period of 90 days after any Loss Proceeds are remitted to the
Disbursement Agent, the Project Entities are not entitled to obtain Advances
pursuant to this Agreement, then the Project Entities shall use all other snch
proceeds and all funds on deposit in the Retail Loss Proceeds Account and the
Resort Loss Proceeds Account to prepay the Bank Loans, the Second Mortgage
Notes and the Retail Facility in accordance with the Bank Credit Agreement, the
Second Mortgage Indenture and the Retail Facility Agreement (with the Retail
Facility receiving (in addition to any funds contained in the Retail Loss Proceeds
Account) that portion of any Loss Proceeds which are proportionately equal to
the percentage of Shared Costs which have been Advanced by the Retail
Lenders).
5.13 Compliance with Material Contracts. Duly and promptly comply with their
respective obligations, and enforce all of their respective rights under all Material Contracts,
except where the failure to comply or enforce such rights, as the case may be, could not
reasonably be expected to have a Material Adverse Effect.
5.14 Utility Easement Modifications. Cause all utility or other easements that would
interfere in any material respect with the construction or maintenance of the Improvements
within the Project to be removed as expeditiously as possible. In any event, the Project Entities
shall remove such easements before they interfere in any material respect with the prosecution in
accordance with the Project Schedule of the work involved with the Project, and in any event,
prior to the Completion Date. In the event such easements are not removed prior to such time as
is reasonably determined by the Construction Consultant and the Project Entities fail to provide
title insurance to the Project Secured Parties in a form reasonably satisfactory to them insuring
over any loss the Project Secured Parties may snffer as a result of Project Entities’ failure to so
remove such easements, then the Pr0iect Entities (a)agree that the Disbursement Agent shall
have the right to authorize such advances as it deems appropriate in order to remove or insure
over the utility easements as exceptions to the title insurance policies in favor of the Project
Secured Parties, and (b)hereby grant to the Disbursement Agent an irrevocable power of
attorney to take such further steps in the name of the Project Entities as the Construction
Consultant determines are appropriate in order to remove or insure over such easements.
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5.15 Retail Leasing Arrangements. Diligently pursue the objectives of the leasing
and marketing plan (as amended from time to time in accordance with the Retail Facility
Agreement) for the Retail Air Space Lease submitted by the Retail Affiliate to the Retail Lender,
and will use all commercially reasonable efforts to achieve the objectives of that leasing and
marketing plan (as amended from time to time in accordance with the Retail Facility
Agreement).
ARTICLE 6
NEGATIVE COVENANTS
The Project Entities covenant and agree, with and for the benefit of the Funding Agents, the
Lenders and the Disbursement Agent that until this Agreement is terminated pursuant to
Section 11.18, they shall not:
6.1

Waiver, Modification and Amendment.
6.1.1 Directly or indirectly enter into, amend, modify, terminate (except in
accordance with its terms), supplement or waive a right or permit or consent to
the amendment, modification, termination (except in accordance with its terms),
supplement or waiver of any of the provisions of, or give any consent tinder:
(a) any Permit, the effect of which could reasonably be expected to
have a Material Adverse Effect;
(b) any material provision of any Payment and Performance Bond
supporting a Contractor’s obligations in excess of $25,000,000 if the result
thereof is materially adverse to the Funding Agents, the Lenders or the
Disbursement Agent; or
(c) any Contract unless entering into, amending, modifying or
terminating such Contract:
(1) could not reasonably be expected to have a Material
Adverse Effect;
(2) the Project Entities concurrently comply with the
procedures set forth in Section 6.1.2 and Section 6.2; and
(3) does not result in a prospective failure of the In Balance
Test to be satisfied unless the Project Entities concurrently comply
with the provisions of Section 6.9.1.
6.1.2 Notwithstanding Section 6.1.1, the Project Entities may:
(a) enter into Contracts consistent with the Plans and Specifications,
the Project Schedule and the Budgets, as each is in effect from time to
time. provided that:

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(i) for each Material Contract, the Project Entities shall
concurrently submit to the Disbursement Agent an Additional
Contract Certificate together with all exhibits, attachments and
certificates required thereby, each duly completed and executed;
(ii) if entering into such Contract will result in any amendment
of the Budgets, the Project Entities have complied with the
requirements of Section 6.4;
(iii) if entering into such Contract will have the effect of a
Scope Change, the Project Entities have complied with the
provisions of Section 6.2; and
(iv) if a Payment and Performance Bond is required under
Section 5.8 with respect to such Contract, the Project Entities shall
have obtained and delivered such Payment and Performance Bond
to the Disbursement Agent within the time period required under
Section 5.8; or
(b) from time to time, amend any Contracts if the amendment could
not reasonably be expected to have a Material Adverse Effect. Each such
amendment shall be in writing and shall identify with particularity all
changes being made, provided that:
(i) for Material Contracts, the Project Entities have submitted
to the Disbursement Agent a Contract Amendment Certificate
together with all exhibits, attachments and certificates required
thereby each duly completed and executed;
(ii) if such amendment will result in an amendment to either of
the Budgets, the Project Entities have complied with the
requirements of Section 6.4;
(iii) if snch amendment will have the effect of a Scope Change,
the Project Entities have complied with the provisions of
Section 6.2; and
(iv) if a Payment and Performance Bond is required under
Section 5.8 with respect to such Contract after giving effect to the
amendment or was delivered under Section 3.1.33 with respect to
such Contract and except to the extent such amendment does not
effect a change of the greater of $1,000,000 or 10% or more to the
aggregate contract price or value under such Contract, the Project
Entities shall have obtained the written consent of the surety that
issued such Payment and Performance Bond to such amendment
and delivered such consent to the Disbursement Agent with a copy
to the Construction Consultant.
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6.2

Scope Changes.
6.2.1

Scope Changes.
(a) Without obtaining the consent of the Bank Agent, direct, consent
to or enter into any Scope Change if such Scope Change will result in the
Project being inconsistent with the standards described on Exhibit M-1;
(b) Without obtaining the consent of both (i) the Bank Agent, and (ii)
the Trustee acting in accordance with the Second Mortgage Indenture,
direct, consent to or enter into any Scope Change if such Scope Change
will result in the Project being inconsistent with the standards described on
Exhibit M-2;
(c) direct, consent to or enter into any Scope Change with respect to
any Line Item Category in the Resort Budget if such Scope Change will
increase the aggregate amount of the Project Costs reflected in the Resort
Budget in any amount unless both:
(i) the Project Entities have accounted for snch increase by
means of any combination of:

(A) receipt of co,ninon equity contributions to the
Companies in the amount of such increase (other than from
funds already in the Accounts) and such contributions are
deposited in the Equity Funding Account or applied to the
temporary reduction of any ontstanding Revolving Loans
under the Bank Credit Agreement; or
(B) the allocation of Realized Savings obtained with
respect to a Line Item Category of the Resort Budget in the
amount of such increase to pay for such Scope Change; or

(C) allocation of the Unallocated Contingency Balance
(but the aggregate of the amounts allocated to pay for
Scope Changes pursuant to this clause (C) shall not, as of
any date, exceed the lesser of (i) 50% of the a~nount by
which (a) the "Unallocated Contingency" in column N of
the Remaining Cost Report exceeds (b) the "Required
Minimum Contingency line item in the In Balance Test
Adjustments section of the Remaining Cost Report; or (ii)
$25,000,000).
(ii) the Project Entities amend the Resort Budget to the extent
required under Section 6.4.1 so as to reflect the proposed Scope
Change;

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(d) direct, consent to or enter into any Scope Change if such Scope
Change would increase the amount of Other Retail Costs except to the
extent that the Retail Affiliate is in compliance with Section 5.1.34 of the
Retail Facility Agreement;
(e) direct, consent to or enter into any Scope Change if such Scope
Change results in any of the following circumstances (in each case, as
determined by the Project Entities and set forth in a certificate of the
Project Entities delivered to the Disbursement Agent and the Funding
Agent, which certificate shall be countersigned by the Construction
Consultant in the case of any Scope Change which is not a Minor Scope
Change):
(i) could reasonably be expected to result in the delay of the
Opening Date beyond the Scheduled Opening Date;
(ii) could reasonably permit or result in any materially adverse
modification of, or materially impairs the enforceability of, any
material warranty under the Prime Constn,~ction Agreement or any
other Contract and could materially and adversely impact the
Project;
(iii) is not permitted by a Contract and could materially and
adversely impact the Project;
(iv) could reasonably present a significant risk of the revocation
or material adverse modification of any material Permit;
(v) Could reasonably cause the Project or any portion thereof
not to comply in all material respects with all Legal Requirements
(provided that the Construction Consultant shall be entitled to
determine that no violation of any Legal Requirement will occur
on the basis of a certification by the Project Entities to such effect
unless the Construction Constlltant is aware of any inaccuracies in
such certification): or
(vi) could reasonably result in a material adverse modification
to. or cancellation or termination of any insurance policy required
to be maintained by the Project Entities pursuant to Section 5.11.
Prior to implementing any Scope Change (other than a Minor Scope Change or
the acceptance of non.-conforming work), the Project Entities shall submit an
Additional Contract Certificate or Contract Amendment Certificate and otherwise
comply with the provisions of Sections 6.1.2(a) or (b), as applicable. Prior to
implementing any Scope Change (including a Minor Scope Change but excluding
the acceptance of non-conforming work) under any Contract as to which the
Project Entities are required to obtain a Payment and Performance Bond pursnant
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to Section 5.8 or Section 3.1.33 except to the extent such Scope Change does not
effect a change of the greater of $1,000,000 or 10% or more to the aggregate
contract price or value under such Contract, the Project Entities shall obtain the
written consent of the surety under the relevant Payment and Performance Bond
to such Scope Change.
6.2.2 Substantial and Final Completion. Accept (or be deemed to have
confirmed) any notice of "Substantial Completion" or "Final Completion" of all
or any portion of the Project issued by any Contractor nnder any Material
Contract without the written approval of the Constn~ction Consultant and the
Architect.
6.3 Amendment to Operative Documents. Enter into any agreement (other than
this Agreement and the Financing Agreements) restricting its ability to amend any of the
Financing Agreements or other Operative Documents.
6.4 Resort Budget and Project Schedule Amendments. Directly or indirectly,
amend, modify, allocate, re-allocate or supplement or permit or consent to the amendment,
modification, allocation, re.-allocation or supplementation of, any of the Line Item Categories or
other provisions of the Resort Budget or modify or extend the Scheduled Opening Date except as
follows:
6.4.1 Permitted Budget Amendments.

(a) Concurrently with the implementation of any Scope Change that
increases the amount of Project Costs necessary to achieve Final
Completion, the Pro.ject Entities shall submit a Budget/Schedule
Amendment Certificate and amend the Resort Budget in accordance with
the provisions of Section 6.4.1(c) and (d) below to the extent necessary so
that the amount set forth therein for each Line Item Category shall reflect
all Scope Changes that have been made to such Line Item Category.
(b) The Project Entities may, from time to time, amend the Resort
Budget in accordance with the provisions of Section 6.4.1(c), (d) and (e)
in order to increase, decrease or otherwise reallocate amounts allocated to
specific Line Item Categories of the Resort Budget.
(c) The Project Entities shall implement any amendment to the Resort
Budget by delivering to the Disbursement Agent a Budget/Schedule
Amendment Certificate together with all exhibits, attachments and
certificates required thereby, each duly completed and executed. Such
Budget/Schedule Amendment Certificate shall describe with particularity
the Line Item Category increases, decreases, contingency allocations, and
other proposed amendments to the Resort Budget.
(d) Increases to the aggregate amount budgeted for any Line Item
Category in the Resort Budget will only be permitted to the extent the
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increase does not result in the failure of the In Balance Test to be satisfied.
(e) Decreases to the aggregate amount budgeted for any Line Item
Category of the Resort Budget will only be permitted upon obtaining
Realized Savings in such Line Item Category.
(f) Notwithstanding the foregoing provisions of this clause neither
Budget will be increased or decreased by reason of any change in any Line
Item in the other Budget.
6.4.2 Permitted Schedule Amendments. The Project Entities may, from time
to time, amend the Project Schedule, by complying with the provisions of
Section 6.4.1(c) and (d) with respect to the changes in the Resort Budget that
will result from the extension of the Scheduled Opening Date and delivering to
the Disbursement Agent a Budget!Schedule Amendment Certificate:
(a) containing a revised Project Schedule and if applicable, reflecting
any new Scheduled Opening Date; and
(b) attaching a certificate of the Construction Consultant to the effect
the resulting changes to the Project Schedule will not result in the Opening
Date occurring following the Outside Date.
If an Event of Loss or a Force Majeure Event occurs, then the Project Entities
shall be permitted to extend the Outside Date beyond March 31, 2010 to the
extent that the Project Entities certify in writing, and the Construction Consultant
confirms, to the Disbursement Agent that such extension corresponds to the
amount of time reasonably necessary to overcome any delays caused by the Event
of Loss or Force Majeure Event; provided that no such extension may extend the
Outside Date beyond September 30, 2010.
6.4.3 Amendment Certificates. Upon submission of the Budget/Schedule
Amendment Certificate to the Disbursement Agent, together with all exhibits,
attachments and certificates required pursuant thereto, each duly completed and
executed, such amendment shall become effective hereunder, and the relevant
Budget and, if applicable, the Project Schedule and the Scheduled Opening Date,
shall thereafter be as so amended.
6.5 Opening Date. Permit the Opening Date to occur unless each of the Opening
Date Certificates have been delivered, provided that the Disbursement Agent may, in
consultation with the Construction Consultant waive or modify any of the Opening Date
Certificates in any manner required to permit the Opening Date provided that all of the
conditions in the body of this Agreement are satisfied and all material amenities associated with
the Project are substantially complete, and may permit any corresponding modification of any
General Contractor’s Advance Certificate delivered concurrently with or after the Project
Entities’ Opening Date Certificate.

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6.6 Zoning and Contract Changes and Compliance. (a) Initiate or consent to or
acquiesce to any zoning downgrade of the Site or seek any material variance under any existing
zoning ordinance except, in each case, to the extent such downgrade or variance could not
reasonably be expected to materially and adversely affect the occupancy, use or operation of the
Project, (b) use or permit the use of the Site in any manner that could result in such use becoming
a non-conforming use (other than a non-conforming use otherwise in compliance with applicable
land use laws, rules and regulations by virtue of a variance) under any zoning ordinance or any
other applicable land use law, rule or regulation or (c) initiate or consent to or acquiesce to any
change in any laws, requirements of Governmental Anthorities or obligations created by private
contracts which now or hereafter could reasonably be likely to materially and adversely affect
the occupancy, use or operation of the Project.
6.7 Unincorporated Materials. Cause or permit (a)the value of Unincorporated
Materials located at the Site but not expected to be incorporated into the Project within the
ensuing calendar month to exceed the amounts set forth in Section 3.3.22 (as adjusted from time
to time pursuant to Section 3.3.220)).
6.8 Deposit Account Arrangements. Prior to the Opening Date, open or maintain
any bank, deposit or any other accounts at any financial institution other than:
(a)

the Accounts provided for herein;

(b) any accounts for payroll, acceptance of advance deposits in respect
of the Project, acceptance of deposits for the purchase of Condo Units that
are not Bonded Condo Deposits, and other similar matters in the ordinary
course of business none of which shall constitute an "Acconnt" hereunder
or shall be subject to this Agreement, provided that (i) none of the
proceeds of the Advances hereunder shall be deposited therein (other than
Advances for payroll amounts to the extent constituting Project Costs),
and (ii) each such account (other than any payroll or zero-balance
accounts) shall be subject to control agreements in favor of (x) in the case
of the Companies, (1) the Bank Agent and (2) the Trustee, and (y) in the
case of the Retail Affiliate, the Retail Agent.
Notwithstanding anything herein to the contrary, the Project Entities may cause to be
deposited into any such account for acceptance of advance deposits or Condo Unit
deposits any such advance deposits in respect of the Project or deposits for Condo Units
which are not Bonded Condo Deposits, refund any such deposits from such accounts, pay
payroll expenses from any such account established for such purpose and receive and
make payments from such accounts described in clause (b) above in the ordinary course
of business.
6.9

In Balance Test.
6.9.1 At any time from and after the initial Advance of funds from the Second
Mortgage Proceeds Account, permit the In Balance Test to fail to be satisfied on
two consecutive Scheduled Advance Dates, provided that to the extent that any

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Force Majeure Event exists as of any such Scheduled Advance Date, then no
default shall exist under this sentence until a third consecutive Scheduled
Advance Date occurs upon which the In Balance Test is not satisfied. Without
limiting the ability of the Project Entities to satisfy the In Balance Test in
another manner consistent with this Agreement, the Project Entities may from
time to time take any of the following actions (or any combination thereof) to
cause the In Balance Test to be satisfied:

(a) Induce Turnberry Residential to provide additional Cash Support
for its Completion Guaranty;
(b) Induce Parent or other Solvent Persons which are reasonably
acceptable to the Bank Agent to provide the Bank Agent and the Trustee
with additional Completion Guaranties or Cash Support; or
(c) Deposit additional cash resulting from contributions to the
permanent equity capital of the Companies into the Equity Funding
Account;
provided that the Project Entities shall not be entitled to increase the Cash Support
Amount to an amount which is in excess of $200,000,000.

6.9.2 To the extent that, as of any date of determination, the amount of the
Available Funds is in excess of the Remaining Costs, then the Project Entities
may request that the Disbursement Agent release Cash Support to the extent of
such excess; provided that the Project Entities shall not be entitled by this
Section 6:9.2 to request:
(a)

the release of the Liquidity Account; or

(b) the release of any Cash Support to the extent that the resulting
Cash Support would be less than $50,000,000 minus the cumulative
amount of all drawings which have then been made pursuant to
Completion Guaranties pursuant to this Agreement;
(c) any release of Cash Support if any Default or Event of Default has
occurred and remains continuing.
Each such request shall be in writing and shall provide supporting detail of the
Project Entities’ calculation of the In Balance Test in a manner reasonably
acceptable to the Disbursement Agent and the Bamk Agent. The Disbursement
Agent, the Construction Consultant and the Bank Agent shall promptly review
any such request submitted by the Project Entities and, provided that the
Disbursement Agent, the Construction Consultant and the Bank Agent agree with
the Project Entities calculations submitted pursuant to this Section, the
Disbursement Agent shall promptly and in any event within ten Banking Days
following any such request release Cash Support in the amount requested.
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6.10

LEED Shortfalls.
In the event that a LEED Shortfall Amount is determined to exist, the Companies
shall obtain contributions to their permanent equity capital (in addition to any
other contributions to their capital which may be required by reason of the failure
of the In-Balance Test to be satisfied, or otherwise), within sixty days following
the date upon which such LEED Shortfall Amount first exists in the amount
thereof, provided that to the extent that a LEED Shortfall Amount exists prior to
April 6, 2008, no such contribution shall be required until the later of the last day
of such sixty day period and June 6, 2008 (the "LEED Calculation Date").
Notwithstanding anything in this Agreement to the contrary, until the LEED
Calculation Date, the Project Entities shall not be required to recognize as Project
Costs or Remaining Co~t (whether in the Budget, Remaining Cost Report, the
representations hereunder or otherwise) any additional costs arising by reason of
any change in Nevada State laws governing the partial sales and use tax
exemption of the Project arising by reason of its proposed qualification pursuant
to the Leadership in Energy and Enviromnental Design ("LEED") program, and
the Project Entities shall at all times be entitled to use the proceeds of the
Advances hereunder to pay such costs.

ARTICLE 7

EVENTS OF DEFAULT
7.1 Events of Default. The occurrence of any of the following events shall coustitute
an event of default ("Event of Default") hereunder:

7.1.1 Other Financing Documents. The occurrence of an "Event of Default"
under and as defined by any one or more of the Facility Agreements, provided
that from and after the date upon which any such "Event of Defanlt" is cured or
waived in accordance with the terms of the applicable Facility Agreement, it
shall no longer constitute an Event of Default hereunder.
7.1.2 Inability to Deliver Advance Request. The failure of the Project Entities
to submit an Advance Request which is approved (including by waiver of the
applicable conditions) on two consecutive Scheduled Advance Dates, provided
that to the extent that such failure results from any Force Majeure Event or to the
extent that on each such Scheduled Advance Date the Project Entities receive
fi~nds pursuant to Sections 3.8 and 3.9 in an amount which is sufficient to pay all
Project Costs which are scheduled to be paid on such Scheduled Advance Dates,
then one additional Advance Date may pass.

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7.1.3

Representations.
(a) Any representation, warranty or certification confirmed or made on
the Closing Date pursuant to this Agreement or any Financing Agreement
by any of the Project Entities shall be found to have been incorrect in any
material respect; or
(b) Any representation, warranty or certification confirmed or made by
any of the Project Entities in this Agreement on any date following the
Closing Date but prior to the Initial Bank Advance Date (including any
Advance Request or other certificate submitted with respect to this
Agreement) shall be found to have been incorrect when made or deemed
to be made, unless the failure of any such representation and warranty to
be true and correct could not reasonably be expected to result in a Material
Adverse Effect; or
(c) Any representation, warranty or certification confirmed or made by
any of the Project Entities in this Agreement on or following the Initial
Bank Advance Date (including any Advance Reqnest or other certificate
submitted with respect to this Agreement) shall be found to have been
incorrect when made or deemed to be made in any material respect; or
(d) Any representation, warranty or certification confirmed or made by
any of the Project Entities in any Material Contract or any certificate
submitted with respect to any Material Contract shall be found to have
been incorrect in any material respect when made or deemed to be made
except to the extent that any failure to be true and correct could not
reasonably be expected to have a Material Adverse Effect.

7.1.4

Covenants.
(a) The Project Entities shall fail to perform or observe any o~ their
respective obligations under Sections 5.1, 5.8, 5.9, 6.1, 6.2, 6.3, 6.4, 6.5,
6.6 or 6.9.1 ;
(b) The Project Entities shall fail to perform or observe any of their
respective obligations nnder Sections 5.4.1, 5.4.7, 5.7 or 5.14 within five
days after a Responsible Officer of the Project Entities obtaining actual
knowledge thereof;
(c) The Project Entities shall fail to at all times maintain in full force
and effect the insurance policies and programs listed on Exhibit D (except
30 days grace after notice from the Controlling Person shall be allowed in
the case of automobile, workers compensation, pollution liability and
design errors and omissions insurance); or
(it)

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obligations under Articles 5 or 6 (other than those listed in
Sections 7.1.4(a), (b) or (c)) where such default shall not have been
remedied within 30 days after the earlier of (i) the Project Entities or any
other Project Entity becoming aware of such breach or default or
(ii) notice of such failure from the Disbursement Agent or any Funding
Agent to the Project Entities.
7.1.5

Breach of Contracts.
(a) The General Contractor or any Project Entity shall breach or
default (after giving effect to applicable cure and grace periods) under any
term, condition, provision, covenant, representation or warranty contained
in any Contract with a contract price or value in excess of $100,000,000
and such breach or default (i) has had or could reasonably be expected to
have a Material Adverse Effect and (ii) continues unremedied for
thirty days after the earlier of (A) the Project Entities becoming aware of
such breach or defatdt or (B) receipt by the Project Entities of notice from
the Disbursement Agent or any Funding Agent of such breach or default;
or

(b) Any party thereto (other than the General Contractor or a Project
Entity) shall breach or default under any term, condition, provision,
covenant, representation or warranty contained in any Contract with a
contract price or value in excess of $100,000,000 and such breach or
default could reasonably be expected to result in a Material Adverse Effect
and shall continue unremedied for thirty days after the earlier of (i)the
Project Entities becoming aware of such breach or default or (ii) receipt by
the Project Entities of notice from the Disbursement Agent or any Funding
Agent of such breach or default; provided, however, that:

(A) if the breach or default is reasonably susceptible to cure
within 60 days but cannot be cured within such 30 days despite
such other party’s good faith and diligent efforts to do so, the cure
period shall be extended as is reasonably necessary beyond such
30 day period (but in no event longer than 60 days) if remedial
action reasonably likely to result in cure is promptly instituted
within such 30 day period and is thereafter diligently pursued nntil
the breach or default is corrected; and
(B) no Default or Event of Default shall be deemed to have
occurred as a result of such breach if the Project Entities provide
written notice to the Fnnding Agents within ten Banking Days after
the Project Entities becoming aware of such breach that the Project
Entities intend to replace such Contract (or that replacement is not
necessary) and (1) the Project Entities obtain a replacement obligor
or obligors reasonably acceptable to the Disbursement Agent (in
consultation with the Construction Consultant) for the affected
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party (if in the judgment of the Disbursement Agent (in
consultation with the Construction Consultant) a replacement is
necessary), (2)the Project Entities enter into a replacement
Contract in accordance with Section 6.1 within 60 days of such
breach (if in the reasonable judgment of the Disbttrsement Agent
(in consultation with the Construction Consultant) a replacement is
necessary); provided, however that the replacement Contract may
require the Project Entities to pay amounts to the replacement
obligor in excess of those that would have been payable under the
breached Contract if such additional payments in the reasonable
judgment of the Disbursement Agent, in consultation with the
Construction Consultant, do not cause the In Balance Test to fail to
be satisfied and (3)such breach or default, after considering any
replacement obligor and replacement Contract and the time
required to implement such replacement, has not and could not
reasonably be expected to have a Material Adverse Effect; or
(c) The Project Entities shall have received, and the right to gtop work
thereunder shall thereafter become effective, a "stop work" notice under
NRS 624.610 or otherwise with respect to any Contract with a contract
price or value in excess of $50,000,000.
7.1.6 Termination or Invalidit, of Material Contracts; Abandonment of
Project.
(a) Any of the Material Contracts with a contract price or value in
excess of $100,000,000 shall have terminated (other than in accordance
with its express terms), become invalid or illegal, or otherwise ceased to
be in full force and effect, provided that with respect to any such Material
Contract other than the Prime Construction Agreement, no Default or
Event of Default shall be deemed to have occurred as a result of such
termination if the Project Entities provide written notice to the Funding
Agents within ten Banking Days after any Project Entity becoming aware
of such Contract ceasing to be in full force and effect; and
(i) the Project Entities obtain a replacement obligor or obligors
reasonably acceptable to the Disbursement Agent (in consultation
with the Construction Consultant), for the affected party (if in the
judgment of the Disbursement Agent (in consultation with the
Construction Consultant) a replacement is necessary);
(ii) the Project Entities enter into a replacement Contract in
accordance with Section 6.1 within 60 days of such termination;
provided, .however that the replacement Contract may require the
Project Entities to pay additional amounts to the replacement
obligor that would have otherwise been payable under the
te~Tninated Contract if such additional payments in the reasonable
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judgment of the Disbursement Agent, in consultation with the
Construction Constlltant, do not cause the In Balance Test to fail to
be satisfied; or
(b) The Project Entities shall (i) abandon the Project or (ii) for a period
in excess of ten days otherwise cease to pursue the operations of the
Project, exc_L~ to the extent resulting from a Force Majeure Event.
7.1.7 Government Authorizations. The Project Entities fail to observe, satisfy
or perform, or there is a violation or breach of, any of the terms, provisions,
agreements, covenants or conditions attaching to or under the issuance to such
Person of any Permit or any such Permit or any provision thereof is suspended,
revoked, cancelled, terminated or materially and adversely modified or fails to
be in full forc~ and effect or any Governmental Authority challenges or seeks to
revoke any such Permit if such failure to perforn~, violation, breach, suspension,
revocation, cancellation, termination or modification could reasonably be
expected to have a Material Adverse Effect.
7.1.8 Future Advances. With respect to any of the Deeds of Trust, if any
"borrower" (as that term is defined in NRS 106.310) who may send a notice
pursuant to NRS 106.380(1), (i) delivers, sends by mail or otherwise gives, or
pnrports to deliver, send by mail or otherwise give, to a beneficiary under any of
the Deeds of Trust (A) any notice of an election to terminate the operation of any
such Deed of Trust as security for any secured obligation, including, without
limitation, any obligation to repay any "future advance" (as defined in NRS
106.320) of "principal" (as defined in NRS 106.345), or (B)any other notice
pursuant to NRS 106.380(1), (ii) records a statement pursuant to NRS
106.380(3), or (iii)causes any Deed of Trust, any secured obligation, or any
Secured Party to be subject to NRS 106.380(2), 106.380(3) or 106.400.
7.2 Remedies. Upon the occurrence and during the continuation of an Event of
Default, the Controlling Person may, subject to the terms of the Project Lender Intercreditor
Agreement, and without further notice of default, presentment or demand for payment, protest or
notice of non-payment or dishonor, or other notices or demands of any kind, all such notices and
demands being waived (to the extent permitted by applicable law) notify the Project Entities and
each Funding Agent of its determination that it will not permit fimher Advances hereunder.
Thereafter, each of the Funding Agents may exercise any or all rights and remedies at law or in
equity (in any combination or order that the Funding Agents may elect, subject to the foregoing),
including without limitation or prejudice to the Funding Agents’ other rights and remedies, the
following:
7.2.1 refuse, and the Funding Agents shall not be obligated, to make any
Advances or make any payments from any Account or other funds held by the
Disbursement Agent by or on behalf of the Project Entities or suspend or
terminate the Commitments; and
7.2.2 exercise any and all rights and remedies available to it tinder any of the
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Financing Agreements (including the exercise of rights in respect of each
Account in which that Funding Agent has been granted a Lien in accordance
with this Agreement).

ARTICLE 8
THE CONSTRUCTION CONSULTANT
8.1 Removal and Fees. The Bank Agent may, in its sole discretion, remove the
Construction Consultant and, upon such removal, a replacement acceptable to the Bank Agent
shall be appointed in consultation with the Project Entities. Notice of any replacement
Construction Consultant shall be given by the Bank Agent to the Funding Agent, the
Disbursement Agent and the Project Entities. All reasonable fees and expenses of the
Construction Consultant (whether the original ones or replacements) shall be paid by the Project
Entities. No other Funding Agent shall have the right~ to remove the Construction Consultant or
appoint a replacement. The Project Entities have reviewed the Construction Consultant
Engagement Agreement and hereby agree to reimburse the Disbursement Agent and the Funding
Agents for the fees of the Construction Consultant set forth therein.
8.2 Duties. The Construction Consultant is obligated to the Funding Agents to carry
out the activities required of them in this Agreement and in the Construction Consultant
Engagement Agreement. The Pro.ject Entities acknowledge that they will not have any cause of
action or claim against the Construction Consultant resulting from any decision made or not
made, any action taken or not taken or any advice given by the Construction Consultant in the
due performance in good faith of its duties.
8.3 Acts of Disbursement Agent. The Disburseinent Agent will take such actions as
any Funding Agent or the Project Entities may reasonably request to cause the Construction
Consultant to act diligently in the issuance of all certificates required to be delivered by the
Construction Consultant and to otherwise fulfill their obligations to the Funding Agents.
ARTICLE 9
THE DISBURSEMENT AGENT
9.1 Appointment and Acceptance. Each of the Funding Agents hereby irrevocably
appoints and authorizes the Disbursement Agent to act on its behalf hereunder and under the
Control Agreements (includiug any future Control Agreements which may hereafter be
executed). The Disbursement Agent accepts such appointments and agrees to exercise
commercially reasonable efforts and utilize commercially prudent practices in the performance
of its duties hereunder consistent with those of similar institutions holding collateral,
administering construction loans and disbursing disbursement control funds.
9.2

Duties and Liabilities of the Disbursement Agent Generally.
9.2.1 Meetings, Etc. Commencing upon execution and delivery hereof, the
Disbursement Agent shall have the right to meet periodically at reasonable

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times, upon three Banking Days’ notice, with representatives of the Project
Entities, the Construction Consultant, the General Contractor, the Architect and
such other Contractors, employees, consultants or agents as the Disbursement
Agent shall reasonably request to be present for such meetings. The
Disbursement Agent may perform such inspections and tests of the Pro.ject as it
deems reasonably appropriate in the performance of its duties hereunder. In
addition, the Disbursement Agent shall have the right at reasonable times upon
prior notice to review all information (including Contracts) supporting the
amendments to the Resort Budget, amendments to any Contracts, Advance
Requests, to inspect materials stored at the Site or at any other location, to
review the insurance required pursuant to the terms of the Financing
Agreements, to confirm receipt of endorsements from the Title Insurer insuring
the continuing priority of the liens of the Deeds of Trust as security for each
Advance hereunder, and to examine the Plans and Specifications and all shop
drawings relating to the Project. The Disbursement Agent is authorized to
contact any Contractor for purposes of confirming receipt of progress payments.
The Disbursement Agent shall be entitled to examine, copy and make extracts of
the books, records, accounting data and other documents of the Project Entities,
including without limitation bills of sale, statements, receipts, conditional and
unconditional lien releases, contracts or agreements, which relate to any
materials, fixtures or articles incorporated into the Project. From time to time, at
the request of the Disbursement Agent, the Project Entities shall make available
to the Disbursement Agent a Project Schedule. The Project Entities agree to
cooperate with the Disbursement Agent in assisting the Disbursement Agent to
perform its duties hereunder and to take such further steps as the Disbursement
Agent reasonably may request in order to facilitate the Disbursement Agent’s
performance of its obligations hereunder.
9.2.2 Powers, Rights and Remedies. The Disbursmnent Agent is authorized to
take such actions and to exercise such powers, rights and remedies under this
Agreement and the Control Agreements as are specifically delegated or granted
to the Disbursement Agent by the terms hereof or thereof, together with such
powers, rights and remedies as are reasonably incidental thereto. The
Disbursement Agent agrees to act in accordance with the instructions of the
Controlling Person and, in the absence of such instructions, shall take such
actions or refrain from acting as it deems reasonable subject to any express
requirements of this Agreement.

Neither the Funding Agents nor the Disbursement Agent shall instruct the
securities intermediary under any Control Agreement to take an action
inconsistent with the Project Entities’ instructions except to the extent expressly
permitted by this Agreement or the relevant Control Agreement.
9.2.3 Notice of Events of Default. If the Disbursement Agent is notified that
an Event of Default or a Default has occurred and is continuing, the
Disbursement Agent shall promptly and in any event within five Banking Days
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provide notice to each of the Funding Agents of the same and otherwise shall
exercise such of the rights and powers vested in it by this Agreement and the
documents constituting or executed in connection with this Agreement, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the reasonable administration of its
own affairs.
9.2.4 No Risk of Own Funds. None of the provisions of this Agreement shall
require the Disbursement Agent to expend or risk its own filnds or otherwise to
incur any personal financial liability in the performance of any of its duties
hereunder or under the Control Agreements, or in the exercise of any of its rights
or powers if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
9.2.5 No Imputed Knowledge. Notwithstanding anything to the contrary in
this Agreement, the Disbursement Agent shall not be deemed to have knowledge
of any fact known to it in any capacity other than the capacity of Disbursement
Agent, or by reason of the fact that the Disbursement Agent is also a Funding
Agent or Lender. The Disbursement Agent’s duties and functions hereunder
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon the Disbursement Agent in its capacity as a Funding
Agent or as a Lender. The Disbursement Agent shall have the same rights and
powers hereunder as any other Funding Agent or Lender and may exercise the
same as though it were not performing its duties and fi~nctions hereunder. The
Disbursement Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with the Project Entities or any of their Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Project Entities for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.
Each party hereto acknowledges that, as of the Closing Date, Bank of America is
the Disbursement Agent hereunder and acting as securities intermediary under
the Control Agreements in respect of the Accounts (other than the Second
Mortgage Proceeds Account), a Funding Agent and as a Lender under certain of
the Facilities.
9.3

Particular Duties and Liabilities of the Disbursement Agent.
9.3.1 Reliance For Instructions. The Disbursement Agent may, from time to
time, in the event that any matter arises as to which specific instructions are not
provided herein or in a Control Agreement (as applicable), request directions
from the Funding Agents or the Controlling Person with respect to such matters
and may refl~se to act until so instructed and shall be fully protected in acting or
refusing to act in accordance with such instructions. The Disbursement Agent is
further authorized by the Funding Agents and the Lenders to enter into
agreements supplemental to this Agreement for the purpose of curing any formal

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defect, inconsistency, omission or ambiguity in this Agreement (without any
consent or approval by the Funding Agents or the Lenders) provided that in no
event shall the Disbursement Agent enter into any supplemental agreement in
respect of this Agreement with respect to Sections 3.5, 3.7.3, 5.11 or 5.12, or any
other provision of this Agreement directly materially and adversely affecting the
rights of the Retail Agent, without the consent of the Retail Agent.
9.3.2 Reliance Generally. The Disbursement Agent may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, approval
or other paper or document believed by it on reasonable grounds to be genuine
and to have been signed or presented by the proper party or parties.
Notwithstanding anything else in this Agreement to the contrary, in performing
its duties hereunder, including approving any Advance Requests, making any
other determinations or taking any other actions hereunder, the Disbursement
Agent shall be entitled to rely on certifications from the Project Entities (and,
where contemplated herein, certifications from third parties, including the
Construction Consultant) as to satisfaction of any requirements and!or conditions
imposed by this Agreement. The Disbursement Agent shall not be required to
conduct any independent investigation as to the accuracy, veracity or
completeness of any such items or to investigate any other facts or circumstances
to verify compliance by the Project Entities with their obligations hereunder.
9.3.3 Court Orders. The Disbursement Agent is authorized, in its exclusive
discretion, to obey and comply with all writs, orders, judgments or decrees
issued by any court or administrative agency affecting any money, documents or
things held by the Disbursement Agent. The Disbursement Agent shall not be
liable to any of the parties hereto, their successors, or representatives by reason
of the Disbursement Agent’s compliance with such writs, orders, judgments or
decrees, notwithstanding the fact that such writ, order, judgment or decree is
later reversed, modified, set aside or vacated.
9,3.4 Requests of the Project Entities. Any request, direction, order or demand
of the Project Entities mentioned herein shall be sufficiently evidenced (unless
other evidence in respect thereof be herein specifically required) by an
instrument signed by one of its Responsible Officers, and any resolution of the
Project Entities may be evidenced to the Disbursement Agent by a copy thereof
certified by the Secretary or an Assistant Secretary of the Project Entities.
9.3.5 Reliance on Opinions of Counsel. The Disbursement Agent may consult
with counsel and any written opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or omitted by it
hereunder or under any Control Agreement in good faith and in accordance with
such opinion of counsel.
9.3.6 Action through Agents or Attorneys. The Disbursement Agent may
execute any of the trusts or powers hereunder or perform any duties hereunder or
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under any Control Agreement either directly or by or through agents or attorneys
appointed with due care, and the Disbursement Agent shall not be responsible
for any act on the part of any agent or attorney so appointed.
9.3.7 Marshaling of Assets. The Disbursement Agent need not marshal in any
particular order any particular part or piece of the Project Security held by the
Disbursement Agent in its capacity as Disbursement Agent hereunder or under
any Control Agreement, or any of the funds or assets that the Disbursement
Agent may be entitled to receive or have claim upon.
9.3.8 Disagreements.
(a) In the event of any disagreement between a Funding Agent and the
Project Entities or any other Person or Persons whether or not named
herein, and adverse claims or demands are made in connection with or for
any of the invest~nents or amounts held pursuant to this Agreement or
under any Control Agreement, the Disbursement Agent shall be entitled at
its option to refuse to comply with any such claim or demand so long as
such disagreement shall continue, and in so doing, the Disbursement
Agent shall not be or become liable for damages or interest to such
Funding Agent or the Project Entities or any other Person or Persons for
the Disbursement Agent’s failure or refusal to comply with such
conflicting or adverse claims or demands. The Disbursement Agent shall
be entitled to continue so to refrain and refuse so to act until:
(i) the rights of the adverse claimants have been fully
adjudicated in the court assuming and having jurisdiction of the
claimants and the investments and amounts held pursuant to this
Agreement or under any Control Agreement; or
(ii) all differences shall have been adjusted by agreement, and
the Disbursement Agent shall have been notified thereof in writing
by all persons deemed by the Disbursement Agent, in its sole
discretion, to have an interest therein.
(b) In addition, the Disbursement Agent may file a suit in interpleader
for the purpose of having the respective rights of all claimants adjudicated,
and may deposit with the court all of the investments and amounts held
pursuant to this Agreement or under any Control Agreement. The Project
Entities agree to pay all costs and reasonable counsel fees incurred by the
Disbursement Agent in such action, said costs and fees to be included in
the judgment in any such action.
9.4 Segregation of Funds and Property Interest. Except as otherwise expressly
provided in the Financing Agreements, monies and other property received by the Disbursement
Agent shall, until used or applied as herein provided, be held for the purposes for which they
were received, and shall be segregated from other funds except to the extent required herein or
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by law. To the extent that the Disbursement Agent also acts as securities intermediary, (a) the
Disbursement Agent shall note in its records that all fimds and other assets in the Accounts
described in Section 2.2, have been pledged to the Secured Parties (as their interests appear in the
matrix set forth in that Section) and that the Disbursement Agent is holding such items for such
Secured Parties. Accordingly, it is the intention of the parties that all such funds and assets shall
not be within the balflcruptcy "estate" (as such term is used in 11 U.S.C. § 541) of the
Disbursement Agent. The Disbursement Agent shall not be under any liability for interest on
any monies received by it hereunder, except as otherwise specified in this Agreement. The
Disbursement Agent hereby expressly waives any right of set-off or similar right it may have
against or in relation to the Accounts and any monies, Cash Equivalents or other amounts on
deposit therein.
9.5 Compensation and Reimbursement of the Disbursement Agent. The Project
Entities covenant and agree to pay to the Disbursement Agent from time to time, and the
Disbursement Agent shall be entitled to, the fees set forth in the letter agreement between the
Project Entities and the Disbursement Agent, and the Project Entities will further pay or
reimburse the Disbursement Agent upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Disbursement Agent in accordance with any of the
provisions of the Financing Agreements or the documents constituting or executed in connection
with the Project Security including any Control Agreements (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and of all persons
not regularly in its employ). The obligations of the Project Entities under this Section 9.5 to
compensate the Disbursement Agent and to pay or reimburse the Disbursement Agent for
reasonable expenses, disbursements and advances shall constitute additional indebtedness (and
shall be deemed permitted indebtedness under each Financing Agreement) hereunder and shall
survive the satisfaction and discharge of this Agreement.
916 Qualification of the Disbursement Agent. Any successor to the initial
Disbursement Agent hereunder shall at all times be a corporation with offices in New York City,
New York which (a)is authorized to exercise corporation trust powers, (b)is subject to
supervision or examiuation by the applicable Governmental Authority, (c) shall have a combined
capital and surplus of at least $500,000,000, (d) shall have a long-term credit rating of not less
than A- or A3, respectively, by S&P or Moody’s; and provided, that any such bank with a longterm credit rating of A- or A3 shall not cease to be eligible to act as Disbursement Agent upon a
downward change in either snch rating of no more than one category or grade of snch minimum
rating, as the case may be; and (e)with respect to any replacement of the Person acting as
Disbursement Agent as of the Closing Date, shall be acceptable to each of the Bank Agent and
the Trustee acting pursuant to the Project Lender Intercreditor Agreement (and so long as no
Event of Default then exists shall be approved by the Project Entities, such approval not to be
uureasonably withheld or delayed). In case at any time the I)isbursement Agent shall cease to be
eligible in accordance with the provisions of this Section 9.6, the Disbursement Agent shall
resign immediately upon appointment of a successor Disbursement Agent in accordance with
Section 9.7.
9.7 Resignation and Removal of the Disbursement Agent. The Trustee (nntil the
Exhaustion of the Second Mortgage Proceeds Account), and the Bank Agent (at any time
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thereafter) shall have the right should they reasonably determine that the Disbursement Agent
has breached or failed to perform its Obligations hereunder or has engaged in willfid misconduct
or gross negligence, upon the expiration of 30 days following delivery of written notice of
substitution to the Disbursement Agent, each of the Funding Agents and the Project Entities, to
cause the Disbursement Agent to be relieved of its duties hereunder and to select a substitute
disbursement agent to serve hereunder. The Disbursement Agent may resign at any time upon
45 days’ written notice to all parties hereto. Such resignation shall take effect upon the earlier of
receipt by the Disbursement Agent of an instn~ment of acceptance executed by a successor
disbursement agent meeting the qualifications set forth in Section 9.6 and consented to by the
other parties hereto or 45 days after the giving of such notice. Upon selection of a substitute
disbursement agent, the Funding Agents and the Project Entities and the substitute disbursement
agent shall enter into an agreement substantially identical to this Agreement and, upon
appointment of a substitute Disbursement Agent, the Disbursement Agent shall promptly transfer
to the substitute Disbursement Agent originals of all books, records, and other documents in the
Disbursement Agent’s possession relating to this Agreement.
9.8 Merger or Consolidation of the Disbursement Agent. Any corporation into
which the Disbursement Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Disbursement Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Disbursement Agent, shall, if eligible hereunder, be the successor of the
Disbursement Agent hereunder; provided, that such corporation shall be eligible under the
provisions of Section 9.6 without the execution or filing of any paper with any party hereto or
any further act on the part of any of the parties hereto except where an instrument of transfer or
assigmnent is required by law to effect such succession, anything herein to the contrary
notwithstanding.
9.9

Statements; Information.
9.9.1 Monthly Statements. The Disbursement Agent shall provide to the
Funding Agents and the Project Entities a monthly statement of all deposits to,
and disbursements from, each Account (other thm~ in respect of the Second
Mortgage Proceeds Account) and interest and earnings credited to each account
established and maintained hereunder and under the other Operative Documents.
The Disbursement Agent shall forward to the Funding Agents any such
statements delivered to it by the securities intermediaries under the Control
Agreements.

9.9.2 Information Requests. The Disbursement Agent shall, at the expense of
the Project Entities (i) as promptly as is reasonably practicable after receipt of
any reasonable written request by the Project Entities or any Funding Agent, but
not more frequently than monthly (unless a Default or an Event of Default shall
have occurred), provide the Project Entities or such Funding Agent, as the case
may be, with such information as the Project Entities or such Funding Agent
may reasonably request regarding all categories, amounts, maturities and issuers
of investments made by the Disbursement Agent pursuant to this Agreement and
regarding amounts available in the Accounts, and (ii)upon the reasonable
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written request of the Project Entities, arrange with the Project Entities for a
mutually convenient time for a Responsible Officer of the Reviewing
Accountant to visit the offices of the Disbursement Agent to examine and take
copies of records relating to and instruments evidencing the investments made
by the Disbursement Agent pursuant to this Agreement.
9.10 Limitation of Liability. The Disbursement Agent’s responsibility and liability
under this Agreement shall be limited as follows: (a) the Disbursement Agent does not
represent, warrant or guaranty to the Funding Agents or the Lenders the performance by the
Project Entities, the General Contractor, the Construction Consultant, the Architect, or any other
Contractor of their respective obligations under the Operative Documents and shall have no duty
to inquire of any Person whether a Default or an Event of Default has occurred and is continuing;
(b) the Disbursement Agent shall have no responsibility to the Project Entities, the Funding
Agents or the Lenders as a consequence of performance by the Disbursement Agent hereunder
except for any bad faith, fraud, gross negligence or willful misconduct of the Disbursement
Agent as finally judicially determined by a court of competent jurisdiction; (c)the Project
Entities shall remain solely responsible for all aspects of their business and conduct in
connection with the Project, including but not limited to the quality and suitability of the Plans
and Specifications, the supervision of the work of construction, the qualifications, financial
condition and performance of all architects, engineers, contractors, subcontractors, suppliers,
consultants and property managers, the accuracy of all applications for payment, and the proper
application of all disbursements; and (d) the Disbursement Agent is not obligated to supervise,
inspect or inform the Project Entities of any aspect of the development, construction or operation
of the Project or any other matter referred to above. The Bank Agent, the Retail Agent and the
Representative (on behalf of the Trustee and the Second Mortgage Holders) have each made
their own independent investigation of the financial condition and affairs of the Project Entities
in connection with the making of the extensions of credit contemplated by the Financing
Agreements and has made and shall continue to make its own appraisal of the creditworthiness
of the Project Entities. Except as specifically set forth herein, the Disbursement Agent shall not
have any duty or responsibility, either initially or on a continuing basis, to make any such
investigation or any stlch appraisal on behalf of the Funding Agents or Lenders or to provide any
Funding Agent or Lender with any credit or other information with respect thereto. The
Disbursement Agent shall not have, by reason of this Agreement, a fiduciary relationship in
respect of any Person; and nothing in this Agreement, expressed or implied, is intended to or
shall be so construed as to impose upon the Disbursement Agent any obligations in respect of
this Agreement except as expressly set forth herein or therein. The Disbursement Agent shall
have no duties or obligations hereunder except as expressly set forth herein, shall be responsible
only for the performance of such duties and obligations and shall not be required to take any
action otherwise than in accordance with the terms hereof. The provisions of this Article 9 are
solely for the benefit of the Disbursement Agent and the Funding Agents and Lenders and the
Project Entities shall have no rights as third party beneficiaries of any of the provisions thereof.
In performing its functions and duties under this Agreement, the Disbursement Agent does not
assume and shall not be deemed to have assumed any obligation towards or relationship of
agency or trust with or for the Project Entities or any of their Affiliates. Neither the
Disbursement Agent nor any of its officers, directors, employees or agents shall be in any
manner liable or responsible for any loss or damage arising by reason of any act or omission to
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act by it or them hereunder or in connection with any of the transactions contemplated hereby,
including, but not limited to, any loss that may occur by reason of forgery, false representations,
the exercise of its discretion, or any other reason, except as a result of their bad faith, fraud, gross
negligence or willful misconduct as finally judicially determined by a court of competent
jurisdiction.
ARTICLE 10

SAFEKEEPING OF ACCOUNTS
10.1 Application of Funds in Accounts. Amounts deposited in the Accounts shall be
applied as provided in this Agreement. The Disbursement Agent shall at all times act and direct
the securities intermediaries under the Control Agreements so as to implement the application of
funds provisions and procedures herein set forth. The Disbursement Agent is hereby authorized
to reduce to cash any Cash Equivalent (without regard to maturity) in any Account in order to
make any application required hereunder.
10.2 Event of Default. Upon the occurrence and during the continuance of an Event
of Default of which it has written notice from a Funding Agent, the Disbursement Agent shall
not deposit or cause to be deposited any amounts into the Payment Accounts, the Interest
Account or the Cash Management Account, unless instructed to the contrary by the relevant
Controlling Person. The Disbursement Agent is hereby irrevocably authorized by the Project
Entities to apply, or cause to be applied, amounts in any Account and any other sums held under
any Control Agreement to the payment of Debt Service or other amounts or obligations due or
payable to the Secured Parties (in each case, only to the extent that such Secured Party holds a
Lien in the relevant Account) when instructed to do so by the Controlling Person.
10.3 Perfection. The Disbursement Agent shall take any steps, from time to time,
requested by the Bamk Agent or the Trustee to confirm or cause the securities intermediaries
under the Control Agreements to confirm and maintain the priority of their respective security
interests in the Accounts.
10.4 Second Mortgage Proceeds Account. Notwithstanding any other provision
hereof, the parties hereto acknowledge that the security interest granted under the Security
Documents to the Trustee in the Second Mortgage Proceeds Account (including any Cash
Equivalents held therein) is for the sole and exclusive benefit of the Trustee on behalf of the
Second Mortgage Holders.
10.5 Bank Proceeds Account. Notwithstanding any other provision hereof, the
parties hereto acknowledge that the security interest granted under the Security Documents to the
Bank Agent in the Bank Proceeds Account (including any Cash Equivalents held therein) is for
the sole and exclusive benefit of the Bank Agent and the Bank Lenders, and subject to the terms
of the Project Lenders Intercreditor Agreement, only the Bank Agent shall have the right to
direct the Disbursement Agent with respect thereto.
10.6 Retail Funding Account and Retail Payments Account. Notwithstanding any
other provision hereof, the parties hereto acknowledge that the security interest granted under the
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Retail Facility Security Documents to the Retail Agent in the Retail Funding Account and the
Retail Payment Account (including any Cash Equivalents held therein) is for the sole and
exclusive benefit of the Retail Agent and the Retail Lenders.
ARTICLE 11

MISCELLANEOUS
11~1 Addresses. Any conununications between the parties hereto or notices provided
herein to be given may be given to the following addresses:

If to the Project Entities:

c/o Fontainebleau Las Vegas, LLC,
Whitney Thier, Esquire
General Counsel
2827 Paradise Road
Las Vegas, NV 89109
Telephone No.: [phone]
Facsimile No.: [phone]

If to the Bank Agent:

Donna F. Kimbrough,
Assistant Vice President
Bank of America, N.A.
Mail Code: TX1-492-14-11
Baruk of America Plaza
901 Main Street
Dallas, TX 75202-3714
Telephone No.: [phone]
Facsimile No.: (214) 290...9436

If to the Trustee:

Wells Fargo Bank, N.A., as Trustee
Corporate Trust Services
MAC N9311-110
625 Marquette Avenue
Miimeapolis, MN 55479
Attention: Fontainebleau Resorts Account Manager
Telephone [phone]
Telecopier: [phone]

If to the Retail Agent:

Lehman Brothers Holdings Inc., as Retail Agent
c/o Lehman Brothers Holdings
399 Park Avenue
New York, New York 10022
Attention: Josh Freedman
Facsimile No.: [phone]

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If to the Disbursement Agent:Bank of America, N.A., as Disbursement Agent for
Fontainebleau Resorts
Mail Code: TX1-492-14-11
Bank of America Plaza
901 Main Street
Dallas, TX 75202-3714
Telephone No.: [phone]
Facsimile No.: [phone]

All notices or other communications required or permitted to be given hereunder shall be in
writing and shall be considered as properly given (a)if delivered in person, (b)if sent by
overnight delivery service, or (c) if sent by prepaid telex, or by telecopy with correct answer
back received. Notice so given shall be effective upon receipt by the addressee, except that
communicatiou or notice so transmitted by telecopy or other direct written electronic means shall
be deemed to have been validly and effectively given on the day (if a Banking Day and, if not,
on the next following Banking Day) on which it is validly transmitted if transmitted before
4:00 p.m., recipient’s time, and if transmitted after that time, on the next following Banking Day;
p_zovided however, that if any notice is tendered to an addressee and the delivery thereof is
refl~sed by such addressee, such notice shall be effective upon such tender. Any party shall have
the right to change its address for notice hereunder to any other location by notice to the other
parties in the manner set forth hereinabove.
11.2 Further Assurances. From time to time the Project Entities shall execute and
deliver, or cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Funding Agents or the Disbursement Agent may
reasonably request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Operative Documents, or of more fully perfecting or renewing the
rights of the Funding Agents and the Lenders with respect to the Pro.ject Security (or with respect
to any additions thereto or replacements or proceeds or products thereof or with respect to any
other property or assets hereafter acquired by any Project Entity which may be deemed to be part
of the Project Security) pursuant hereto or thereto. Upon the exercise by the Funding Agents, the
Disbursement Agent or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Operative Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Project Entities shall execute
and deliver, or will cause the execution and delivery of, all applications, certifications,
instruments and other documents and papers that the Funding Agent, the Disbursement Agent or
such Lender may be required to obtain from the Project Entities for such governmental consent,
approval, recording, qualification or authorization.
11.3 Delay and Waiver. No delay or omission to exercise any right, power or remedy
accruing upon the occurrence of any Default or Event of Default or any other breach or default
of the Project Entities under this Agreement shall impair any such right, power or remedy of the
Funding Agents, the Lenders, the Disbursement Agent or any other Secured Party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence therein, or in any
similar breach or default thereafter occurring, nor shall any waiver of any single Default, Event
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of Default or other breach or default be deemed a waiver of any other Default, Event of Default
or other breach or defanlt theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any of the Funding Agents, the Lenders, the
Disbursement Agent or any other Secured Party, of any Default, Event of Default or other breach
or default under this Agreement or any other Financing Agreement, or any waiver on the part of
any of the Funding Agents, the Lenders, the Disbursement Agent or any other Secured Party, of
any provision or condition of this Agreement or any other Operative Document, must be in
writing and shall be effective only to the extent in such writing specifically Set forth. All
remedies, either under this Agreement or any other Financing Agreement or by law or otherwise
afforded to any of the Funding Agents, the Lenders, the Disbursement Agent or any other
Secured Party, shall be cumulative and not alternative.
11.4 Additional Security; Right to Set-Off. Regardless of the adequacy of any other
collateral, any Secured Party may execute or realize on its security interest in any deposits or
other sums credited by or due from any such Person to the Project Entities, may apply any such
deposits or other sums to or set them off against the Project Entities’ obligations to the Project
Secured Parties under this Agreement and the other Financing Agreements at any time after the
occurrence and during the continuance of any Event of Default.
11.5 Entire Agreement. This Agreement and any agreement, document or instrument
attached hereto or referred to herein integrate all the terms and conditions mentioned herein or
incidental hereto and supersede all oral negotiations and prior writings in respect to the subject
matter hereof, all of which negotiations and writings are deemed void and of no force and effect.
11.6 Governing Law. This Agreement shall be governed by the laws of the State of
New York of the United States of America and shall for all purposes be governed by and
construed in accordance with the laws of such state without regard to the conflict of law rules
thereof other than Section 5-1401 of the New York General Obligations Law, provided, however,
that to the extent any terms of this Agreement are incorporated in and made part of any other
Financing Agreement, any such term so incorporated shall for all purposes be governed by and
construed in accordance with the law governing the Financing Agreement into which such term
is so incorporated.
11.7 Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby,
and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or
unenforceable provision.
11.8 Headings. Paragraph headings have been inserted in this Agreement as a matter
of convenience for reference only and it is agreed that such paragraph headings are not a part of
this Agreement and shall not be used in the interpretation of any provision of this Agreement.
11.9 Limitation on Liability. NO CLAIM SHALL BE MADE BY THE PROJECT
ENTITIES OR ANY OF THEIR AFFILIATES AGAINST THE FUNDING AGENTS, THE
LENDERS, THE DISBURSEMENT AGENT, THE CONTROLLING PERSON OR ANY
OTHER SECURED PARTY OR ANY OF THEIR RESPECTIVE AFFILIATES, DIRECTORS,
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EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES (WHETHER OR NOT THE CLAIM
THEREFOR IS BASED ON CONTRACT, TORTOR DUTY IMPOSED BY LAW), IN
CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPI_.ATED BY THIS AGREEMENT OR THE OTHER
OPERATIVE DOCUMENTS OR ANY ACT OR OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH; AND THE PROJECT ENTITIES HEREBY WAIVE,
RELEASE AND AGREE NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH
DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.
11.10 Waiver of Jury Trial. ALL PARTIES TO THIS AGREEMENT HEREBY
KNOWING[N, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER FINANCING AGREEMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF ANY PARTY TO THIS AGREEMENT. THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE FUNDING AGENTS, DISBURSEMENT AGENT
AND EACH OF THE OTHER LENDERS AND SECURED PARTIES TO ENTER INTO THIS
AGREEMENT.
11.11 Consent to Jurisdiction. Any legal action or proceeding by or against the
Project Entities or with respect to or arising out of this Agreement may be brought in or removed
to the courts of the State of New York, in and for the County of New York, or of the United
States of America for the Southern District of New York. By execution and delivery of this
Agreement, the Project Entities, accept, for themselves and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts for legal proceedings arising out of
or in connection with this Agreement and irrevocably consents to the appointment of the
Corporation Service Company as its agent to receive service of process in New York, New York.
Nothing herein shall affect the right to serve process in any other manner permitted by law or
any right to bring legal action or proceedings in any other competent jurisdiction, including
judicial or non-judicial foreclosure of real property interests which are part of the Project
Security. The Project Entities further agree that the aforesaid courts of the State of New York
and of the United States of America for the Southern District of New York shall have exclusive
jurisdiction with respect to any claim or counterclaim of the Project Entities based upon the
assertion that the rate of interest charged by or under this Agreement, or under the other
Financing Agreements is usurious. The Project Entities hereby waive any right to stay or dismiss
any action or proceeding under or in connection with any or all of the Project, this Agreement or
any other Operative Document brought before the foregoing courts on the basis of forum nonOllVet~i~Hs.

11.12 Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, the Project Entities may not assign or otherwise transfer any of
their rights under this Agreement.
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11.13 Reinstatement. This Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time payment and performance of the Project Entities’ obligations
hereunder or under the other Financing Agreements, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by the
Secured Parties. In the event that any payment or any part thereof is so rescinded, reduced,
restored or returned, snch obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or rettmaed.
11.14 No Partnership; Etc. The Secured Parties and the Project Entities intend that the
relationship between them shall be solely that of creditors and debtors. Nothing contained in this
Agreement or in any of the other Financing Agreements shall be deemed or construed to create a
partnership, tenancy-in-common, joint tenancy, joint venture or co.-ownership by or between the
Secured Parties and the Project Entities or any other Person. The Secured Parties shall not be in
any way responsible or liable for the debts, losses, obligations or duties of the Project Entities or
any other Person with respect to the Project or otherwise. All obligations to pay real property or
other taxes, assessments, insurance premiums, and all other fees and charges arising from the
ownership, operation or occupancy of the Project and to perform all obligations under the
agreements and contracts relating to the Project shall be the sole responsibility of the Project
Entities.
11.15 Costs and Expenses.
11.15.1 Reimbursement of Costs. The Project Entities shall (subject to the
limitations set forth herein and, with respect to each Funding Agent, to the
express provisions of the Financing Agreements or any other fee letters or
engagement letters to which such Funding Agent is a party) pay the reasonable
legal, engineering, other professional and all other fees and costs of the Funding
Agents, and the Disbursement Agent and their consultants and advisors, the
reasonable travel expenses and other out-of-pocket costs incurred by each of
them in connection with the preparation, negotiation, execution and delivery,
and where appropriate, registration of the Operative Documents (and all matters
incidental thereto), the syndication of the Loans, the administration of the
transactions contemplated by the Operative Documents (including, without
limitation, the administration of this Agreement, the other Operative Documents
and the Security Documents) and the preservation or enforcement of any of their
respective rights or in com~ection with any amendments, waivers or consents
required under the Financing Agreements or the Operative Documents provided
that this shall not require the payment by any of the other Project Entities of any
expenses, fees or costs attributable to the Retail Affiliate or the Retail Budget.
The Trustee and the Bank Agent shall be entitled to charge the Second Mortgage
Proceeds Account and the Bank Proceeds Account, and the Bank Agent shall be
entitled to make Advances under the Batik Credit Facility, for the direct payment
of such expenses.
11.15.2 Indemnity. The Project Entities shall indemnify, defend and hold
harnfless the Funding Agents, the Lenders, the Construction Consultant, the
Disbursement Agent, each of their respective affiliates and each of their
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respective officers, directors, partners, trustees, employers, affiliates,
shareholders, advisors, agents, attorneys, attorneys-in-fact, representatives and
"controlling persons" (within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended), (collectively,
the "Indemnitees") from and against and reimburse the Indemnitees for any and
all present and future claims, expenses, obligations, liabilities, losses, damages,
injuries (to person, property, or natural resources), penalties, stamp or other
similar taxes, actions, suits, judgments, reasonable costs and expenses (including
any legal or other expenses reasonably incurred by them in connection with the
investigating, preparing to defend or defending, or providing evidence in or
preparing to serve or serving as witness with respect to, any lawsuits,
investigations, claims or other proceedings (whether or not such Indemnitee is a
formal party thereto)) of whatever kind or nature, whether or not well founded,
ineritorious or unmeritorious, demanded, asserted or claimed against any such
Indemnitee including any liability resnlting from any delay or omission to pay
any such tax (collectively, "Claims") arising in any maimer out of or in
co~mection with this Agreement, the Financing Documents or any other
Operative Documents, the use of proceeds therefrom, the development,
construction, ownership and operation of the Project, the transactions
contemplated by this Agreement or any other Operative Document, any other
transaction related hereto or thereto of any claim, litigation, investigation or
proceeding relating to any of the foregoing (regardless of whether any
Indenmitee is a party hereto or thereto) including without limitation (a) any and
all Claims arising in connection with the release or presence of any Hazardous
Substances at the Site or the Project, whether foreseeable or unforeseeable,
including all costs of removal and disposal of such Hazardous Substances, all
reasonable costs required to be incurred in (i) determining whether the Project is
in compliance and (ii)causing the Pro.ject to be in compliance, with all
applicable Legal Requirements, all reasonable costs associated with claims for
damages to persons or property, and reasonable attorneys’ and consultants’ fees
and court costs, (b) any and all Claims arising out of or based upon any untrue
statement or alleged untrue statement of material fact contained in any
preliminary or final prospectus or any other similar disclosure document or in
any amendment or supplement thereto, any omission or alleged omission to state
in any preliminary or final prospectus or any other similar disclosure document
or in any amendment or supplement thereto any material fact required to be
stated therein or necessary to make the statements therein not misleading or
(c) any and all Claims arising in any matter out of, relating to or in connection
with any conduct by any Loan Party or their respective employees or agents or
any action or failure to act undertaken by any book-running manager under the
Facility Agreements at any Loan Party’s request or with any Loan Party’s
consent. No Indemnitee shall be liable for any damages arising from the nse by
unauthorized Persons of information or other materials sent through electronic,
telecommunication or other information transmission systems that are
intercepted by other Persons.

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11.15.3 Gross Negligence. The indemnity obligation of the Project Entities
pursuant to this Section 11.15 shall not apply with respect to an Indemnitee, to
the extent arising as a resnlt of the fraud, bad faith,, gross negligence or willfifl
misconduct of such Indemnitee, as finally jndicially determined by a court of
competent jurisdiction, but shall continue to apply to other Indemnitees.
11.15.4 Unenforceability. To the extent that the undertaking in the preceding
paragraphs of this Section 11.15 may be unenforceable because it is violative of
any law or public policy, the Project Entities will contribute the maximnm
portion that it is permitted to pay and satisfy under applicable law to the payment
and satisfaction of such nndertakings.
11.15.5 Foreclosure. The provisions of this Section ll.15 shall survive
foreclosure of the Security Documents and satisfaction or discharge of the
Project Entities’ obligations hereunder, and shall be in addition to any other
rights and remedies of any Indemnitee.
11.15.6 Payment Due Dates. Any amounts payable by the Project Entities
pursuant to this Section 11.15 shall be payable within ten Banking Days after the
Project Entities receive an invoice for such amounts from any applicable
Indenmitee, and if not paid when due shall bear interest at the highest default ¯
rate set forth in any of the Financing Agreements from and after such applicable
date until paid in full in inmaediately available fi~nds.
11.15.7 Actions; Counsel. In case any action or proceeding shall be instituted
involving any Indemnitee for which indemnification is to be sought hereunder,
then such Indemnitee shall promptly notify the Project Entities of the
commencement of any action or proceeding; provided, however, that the failure
so to notify the Project Entities shall not relieve the Project Entities from any
liability that the Project Entities may have to such Indemnitee pursuant to
Section 11.15.2 or from any liability that the Project Entities may have to such
Indemnitee.
11.15.8 Settlement. Any Indemnitee against whom any Claim is made shall be
entitled, after consultation with the Project Entities and upon consultation with
legal counsel wherein such Indemnitee is advised that such Claim is reasonably
meritorious, to compromise or settle any such Claim if such Indemnitee
determines in its reasonable discretion that failure to compromise or settle such
Claim could reasonably subject such Indemnitee to material liability. Any such
compromise or settlement shall be binding upon the Project Entities for purposes
of this Section 11.15.
11.15.9 Distinct Obligations. Nothing in this Section 11.15 is intended to create
any liability of the Retail Affiliate for any amount attribntable to the Resort
Budget or the other Project Entities or by the other Project Entities for any
amonnts attribntable to the Retail Budget or the Retail Affiliate.
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11.16 Agreements Among Funding Agents and Other Secured Parties. The Pro.ject
Entities acknowledge that the parties thereto have entered into the Intercreditor Agreements, and
agree that the agreements set forth therein do not violate any obligation to the Project Entities.
The Project Entities agree not to take any action to invalidate or challenge the validity of, or
assert in writing the invalidity of any provisions of the Intercreditor Agreements. As among the
Secured Parties, no provision hereof shall be deemed to relieve or in any way affect the Secured
Parties’ respective obligations or liabilities under the Intercreditor Agreements. Except for the
Retail Affiliate, the Project Entities are not a third party beneficiary of the Intercreditor
Agreements and shall have no right to enforce the same against any party. Each of the Funding
Agents and the Lenders shall be entitled to deliver copies of the credit documentation among the
Project Entities and the other Funding Agents and Lenders to prospective assignees and
participants under its respective Facility Agreements subject to its respective obligations in
respect of confidentiality to the Project Entities, without restriction as to the other° Funding
Agents or Lenders.
11,17 Counterparts. This Agreement may be executed in one or more duplicate
counterparts (including by facsimile) and when signed by all of the parties listed below shall
constitute a single binding agreement.
11.18 Termination. Subject to Section 11.13, this Agreement shall terminate and be of
no fi~rther force or effect upon completion of the transactions contemplated by Section 2.23,
provided that (a) the provisions of Article 9, Section 11.15 and Section 11.21 shall survive the
termination of this Agreement, and (b) the Disbursement Agent shall continue to retain any
amonnts in the Liquidity Account in the manner contemplated by this Agreement and subject to
the Control Agreements established pursuant to this Agreement for the benefit of the Bank Agent
and the Trustee, provided that amounts contained in the Liquidity Account shall thereafter be
disbursed in accordance with Section 7.24 of the Bank Credit Agreement (as amended from time
to time in accordance with the provisions of the Bank Credit Agreement) and when all funds in
such Account have been fully disbursed in accordance with such Section 7.24 of the Bank Credit
Agreement the Disbursement Agent shall terminate the Control Agreement established on such
Account pursuant to this Agreement. In addition, the Trustee shall cease to be a party to this
Agreement on the date that the Second Mortgage Proceeds Account is Exhausted. On such date,
(i) the Trustee shall have no flmher rights or obligations hereunder, (ii) neither the Trustee nor
the Second Mortgage Holders shall be entitled to any of the benefits of this Agreement, and (iii)
this Agreement shall automatically be amended to delete all references to the Trustee and the
Second Mortgage Holders to reflect that the Trustee is no longer a party to this Agreement and to
fi~rther reflect that neither the Trustee nor the Second Mortgage Holders shall be entitled to any
of the benefits of this Agreement; provided however that the Trustee and the Second Mortgage
Holders shall continue to (a) be permitted to correct the amount of Debt Service in respect of the
Second Mortgage Notes set forth in an Advance Request as provided in Section 2:4.4(c), (b)
receive copies of certificates delivered by the Project Entities pursuant to Sections 2.21, 2.22 and
2.23, (c) receive notices delivered under Sections 5.4 and 9.2.3, (d) approve Scope Changes as
and to the extent set forth in Section 6.2.1(b), (e)receive the benefit of control agreements
entered into pursuant to clause (ii)(x)(2) of the proviso in Section 6.8(b), (f) receive the benefit of
the indemnity provisions of Section 11.15 and (g)receive the benefits of the amendment
provisions of Section 11.19, and the Trustee shall be entitled to enforce this proviso as a third
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party beneficiary.
11.19 Amendments. The Bank Agent and the Disbursement Agent are authorized by
each of the other Funding Agents to enter into amendments to this Agreement requested by the
Project Entities for the purpose of curing any formal defect, inconsistency, omission or
ambiguity in this Agreement (without any consent or approval by the other Funding Agents or
the Lenders). From the Exhaustion of the Second Mortgage Proceeds Account, the Bank Agent
may also amend this Agreement or waive any Default or Event of Default without the consent of
the Trustee, the Second Mortgage Holders, the Retail Agent or the Retail Lenders; provided,
however, that (a) any such waiver by the Bank Agent shall not, without the consent of a majority
in interest of the Retail Lenders constitute a waiver of any Default or Event of Default which
otherwise independently (not by cross-default or cross-reference to another agreement)
constitutes a default or event of default under the Retail Facility; (b) the Bank Agent shall not,
without the consent of the Trustee, be permitted to amend Sections 11.6, 11.10, the proviso in the
last sentence of Section 11.18 or any of the Sections of this Agreement cross referenced in such
proviso to the extent any such amendment would adversely affect the rights of the Trustee as set
forth in such proviso and (c) notwithstanding anything to the contrary contained in this
Agreement, in no event shall this Agreement be amended in a manner which would (i) have the
effect of modifying the provisions of Sections 3.5, 3.7.3, 5.11 or 5.12, (ii) have the effect of
modifying any of the Sections or definitions cross referenced or used in Sections 3.5, 3.7.3, 5.11
or 5.12 (unless such modification would not materially and adversely affect such Sections 3.5,
3.7.3, 5.11 or 5.12 as the same relate to the Retail Agent or Retail Lenders) or (iii) increase any
of the obligations of the Retail Agent or Retail Lenders hereunder, change the character of the
Shared Costs for which the Retail Lenders must fund Advances, increase the liabilities of the
Retail Agent or Retail Lender hereunder in any manner, change the order of funding required
hereunder in a manner affecting the Retail Agent or Retail Lenders, affect the Retail Agent and
the Retail Lender’s security interest in the Retail Accounts, diminish the right of the Retail Agent
to receive information or reports herennder, or modify any of the definitions relating to the
Shared Costs, Retail Lender’s Shared Cost Commitment, Other Retail Costs or the Retail
Budget), in each case without the prior written consent of the Retail Agent. Neither the Bank
Agent nor the Trustee may amend or waive any of the conditions to the making of Advances by
the Retail Agent and the Retail Lenders set forth in Section 3.5.
11.20 [Intentionally Omitted]
11.21 Confidentiality. Each of the Funding Agents and the Disbursement Agent agrees
to maintain the confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such Information
and instructed to keep such Information confidential), (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any
other party hereto, (e) in cormection with the exercise of any remedies hereunder or under any
other instrument, document or agreement executed in connection herewith or any action or
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proceeding relating to this Agreement or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of this Section, to
(i) any assignee of or participant in, or any prospective assignee of or participant in, any of its
rights or obligations under the Financing Agreements, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to Project Entities and
their obligations, (g) with the consent of any Project Entity or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes
available to them or their respective Affiliates on a nonconfidential basis from a source other
than Project Entities.
As used in this Section "Information" means all information received frmn any Loan Party other
than any such information that is available to the Funding Agent or the Disbursement Agent on a
nonconfidential basis prior to disclosure by any Loan Party, provided that, iu the case of
information received after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such Information
as such Person would accord to its own confidential information.
[Remainder of this page intentionally left blank- signature pages follow]

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Case 1:09-md-02106-ASG Document 37-7 Entered on FLSD Docket 02/18/2010 Page 19 of 43

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their officers thereunto duly authorized as of the day and year first above written.
FONTAINEBLEAU LAS VEGAS HOLDINGS, LLC,
a Delaware limited liability company
By: Fontainebleau Resort Properties I, LLC,
its Managing Member
By: Fontainebleau Resort Itoldings, LLC,
its Managing Member ~
By: Fontaineb!eau Resorts, LLC, its Managing
Member
By:
Title:

FONTAINEBLEAU LAS VEGAS CAPITAL CORP.
a Delaware corporation
By:
Title:

FONTAINEBLEAU LAS VEGAS RETAIL, LLC,
a Delaware limited liability company
By: Fontainebleau Las Vegas Retail Mezzanine, LLC,
its Managing Member
By: Fontainebleau Las Vegas Retail Parent, LLC,
its Managing Member

By: Fontainebleau Resort Holdings, LLC,
its Managing Member
By: Fontaineb~£au R@orts, LLC, its
Managin~Memb~ ....
Title: -~c ~ ~ ~- i ~ ~-~ (’ iq ~’- ~ ~ ~t_~ ~ ,9

[Master Disbursement Agreement]