Document:

EXHIBIT 10.1

LEASE

THIS DOCUMENT SECURES FUTURE ADVANCES

Dated as of March
26, 2007

between

ADOBE
SYSTEMS INCORPORATED,

as the Lessee,

and

SELCO SERVICE CORPORATION

(Doing Business in
California as “Ohio SELCO Service Corporation”),

as the Lessor.

Lease Extension re
Office Tower

Located in City of San Jose, Santa Clara County, California

for Adobe Systems Incorporated

This
Lease is subject to a lien in favor of the Administrative Agent on behalf of
the Secured Parties.  This Lease has been
executed in several counterparts.  To the
extent, if any, that this Lease constitutes chattel paper (as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no lien on this Lease may be created through the transfer or
possession of any counterpart other than the original counterpart containing
the receipt therefor executed by the Administrative Agent, on or following the
signature page hereof.

This counterpart is the
original counterpart.

 

   
 

 

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 1.1.

  	
  Definitions;
  Interpretation

  	
   

  	
  1

  
	
  ARTICLE II

  	
  LEASE

  	
   

  	
  1

  
	
  SECTION 2.1.

  	
  Acceptance and
  Lease of Property

  	
   

  	
  1

  
	
  SECTION 2.2.

  	
  Acceptance
  Procedure

  	
   

  	
  2

  
	
  SECTION 2.3.

  	
  Lease Term

  	
   

  	
  2

  
	
  SECTION 2.4.

  	
  Title

  	
   

  	
  2

  
	
  ARTICLE III

  	
  PAYMENT OF RENT

  	
   

  	
  2

  
	
  SECTION 3.1.

  	
  Rent

  	
   

  	
  2

  
	
  SECTION 3.2.

  	
  Payment of Rent

  	
   

  	
  2

  
	
  SECTION 3.3.

  	
  Supplemental
  Rent

  	
   

  	
  2

  
	
  SECTION 3.4.

  	
  Method of
  Payment

  	
   

  	
  3

  
	
  ARTICLE IV

  	
  QUIET ENJOYMENT; RIGHT TO INSPECT

  	
   

  	
  3

  
	
  SECTION 4.1.

  	
  Quiet Enjoyment

  	
   

  	
  3

  
	
  SECTION 4.2.

  	
  Right to Inspect

  	
   

  	
  3

  
	
  ARTICLE V

  	
  NET LEASE, ETC

  	
   

  	
  4

  
	
  SECTION 5.1.

  	
  Net Lease

  	
   

  	
  4

  
	
  SECTION 5.2.

  	
  No Termination
  or Abatement

  	
   

  	
  4

  
	
  ARTICLE VI

  	
  ASSIGNMENT AND SUBLEASING BY LESSEE

  	
   

  	
  5

  
	
  SECTION 6.1.

  	
  General

  	
   

  	
  5

  
	
  SECTION 6.2.

  	
  Subletting

  	
   

  	
  5

  
	
  ARTICLE VII

  	
  LESSEE ACKNOWLEDGMENTS

  	
   

  	
  6

  
	
  SECTION 7.1.

  	
  Condition of the
  Property

  	
   

  	
  6

  
	
  SECTION 7.2.

  	
  Enforcement of
  Warranties; No Obligation of Lessor to Repair, etc

  	
   

  	
  6

  
	
  SECTION 7.3.

  	
  No Liability of
  Participants, etc

  	
   

  	
  7

  
	
  ARTICLE VIII

  	
  POSSESSION AND USE OF THE PROPERTY, ETC

  	
   

  	
  7

  
	
  SECTION 8.1.

  	
  Utility Charges

  	
   

  	
  7

  
	
  SECTION 8.2.

  	
  Possession, Use
  and Operation of the Property

  	
   

  	
  7

  
	
  SECTION 8.3.

  	
  Compliance with
  Applicable Laws and Insurance Requirements; Necessary Permits, etc

  	
   

  	
  7

  
	
  SECTION 8.4.

  	
  Non-discrimination
  Required by Ground Lease

  	
   

  	
  8

  

 

 i
 

 

	
  ARTICLE IX

  	
  MAINTENANCE AND REPAIR

  	
   

  	
  8

  
	
  SECTION
  9.1.

  	
  Maintenance and
  Repair

  	
   

  	
  8

  
	
  ARTICLE X

  	
  MODIFICATIONS, ETC

  	
   

  	
  8

  
	
  SECTION
  10.1.

  	
  Modifications

  	
   

  	
  8

  
	
  ARTICLE XI

  	
  DISCHARGE OF LIENS;
  CONDITION UPON RETURN

  	
   

  	
  9

  
	
  SECTION
  11.1.

  	
  Lessee’s
  Obligation to Discharge Liens

  	
   

  	
  9

  
	
  SECTION 11.2.

  	
  Condition Upon
  Return to Lessor

  	
   

  	
  9

  
	
  ARTICLE XII

  	
  PERMITTED CONTESTS;
  GRANTS AND RELEASES OF EASEMENTS; GROUND LEASE PURCHASE OPTION

  	
   

  	
  10

  
	
  SECTION
  12.1.

  	
  Permitted
  Contests in Respect of Applicable Law Other Than Impositions

  	
   

  	
  10

  
	
  SECTION 12.2.

  	
  Grants and
  Releases of Easements; Lessor’s Waivers

  	
   

  	
  10

  
	
  SECTION 12.3.

  	
  Purchase Option
  Under Ground Lease

  	
   

  	
  11

  
	
  ARTICLE XIII

  	
  INSURANCE

  	
   

  	
  12

  
	
  SECTION
  13.1.

  	
  Required
  Insurance

  	
   

  	
  12

  
	
  SECTION 13.2.

  	
  Deductibles;
  Insurance Providers; Coverage and Endorsements; Confirmation of Insurance,
  etc

  	
   

  	
  13

  
	
  ARTICLE XIV

  	
  RISK OF LOSS; CASUALTY
  AND CONDEMNATION; ENVIRONMENTAL MATTERS

  	
   

  	
  14

  
	
  SECTION
  14.1.

  	
  Risk of Loss

  	
   

  	
  14

  
	
  SECTION 14.2.

  	
  [Reserved]

  	
   

  	
  15

  
	
  SECTION 14.3.

  	
  Casualty or
  Condemnation during Lease Term

  	
   

  	
  15

  
	
  SECTION 14.4.

  	
  Environmental
  Matters

  	
   

  	
  16

  
	
  SECTION 14.5.

  	
  Notice of
  Environmental Matters

  	
   

  	
  17

  
	
  ARTICLE XV

  	
  TERMINATION OF LEASE

  	
   

  	
  17

  
	
  SECTION
  15.1.

  	
  Partial
  Termination upon Certain Events

  	
   

  	
  17

  
	
  SECTION 15.2.

  	
  Termination
  Procedures

  	
   

  	
  18

  
	
  ARTICLE XVI

  	
  LEASE EVENTS OF DEFAULT

  	
   

  	
  18

  
	
  SECTION
  16.1.

  	
  Lease Events of
  Default

  	
   

  	
  18

  
	
  SECTION 16.2.

  	
  Remedies

  	
   

  	
  21

  
	
  SECTION 16.3.

  	
  Excess Amounts

  	
   

  	
  25

  
	
  SECTION 16.4.

  	
  Waiver of
  Certain Rights

  	
   

  	
  25

  
					

 

 ii
 

 

	
  ARTICLE XVII

  	
  LESSOR’S RIGHT TO CURE

  	
   

  	
  25

  
	
  SECTION
  17.1.

  	
  The Lessor’s
  Right to Cure the Lessee’s Lease Defaults

  	
   

  	
  25

  
	
  ARTICLE XVIII

  	
  PURCHASE PROVISIONS

  	
   

  	
  26

  
	
  SECTION
  18.1.

  	
  Purchase of the
  Property

  	
   

  	
  26

  
	
  SECTION 18.2.

  	
  Expiration Date
  Purchase of the Property

  	
   

  	
  26

  
	
  SECTION 18.3.

  	
  Acceleration of
  Purchase Obligation

  	
   

  	
  27

  
	
  SECTION 18.4.

  	
  Provisions
  Relating to the Exercise of Purchase Option or Purchase Obligation

  	
   

  	
  27

  
	
  ARTICLE XIX

  	
  EXTENSION OF EXPIRATION
  DATE

  	
   

  	
  28

  
	
  SECTION
  19.1.

  	
  Extension of
  Expiration Date

  	
   

  	
  28

  
	
  ARTICLE XX

  	
  REMARKETING OPTION

  	
   

  	
  28

  
	
  SECTION
  20.1.

  	
  Option to
  Remarket

  	
   

  	
  28

  
	
  SECTION 20.2.

  	
  Conveyance Upon
  Remarketing

  	
   

  	
  30

  
	
  SECTION 20.3.

  	
  Acceptance of
  Bids

  	
   

  	
  31

  
	
  SECTION 20.4.

  	
  Certain
  Obligations Continue

  	
   

  	
  31

  
	
  ARTICLE XXI

  	
  ESTOPPEL CERTIFICATES;
  ACCEPTANCE OF SURRENDER; 

  NO MERGER OF TITLE

  	
   

  	
  32

  
	
  SECTION
  21.1.

  	
  Estoppel
  Certificates

  	
   

  	
  32

  
	
  SECTION 21.2.

  	
  Acceptance of
  Surrender

  	
   

  	
  32

  
	
  SECTION 21.3.

  	
  No Merger of
  Title

  	
   

  	
  32

  
	
  ARTICLE XXII

  	
  GRANT OF LIEN;
  FORECLOSURE OF INTEREST; FURTHER 

  ASSURANCES

  	
   

  	
  32

  
	
  SECTION
  22.1.

  	
  Grant of Lien by
  Lessee; Foreclosure of Lessee’s Interest

  	
   

  	
  32

  
	
  SECTION 22.2.

  	
  Further
  Assurances

  	
   

  	
  37

  
	
  SECTION 22.3.

  	
  Security for
  Obligations

  	
   

  	
  37

  
	
  ARTICLE XXIII

  	
  INTENT OF THE PARTIES

  	
   

  	
  38

  
	
  SECTION
  23.1.

  	
  Nature of
  Transaction

  	
   

  	
  38

  
	
  ARTICLE XXIV

  	
  MISCELLANEOUS

  	
   

  	
  38

  
	
  SECTION
  24.1.

  	
  Survival;
  Severability; etc

  	
   

  	
  38

  
	
  SECTION 24.2.

  	
  Amendments and
  Modifications

  	
   

  	
  39

  
	
  SECTION 24.3.

  	
  No Waiver

  	
   

  	
  39

  
	
  SECTION 24.4.

  	
  Notices

  	
   

  	
  39

  
	
  SECTION 24.5.

  	
  Successors and
  Assigns

  	
   

  	
  39

  
					

 iii
 

 

	
  SECTION 24.6.

  	
   

  	
  Headings and Table of Contents

  	
   

  	
  39

  
	
  SECTION 24.7.

  	
   

  	
  Counterparts

  	
   

  	
  39

  
	
  SECTION 24.8.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  39

  
	
  SECTION 24.9.

  	
   

  	
  Liability Limited

  	
   

  	
  39

  
	
  SECTION 24.10.

  	
   

  	
  Original Lease

  	
   

  	
  40

  

 

 iv

LEASE

THIS DOCUMENT SECURES FUTURE ADVANCES

THIS LEASE (this “Lease”),
dated as of March 26, 2007, between ADOBE
SYSTEMS INCORPORATED, a Delaware corporation, as Lessee (together with
its permitted successors and assigns, the “Lessee”),
and SELCO SERVICE CORPORATION, an
Ohio corporation doing business in California as “Ohio SELCO SERVICE CORPORATION”, as Lessor (in such
capacity, the “Lessor”).

WITNESSETH:

WHEREAS, the Lessor and the Lessee previously
entered into a lease financing (the “Prior Transaction”)
pursuant to that certain Participation Agreement dated as of September 26, 2001
(the “Prior Participation Agreement”), to, inter alia, construct Improvements on the Land;

WHEREAS, the Lessor and the Lessee desire to
refinance the Prior Transaction;

WHEREAS, pursuant to that certain Participation
Agreement dated as of the date hereof (as amended, modified, restated or
supplemented from time to time, the “Participation Agreement”),
among the Lessee, the Lessor, the Purchasers described therein, the Lender described
therein, and KeyBank National Association, as Administrative Agent for the
Participants, the Participants have agreed to re-finance the Property;

WHEREAS, the Lessor desires to lease to the
Lessee, and the Lessee desires to lease from the Lessor, the Property; and

WHEREAS, the Property will be subject to the
terms of this Lease;

NOW, THEREFORE, in consideration of the
foregoing, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE I

DEFINITIONS

SECTION 1.1.  Definitions;
Interpretation.  Capitalized
terms used but not otherwise defined in this Lease have the respective meanings
specified in Appendix A to the
Participation Agreement, and the rules of interpretation set forth in such Appendix A shall apply to this Lease.

ARTICLE II

LEASE

SECTION 2.1.  Acceptance and Lease of
Property.  Pursuant to the
Prior Participation Agreement, the Lessor did acquire and accept (a) a
leasehold interest in the Land, and (b) the Improvements constructed
thereon.  The Lessor now agrees that it
shall, commencing on the first 

day of the Lease Term,
demise and lease to the Lessee hereunder for the Lease Term the Lessor’s
interest in the Property, and the Lessee hereby agrees, expressly for the
direct benefit of the Lessor, to accept and lease from the Lessor for the Lease
Term, the Lessor’s interest in the Property.

SECTION 2.2.  Acceptance Procedure.  The Lessee hereby agrees that the execution
and delivery by it of this Lease shall, without further act, constitute the
acceptance by the Lessee of the Property for all purposes of this Lease and the
other Operative Documents on the terms set forth herein and therein, and that
the Property, including all Improvements constructed or installed on the
Property, shall be deemed to be included in the leasehold estate of this Lease
and shall be subject to the terms and conditions of this Lease as of the first
day of the Lease Term.

SECTION 2.3.  Lease Term.  The Lease Term (the “Lease Term”)
of this Lease shall commence on (and include) and be in full force and effect
on the Closing Date, and shall end on (and include) the Expiration Date (as the
same may be extended in accordance with Section 19.1 hereof).

SECTION 2.4.  Title.  The Property is leased to the Lessee without
any representation or warranty, express or implied, by the Lessor and subject
to the rights of parties in possession, the existing state of title (including,
without limitation, all Liens other than Lessor Liens attributable to Lessor)
and all Applicable Law.  The Lessee shall
in no event have any recourse against the Lessor for any defect in or exception
to title to the Property other than resulting from Lessor Liens attributable to
the Lessor.

ARTICLE III

PAYMENT OF RENT

SECTION 3.1.  Rent.

(a)           During the Lease Term, the Lessee
shall pay Basic Rent for the Property to the Lessor on each Rent Payment Date,
on the date required under Section 20.1(m) in connection with the Lessee’s
exercise of the Remarketing Option and on any date on which this Lease shall
terminate with respect to the Property.

(b)           Neither the Lessee’s inability or
failure to take possession of all or any portion of the Property when delivered
by the Lessor, nor the inability or failure of the Lessor to deliver all or any
portion of the Property to the Lessee on the Closing Date or thereafter,
whether or not attributable to any act or omission of the Lessee or any act or
omission of the Lessor, shall delay or otherwise affect the Lessee’s obligation
to pay Rent for the Property in accordance with the terms of this Lease.

SECTION 3.2.  Payment of Rent.  Rent shall be paid absolutely net to each
Person entitled thereto, so that this Lease shall yield to such Person the full
amount thereof, without setoff, deduction or reduction.

SECTION 3.3.  Supplemental Rent.  The Lessee shall pay to the Lessor or any
other Person entitled thereto any and all Supplemental Rent promptly as the
same shall become due 

 2
 

and payable, and if the
Lessee fails to pay any Supplemental Rent, the Lessor and such other Persons
shall have all rights, powers and remedies provided for herein or by law or
equity or otherwise.  The Lessee shall
pay to the Lessor, as Supplemental Rent, among other things, (a) all rent,
taxes, insurance  and any other amounts
payable by the Lessor as tenant under the Ground Lease, and (b) on demand, to
the extent permitted by Applicable Law, interest at the Default Rate (or if no
rate is applicable, at a rate per annum equal to the Base Rate plus a margin of 2% per annum) on any installment of Basic
Rent not paid when due for the period for which the same shall be overdue and
on any payment of Supplemental Rent not paid when due or demanded by the Lessor
for the period from the due date or the date of any such demand, as the case
may be, until the same shall be paid. 
The expiration or other termination of the Lessee’s obligations to pay
Basic Rent hereunder shall not limit or modify the obligations of the Lessee
with respect to Supplemental Rent. 
Unless expressly provided otherwise in this Lease, in the event of any
failure on the part of the Lessee to pay and discharge any Supplemental Rent as
and when due, the Lessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added under any agreement to
which Lessee is a party or which is authorized in writing by the Lessee with a
third party for nonpayment or late payment of such Supplemental Rent, all of
which shall also constitute Supplemental Rent.

SECTION 3.4.  Method of Payment.  Each payment of Rent payable by the Lessee to
the Lessor under this Lease or any other Operative Document shall be made by
the Lessee to the Administrative Agent as assignee of the Lessor under the
Assignment of Lease and Rent (or, if all amounts owing to the Participants
under the Operative Documents have been paid in full, to the Lessor) prior to
2:00 P.M. (New York time), to the Account in immediately available funds
consisting of lawful currency of the United States of America on the date when
such payment shall be due.  Payments
received after 2:00 P.M. (New York time), on the date due shall for the purpose
of Section 16.1 hereof be deemed received on such day; provided,
however, that for the purposes of the second sentence of Section 3.3
hereof, such payments shall be deemed received on the next succeeding Business
Day and subject to interest at the Default Rate as provided in such Section
3.3.

ARTICLE IV

QUIET ENJOYMENT; RIGHT TO INSPECT

SECTION 4.1.  Quiet Enjoyment.  Subject to Sections 2.4 and 4.2, and subject
to the rights of the Lessor contained in Article XVI hereof and the other terms
of the Operative Documents to which the Lessee is a party, the Lessee shall
peaceably and quietly have, hold and enjoy the Property for the Lease Term,
free of any claim or other action by the Lessor or anyone claiming by, through
or under the Lessor (other than the Lessee) with respect to any matters arising
from and after the Closing Date.  Such
right of quiet enjoyment is independent of, and shall not affect the rights of
the Lessor or any assignee thereof otherwise to initiate legal action to
enforce the obligations of the Lessee under this Lease.

SECTION 4.2.  Right to Inspect.  During the Lease Term, the Lessee shall upon
reasonable advance written  notice from
the Lessor (except that no advance notice will be required after the occurrence
and during the continuance of a Lease Event of Default), permit any Participant
or the Administrative Agent and their respective authorized representatives to
inspect the Property during normal business hours, provided,
that such inspections shall not unreasonably interfere with the Lessee’s
business operations at the Property.

 3
 

ARTICLE V

NET LEASE, ETC.

SECTION 5.1.  Net Lease.  This Lease shall constitute a net lease.  Any present or future law to the contrary
notwithstanding, this Lease shall not terminate, nor shall the Lessee be
entitled to any abatement, suspension, deferment, reduction, setoff,
counterclaim, or defense with respect to the Rent, nor shall the obligations of
the Lessee hereunder be affected (except as expressly herein permitted and by
performance of the obligations in connection therewith) by reason of: (a) any
defect in the condition, merchantability, design, construction, quality or fitness
for use of the Property or any part thereof, or the failure of the Property to
comply with all Applicable Law, including any inability to occupy or use the
Property or any part thereof by reason of such non-compliance; (b) any damage
to, removal, abandonment, salvage, loss, contamination of or Release from,
scrapping or destruction of or any requisition or taking of the Property or any
part thereof, (c) any restriction, prevention or curtailment of or interference
with the construction on or any use of the Property or any part thereof
including eviction; (d) any defect in title to or rights to the Property or any
Lien on such title or rights or on the Property (other than Lessor Liens); (e)
any change, waiver, extension, indulgence or other action or omission or breach
in respect of any obligation or liability of or by the Administrative Agent or
any Participant; (f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceedings relating to Lessee,
any Participant or any other Person, or any action taken with respect to this
Lease by any trustee or receiver of the Lessee, any Participant or any other
Person, or by any court, in any such proceeding; (g) any claim that the Lessee
has or might have against any Person, including without limitation any
Participant or any vendor, manufacturer, contractor of or for the Property; (h)
any failure on the part of the Lessor to perform or comply with any of the
terms of this Lease (other than performance by the Lessor of its obligations
set forth in Section 2.1 hereof), of any other Operative Document or of any
other agreement; (i) any invalidity or unenforceability or illegality or
disaffirmance of this Lease against or by the Lessee or any provision hereof or
any of the other Operative Documents or any provision of any thereof; (j) the
impossibility or illegality of performance by the Lessee, the Lessor or both;
(k) any action by any court, administrative agency or other Governmental
Authority; or (l) any other cause or circumstances whether similar or
dissimilar to the foregoing and whether or not the Lessee shall have notice or
knowledge of any of the foregoing.  The
Lessee’s agreement in the preceding sentence shall not affect any claim, action
or right the Lessee may have against the Lessor or any other Participant.  The parties intend that the obligations of
the Lessee hereunder shall be covenants and agreements that are separate and
independent from any obligations of the Lessor hereunder or under any other
Operative Documents and the obligations of the Lessee shall continue unaffected
unless such obligations shall have been modified or terminated in accordance
with an express provision of this Lease.

SECTION 5.2.  No Termination or
Abatement.  The Lessee shall
remain obligated under this Lease in accordance with its terms and shall not
take any action to terminate, rescind or avoid this Lease (except as provided
herein), notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting the Lessor or 

 4
 

any Participant, or any
action with respect to this Lease which may be taken by any trustee, receiver
or liquidator of the Lessor or any Participant or by any court with respect to
the Lessor or any Participant.  The
Lessee hereby waives all right to terminate or surrender this Lease (except as
provided herein) or except as a consequence of a reduction in the Property Cost
as a result of Casualty or Condemnation proceeds pursuant to the terms of
Section 14.3(a) of this Lease, or as a result of a purchase of any or all of
the Property pursuant to Section 18.1 of this Lease, to avail itself of any
abatement, suspension, deferment, reduction, setoff, counterclaim or defense
with respect to the Property Cost.  The
Lessee shall remain obligated under this Lease in accordance with its terms and
the Lessee hereby waives any and all rights now or hereafter conferred by
statute or otherwise to modify or to avoid strict compliance with its
obligations under this Lease and the Operative Documents.  Notwithstanding any such statute or
otherwise, the Lessee shall be bound by all of the terms and conditions
contained in this Lease.

ARTICLE VI

ASSIGNMENT AND SUBLEASING BY LESSEE

SECTION 6.1.  General.  THE LESSEE SHALL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT AND EACH PARTICIPANT (SUCH CONSENTS
TO BE GIVEN OR WITHHELD IN THE SOLE DISCRETION OF THE ADMINISTRATIVE AGENT AND
EACH PARTICIPANT), TRANSFER, ASSIGN OR ENCUMBER THIS LEASE OR ANY OF ITS RIGHTS
OR OBLIGATIONS HEREUNDER OR SUBLEASE THE PROPERTY OR ANY PART THEREOF EXCEPT AS
PERMITTED BY SECTION 6.2, AND ANY SUCH TRANSFER, ASSIGNMENT, ENCUMBRANCE OR
SUBLEASE THAT IS NOT PERMITTED BY SECTION 6.2 AND MADE WITHOUT SUCH WRITTEN
CONSENTS THERETO SHALL BE NULL AND VOID.

SECTION 6.2.  Subletting.  During the Lease Term, the Lessee may
sublease the Property or any portion thereof to any Person upon no less than
five (5) days prior written notice to the Administrative Agent and the Lessor; provided, however, that: 
(a) no sublease or other relinquishment of possession of the Property
shall in any way discharge or diminish any of the obligations of the Lessee to
the Lessor and the other Participants under this Lease and the other Operative
Documents and the Lessee shall remain directly and primarily liable under this
Lease and the other Operative Documents to which it is a party; (b) any
sublease of the Property shall expressly be made subject to and subordinated to
this Lease and to the rights of the Lessor hereunder; (c) each sublease shall
expressly provide for the immediate surrender of the Property to the Lessor
after notice from the Lessor to such sublessee of the occurrence of a Lease
Event of Default and a request for such surrender; and (d) all such subleases
shall expressly provide for automatic termination at or prior to the earlier of
(i) the Expiration Date and (ii) the occurrence of a Lease Event of Default
unless the Lessee shall have exercised its Purchase Option and purchased the
Property pursuant to Section 18.1.

 5
 

ARTICLE VII

LESSEE ACKNOWLEDGMENTS

SECTION 7.1.  Condition of the Property.  THE LESSEE ACKNOWLEDGES AND AGREES THAT
ALTHOUGH THE LESSOR WILL (A) OWN AND HOLD LEASEHOLD TITLE TO THE LAND AND (B)
OWN AND HOLD TITLE TO THE IMPROVEMENTS, THE LESSEE IS SOLELY RESPONSIBLE FOR
PROPERTY AND ANY ALTERATIONS OR MODIFICATIONS THERETO.  THE LESSEE FURTHER ACKNOWLEDGES AND AGREES
THAT IT IS LEASING THE PROPERTY “AS IS, WHERE IS, AND WITH
ALL FAULTS” WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY THE ADMINISTRATIVE AGENT OR ANY PARTICIPANT AND IN EACH CASE
SUBJECT TO (A) THE EXISTING STATE OF TITLE (EXCLUDING LESSOR LIENS ATTRIBUTABLE
TO LESSOR), (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF, (C) ANY STATE
OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW, AND (D)
VIOLATIONS OF APPLICABLE LAW WHICH MAY EXIST ON THE DATE HEREOF, ON THE CLOSING
DATE OR ON ANY DATE THEREAFTER.  NEITHER
THE ADMINISTRATIVE AGENT NOR ANY PARTICIPANT HAS MADE OR SHALL BE DEEMED TO
HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) OR
SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE (OTHER THAN
FOR LESSOR LIENS ATTRIBUTABLE TO THE ADMINISTRATIVE AGENT OR SUCH PARTICIPANT,
AS THE CASE MAY BE), VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR
FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT (EXCEPT SECTION 4.1 HEREOF) WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF) AND
NEITHER THE LESSOR NOR ANY OTHER PARTICIPANT SHALL BE LIABLE FOR ANY LATENT,
HIDDEN, OR PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR LIENS ATTRIBUTABLE TO
THE LESSOR OR SUCH OTHER PARTICIPANT) OR THE FAILURE OF THE PROPERTY, OR ANY
PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAW.

SECTION 7.2.  Enforcement of Warranties;
No Obligation of Lessor to Repair, etc.  The Lessor hereby appoints the Lessee as the
Lessor’s attorney-in-fact, with full authority in the place and stead of the Lessor,
to take such actions from time to time during the Lease Term so long as no
Lease Event of Default shall have occurred and be continuing, at the Lessee’s
sole cost and expense, as are necessary or desirable to enforce any warranty or
guaranty of any Person relating to the Property.  The Lessor shall under no circumstances be
required to build any improvements on the Property, make any repairs,
replacements, alterations or renewals of any nature or description to the
Property, make any expenditure whatsoever in connection with this Lease (other
than for Advances made in accordance with and pursuant to the terms of the
Participation Agreement) or maintain the Property in any way.  The Lessee waives any right to (a) require
the Lessor to maintain, repair, or rebuild all or any part of the Property or
(b) make repairs at the expense of the Lessor pursuant to any Applicable Law,
Insurance Requirement, contract, agreement, or covenant, condition or
restriction in effect at any time during the Lease Term.

 6
 

SECTION 7.3.  No Liability of
Participants, etc.  Nothing
contained in this Lease shall be construed as constituting the consent or
request of the Lessor, any other Participant, Affected Party, Indemnitee or
other Person, expressed or implied, to or for the performance by any
contractor, mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Property or any part
thereof.  NOTICE IS HEREBY GIVEN THAT
NEITHER THE ADMINISTRATIVE AGENT NOR ANY PARTICIPANT IS OR SHALL BE LIABLE FOR
ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR
TO ANYONE HOLDING ANY INTEREST IN THE PROPERTY OR ANY PART THEREOF THROUGH OR
UNDER THE LESSEE, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF THE LESSOR OR
ANY OTHER PARTICIPANT IN AND TO THE PROPERTY.

ARTICLE VIII

POSSESSION AND USE OF THE PROPERTY, ETC.

SECTION 8.1.  Utility Charges.  The Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on the Property during the
Lease Term.  The Lessee shall be entitled
to receive any credit or refund with respect to any utility charge paid by the
Lessee and the amount of any credit or refund received by the Lessor on account
of any utility charges paid by the Lessee, net of the costs and expenses
reasonably incurred by the Lessor in obtaining such credit or refund, shall be
promptly paid over to the Lessee.

SECTION 8.2.  Possession, Use and
Operation of the Property. 
Lessee covenants that the Property shall be used, operated and
maintained as a first class office building and in a manner consistent with
this Lease and the standards applied by the Lessee for other office building
similar to the Property owned or leased by the Lessee and its
Subsidiaries.  The Lessee shall pay, or
cause to be paid, all charges and costs required in connection with the use of
the Property as contemplated by this Lease. 
The Lessee shall not commit or permit any waste or abandonment of the
Property or any part thereof.

SECTION 8.3.  Compliance with Applicable
Laws and Insurance Requirements; Necessary Permits, etc.  Subject to the terms of Article XII relating
to permitted contests, the Lessee, at its sole cost and expense, shall:

(a)           comply in all material respects with
all Applicable Laws (including all 
Environmental Laws) relating to the Property, including the use,
construction, operation, maintenance, repair and restoration thereof and the
remarketing thereof pursuant to Article XX, whether or not compliance therewith
shall require structural or extraordinary changes in the Improvements or
interfere with the use and enjoyment of the Property,

(b)           comply in all material respects with
all Insurance Requirements, and

 7
 

(c)           procure, maintain and comply in all
material respects with all Necessary Permits, and notify the Lessor within ten
(10) days of an officer of the Lessee having knowledge of any actual or pending
termination or revocation of any Necessary Permit.

SECTION 8.4.  Non-discrimination
Required by Ground Lease.  The
Lessee herein covenants by and for itself, its heirs, executors, administrators
and assigns, and all persons claiming under or through it, and this Lease is
made and accepted upon and subject to the following conditions:

“That there shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex,
age, handicap, marital status, ancestry or national origin in the leasing,
subleasing, transferring, use, occupancy, tenure or enjoyment of the premises
herein leased, nor shall the Lessee itself, or any person claiming under or
through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees
in the premises herein leased.”

ARTICLE IX

MAINTENANCE AND REPAIR

SECTION 9.1.  Maintenance and Repair.  The Lessee, at its sole cost and expense,
shall maintain the Property in good condition (ordinary wear and tear excepted)
and make all necessary repairs thereto, of every kind and nature whatsoever,
whether interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by all
Applicable Laws and Insurance Requirements and in no event less than the
standards applied by the Lessee in the operation and maintenance of facilities
similar to the Property owned or leased by the Lessee or its Subsidiaries.

ARTICLE X

MODIFICATIONS, ETC

SECTION 10.1.  Modifications.  During the Lease Term, the Lessee, at its
sole cost and expense, may at any time and from time to time make alterations,
renovations, improvements and additions to the Property or any part thereof and
substitutions and replacements therefor (collectively, “Modifications”);
provided, however, that:

(a)           except for any Modification required
to be made pursuant to any Applicable Law (a “Required
Modification”), no Modification shall diminish the Fair Market Sales
Value, residual value, utility or remaining useful life of the Property; and

(b)           such Modifications shall comply with
Articles VIII and IX.

All
Modifications shall remain part of the realty and title thereto shall
immediately vest in the Lessor and be subject to the this Lease; provided, however, that Modifications that (i) are not
Required Modifications, (ii) were not financed by the Participants and (iii)
can be removed 

 8
 

without causing (A) damage to the Property, (B) any
diminution in the Fair Market Sales Value of the Property and (C) any
diminution in the remaining useful life of the Property, shall be the property
of the Lessee or other third party and may be removed by the Lessee during the
Lease Term and shall not be subject to this Lease.  The Lessee may place upon the Property any trade
fixtures, machinery, equipment, inventory or other property belonging to the
Lessee or third parties and may remove the same, subject,
however, to the terms of Section 9.1;  provided, however,
that such trade fixtures, machinery, equipment, inventory or other property can
be removed without causing damage to the Property, any diminution in the Fair
Market Sales Value of the Property or any diminution in the remaining useful
life of the Property; provided, further, however,
that the Lessee shall keep and maintain at the Property and shall not remove
from the Property any Equipment financed or otherwise paid for by the
Participants pursuant to the Participation Agreement or the Prior Participation
Agreement.

ARTICLE XI

DISCHARGE OF LIENS; CONDITION UPON RETURN

SECTION 11.1.  Lessee’s Obligation to
Discharge Liens.  The Lessee
agrees that except as otherwise provided herein and subject to the terms of
Article XII relating to permitted contests, the Lessee shall not directly or
indirectly create or allow to remain, and shall promptly discharge at its sole
cost and expense, any Lien (other than any Permitted Property Lien), defect,
attachment, levy, title retention agreement or claim upon the Property or any
Lien, attachment, levy or claim with respect to the Rent or with respect to any
amounts held by any Participant pursuant to the Operative Documents, other than
Permitted Property Liens.

SECTION 11.2.  Condition Upon Return to
Lessor.  The Lessee shall,
upon the expiration or earlier termination of this Lease (other than as a
result of the Lessee’s purchase of the Property from the Lessor as provided
herein), vacate and surrender the Property to the Lessor in its then-current, “AS IS” condition, without any express or implied warranty
subject to the Lessee’s obligations under Sections 8.3, Article IX, 10.1, 11.1,
14.3, 14.4 and Article XX.  Title to all
improvements, furnishings, furniture, fixtures and any personal property of the
Lessee which were not funded by the Lessor and the Lenders pursuant to the Participation
Agreement or the Prior Participation Agreement, located on or about the
Property whether or not affixed to the realty, shall, subject to the following
sentence, be and remain the property of the Lessee throughout the Lease Term,
and at any time during the Lease Term, may be removed by the Lessee or, at the
Lessee’s election surrendered with the Property, in which event title to such
surrendered property shall, if the Lessor so elects, be deemed transferred to
the Lessor.  Notwithstanding the
foregoing, any fixture constituting part of the Property which is required by
Applicable Law or which cannot be removed without causing (a) material damage
to the Property, (b) any diminution in the Fair Market Sales Value of the
Property or (c) any diminution in the remaining useful life of the Property,
shall at all times remain part of the Property.

 

 9

ARTICLE XII

PERMITTED CONTESTS; GRANTS AND RELEASES OF EASEMENTS;  GROUND

LEASE PURCHASE OPTION

SECTION 12.1.  Permitted Contests in
Respect of Applicable Law Other Than Impositions.  Except to the extent otherwise provided in
Section 13.5(b) of the Participation Agreement regarding Taxes and other
Impositions, if, to the extent and for so long as (a) a test, challenge, appeal
or proceeding for review of any Applicable Law relating to the Property shall
be prosecuted diligently and in good faith in appropriate proceedings by the
Lessee or (b) compliance with such Applicable Law shall have been excused or
exempted by a valid nonconforming use, variance permit, waiver, extension or
forbearance, the Lessee shall not be required to comply with such Applicable Law
relating to the Property but only if and so long as any such test, challenge,
appeal, proceeding, waiver, extension, forbearance or noncompliance shall not,
in the reasonable opinion of the Lessor, the other Participants and the
Administrative Agent, involve (i) any risk of criminal liability being imposed
on any Indemnitee or (ii) any substantial risk of (A) foreclosure, forfeiture
or loss of the Property or any material part thereof, (B) the nonpayment of
Rent or (C) the sale of, or the creation of any Lien (other than a Permitted
Property Lien) on, any part of the Property, (D) civil liability being imposed
on any Indemnitee or the Property, or (E) enjoinment of, or interference with,
the use, possession or disposition of the Property in any material respect.  The Lessor, at the Lessee’s sole cost and
expense, shall execute and deliver to the Lessee such authorizations and other
documents as may reasonably be required in connection with any such permitted
contest.

The
Lessor will not be required to join in any proceedings pursuant to this Section
12.1 unless a provision of any Applicable Law requires that such proceedings be
brought by or in the name of the Lessor; and in that event the Lessor will join
in the proceedings or permit them or any part thereof to be brought in its name
if and so long as (a) the Lessee has not elected the Remarketing Option, (b) no
Lease Default shall have occurred and be continuing and (c) the Lessee pays all
related expenses of the Administrative Agent and the Indemnitees with respect
to such proceedings and indemnifies the Administrative Agent and the
Indemnitees with respect thereto

SECTION 12.2.  Grants and Releases of
Easements; Lessor’s Waivers. 
Provided that no Lease Event of Default shall have occurred and be
continuing, from time to time upon request of the Lessee and subject to the
Lessee’s prompt reimbursement of the Lessor’s costs and expenses, the Lessor
(as holder of record of a leasehold interest in the Property) shall execute
such documents reasonably satisfactory in form (which have been prepared at
Lessee’s expense) to effect any of the actions set forth in clauses (a), (b),
(c), (d), (e) and (f) of the following sentence, if in the Lessee’s reasonable
and good faith opinion such action by the Lessor is necessary or appropriate to
effect such intended actions.  Provided
that (i) no Lease Event of Default shall have occurred and be continuing and
(ii) that the same will not adversely affect the fair market sales value, performance,
utility or remaining useful life of the Property; and subject to the provisions
of Articles VII, IX and X and Section 8.3, the Lessor hereby consents in each
instance to the following actions by the Lessee as the Lessor’s agent, and the
Lessor hereby appoints the Lessee the Lessor’s attorney-in-fact, with full
authority in the place and stead of the Lessor to take such action or actions
from time to time during the Lease Term, but at the Lessee’s sole cost 

 10
 

and expense: (a) the
granting of easements, licenses, rights-of-way and other rights and privileges
in the nature of easements reasonably necessary or desirable for the use,
repair, operation or maintenance of the Property as herein provided; (b) the
release of existing easements or other rights in the nature of easements which
are for the benefit of the Property; (c) if required by applicable Governmental
Authority, the dedication or transfer of unimproved portions of the Property
for road, highway or other public purposes; (d) the execution of amendments to
any covenants and restrictions; (e) the filing and processing of  any and all permit applications,
authorizations, entitlements, agreements with any government or regulatory
agency or amendments thereof, or other documents reasonably required or
beneficial for construction or Modification of the Improvements, or amendments
to Permitted Property Liens or governmental permits or approvals affecting the
Property; and (f) the execution and filing of tract or parcel maps subdividing
the Land into lots or parcels or reconfiguring existing lots or parcels; provided, however, that in each case:  (i) such grant, release, dedication, transfer
or amendment is, in the Lessee’s judgment, reasonably necessary or beneficial
in connection with the use, maintenance, alteration or improvement of the Property,
(ii) such grant, release, dedication, transfer or amendment will not cause the
Property or any portion thereof to fail to comply with the provisions of this
Lease or any other Operative Documents and all Applicable Law (including,
without limitation, all applicable zoning, planning, building and subdivision
ordinances, all applicable restrictive covenants and all applicable
architectural approval requirements); (iii) any and all governmental consents
or approvals required prior to (or as a consequence of) such grant, release,
dedication, transfer, annexation or amendment have been obtained, and any and
all filings required prior to (or as a consequence of) such action have been
made; (iv) the Lessee shall remain obligated under this Lease and under any
instrument executed by the Lessee consenting to the assignment of the Lessor’s
interests in this Lease as security for indebtedness, in each such case in
accordance with their terms, as though such grant, release, dedication,
transfer or amendment had not been effected; (v) the Lessee shall pay and
perform any obligations of the Lessor under such grant, release, dedication,
transfer or amendment and (vi) such grant, release, dedication, transfer or
amendment will not materially adversely affect the Fair Market Sales Value,
residual value, utility or remaining useful life of the Property.  The Lessor acknowledges the Lessee’s right to
finance and to secure under the Uniform Commercial Code, inventory,
furnishings, furniture, equipment, machinery, leasehold improvements and other
personal property located at the Property other than Equipment, and the Lessor
agrees to execute Lessor waiver forms and release of Lessor Liens in favor of
any purchase money seller, lessor or lender which has financed or may finance
in the future such items.  Without
limiting the effectiveness of the foregoing, provided,
that no Lease Event of Default shall have occurred and be continuing, the
Lessor shall, upon the request of the Lessee, and at the Lessee’s sole cost and
expense, execute and deliver any instruments necessary or appropriate to
confirm any such grant, release, dedication, transfer, annexation or amendment
to any Person permitted under this Section 12.2 including landlord waivers with
respect to any of the foregoing.

SECTION 12.3.  Purchase Option Under
Ground Lease.  So long as no
Event of Default under this Lease shall have occurred and be continuing, Lessor
shall not exercise any purchase option right under the Ground Lease without
Lessee’s prior written consent (which consent Lessee may withhold in its sole
discretion at any time unless an Event of Default under this Lease shall have
occurred and be continuing).  So long as
no Event of Default under this Lease shall have occurred and be continuing,
upon the Lessee’s written request, Lessor shall (at Lessee’s cost and expense
and no cost or expense to Lessor) cooperate with Lessee so as to 

 11
 

permit Lessee to acquire
the Ground Lessor’s interest under the Ground Lease and become the lessor
thereunder pursuant to any purchase option right contained in the Ground Lease
(which cooperation may include either an assignment of such purchase option
rights to Lessee or by Lessor exercising such purchase option on behalf of and
for the benefit of the Lessee); provided, however,
that Lessor shall have no obligation or liability with respect to the purchase
of such interests of the Ground Lessor, and Lessee shall indemnify and hold
Lessor harmless from and against any and all loss, cost, liability, claim,
damage or expense suffered or incurred by Lessor (including taxes and attorney’s
fees and costs) as a consequence of, or in any way related to, the assignment
to Lessee or the exercise of any such purchase option right under the Ground
Lease or any actions taken by Lessor with respect thereto.

ARTICLE XIII

INSURANCE

SECTION 13.1.  Required Insurance.  During the Lease Term, the Lessee shall, at
its own expense, maintain insurance as set forth herein.

(a)           Commercial General
Liability Insurance.  During
the Lease Term, the Lessee shall procure and carry or cause to be procured and
carried, at the Lessee’s sole cost and expense, commercial general liability
insurance (including for bodily injuries or death sustained by persons and
damage to property) and such other public liability coverages as are ordinarily
procured by the Lessee with respect to similar facilities.  The terms and amounts of such liability
insurance shall be consistent with normal industry practice, but in any event
not less than the scope and amount of coverage as are ordinarily procured by
the Lessee with respect to office buildings similar to the Property; provided, however, that such coverage shall be in an amount
of at least $5,000,000 combined single limit per occurrence and in the
aggregate, as applicable.  In no event
may the coverage described in this clause (a) be provided on claims-made (as
opposed to an occurrence) coverage form.

(b)           Property Insurance.  During the Lease Term, the Lessee shall
obtain, and keep in full force and effect, a policy or policies of property
insurance insuring the Property for the full replacement cost thereof (without
depreciation) against physical damage to the Improvements caused by perils now
or hereafter defined in an “all risks”
insurance policy, including but not limited to fire, lightning, windstorm,
hail, explosion, riot and civil commotion, vandalism and malicious mischief,
and smoke, with coverage for flood to the extent available on commercially
reasonable terms for the Lessee.  Lessee
will self-insure against loss or damage to the Improvements caused by any
earthquake, and Lessee will not be required to maintain earthquake insurance
but may elect to do so.

(c)           Worker’s Compensation and
Employers’ Liability Insurance. 
During the Lease Term, the Lessee shall (i) maintain workers’
compensation insurance as required by the State of California, and (ii)
maintain employer’s liability insurance with a $1,000,000 minimum limit per
accident and a $1,000,000 minimum limit for excess liability.

 12
 

 

(d)           Automobile Liability
Insurance.  During the Lease
Term, the Lessee shall maintain automobile liability insurance against claims
for personal injury (including bodily injury and death) and property damage
covering all owned, leased, non-owned and hired vehicles, including loading and
unloading, with a $1,000,000 minimum limit per occurrence.

SECTION 13.2.  Deductibles; Insurance
Providers; Coverage and Endorsements; Confirmation of Insurance, etc.

(a)           Deductibles.  The insurance required to be obtained by
Lessee under this Article XIII may be subject to such reasonable deductible
amounts as is consistent with the Lessee’s practice for other properties
similar to the Property owned or leased by Lessee, and may be carried under
blanket policies maintained by or on behalf of the Lessee so long as such
policies otherwise comply with the provisions of this Article XIII.

(b)           Insurance Providers.  All insurance required to be carried pursuant
to the requirements of this Article XIII shall be written by reputable
insurance companies that are financially sound and solvent and otherwise
reasonably appropriate considering the amount and type of insurance being
provided by such companies.  Any
insurance company selected by the Lessee which is rated in Best’s Insurance
Guide or any successor thereto (or if there be none, an organization having a
similar national reputation) shall have a general policyholder rating of “A--” and a financial rating of at least “IX” or , if not rated in Best’s Insurance Guide, an S&P
rating of “BBB” or better, or be otherwise
reasonably acceptable to the Lessor and the Administrative Agent.  Such rating shall not be required with
respect to any insurance required by this Article XIII if on any date such
insurance is underwritten by an Eligible Captive Insurance Subsidiary of
Lessee, Lessee’s Consolidated Leverage Ratio for the most recently preceding
four (4) quarter period is 3.00 to 1.00 or less.

(c)           Endorsements.  All insurance required to be carried or
arranged for by the Lessee pursuant to the requirements of Section 13.1 shall
provide in the policy or by special endorsement that:

(i)            in the case of insurance required by
Section 13.1(a) or 13.1(d), the Administrative Agent and each Participant are
included as “additional insureds”;

(ii)           in the case of insurance required by
Section 13.1(b), the Lessor is named as “loss payee”,
each Participant is named as its interest may appear, and such insurance shall
include a standard form “mortgagee endorsement”
in favor of the Administrative Agent on behalf of the Participants;

(iii)          the insurer thereunder waives all
rights of subrogation against the Administrative Agent and each Participant;

(iv)          such insurance shall be primary and
shall apply to any loss or claim before any contribution of any other insurance
carried by or on behalf of the Lessor;

(v)           if the insurers cancel such insurance
for any reason whatsoever or any materially adverse change is made in policy
terms or conditions, such cancellation or 

 13
 

change shall not
be effective as to the Administrative Agent and the Participants for thirty
(30) days after receipt by the Lessor, the Administrative Agent and the
Participants of written notice from such insurers of such cancellation or
change; and if such insurance is allowed to lapse for nonpayment of premium,
such lapse shall not be effective as to the Administrative Agent and the
Participants for ten (10) days after receipt by the Lessor, the Administrative
Agent and the Participants of written notice from such insurers of such lapse;
and

(vi)          with respect to all liability insurance,
in as much as the policies are written to cover more than one insured, all
terms, conditions, insuring agreements and endorsements, with the exception of
the limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured, and such policies shall be endorsed to
provide a severability of interest or cross liability clause.

(d)           Payment of Premiums.  The Lessee shall pay or cause to be paid all
premiums for the insurance required hereunder. 
The Lessee shall renew or replace, or cause to be renewed or replaced,
each insurance policy required hereunder prior to the expiration date thereof.

(e)           Confirmation of Insurance.  Promptly (but in any event within thirty (30)
days) after (i) the renewal of each insurance policy required hereunder, (ii)
the issuance of any additional policies or amendments or supplements to any of
such policies or (iii) the issuance of any such insurance the Lessee shall
provide the Lessor certificates of insurance evidencing the existence of all
insurance then required to be maintained by the Lessee pursuant to this Article
XIII.

ARTICLE XIV

RISK OF LOSS; CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS

SECTION 14.1.  Risk of Loss.

(a)           Lease Term.  During the Lease Term, the risk of loss of or
decrease in the enjoyment and beneficial use of the Property as a result of the
damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or other acts of God, taking, destruction, confiscation, requisition or
commandeering, partial or complete, of or to the Property and/or any part
thereof, however caused or occasioned, shall be borne by the Lessee until the
Property has been returned to the Lessor in accordance with the provisions of
this Lease or has been purchased by the Lessee or another Person in accordance
with the provisions of this Lease.  The
Lessee agrees that no occurrence specified in the preceding sentence shall
impair, in whole or in part, any obligation of the Lessee under this Lease,
including the obligation to pay Basic Rent and Supplemental Rent.

(b)           Participants Not
Accountable to Lessee.  None
of the Administrative Agent, any Participant or their respective agents,
employees or contractors shall in any event be answerable or accountable to the
Lessee for any loss of or decrease in the enjoyment or beneficial use of the
Property, except for loss or damages arising from the gross negligence or
willful misconduct of the Administrative Agent or such Participant, as the case
may be.

 14
 

 

SECTION 14.2.  [Reserved].

SECTION 14.3.  Casualty or Condemnation.

(a)           Subject to the provisions of this
Article XIV, if all or a portion of the Property is damaged or destroyed in
whole or in part by a Casualty during the Lease Term or if the use, access,
occupancy, easement rights or title to the Property or any part thereof, is the
subject of a Condemnation during the Lease Term, then

(i)            in the case of a Casualty affecting
the Property that is not an Event of Loss, any insurance proceeds payable with
respect to such Casualty shall be paid directly to the Lessee (or if received
by the Lessor, shall be paid over to the Lessee) for the sole purpose of
reconstruction, refurbishment and repair of the Property; provided,
however, that in the event that either (A) such reconstruction,
refurbishment or repair cannot be completed prior to the end of the Lease Term
or (B) the Lessee shall elect not to use such proceeds for the reconstruction,
refurbishment or repair of the Property, then all such insurance proceeds
payable with respect to such Casualty shall be paid to the Lessor to be applied
towards the payment of the Property Cost in accordance with Section 7.2 of the
Participation Agreement,

(ii)           in the case of a Condemnation of any
part of the Property that is not an Event of Loss, any award or compensation
relating thereto shall be paid to the Lessee for the sole purpose of
restoration of the Property; provided, however,
that if such restoration cannot be completed prior to the end of the Lease
Term, then such award or compensation shall be paid to the Lessor to be applied
towards the payment of the Property Cost in accordance with Section 7.2 of the
Participation Agreement, and

(iii)          in the case of any Casualty or
Condemnation that is an Event of Loss, such award or compensation shall be paid
to the Lessor to be applied toward the payment of the Property Cost on the
Termination Date in accordance with Article XV;

provided, however, that, in each
case, if a Lease Event of Default shall have occurred and be continuing, such
award, compensation or insurance proceeds shall be paid directly to the Lessor
or, if received by the Lessee, shall be held in trust for the Lessor and the
other Participants, and shall be paid by the Lessee to the Account to be
distributed in accordance with Article VII of the Participation Agreement.  At any time that a Lease Event of Default
shall have occurred and be continuing, all amounts held by the Lessor, the
Administrative Agent, or any other Participants on account of any award,
compensation or insurance proceeds either paid directly to the Lessor, any
other Participant or the Administrative Agent or turned over to the Lessor, any
other Participant or the Administrative Agent shall at the option of the Lessor
either be (i) paid to the Lessee for the repair of damage caused by such
Casualty or Condemnation in accordance with clause (d) of this Section 14.3, or
(ii) applied to the repayment of the Property Cost on the Termination Date in
accordance with Article XV.

 15
 

 

(b)           The Lessee may appear in any
proceeding or action to negotiate, prosecute, adjust or appeal any claim for
any award, compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof.  At the Lessee’s reasonable request, and at
the Lessee’s sole cost and expense, the Lessor and the Administrative Agent
shall participate in any such proceeding, action, negotiation, prosecution or
adjustment.  The Lessor and the Lessee
agree that this Lease shall control the rights of the Lessor and the Lessee in
and to any such award, compensation or insurance payment.

(c)           If the Lessor or the Lessee shall
receive notice of a Casualty or of an actual, pending or threatened
Condemnation of the Property or any interest therein, the Lessor or the Lessee,
as the case may be, shall give notice thereof to the other and to the
Administrative Agent promptly after the receipt of such notice.

(d)           If pursuant to this Section 14.3 and
Section 15.1, this Lease shall continue in full force and effect following a
Casualty or Condemnation with respect to the Property, the Lessee shall, at its
sole cost and expense (and, without limitation, if any award, compensation or
insurance payment is not sufficient to restore the Property in accordance with
this clause (d), the Lessee shall pay the shortfall), promptly and diligently
repair any damage to the Property caused by such Casualty or Condemnation in
conformity with the requirements of Sections 8.3 and 9.1, to restore the
Property to substantially the same condition, operative value and useful life
as existed immediately prior to such Casualty or Condemnation.  Upon completion of such restoration, the
Lessee shall furnish to the Lessor (which, in turn, shall furnish to the
Administrative Agent) an architect’s certificate of substantial completion and
an Authorized Officer’s Certificate confirming that such restoration has been
completed pursuant to this Lease.

(e)           In no event shall a Casualty or
Condemnation affect the Lessee’s obligations to pay Rent pursuant to Section
3.1 or to perform its obligations and pay any amounts due on the Expiration
Date or pursuant to Articles XVIII and XIX.

(f)            Any Excess Casualty/Condemnation
Proceeds received by the Administrative Agent or any Participant in respect of
a Casualty or Condemnation shall be turned over to the Lessee.

(g)           The
Lessee hereby agrees that its rights to terminate this Lease by reason of any
Condemnation affecting all or any part of the Property are solely as set forth
herein and in the other Operative Documents, and the Lessee hereby expressly
waives any rights it may have under Section 1265.130 of the California Code of
Civil Procedure, as in effect from time to time.

SECTION 14.4.  Environmental Matters.  Promptly upon any officer of Lessee obtaining
knowledge of the existence (or the alleged existence) of an Environmental
Violation with respect to the Property for which the cost of remediation or of
steps to comply with applicable permits might reasonably be expected to exceed
$5,000,000, the Lessee shall notify the Lessor and the Administrative Agent in
writing of such Environmental Violation, providing the details thereof as well
as the remedial action which the Lessee is proposing.  If the Lessor does not terminate this Lease
pursuant to Section 15.1(b), the Lessee shall, at its sole cost and expense,
promptly and diligently commence any response, clean up, remedial or other
action required by Applicable 

 16
 

Law to remove, clean up
or remediate each Environmental Violation in accordance with the terms of
Section 8.3.  The Lessee shall, upon
completion of remedial action by the Lessee for Environmental Violations
described in the first sentence of Section 14.2, cause to be prepared by an
environmental consultant reasonably acceptable to the Lessor a report
describing such Environmental Violation and the actions taken by the Lessee (or
its agents) in response to such Environmental Violation, and a statement by the
consultant that such Environmental Violation has been remedied in compliance in
all material respects with applicable Environmental Laws.  Each Environmental Violation shall be
remedied prior to the Expiration Date unless the Property has been purchased by
the Lessee in accordance with Section 18.1. 
Nothing in this Article XIV shall reduce or limit the Lessee’s
obligations under Sections 13.1, 13.2 or 13.3 of the Participation Agreement.

SECTION 14.5.  Notice of Environmental
Matters.  Promptly, but in any
event within thirty (30) business Days from the date any officer of the Lessee
obtains knowledge thereof pursuant to written notice from any Governmental
Authority, the Lessee shall provide to the Lessor and the Administrative Agent
written notice of any pending or threatened claim, action or proceeding
involving any Environmental Laws or any Release on or in connection with the
Property.  All such notices shall
describe in reasonable detail the nature of the claim, action or proceeding and
the Lessee’s proposed response thereto. 
In addition, the Lessee shall provide to the Lessor, within thirty (30)
business Days of receipt, copies of all material written communications with
any Governmental Authority relating to any such Environmental Violation in
connection with the Property.  The Lessee
shall also promptly provide such detailed reports of any such material
environmental claims.  In the event that
the Lessor receives written notice of any pending or threatened claim, action
or proceeding involving any Environmental Laws or any Release on or in
connection with the Property, the Lessor shall promptly give notice thereof to
the Lessee.

ARTICLE XV

TERMINATION OF LEASE

SECTION 15.1.  Partial Termination upon
Certain Events.  If any of the
following occurs during the Lease Term with respect to the Property:

(a)           an Event of Loss occurs; or

(b)           an Environmental Violation with
respect to the Property occurs or is discovered the cost of remediation of
which would exceed $20,000,000;

and
the Lessor shall have given written notice (a “Termination
Notice”) to the Lessee that, as a consequence of such event this
Lease is to be terminated, then the Lessee shall be obligated to purchase the
Lessor’s interest in the Property within thirty (30) days after the Lessee’s
receipt of the Termination Notice, by paying to the Lessor an amount equal to
the Property Cost plus all accrued and unpaid Rent plus all other amounts then due and owing under the
Operative Documents.

 17
 

 

SECTION 15.2.  Termination Procedures.  On the date of the payment by the Lessee of
the Property Cost and all other amounts required to be paid pursuant to Section
15.1 (such date, the “Termination Date”),
this Lease shall terminate (except with respect to the provisions hereof that
expressly survive termination of this Lease) and, concurrent with the Lessor’s
receipt of such payment, the Lessor shall transfer to the Lessee (or its designee)
all of the Lessor’s interest in the Property in accordance with the procedures
set forth in Section 18.4.

ARTICLE XVI

LEASE EVENTS OF DEFAULT

SECTION 16.1.  Lease Events of Default.  The occurrence of any one or more of the
following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute a “Lease Event of Default”:

(a)           Non-Payment.  The Lessee shall (i) fail to pay when due any
amount of Property Cost, Purchase Price, or any amount  due under Section 20.1(m) or  any Maximum Recourse Amount (including
without limitation, amounts due pursuant to Section 18.1 or 20.1(m)), (ii) fail
to pay on the Expiration Date any Basic Rent, fees or other amounts payable on
the Expiration Date, or (iii) fail to pay within three (3) Business Days after
the same becomes due, any other Basic Rent, fees or other amounts required
under the terms of this Lease or any of the other Operative Documents
(including any Supplemental Rent other than Supplemental Rent referred to in
clause (i) or (ii) of this Section 16.1(a)); or

(b)           Specific Defaults.  The Lessee (or, to the extent applicable
thereto, any of its Subsidiaries) shall fail to observe or perform any
covenant, obligation, condition or agreement set forth in Section 9.2 or
Section 9.3 of the Participation Agreement or the Lessee shall fail to observe
or perform any of its obligations under Article XX after giving notice of
its election of the Remarketing Option; or any insurance required to be
maintained pursuant to Article XIII of this Lease shall fail to be in full
force and effect; or

(c)           Other Defaults.  The Lessee (or, to the extent applicable
thereto, any of its Subsidiaries) shall fail to observe or perform any other
covenant, obligation, condition or agreement contained in this Lease or the
other Operative Documents (other than those described in the foregoing clauses
(a) and (b) of this Section 16.1, which defaults shall be subject to cure
periods only as set forth in such clauses) and such failure shall continue for
(a) in the case of any covenant, obligation, condition or agreement contained
in this Lease, thirty (30) days and (b) in the case of any covenant,
obligation, condition or agreement set forth in any other Operative Document,
fifteen (15) Business Days, in each case after the earlier of (i) the Lessee’s
written acknowledgement of such failure and (ii) the Administrative Agent’s or
the Lessor’s written notice to the Lessee of such failure; or

 18
 

 

(d)           Representations and
Warranties.  Any written
representation, warranty, certificate, information or other statement
(financial or otherwise) made or furnished by the Lessee or any of its
Subsidiaries to the Administrative Agent, the Lessor, the Lender or any
Purchaser in or in connection with this Lease or any of the other Operative
Documents (excluding financial projections and analyst reports) shall be false,
incorrect, incomplete or misleading in any material respect when made or
furnished, and either:

(i)            The Lessee has acknowledged that
such representation, warranty, certificate, information or other statement was
false, incorrect, incomplete or misleading in any material respect or the
Administrative Agent, the Lessor, the Lender or any Purchaser has delivered to
the Lessee written notice to such effect and such representation, warranty,
certificate, information or other statement cannot be remedied; or

(ii)           Such representation, warranty,
certificate, information or other statement continues to be false, incorrect,
incomplete or misleading in any material respect thirty (30) days after the
earlier of (A) the Lessee’s written acknowledgement that such representation,
warranty, certificate, information or other statement was false, incorrect,
incomplete or misleading in any material respect and (B) the Administrative
Agent’s, the Lessor’s, the Lender’s or any Purchaser’s written notice to the
Lessee to such effect; or

(e)           Cross-Default.  (i) The Lessee or any of its Subsidiaries
shall fail to make any payment on account of any Indebtedness of such Person
(other than the Obligations) when due (whether at scheduled maturity, by
required prepayment, upon acceleration or otherwise) and such failure shall
continue beyond any period of grace provided with respect thereto, if the
amount of such Indebtedness exceeds $100,000,000 or the effect of such failure
is to cause, or permit the holder or holders thereof to cause, Indebtedness of
the Lessee and its Subsidiaries (other than the Obligations) in an aggregate
amount exceeding $100,000,000 to become redeemable, due or otherwise payable
(whether at scheduled maturity, by required prepayment, upon acceleration or
otherwise) and/or to be secured by cash collateral or (ii) the Lessee or any of
its Subsidiaries shall otherwise fail to observe or perform any agreement, term
or condition contained in any agreement or instrument relating to any
Indebtedness of such Person (other than the Obligations), or any other event
shall occur or condition shall exist, if the effect of such failure, event or
condition is to cause, or permit the holder or holders thereof to cause,
Indebtedness of the Lessee and its Subsidiaries (other than the Obligations) in
an aggregate amount exceeding $100,000,000 to become redeemable, due or
otherwise payable (whether at scheduled maturity, by required prepayment, upon
acceleration or otherwise) and/or to be secured by cash collateral (provided, however, that the occurrence of any failure, event
or condition described in this clause (ii) shall not constitute a Lease Event
of Default if such failure, event or condition would not cause, or permit the
holders of the relevant Indebtedness to cause, such Indebtedness to become
redeemable, due or otherwise payable and/or to be secured by cash collateral
but for the inclusion in the agreement or instrument governing such
Indebtedness of a default provision specifying that the occurrence of any event
having (or reasonably likely to have) a material adverse effect on the Lessee
constitutes an event of default under such Indebtedness); or

 19
 

 

(f)            Insolvency, Voluntary
Proceedings.  The Lessee or
any of its Material Domestic Subsidiaries shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian of itself or of all
or a substantial part of its property, (ii) be unable, or admit in writing its
inability, to pay its debts generally as they mature, (iii) make a general
assignment for the benefit of its or any of its creditors, (iv) be dissolved or
liquidated in full or in part except as otherwise permitted by Section 9.2(c)
of the Participation Agreement, (v) become insolvent (as such term may be
defined or interpreted under any applicable statute), (vi) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or

(g)           Involuntary Proceedings.  Proceedings for the appointment of a
receiver, trustee, liquidator or custodian of the Lessee or any of its Material
Domestic Subsidiaries or of all or a substantial part of the property thereof,
or an involuntary case or other proceedings seeking liquidation, reorganization
or other relief with respect to the Lessee or any of its Material Domestic
Subsidiaries or the debts thereof under any bankruptcy, insolvency or other
similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement; or

(h)           Judgments.  (i) One or more judgments, orders, decrees or
arbitration awards requiring the Lessee and/or its Subsidiaries to pay an
aggregate amount of $100,000,000 or more (exclusive of amounts covered by
insurance issued by an insurer not an Affiliate of the Lessee (other than an
Eligible Captive Insurance Subsidiary) and otherwise satisfying the
requirements set forth in Section 9.1(g) of the Participation Agreement) shall
be rendered against the Lessee and/or any of its Subsidiaries in connection
with any single or related series of transactions, incidents or circumstances
and the same shall not be satisfied, vacated or stayed for a period of ten (10)
consecutive days; or (ii) any judgment, writ, assessment, warrant of
attachment, tax lien or execution or similar process shall be issued or levied
against a substantial part of the property of the Lessee and its Subsidiaries taken
as a whole and the same shall not be released, stayed, vacated or otherwise
dismissed within ten (10) days after issue or levy; or

(i)            Operative Documents; Liens.  The Operative Documents, taken as a whole,
shall cease to provide the Administrative Agent or the Participants the
practical realization of the material rights and remedies intended to be
provided thereunder or be asserted by the Lessee or any of its Subsidiaries not
to be a legal, valid and binding obligation of the Lessee or any of its Subsidiaries
enforceable in accordance with its terms; or any Lien granted by the Lessee
under any Operative Document shall, taken as a whole, terminate or cease to be
effective against the Lessee; or the Lessee shall directly contest the
effectiveness, validity, binding nature or enforceability of any Lien granted,
or purported to be granted, by the Lessee under any Operative Document; or

 

 20

(j)            ERISA.  (i) an ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Lessee under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess
of $100,000,000, or (ii) the Company or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of $100,000,000; or

(k)           [Reserved];

(l)            Casualty or Condemnation.  All or a material part of the Property is
destroyed or suffers an actual or constructive loss or material damage in
connection with any Casualty or Condemnation, and in any such case, the
Property ceases to be operational for a period beyond the Expiration Date or
beyond the later of (i) one hundred eighty (180) days after the receipt of any
insurance awards or condemnation proceeds in connection with such Casualty or
Condemnation and (ii) three hundred sixty (360) days after the occurrence of
such Casualty or Condemnation, unless, in any such case, the Lessee shall have
submitted to the Lessor a plan of restoration or repair of the Property and the
Lessor, in its sole discretion (after consultation with the other Participants)
shall have consented to such plan of restoration or repair.

SECTION 16.2.  Remedies.  Upon the occurrence of any Lease Event of
Default of the type described in clause (f) or (g) of Section 16.1, the
Property Cost, together with all accrued Basic Rent, Supplemental Rent and fees
and other obligations of the Lessee accrued under the Operative Documents,
shall automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Lessee.  Upon the occurrence of any Lease
Event of Default other than a Lease Event of Default of the type described in
clause (f) or (g) of Section 16.1, and at any time thereafter during the
continuance of such event, the Lessor may, and at the request of the Required
Participants (but subject to the terms and restrictions of Section 16.16 of the
Participation Agreement) shall, by notice to the Lessee, declare the Property
Cost then outstanding to be due and payable in whole (or in part in which case
any portion of the Property Cost not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the Property Cost
(or the portion thereof so declared to be due and payable), together with all
accrued Basic Rent, Supplement Rent and all fees and other obligations of the
Lessee accrued under the Operative Documents, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Lessee.

In
addition, upon the occurrence of any Lease Event of Default and at any time
thereafter so long as such Lease Event of Default is continuing, the Lessor
may, and at the request of the Required Participants (but subject to the terms
and restrictions of Section 16.16 of the Participation Agreement) shall, do one
or more of the following (and in such order) as the Lessor or the Required
Participants in its (or their) sole discretion shall determine, without
limiting any other right or remedy the Lessor may have on account of such Lease
Event of Default (including, without limitation, the obligation of the Lessee
to purchase the Property as set forth in Section 18.3):

 21
 

 

(a)           The Lessor may, by notice to the
Lessee, rescind or terminate this Lease as to any part of the Property or all
of the Property as of the date specified in such notice; provided,
however (i) no reletting, reentry or taking of possession of the
Property (or any portion thereof) by the Lessor will be construed as an
election on the Lessor’s part to terminate this Lease unless a written notice
of such intention is given to the Lessee, (ii) notwithstanding any reletting,
reentry or taking of possession, the Lessor may at any time thereafter elect to
terminate this Lease for a continuing Lease Event of Default and (iii) no act
or thing done by the Lessor or any of its agents, representatives or employees
and no agreement accepting a surrender of the Property shall be valid unless
the same be made in writing and executed by the Lessor;

(b)           The Lessor may (i) demand that the
Lessee, and the Lessee shall upon the written demand of the Lessor, return the
Property promptly to the Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Articles VII and IX and
Section 8.3 hereof as if the Property were being returned at the end of the
Lease Term, and the Lessor shall not be liable for the reimbursement of the
Lessee for any costs and expenses incurred by the Lessee in connection
therewith and (ii) without prejudice to any other remedy which the Lessor may
have for possession of the Property, and to the extent and in the manner
permitted by Applicable Law, enter upon the Property and take immediate
possession of (to the exclusion of the Lessee) the Property or any part thereof
and expel or remove the Lessee and any other Person who may be occupying the
Property, by summary proceedings or otherwise, all without liability to the
Lessee for or by reason of such entry or taking of possession, whether for the
restoration of damage to property caused by such taking or otherwise and, in
addition to the Lessor’s other damages, the Lessee shall be responsible for all
costs and expenses incurred by the Administrative Agent, the Lessor and/or any
other Participant in connection with any reletting, including, without
limitation, reasonable brokers’ fees and all costs of any alterations or
repairs made by the Administrative Agent, the Lessor or any other Participant;

(c)           As more fully set forth in the Lessor
Mortgage, the Lessor may sell all or any part of the Property at public or
private sale, as the Lessor may determine;

(d)           The Lessor may, at its option, elect
not to terminate this Lease and continue to collect all Basic Rent,
Supplemental Rent, and all other amounts due to the Lessor (together with all
costs of collection) and enforce the Lessee’s obligations under this Lease as
and when the same become due, or are to be performed, and at the option of the
Lessor, upon any abandonment of the Property by the Lessee or re-entry of same
by the Lessor, the Lessor may enforce, by suit or otherwise, all other
covenants and conditions hereof to be performed or complied with by the Lessee
hereunder and to exercise all other remedies permitted by Applicable Law;

(e)           Unless the Property has been sold in
its entirety, the Lessor may, whether or not the Lessor shall have exercised or
shall thereafter at any time exercise any of its rights under clause (b), (c)
or (d) of this Section 16.2 with respect to the Property or any portions
thereof, demand, by written notice to the Lessee specifying a date (a “Termination Date”) not earlier than five (5) business Days
after the date of such notice, 

 22
 

that the Lessee
purchase the Property on such Termination Date for a price equal to the
Property Cost plus all accrued and unpaid Basic
Rent and all other amounts due and owing under the Operative Documents in
accordance with the provisions of Section 18.1 (notwithstanding clauses (a) and
(c) of such Section);

(f)            The Lessor may exercise any other
right or remedy that may be available to it under Applicable Law, including any
and all rights or remedies under the Security Documents, or proceed by
appropriate court action (legal or equitable) to enforce the terms hereof or to
recover damages for the breach hereof. 
Separate suits may be brought to collect any such damages for any
period(s), and such suits shall not in any manner prejudice the Lessor’s right
to collect any such damages for any subsequent period(s), or the Lessor may
defer any such suit until after the expiration of the Lease Term, in which
event such suit shall be deemed not to have accrued until the expiration of the
Lease Term;

(g)           The Lessor may retain and apply
against the Property Cost and all other amounts due and owing by the Lessee
under the Operative Documents all sums which the Lessor would, absent such
Lease Event of Default, be required to pay to, or turn over to, the Lessee
pursuant to the terms of this Lease and upon payment in full of the Property
Cost plus all accrued and unpaid Basic Rent
and all other amounts due and owing under the Operative Documents from such
sums, the Property shall be conveyed to Lessee in accordance with Section 18.4
of this Lease;

(h)           If a Lease Event of Default shall
have occurred and be continuing, the Lessor, to the extent permitted by
Applicable Law, as a matter of right and with notice to the Lessee, shall have
the right to apply to any court having jurisdiction to appoint a receiver or
receivers of the Property, and the Lessee hereby irrevocably consents to any
such appointment.  Any such receiver(s)
shall have all of the usual powers and duties of receivers in like or similar
cases and all of the powers and duties of the Lessor in case of entry, and
shall continue as such and exercise such powers until the date of confirmation
of the sale of the Property unless such receivership is sooner terminated;

(i)            To the maximum extent permitted by
law, the Lessee hereby waives the benefit of any appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshaling in the event of any sale of the Property or any interest
therein;

(j)            By notice to the Lessee after the
occurrence and during the continuance of a Lease Event of Default, the Lessor
may terminate the Lessee’s right to possession of the Property.  A notice given in connection with unlawful
detainer proceedings specifying a time within which to cure a default shall
terminate the Lessee’s right to possession if the Lessee fails to cure the
default within the time specified in the notice.  Upon termination of the Lessee’s right to
possession and without further demand or notice, the Lessee shall surrender possession
and vacate the Property and deliver possession thereof, and the Lessor may
re-enter the Property and remove any persons in possession thereof.  Upon such termination of the Lessee’s right
to possession, this Lease shall terminate and the Administrative Agent (on
behalf of the Secured Parties) may recover from the Lessee:

 23
 

 

(i)            The worth at the time of award of
the unpaid Rent (including, without limitation, Basic Rent and Supplemental
Rent) which had been earned at the time of termination:

(ii)           The worth at the time of award of the
amount by which the unpaid Rent (including, without limitation, Basic Rent and
Supplemental Rent) which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided;

(iii)          The worth at the time of award of the
amount by which the unpaid Rent for the balance of the Lease Term (without
giving effect to the early termination of this Lease) after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided;

(iv)          Any other amount necessary to
compensate the Lessor, its successors and assigns for all the detriment
proximately caused by the Lessee’s failure to perform the Lessee’s obligation
under the Lease or which in the ordinary, course of things would be likely to
result therefrom, including, but not limited to, the costs and expenses
(including without limitation, reasonable attorneys’ fees, advertising costs
and brokers’ commissions) of recovering possession of the Property, removing
persons or property therefrom, placing the Property in good order, condition,
and repair, preparing and altering the Property for reletting, and all other
costs and expenses of reletting; and

(v)           Such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
California law.

The “worth at the time of
award” of the amounts referred to in clauses (i), (ii) and (iii)
above, is computed by allowing interest at the Default Rate.  The worth at the time of award of the amount
referred to in clause (iii) above is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco, California at the
time of award plus one percent (1%).

(k)           The Lessor shall be entitled to
enforce payment of the indebtedness and performance of the obligations secured
hereby and to exercise all rights and powers under this instrument or under any
of the other Operative Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the obligations secured
hereby may now or hereafter be otherwise secured, whether by deed of trust,
mortgage, security agreement, pledge, lien, assignment or otherwise.  Neither the acceptance of this instrument nor
its enforcement, shall prejudice or in any manner affect the Lessor’s right to
realize upon or enforce any other security now or hereafter held by the Lessor,
it being agreed that the Lessor shall be entitled to enforce this instrument
and any other security now or hereafter held by the Lessor in such order and
manner as the Lessor may determine in its absolute discretion.  No remedy herein conferred upon or reserved
to the Lessor is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy 

 24
 

given hereunder or
now or hereafter existing at law or in equity or by statute.  Every power or remedy given by any of the
Operative Documents to the Lessor or to which it may otherwise be entitled, may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by the Lessor. 
In no event shall the Lessor, in the exercise of the remedies provided
in this instrument (including, without limitation, in connection with the
assignment of rents to Lessor, or the appointment of a receiver and the entry
of such receiver onto all or any part of the Property), be deemed a “mortgagee in possession,” and the Lessor shall not in any
way be made liable for any act, either of commission or omission, in connection
with the exercise of such remedies.

(l)            In addition to the foregoing
remedies, upon the occurrence or existence of any Lease Event of Default, the
Administrative Agent may exercise any other right, power or remedy available to
it under any of the Operative Documents or otherwise by law, either by suit in
equity or by action at law, or both.

The
Lessee acknowledges and agrees that upon the declaration of a Lease Event of
Default the amount due and owing by it to the Lessor hereunder shall be the
Property Cost plus all other amounts then owing
under the Operative Documents (including all accrued and unpaid Contingent
Payments) and that, to the maximum extent permitted by law, the Lessee waives
any right to contest the Property Cost plus such other
amounts as the liquidated sum due upon acceleration of this instrument.

SECTION 16.3.  Excess Amounts.  If, pursuant to the exercise by the Lessor of
its remedies pursuant to this Section 16.3, the Property Cost, all accrued and
unpaid Basic Rent and all other amounts due and owing from the Lessee under
this Lease and the other Operative Documents have been paid in full, then the
Lessor shall remit to the Lessee any excess amounts received by the Lessor and,
at the sole cost and expense of the Lessee, return the Property to the Lessee
in accordance with Section 18.4 (and, at the request of the Lessor, the Lessee
shall be obligated to accept such return of the Property).  The obligation to deliver such excess to the
Lessee shall survive this Lease.

SECTION 16.4.  Waiver of Certain Rights.  Subject to the foregoing, if this Lease shall
be terminated pursuant to Section 16.2, the Lessee waives, to the fullest
extent permitted by law, (a) any notice of re-entry or the institution of legal
proceedings to obtain re-entry or possession; (b) any right of redemption,
re-entry or repossession except as expressly provided herein; (c) the benefit
of any laws now or hereafter in force exempting property from liability for
rent or for debt or limiting the Lessor with respect to the election of
remedies; and (d) any other rights which might otherwise limit or modify any of
the Lessor’s rights or remedies under this Article XVI.

ARTICLE XVII

LESSOR’S RIGHT TO CURE

SECTION 17.1.  The Lessor’s Right to Cure
the Lessee’s Lease Defaults. 
The Lessor, without waiving or releasing any obligation or Lease Event
of Default, may (but shall be under no obligation to) after reasonable prior
written notice to the Lessee remedy any Lease Event of 

 25
 

Default for the account
and at the sole cost and expense of the Lessee, including the failure by the
Lessee to maintain the insurance required by Article XIII, and may, to the
fullest extent permitted by law, and notwithstanding any right of quiet
enjoyment in favor of the Lessee, enter upon the Property after three (3) days’
prior written notice to the Lessee of such entry for such purpose and take all
such action thereon as may be necessary or appropriate therefor; provided, however, that no prior written notice shall be
required with respect to any such remedy or entry after the occurrence and
during the continuance of a Lease Event of Default.  No such entry shall be deemed an eviction of
the Lessee.  All reasonable out-of-pocket
costs and expenses so incurred (including fees and expenses of counsel),
together with interest thereon at the Default Rate from the date on which such
sums or expenses are paid by the Lessor, shall be paid by the Lessee to the Lessor
as Supplemental Rent.

ARTICLE XVIII

PURCHASE PROVISIONS

SECTION 18.1.  Purchase of the Property.  Subject to the conditions contained herein,
the Lessee shall have the irrevocable option on any Business Day to purchase
all (but not less than all) of the Property at a price (the  “Purchase
Price”) equal to the Property Cost outstanding
on the date of such purchase, plus all
accrued and unpaid Rent and all other amounts (including Break Costs (if any))
then due under the Operative Documents (all such amounts, in the aggregate, the
“Property Balance”).  The Lessee’s exercise of its option pursuant
to this Section 18.1 shall be subject to the following conditions:

(a)           the Lessee shall have delivered a
Purchase Notice to the Lessor not less than forty-five (45) days prior to such
purchase, specifying the date of such purchase; and

(b)           the Lessee shall not have given
notice of its intention to exercise the Remarketing Option (or, if such notice
has been given, the same shall have been irrevocably rescinded).

If
the Lessee exercises its option pursuant to this Section 18.1 then, upon
receipt by the Administrative Agent (as assignee of the Lessor) of all amounts
due in connection therewith, the Lessor shall transfer to the Lessee or its
designee all of the Lessor’s right, title and interest in and to the Property
in accordance with the procedures set forth in Section 18.4, such transfer to
be effective as of the date specified in the Purchase Notice.  The Lessee may designate, in a notice given
to the Lessor not less than ten (10) Business Days prior to the closing of such
purchase (time being of the essence), the transferee or transferees to whom the
conveyance shall be made (if other than to the Lessee), in which case such
conveyance shall (subject to the terms and conditions set forth herein) be made
to such designee; provided, however, that such
designation of a transferee or transferees shall not cause the Lessee to be
released, fully or partially, from any of its obligations under this Lease,
including, without limitation, the obligation to pay to the Lessor the Purchase
Price on the date specified in the applicable Purchase Notice.

SECTION 18.2.  Expiration Date Purchase
of the Property.  Unless the
Lessee shall have (a) purchased the Property pursuant to its Purchase Option
under Section 18.1, (b) exercised the Remarketing Option pursuant to Section
20.1 and satisfied all of the Return Conditions, or (c) 

 26
 

properly exercised or be
deemed to have exercised the Renewal Option (if then available) pursuant to
Section 19.1, then the Lessee (or its designee) shall purchase all (but not
less than all) of the Property for the Purchase Price on the Expiration Date
and, upon the Lessor’s receipt of all amounts due in connection therewith, the
Lessor shall transfer to the Lessee or its designee all of the Lessor’s right,
title and interest in and to the Property in accordance with the procedures set
forth in Section 18.4, such transfer to be effective as of the Expiration
Date.  The Lessee may designate, in a
notice given to the Lessor not less than ten (10) business Days prior to the
Expiration Date (time being of the essence), the transferee or transferees to
whom the conveyance shall be made (if other than to the Lessee), in which case
such conveyance shall (subject to the terms and conditions set forth herein) be
made to such designee; provided, however,
that such designation of a transferee or transferees shall not cause the Lessee
to be released, fully or partially, from any of its obligations under this
Lease, including, without limitation, the obligation to pay to the Lessor the
Purchase Price on the Expiration Date

SECTION 18.3.  Acceleration of Purchase
Obligation.  The Lessee shall
be obligated to purchase for an amount equal to the Property Balance all of the
interest of the Lessor in the Property (notwithstanding any prior election to
exercise its Purchase Option pursuant to Section 18.1) automatically and
without notice upon the occurrence of any Lease Event of Default described in
Section 16.1(f) or 16.1(g).  Any purchase
under this Section 18.3 shall be in accordance with the procedures set forth in
Section 18.4.

SECTION 18.4.  Provisions Relating to the
Exercise of Purchase Option or Purchase Obligation.  In connection with any termination of this
Lease with respect to the Property pursuant to the terms of Article XV or upon
the Lessor’s receipt of the Property Cost and all accrued and unpaid Basic Rent
and other amounts due and owing under the Operative Documents pursuant to the
Lessor’s exercise of remedies under Section 16.2, or in connection with the
Lessee’s purchase of the Property in accordance with Section 18.1, then, upon
the date on which this Lease is to terminate and upon tender by the Lessee of
the amounts set forth in Article XV, Article XVI or Section 18.1, as
applicable:

(a)           the Lessor shall execute and deliver
to the Lessee (or to the Lessee’s designee) at the Lessee’s cost and
expense:  (i) a deed with respect to the
Property and an assignment of the Ground Lease; (ii) a bill of sale with
respect to the interest of the Lessor in all items of personalty or Equipment
constituting part of the Property; and (iii) an assignment of the Lessor’s
entire interest in the Property (which shall include an assignment of all of
the right, title and interest of the Lessor in and to any Casualty or
Condemnation proceeds or awards with respect to the Property not previously
received by the Lessor and an assignment of leases of the Property), in each
containing no representations or warranties of the Lessor other than representations
regarding the absence of Lessor Liens attributable to the Lessor, and in
recordable form and otherwise in conformity with local custom and free and
clear of the Lien of the Lessor Mortgage and any Lessor Liens;

(b)           the Property shall be conveyed to the
Lessee “AS IS” and in its then present physical
condition; and

 27
 

 

(c)           the Lessor shall execute and deliver
to Lessee and the Lessee’s title insurance company an affidavit as to the
Lessor’s title and Lessor Liens and shall execute and deliver to Lessee a
statement of termination of this Lease.

ARTICLE XIX

EXTENSION OF EXPIRATION DATE

SECTION 19.1.  Extension of Expiration
Date.  The Lessee has the
option (the “Renewal Option”) to extend the
Expiration Date subject to, and in accordance with, the terms and conditions of
Article XI of the Participation Agreement.

ARTICLE XX

REMARKETING OPTION

SECTION 20.1.  Option to Remarket.  Subject to the fulfillment of each of the
conditions set forth in this Section 20.1 and in Section 20.2 (such conditions,
collectively, the “Return Conditions”),
the Lessee shall have the option (the “Remarketing Option”)
to market all (but not less than all) of the Property on behalf of the Lessor.

The
Lessee’s effective exercise and consummation of the Remarketing Option shall be
subject to the due and timely fulfillment of each of the following provisions
as to the Property as of the dates set forth below:

(a)           Not later than one hundred eighty
(180) days prior to the Scheduled Lease Term Termination Date, the Lessee shall
give to the Lessor written notice of the Lessee’s exercise of the Remarketing
Option, which exercise shall be irrevocable. 
Failure by the Lessee to give timely notice shall be deemed to be an
election by the Lessee, without further act thereby, of its Purchase Option for
all of the Property.

(b)           Not later than ninety (90) days prior
to the Scheduled Lease Term Termination Date, the Lessee shall deliver to the
Lessor an Environmental Audit for the Property. 
Such Environmental Audit shall be prepared by an environmental
consultant selected by the Lessor in the Lessor’s reasonable discretion and
shall contain conclusions reasonably satisfactory to the Lessor as to the
environmental status of the Property.  If
any such Environmental Audit indicates any exceptions that are required to be
remediated under any Applicable Law, the Lessee shall have also delivered prior
to the Scheduled Lease Term Termination Date, a Phase Two environmental
assessment by such environmental consultant and a written statement by such
environmental consultant indicating that all such exceptions have been remedied
in compliance with Applicable Law.

(c)           On the date of the Lessee’s notice to
the Lessor of the Lessee’s exercise of the Remarketing Option, no Lease Event
of Default shall exist, and thereafter, no Lease Event of Default shall exist.

 28
 

 

(d)           All Modifications, restoration,
rebuilding and remediation of the Property required under this Lease shall have
been completed prior to the date on which the Lessor receives notice of the Lessee’s
intention to exercise the Remarketing Option, and, on or prior to the
Expiration Date, the Property shall be in good and full operating condition
(ordinary wear and tear excepted).

(e)           The Property shall be free and clear
of all Liens (other than Permitted Property Liens of the type described in
clauses (a), (c), (g) and (h) of the definition thereof), and any Permitted
Property Lien that was contested by the Lessee shall have been removed.  If requested by the Lessor, all subleases of
the Property shall have been terminated prior to the Expiration Date.  The Lessee shall not have been excused
pursuant to Section 12.1 from complying with any Applicable Law that involved
the extension of the ultimate imposition of such Applicable Law beyond the
Scheduled Lease Term Termination Date.

(f)            All Necessary Permits and other
agreements necessary for the use and operation of the Property shall be in
effect and shall on the Expiration Date be assigned or transferred to the
Lessor to the extent assignable or transferable.

(g)           The Lessee shall permit inspection of
the Property and any maintenance records relating to the Property by the
Participants, the Administrative Agent and any prospective purchasers, and
shall allow the Participants, the Administrative Agent and any prospective
purchaser reasonable access to the Property for the purpose of inspecting the
same.

(h)           During the Marketing Period, the
Lessee shall, as nonexclusive agent for the Lessor, use reasonable commercial
efforts to sell the Lessor’s interest in the Property for not less than the
Fair Market Sales Value, and shall use reasonable commercial efforts to procure
bids from one or more bona fide
prospective purchasers.  No such
purchaser shall be the Lessee or an Affiliate of the Lessee, but the Lessor and
the other Participants may submit one or more bids for the Property.  The Lessee shall deliver to the Lessor and
the other Participants all bids for the Property received from prospective
purchasers within five (5) days of the Lessee’s receipt of each such bid.

(i)            The Lessee shall have obtained, at
its cost and expense, all required governmental and regulatory consents and
approvals and shall have made all filings as required by Applicable Law in
order to carry out and complete the transfer of the Property and permit the
operation of the Property by the Lessor (or any designee of the Lessor) or a
third-party purchaser.  As to the Lessor,
any such sale shall be made on an “as is, with all faults”
basis without representation or warranty by the Lessor other than the absence
of Lessor Liens.

(j)            The Lessee shall pay directly, and
not from the sale proceeds, all prorations and credits, whether incurred by the
Lessor or the Lessee, including without limitation, the cost of all
environmental reports, appraisals required under Section 13.2 of the
Participation Agreement and the Lessee’s attorneys’ fees, and the Lessee shall
not incur Sales Costs in connection with the sale of the Property in an
aggregate amount in excess of 5% of the Property Cost without the prior written
consent of the Lessor.

 29
 

 

(k)           The Lessee shall pay to the Lessor on
or prior to the Expiration Date the amounts, if any, required to be paid
pursuant to Section 13.2 of the Participation Agreement.

(l)            The Net Remarketing Proceeds shall
be paid directly to the Lessor and shall be distributed by the Lessor to the
Administrative Agent for distribution in accordance with Section 7.4 of
the Participation Agreement.

(m)          The Lessee shall pay to the Lessor (or
in the case of Supplemental Rent, to the Person entitled thereto), no later
than one (1) Business Day prior to the Scheduled Lease Term Termination Date,
an amount equal to the sum of (i) the aggregate outstanding Property Cost
(after giving effect to the distribution of the Net Remarketing Proceeds
pursuant to Section 7.4 of the Participation Agreement) plus
(ii) all accrued and unpaid Basic Rent and all other amounts under the
Operative Documents which have accrued or will accrue prior to or as of the
Scheduled Lease Term Termination Date, in the type of funds specified in
Section 3.4 hereof; provided, however,
that in no event shall the amounts paid by the Lessee pursuant to clause (i) of
this Section 20.1(m) exceed the Maximum Recourse Amount.

SECTION 20.2.  Conveyance Upon
Remarketing.  If the Lessee
elects the Remarketing Option then the Lessee shall, in addition to making the
payment required pursuant to Section 20.1(m) above, at its own cost and
expense, do each of the following:

(a)           on or prior to the Expiration Date,
execute and deliver to the Lessor (or the Lessor’s designee) or, if the Lessor
has accepted any bid for the Property, to the applicable purchaser of the
Property, the following: (i) a deed covering all of the Lessee’s right, title
and interest in, to and under the Property, containing representations and
warranties of grantor to the Lessor (or such other Person) solely regarding the
absence of Liens (other than Lessor Liens and the Liens of the Security
Documents), (ii) a bill of sale conveying to the Lessor (or such other Person)
all of the Lessee’s interest “as is” in all
Equipment and other personal property constituting part of the Property and
(iii) an assignment of all of the Lessee’s interest in the Property (which
shall include an assignment of all of the Lessee’s right, title and interest in
and to all Necessary Permits (to the extent assignable) and all awards,
compensation and insurance proceeds payable in connection with any Casualty or
Condemnation affecting the Property and an assignment of all subleases relating
to the Property), in each case in recordable form and otherwise in conformity
with local custom and free and clear of any Liens attributable to the Lessee;

(b)           on or prior to the Expiration Date,
execute and deliver to the Lessor and the Lessor’s title insurance company an
affidavit as to the absence of any Liens (other than Permitted Property Liens
of the type described in clauses (a), (b), (c), (g) and (h) of the definition
thereof), and shall execute and deliver to the Lessor a statement of
termination of this Lease;

 30
 

 

(c)           on or prior to the Expiration Date,
vacate the Property and transfer possession of the Property to the Lessor (or
its designee) or, if the Lessor has accepted any bid for the Property, to the
applicable purchaser of the Property, by surrendering the same into the
possession of the Lessor or such Person, as the case may be, in the condition
required by Section 20.1, free and clear of all Liens (other than Permitted
Property Liens of the type described in clauses (a), (b), (c), (g) and (h) of
the definition thereof), in good condition (as modified by Modifications
permitted by this Lease), ordinary wear and tear excepted, and in compliance
with Applicable Law (including Environmental Laws); and

(d)           for a period of up to one (1) year
after the Expiration Date, cooperate reasonably with the Lessor and/or any
Person designated by the Lessor to receive the Property, which cooperation
shall include reasonable efforts with respect to the following, all of which
the Lessee shall do on or before the Expiration Date for the Property or as
soon thereafter as is reasonably practicable: providing copies of all books and
records regarding the maintenance and ownership of the Property and all
know-how, data and technical information relating thereto, providing a current
copy of the applicable Plans and Specifications, granting or assigning all
Necessary Permits (to the extent assignable) and cooperating reasonably in
seeking and obtaining all necessary Governmental Action.  The obligations of the Lessee under this
paragraph shall survive the expiration or termination of this Lease.

If
one or more of the Return Conditions shall not be fulfilled as of the
applicable date for such fulfillment, then the Remarketing Option shall be null
and void (whether or not it has been theretofore exercised by the Lessee), in
which event all of the Lessee’s rights under this Article XX shall immediately
terminate and the Lessee shall purchase from the Lessor, and the Lessor shall
convey to the Lessee in accordance with the provisions of Section 18.4, on the
Expiration Date all of the Lessor’s interest in the Property for an amount
equal to the Property Balance.

SECTION 20.3.  Acceptance of Bids.  The Lessor in its sole discretion shall
decide whether to accept any bid obtained by the Lessee for the purchase of the
Property, and the Lessee shall not have any right, power or authority to bind
the Lessor or the Participants in connection with any proposed sale of the
Property; provided, however, that the Lessor shall
accept any all-cash bid from a bona fide
purchaser (other than a prospective purchaser that is the Lessee or an
Affiliate of the Lessee) that (a) has offered the highest bid for the Property
and (b) is in an amount that exceeds the sum of (i) the Property Cost, plus (ii) all Sales Costs incurred in connection with the
sale of the Property.  The Lessor shall
have the right, but shall be under no duty, to solicit bids, to inquire into
the efforts of the Lessee to obtain bids or otherwise to take action in
connection with any such sale.

SECTION 20.4.  Certain Obligations
Continue.  During the
Marketing Period, the obligation of the Lessee to pay Rent with respect to the
Property (including the installment of Rent due on the Expiration Date) shall
continue undiminished until payment in full of the Maximum Recourse Amount and
all accrued and unpaid Basic Rent and Supplemental Rent due to the Lessor with
respect to the Property under the Operative Documents to which the Lessee is a
party.

 

 31

ARTICLE XXI

ESTOPPEL CERTIFICATES;

ACCEPTANCE OF SURRENDER; NO MERGER OF TITLE

SECTION 21.1.  Estoppel Certificates.  At any time and from time to time upon not
less than thirty (30) business Days’ prior request by the Lessor or the Lessee
(the “Requesting Party”), the other party
(whichever party shall have received such request, the “Certifying
Party”) shall furnish to the Requesting Party a certificate signed
by an individual having the office of vice president or higher in the
Certifying Party certifying that this Lease is in full force and effect (or
that this Lease is in full force and effect as modified and setting forth the
modifications); the dates to which the Basic Rent and Supplemental Rent have
been paid; to the best knowledge of the signer of such certificate, whether or
not the Requesting Party is in default under any of its obligations hereunder
(and, if so, the nature of such alleged default); and such other matters under
this Lease as the Requesting Party may reasonably request.  Any such certificate furnished pursuant to
this Article XXI may be relied upon by the Requesting Party, and any existing
or prospective mortgagee, purchaser or lender, and any accountant or auditor,
of, from or to the Requesting Party (or any Affiliate thereof).

SECTION 21.2.  Acceptance of Surrender.  No surrender to the Lessor of this Lease or
of the Property or of any part thereof or of any interest therein shall be
valid or effective unless agreed to and accepted in writing by the Lessor and
the Administrative Agent, and no act by the Lessor or the Administrative Agent
or any representative or agent of the Lessor or the Administrative Agent, other
than a written acceptance, shall constitute an acceptance of any such
surrender.

SECTION 21.3.  No Merger of Title.  There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) the fee or ground leasehold estate in the Property,
except as may expressly be stated in a written instrument duly executed and
delivered by the appropriate Person or (c) a beneficial interest in the Lessor.

ARTICLE XXII

GRANT OF LIEN; FORECLOSURE OF INTEREST; FURTHER ASSURANCES

SECTION 22.1.  Grant of Lien by Lessee; Foreclosure of Lessee’s Interest.

(a)           The Lessee hereby mortgages, grants,
bargains, sells, releases, confirms, conveys, assigns, transfers and sets over
to FIRST AMERICAN TITLE INSURANCE COMPANY, as trustee (together with all
successor trustees, the “Trustee”) IN
TRUST, WITH POWER OF SALE, for the benefit of the Lessor and each Participant,
and grants to the Trustee for the benefit of the Lessor and each Participant a
security interest in, and all of the Lessee’s right, title and interest in and
to the Property, including, without limitation, all buildings, structures and
other improvements, and all fixtures and other property now or hereafter attached
to or affixed to any such buildings, structures or other improvements, and any
additions and 

 32
 

alterations thereto or
replacements thereof, now or hereafter built, constructed or located upon the
Property, all rents, additional rents, issues, income, revenues, distributions,
royalties and profits now or in the future payable in respect of the Property,
together with all of the right, power and authority of the Lessee to alter,
modify or change the terms, conditions and provisions of this Lease and any
other lease pertaining to the Property, to consent to any request made by a
tenant or landlord pursuant thereto, or to surrender, cancel or terminate the
same or to accept any surrender, cancellation or termination of the same,
together with all of the options, rights, powers and privileges of the Lessee
under any lease pertaining to the Property, whether heretofore or hereafter
existing, including, without limitation, the rights and options to purchase the
Property contained in Article XVIII of this Lease, and all present and
future right, title and interest of the Lessee in and to (i) all refunds, tax
abatement agreements, rebates, reserves, deferred payments, deposits, cost
savings, awards and payments of any kind due from or payable by (A) any Governmental
Authority, or (B) any insurance or utility company, in each case under clause
(A) or (B) above in respect of the Property, and (ii) all refunds, rebates and
payments of any kind due from or payable by any Governmental Authority for any
taxes, assessments, or governmental or quasi-governmental charges or levies
imposed upon the Lessee in respect of the Property, and all plans and
specifications, designs, drawings and other information, materials and matters
heretofore or hereafter prepared relating to the Property or any construction
on the Property, all proceeds (including claims and demands therefor) of the
conversion, voluntary or involuntary, of any of the foregoing into cash or
liquidated claims, including without limitation the proceeds of insurance and
condemnation awards in respect of the Property or any portion thereof, all
additional estates, rights and interests hereafter acquired by the Lessee in
all or any or the Property or any portion thereof, together with all proceeds
of the conversion, whether voluntary or involuntary, of any of the Property
into cash or other liquid claims, including without limitation, all awards,
payments or proceeds, including interest thereon, and the right to receive the
same, which may be made as a result of any casualty, any exercise of the right
of eminent domain or deed in lieu thereof, any injury to the Property and any
defect in title in the Property or other matter insured under any policy of
title insurance, together with attorney’s fees, costs and disbursements
incurred by the Lessor in connection with the collection of such awards,
payments and proceeds, and the Lessee further grants to the Lessor, pursuant to
the Uniform Commercial Code as in effect in any applicable jurisdiction, a
security interest in all present and future right, title and interest of the
Lessee in and to any portion of the foregoing property for which a security
interest may be created under such Uniform Commercial Code.

To
have and to hold the same whether now owned or held or hereafter acquired unto
the Trustee, its successors-in-trust forever, IN TRUST, WITH POWER OF SALE, to
secure to the Lessor the payment of Basic Rent, Supplemental Rent, Property
Cost and all other sums owing to the Lessor and the other Participants under
this Lease and the other Operative Documents and the performance and observance
of the terms, covenants, warranties, conditions, agreements and obligations
under this Lease and the other Operative Documents, together with interest
thereon, and all other amounts payable by Lessee under the Operative Documents
(collectively, the “Secured Obligations”).  If the Lessee shall pay all sums due under
this Lease and the other Operative Documents when due according to the terms
thereof and shall otherwise fully and properly perform and comply with all of
the obligations, agreements, terms and conditions of this Lease and the other
Operative Documents, then this conveyance shall become null and void.

 33
 

(b)           In the context of the exercise of
remedies under the Operative Documents, including, without limitation, in the
case of any insolvency or receivership proceedings or a petition under the
Bankruptcy Code or any other applicable insolvency laws or statute of the
United States of America or any State or Commonwealth thereof affecting the
Lessee or the Lessor, or any enforcement or collection actions, the
transactions evidenced by this Lease are loans made by the Lessor as an
unrelated third party lender to the Lessee secured by all of the Property, all
to secure such loans, effective on the date hereof to have and to hold such
interests in the Property unto the Trustee for the benefit of the Lessor and
its successors and assigns, forever, provided always
that these presents are upon the express condition that, if all amounts due under
this Lease and the other Operative Documents shall have been paid and satisfied
in full, then this instrument and the estate hereby granted shall cease and
become void.

(c)           In the event of the occurrence of any
Lease Event of Default, then the entire unpaid balance of all sums due under
this Lease and the other amounts accrued thereon shall, at the option of the
owner thereof and without notice, immediately become due and payable for all
purposes, whether or not due according to the maturity date or dates thereof;
and all other indebtedness, the payment of which is secured hereby, shall
likewise become due and payable.  The
Trustee, the Lessor and each of them are authorized prior or subsequent to the
institution of any foreclosure proceedings to enter upon, or to seek the
appointment of a receiver from a court of competent jurisdiction to enter upon,
all or any of the Property or any part thereof and to take possession of all or
any of the Property or any part thereof and exercise without interference from
the Lessee, any and all rights which the Lessee has with respect to the
management, possession, operation, protection or preservation of the Property.

Upon
the occurrence of any Lease Event of Default, the Lessor shall have the power
and authority, after proper notice and lapse of such time as may be required by
law, to cause the Trustee to sell all or any of the Property or any portion
thereof by notifying the Trustee of that election and depositing with the
Trustee this instrument and receipts and evidence of expenditures made and
secured hereby as the Trustee may reasonably require.  Upon receipt of any such notice from the
Lessor, the Trustee shall cause to be recorded, published and delivered to the
Lessee such notice of default and election to sell as is then required by
applicable statutory authority and by this instrument, which notice shall set
forth, among other things, the nature of the breach(es) or default(s), the
action(s) required to effect a cure thereof and the time period within which that
cure may be effected.  If no cure is
effected within the statutory time limits following recordation of the notice
of Default and election to sell and after notice of sale has been given as
required by the above-referenced statutes, the Trustee may without further
notice or demand sell and convey the Property in accordance with the
above-referenced statutes.  The Property
may be sold as a whole or in separate lots, parcels or items and in such order
as the Lessor may direct, at public auction to the highest bidder for cash in
lawful money of the United States payable at the time of sale.  The Trustee shall deliver to such
purchaser(s) a good and sufficient deed or deeds conveying the property so
sold, but without any covenant or warranty express or implied.  The recitals in such deed of any matter or
fact shall be conclusive proof of the truthfulness thereof.  Any Person, including the Lessee, the
Trustee, the Lessor or any Participant, may purchase at any sale.  After deducting all costs, fees and expenses
of the Lessor, the Administrative Agent and the Trustee, including costs of
evidence of title in connection with any sale, the Administrative Agent shall
apply the proceeds of sale, in the following order of priority, to payment of
the following: (i) first, all
amounts expended by or for the account of the 

 34
 

Lessor or the Administrative Agent under the terms
hereof and not then repaid, with accrued interest at the Default Rate; and (ii)
second, all other amounts then due and
owing hereunder including, without limitation, all Basic Rent, Supplemental
Rent, the full amount of the Property Cost as of the date of sale as if this
Lease had been terminated with respect to the Property under Section 18.1 and
all other amounts then payable by the Lessee under this Lease and the other
Operative Documents, with the Administrative Agent having the right to apply
the proceeds of sale to the amounts described above in this clause (ii) in such
order, proportion and priority as the Administrative Agent and the Lessor may
elect in their sole and absolute discretion. 
To the extent permitted by applicable statutes, the Trustee may postpone
the sale of all or any portion of the Property by public announcement at the
time and place of sale, and from time to time thereafter may again postpone
that sale by public announcement or subsequently noticed sale, and without
further notice may make such sale at the time fixed at the last postponement or
may, in its discretion, give a new notice of sale.  A sale of less than all of the Property or
any defective or irregular sale made hereunder shall not exhaust the power of
sale provided for herein, and subsequent sales may be made hereunder until all
of the Secured Obligations shall have been satisfied or all of the Property
shall have been sold in its entirety, without defect or irregularity.  No action of the Lessor, the Administrative
Agent or the Trustee based upon the provisions contained herein or contained in
the applicable statutes, including, without limitation, the giving of the
notice of Default and election to sell or the notice of sale, shall constitute
an election of remedies which would preclude the Lessor or its assignee(s) from
pursuing judicial foreclosure before a completed sale pursuant to the power of
sale contained herein.  The Lessor shall
have the right, with the irrevocable consent of the Lessee hereby given and
evidenced by the execution of this instrument, to obtain appointment of a
receiver by any court of competent jurisdiction without further notice to the
Lessee, which receiver shall be authorized and empowered to enter upon and take
possession of any or all of the Property, including all personal property used
upon or in connection with the real property herein conveyed, to let any or all
of the Property, to receive all the rents, issues and profits, if any, which
may be due or become due in respect to the leasing of the Property to another
party (“Property Rents”), and apply the
Property Rents after payment of all necessary charges and expenses to reduction
of the Secured Obligations in such order, proportion and priority as the Lessor
may elect.  At the option of the Lessor,
the receiver shall accomplish entry and taking possession of the Property by
actual entry and possession or by notice to the Lessee.  The receiver so appointed by a court of
competent jurisdiction shall be empowered to issue receiver’s certificates for
funds advanced by the Lessor and the Participants for the purpose of protecting
the value of the Property as security for the Secured Obligations.  The amounts evidenced by receiver’s
certificates shall bear interest at the Default Rate and may be added to the
Secured Obligations if the Lessee or a junior lienholder purchases any or all
of the Property at the trustee’s sale. 
Trustee or any successor acting hereunder may resign and thereupon be
discharged of the trusts hereunder upon thirty (30) days’ prior written notice
to the Lessor and the Administrative Agent. 
Regardless of whether the Trustee resigns, the Lessor may, from time to
time, substitute a successor or successors to any Trustee named herein or
acting hereunder in accordance with any statutory procedure for such
substitution; or if the Lessor, in its sole and absolute discretion, so elects,
and if permitted by law, the Lessor may substitute such successors or
successors by recording, in the office of the recorder of the county or
counties where the Property is located, a document executed by the Lessor and
containing the name of the original Lessee and Lessor hereunder, the book and
page where this instrument (or a memorandum hereof) is recorded (and/or
instrument number, as applicable) and the name of the 

 35
 

new Trustee, which instrument shall be conclusive
proof of proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the predecessor Trustee, succeed to the rights, powers
and duties hereunder.  It is acknowledged
that A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT; A POWER OF SALE MAY
ALLOW THE LESSOR AND/OR THE ADMINISTRATIVE AGENT (AS ASSIGNEE OF THE LESSOR) TO
TAKE THE PROPERTY (OR ANY PORTION THEREOF) AND SELL IT WITHOUT GOING TO COURT
IN A FORECLOSURE ACTION UPON DEFAULT BY THE LESSEE UNDER THIS INSTRUMENT.

If
(i) the Property shall consist of one or more parcels, whether or not contiguous
and whether or not located in the same county, or (ii) in addition to this
Lease and the Lessor Mortgage, the Lessor shall now or hereafter hold one or
more additional mortgages, liens, deeds of trust or other security (directly or
indirectly) for the Secured Obligations upon other property in the State in
which the Property is located (whether or not such property is owned by the
Lessor or by others) or (iii) both the circumstances described in clauses (i)
and (ii) shall be true, then to the fullest extent permitted by law, the Lessor
may, in its sole discretion, commence or consolidate in a single foreclosure
action all foreclosure proceedings against all such collateral securing the
Secured Obligations (including the Property), which action may be brought or
consolidated in the courts of any county in which any of such collateral is
located.  The Lessee acknowledges that
the right to maintain a consolidated foreclosure action is a specific
inducement to the Lessor to extend the Advances, and the Lessee expressly and
irrevocably waives any objections to the commencement or consolidation of the
foreclosure proceedings in a single action and any objections to the laying of
venue or based on the grounds of forum non conveniens
which it may now or hereafter have.  The
Lessee further agrees that if the Lessor shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Property or against
any collateral other than the Property, which collateral directly or indirectly
secures the Secured Obligations, or if the Lessor shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Property is located, the Lessor
may commence or continue foreclosure proceedings and exercise its other
remedies granted in this Lease and the Lessor Mortgage against the Property or
any part thereof and the Lessee waives any objections to the commencement or
continuation of a foreclosure of this Lease and the Lessor Mortgage or exercise
of any other remedies hereunder based on such other proceedings or judgments,
and waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Lease or the Lessor Mortgage or such other
proceedings on such basis.  Neither the
commencement nor continuation of proceedings to foreclose this Lease and the
Lessor Mortgage nor the exercise of any other rights hereunder or thereunder
nor the recovery of any judgment by the Lessor and/or the Administrative Agent
(as assignee of the Lessor) in any such proceedings shall prejudice, limit or
preclude the right of the Lessor to commence or continue one or more
foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Property is located)
which directly or indirectly secures the Secured Obligations, and the Lessee
expressly waives any objections to the commencement of, continuation of, or
entry of a judgment in such other proceedings or exercise of any remedies in
such proceedings based upon any action or judgment connected to this Lease or
the Lessor Mortgage, and the Lessee also waives any right to seek to dismiss,
stay, remove, transfer or consolidate either such other proceedings or any
action under this Lease or the Lessor Mortgage on such basis.

 36
 

If
the Lessor so elects, the Trustee may sell any personal property covered by
this instrument at one or more separate sales in any manner permitted by the
Uniform Commercial Code as in effect in any applicable jurisdiction.  One or more exercises of the powers herein
granted shall not extinguish nor exhaust such powers until all of the Property
shall have been sold in its entirety or until the entire amounts evidenced
and/or secured by this Lease, the Lessor Mortgage and the other Operative
Documents shall have been paid in full.

(d)           With respect to that portion of the
Property constituting personal property, for the purpose of securing the Lessee’s
obligations for the repayment of the above-described Secured Obligations, (i)
the Lease shall also be deemed to be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial Code as in
effect in any applicable jurisdiction; (ii) the conveyance provided for hereby
shall be deemed to be a grant by the Lessee to the Lessor of a lien and
security interest in all of the Lessee’s present and future right, title and
interest in and to such portion of the Property, including but not limited to
the Lessee’s leasehold estate therein and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, investments, securities
or other property, whether in the form of cash, investments, securities or
other property to secure such obligations, effective on the date hereof, to
have and to hold such interests in the Property unto the Lessor and its
successors and assigns, forever, provided always that these presents are upon
the express condition that, if all amounts due under this Lease and the other
Operative Documents shall have been paid and satisfied in full, then this
instrument and the estate hereby granted shall cease and become void; (iii) the
possession by the Lessor of notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be “possession by the secured party”
for purposes of perfecting the security interest pursuant to Section 9-313 of
the Uniform Commercial Code as in effect in any applicable jurisdiction; and
(iv) notifications to Persons holding such property, and acknowledgments,
receipts or confirmations from financial intermediaries, bankers or agents (as
applicable) of the Lessee shall be deemed to have been given for the purpose of
perfecting such security interest under Applicable Law.

SECTION 22.2.  Further Assurances.  The Lessee shall, to the extent consistent
with this Lease, and the Lessor shall, if so directed by the Administrative
Agent, take such actions and execute, deliver, file and record such other
documents, financing statements, mortgages and deeds of trust as may be
necessary to ensure that, if the Lease were deemed to create a security
interest in the Property in accordance with this Article XXII, such security
interest would be deemed to be a perfected security interest with priority over
all Liens (other than Permitted Property Liens) under Applicable Law and will
be maintained as such throughout the Lease Term.

SECTION 22.3.  Security for Obligations.  The security interest and mortgage and/or
deed of trust created under this Article XXII secures the payment and
performance of all Obligations now or hereafter existing under this Lease, the
Participation Agreement and each other Operative Document to which the Lessee
is or may become a party, whether for Basic Rent, Supplemental Rent (including
obligations with respect to the payment of Property Cost and amounts payable
pursuant to Section 20.1(m)) costs, fees, expenses or otherwise.

 37
 

ARTICLE XXIII

INTENT OF THE PARTIES

SECTION 23.1.  Nature of Transaction.

(a)           The parties hereto intend that, with
respect to the Property and the Lease, (i) for financial accounting purposes
with respect to the Lessee, (x) the Lease will be treated as an “operating lease” pursuant to Statement of financial
Accounting standards (SFAS) No. 13, as amended, (y) the Lessor will be treated
as the owner and the lessor of the Property to which it holds title and the
Lessee will be treated as the lessee of the Property, (ii) for federal and all
state and local income tax purposes and bankruptcy purposes, (A) the Lease will
be treated as a financing arrangement, and (B) the Lessee under the Lease will
be treated as the owner of the Property and will be entitled to all tax
benefits ordinarily available to an owner of property like such Property for
such tax purposes, and (iii) all risks relating to environmental matters shall
be borne by the Lessee in accordance with the provisions of the Participation
Agreement.

(b)           The parties hereto intend that, for
federal, state, local and foreign tax and regulatory purposes, the Property
Balance will be indebtedness of the Lessee secured, inter alia,
by the Property and the rights to payment of Rent under the Lease, and agree to
so treat the Property Balance accordingly for all such purposes.

(c)           Specifically, without limiting the
generality of the foregoing, the parties hereto intend and agree that in the
event of any insolvency or receivership proceedings or a petition under the United
States bankruptcy laws or any other applicable insolvency laws or statutes of
the United States of America or any state or commonwealth thereof affecting the
Lessee or any other party to the Participation Agreement or any collection
actions, the transactions evidenced by the Operative Documents are loans made
to the Lessee by the Lessor (using its own funds as well as funds provided by
the Lender and the Purchasers as unrelated third party lenders).

(d)           The Lessor agrees that it will comply
with its obligations set forth in the first sentence of Section 13.5(e) of the
Participation Agreement.

ARTICLE XXIV

MISCELLANEOUS

SECTION 24.1.  Survival; Severability;
etc.  Anything contained in
this Lease to the contrary notwithstanding, all claims against and liabilities
of the Lessee or the Lessor arising from events commencing prior to the
expiration or earlier termination of this Lease shall survive such expiration
or earlier termination.  If any term or
provision of this Lease or any application thereof shall be declared invalid or
unenforceable, the remainder of this Lease and any other application of such
term or provision shall not be affected thereby.  If any right or option of the Lessee provided
in this Lease, including any right or option described in Article XIV, XV,
XVIII or XX, would, in the absence of the limitation imposed by this sentence,
be invalid or unenforceable as being in violation of the rule against
perpetuities or any other rule of law 

 38
 

relating to the vesting
of an interest in or the suspension of the power of alienation of property,
then such right or option shall be exercisable only during the period which
shall end twenty-one (21) years after the date of death of the last survivor of
the descendants of Franklin D. Roosevelt, the former President of the United
States, Henry Ford, the deceased automobile manufacturer, and John D.
Rockefeller, the founder of the Standard Oil Company, known to be alive on the
date of the execution, acknowledgment and delivery of this Lease.

SECTION 24.2.  Amendments and
Modifications.  Subject to the
requirements, restrictions and conditions set forth in the Participation
Agreement, neither this Lease nor any provision hereof may be amended, waived,
discharged or terminated except by an instrument in writing in recordable form
signed by the Lessor and the Lessee.

SECTION 24.3.  No Waiver.  No failure by the Lessor, any other
Participant, the Administrative Agent or the Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term.  To the fullest
extent permitted by law, no waiver of any default shall affect or alter this
Lease, and this Lease shall continue in full force and effect with respect to
any other then existing or subsequent default.

SECTION 24.4.  Notices.  All notices, demands, requests, consents,
approvals and other communications hereunder shall be in writing and directed
to the address described in, and deemed received in accordance with the
provisions of, Section 16.3 of the Participation Agreement.

SECTION 24.5.  Successors and Assigns.  All the terms and provisions of this Lease
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

SECTION 24.6.  Headings and Table of
Contents.  The headings and
table of contents in this Lease are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

SECTION 24.7.  Counterparts.  This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.

SECTION 24.8.  GOVERNING LAW.  THIS LEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA.

SECTION 24.9.  Liability Limited.  The parties hereto agree that except as
specifically set forth in this Lease or in any other Operative Document, the
Lessor shall have no personal liability whatsoever to Lessee or any Participant
or their respective successors and assigns for any claim or obligation based on
or in respect of this Lease or any of the other Operative Documents or arising
in any way from the transactions contemplated hereby or thereby and recourse,
if any, shall be solely had against the Lessor’s interest in the Property and
the Collateral or from payments (other than payments of Yield and payments due
to the Lessor with respect to indemnities, reimbursement of expenses or fees,
in each case payable to the Lessor for 

 39
 

its own account) received
from the Lessee (it being acknowledged and agreed by each party hereto that all
such personal liability of the Lessor is expressly waived and released as a
condition of, and as consideration for, the delivery by the Lessor of each
Operative Document to which it is a party); provided, however,
that the Lessor shall be liable in its individual capacity (a) for its own
willful misconduct or gross negligence, (b) for breach of its representations
and warranties set forth in Section 8.2 of the Participation Agreement, (c) for
any Lessor Lien attributable to it, and (d) for any Tax based on or measured by
any fees, commission or compensation received by it for acting as the Lessor as
contemplated by the Operative Documents.

SECTION 24.10.  Original Lease.  The single executed original of this Lease
marked “THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART” on the signature page thereof and containing the
receipt thereof of the Administrative Agent therefor on or following the
signature page thereof shall be the Original Executed Counterpart of this Lease
(the “Original Executed Counterpart”).  To the extent that this Lease constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Lease may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.

[THE
REMAINDER OF THIS PAGE HAS 

BEEN INTENTIONALLY LEFT BLANK]

 

 40

IN
WITNESS WHEREOF, the parties have caused this Lease be duly executed and
delivered as of the date first above written.

	
   

  	
  Adobe Systems Incorporated,

  
	
   

  	
   as Lessee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mark
  Garrett

  
	
   

  	
   

  	
  Mark Garrett

  
	
   

  	
   

  	
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SELCO Service Corporation,

  
	
   

  	
   as Lessor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Donald C.
  Davis

  
	
   

  	
   

  	
  Donald C. Davis

  
	
   

  	
   

  	
  Vice President

  

 

THIS COUNTERPART
IS THE ORIGINAL EXECUTED COUNTERPART.

Receipt
of this original counterpart of the foregoing Lease is hereby acknowledged as
of the date hereof.

	
   

  	
  KeyBank National Association,

  
	
   

  	
   as the
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/ Raed
  Alfayoumi

  
	
   

  	
   

  	
  Raed Alfayoumi

  
	
   

  	
   

  	
  Vice PresidentEXHIBIT 10.2

PARTICIPATION AGREEMENT

dated as of March 26, 2007

among

ADOBE SYSTEMS INCORPORATED,

as Lessee,

SELCO SERVICE CORPORATION

(Doing Business in California as

OHIO SELCO SERVICE CORPORATION),

as Lessor,

KEYBANK NATIONAL ASSOCIATION,

as Purchaser,

ADOBE SYSTEMS INCORPORATED,

as Purchaser,

KEYBANK NATIONAL ASSOCIATION,

as Lender,

and

KEYBANK NATIONAL ASSOCIATION,

as Administrative Agent,

with

KEY LEASE ADVISORY SERVICES 

(a Division of Key Equipment Finance Inc.),

as Structuring Agent.

Extension of Lease Financing of Office Tower

Located in City of San Jose, Santa Clara County, California

for Adobe Systems Incorporated

Closing Date:  March 26, 2007

 

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS;
  INTERPRETATION

  	
  2

  
	
  SECTION 1.1.

  	
  Definitions;
  Interpretation

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  [RESERVED]

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  FUNDING OF
  ADVANCES

  	
  2

  
	
  SECTION 3.1.

  	
  Advances

  	
  2

  
	
  SECTION 3.2.

  	
  Lessor’s Commitment

  	
  2

  
	
  SECTION 3.3.

  	
  Purchasers’
  Commitment

  	
  2

  
	
  SECTION 3.4.

  	
  Lenders’
  Commitment

  	
  3

  
	
  SECTION 3.5.

  	
  Procedures for
  Advances

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CALCULATION OF
  BASIC RENT; YIELD; RETURN; INTEREST; FEES; PAYMENT

  	
  3

  
	
  SECTION 4.1.

  	
  Calculation of
  Basic Rent

  	
  3

  
	
  SECTION 4.2.

  	
  Interest on
  Loans

  	
  4

  
	
  SECTION 4.3.

  	
  Return on
  Capital

  	
  4

  
	
  SECTION 4.4.

  	
  Yield

  	
  4

  
	
  SECTION 4.5.

  	
  Computation of
  Basic Rent and Yield

  	
  4

  
	
  SECTION 4.6.

  	
  Prepayments

  	
  5

  
	
  SECTION 4.7.

  	
  Fees

  	
  5

  
	
  SECTION 4.8.

  	
  Place and Manner
  of Payments

  	
  5

  
	
  SECTION 4.9.

  	
  [Reserved]

  	
  6

  
	
  SECTION 4.10.

  	
  Accounting
  Terms; Computations

  	
  6

  
	
  SECTION 4.11.

  	
  Late Payments;
  Default Rate

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  CERTAIN
  INTENTIONS OF THE PARTIES

  	
  7

  
	
  SECTION 5.1.

  	
  Intent

  	
  7

  
	
  SECTION 5.2.

  	
  Amounts Due
  Under Lease

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  CLOSING DATE

  	
  8

  
	
  SECTION 6.1.

  	
  Closing Date

  	
  8

  
					

 i
 

 

	
  ARTICLE VII

  	
  DISTRIBUTIONS

  	
  13

  
	
  SECTION 7.1.

  	
  Basic Rent

  	
  13

  
	
  SECTION 7.2.

  	
  Purchase
  Payments by the Lessee

  	
  14

  
	
  SECTION 7.3.

  	
  Payment of
  Maximum Recourse Amount

  	
  15

  
	
  SECTION 7.4.

  	
  Sales Proceeds
  of Remarketing of Property

  	
  15

  
	
  SECTION 7.5.

  	
  Distribution of
  Payments After Lease Event of Default

  	
  16

  
	
  SECTION 7.6.

  	
  Casualty and
  Condemnation Amounts

  	
  17

  
	
  SECTION 7.7.

  	
  Supplemental
  Rent

  	
  17

  
	
  SECTION 7.8.

  	
  Other Payments

  	
  17

  
	
  SECTION 7.9.

  	
  Order of
  Application

  	
  18

  
	
  SECTION 7.10.

  	
  Payments to
  Account

  	
  18

  
	
  SECTION 7.11.

  	
  Pro Rata
  Treatment

  	
  18

  
	
  SECTION 7.12.

  	
  Sharing of
  Payments

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  REPRESENTATIONS

  	
  19

  
	
  SECTION 8.1.

  	
  Representations
  of the Lessee

  	
  19

  
	
  SECTION 8.2.

  	
  Warranties and
  Representations of the Lessor

  	
  25

  
	
  SECTION 8.3.

  	
  Representations
  of the Participants

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  COVENANTS

  	
  29

  
	
  SECTION 9.1.

  	
  Affirmative
  Covenants

  	
  29

  
	
  SECTION 9.2.

  	
  Negative
  Covenants

  	
  34

  
	
  SECTION 9.3.

  	
  Financial
  Covenant

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  GROUND LEASE

  	
  38

  
	
  SECTION 10.1.

  	
  Ground Lease

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  EXTENSION OF
  LEASE TERM

  	
  38

  
	
  SECTION 11.1.

  	
  Right of Lessee
  to Extend

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  TRANSFERS OF
  PARTICIPANTS’ INTERESTS

  	
  39

  
	
  SECTION 12.1.

  	
  Assignments by
  Participants

  	
  39

  
				

 ii
 

 

	
  SECTION 12.2.

  	
  Participations

  	
  41

  
	
  SECTION 12.3.

  	
  Pledge Under Regulation
  A

  	
  41

  
	
  SECTION 12.4.

  	
  Acknowledgment
  of Assignment of Lease and Rent

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  INDEMNIFICATION

  	
  42

  
	
  SECTION 13.1.

  	
  General
  Indemnification

  	
  42

  
	
  SECTION 13.2.

  	
  End of Term
  Indemnity

  	
  44

  
	
  SECTION 13.3.

  	
  Environmental
  Indemnity

  	
  45

  
	
  SECTION 13.4.

  	
  Proceedings in
  Respect of Claims

  	
  46

  
	
  SECTION 13.5.

  	
  General Tax
  Indemnity

  	
  47

  
	
  SECTION 13.6.

  	
  Indemnity
  Payments in Addition to Lease Obligations

  	
  52

  
	
  SECTION 13.7.

  	
  Illegality

  	
  52

  
	
  SECTION 13.8.

  	
  Inability to
  Determine Rates

  	
  52

  
	
  SECTION 13.9.

  	
  Increased Costs

  	
  53

  
	
  SECTION 13.10.

  	
  Funding Losses

  	
  53

  
	
  SECTION 13.11.

  	
  Capital
  Requirements

  	
  54

  
	
  SECTION 13.12.

  	
  Mitigation

  	
  55

  
	
  SECTION 13.13.

  	
  Taxes on
  Payments

  	
  55

  
	
  SECTION 13.14.

  	
  Survival

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
  PAYMENT OF
  CERTAIN EXPENSES

  	
  57

  
	
  SECTION 14.1.

  	
  Payment of Costs
  and Expenses

  	
  57

  
	
  SECTION 14.2.

  	
  Brokers’ Fees
  and Stamp Taxes

  	
  58

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV

  	
  THE
  ADMINISTRATIVE AGENT

  	
  58

  
	
  SECTION 15.1.

  	
  Appointment

  	
  58

  
	
  SECTION 15.2.

  	
  Delegation of
  Duties

  	
  59

  
	
  SECTION 15.3.

  	
  Exculpatory
  Provisions

  	
  59

  
	
  SECTION 15.4.

  	
  Reliance by
  Administrative Agent

  	
  59

  
	
  SECTION 15.5.

  	
  Notice of
  Default

  	
  60

  
	
  SECTION 15.6.

  	
  Non-Reliance on
  Administrative Agent and Other Participants

  	
  60

  
				

 iii
 

 

	
  SECTION 15.7.

  	
  Indemnification

  	
  60

  
	
  SECTION 15.8.

  	
  Administrative
  Agent in Its Individual Capacity

  	
  60

  
	
  SECTION 15.9.

  	
  Successor
  Administrative Agent

  	
  61

  
	
  SECTION 15.10.

  	
  Eligibility of
  the Administrative Agent

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI

  	
  MISCELLANEOUS

  	
  62

  
	
  SECTION 16.1.

  	
  Survival of
  Agreements

  	
  62

  
	
  SECTION 16.2.

  	
  No Broker, etc

  	
  62

  
	
  SECTION 16.3.

  	
  Notices

  	
  62

  
	
  SECTION 16.4.

  	
  Counterparts

  	
  62

  
	
  SECTION 16.5.

  	
  Amendments

  	
  62

  
	
  SECTION 16.6.

  	
  Headings, etc

  	
  64

  
	
  SECTION 16.7.

  	
  Parties in
  Interest

  	
  64

  
	
  SECTION 16.8.

  	
  GOVERNING LAW

  	
  64

  
	
  SECTION 16.9.

  	
  Severability

  	
  64

  
	
  SECTION 16.10.

  	
  Liability
  Limited

  	
  65

  
	
  SECTION 16.11.

  	
  Further
  Assurances

  	
  65

  
	
  SECTION 16.12.

  	
  SUBMISSION TO
  JURISDICTION

  	
  65

  
	
  SECTION 16.13.

  	
  Setoff

  	
  66

  
	
  SECTION 16.14.

  	
  WAIVER OF JURY
  TRIAL

  	
  66

  
	
  SECTION 16.15.

  	
  Special
  Provisions re Sales of Receivables

  	
  66

  
	
  SECTION 16.16.

  	
  Special
  Provisions re Sales of Receivables to Lessee Parties

  	
  68

  
	
  SECTION 16.17.

  	
  Treatment of
  Certain Information; Confidentiality

  	
  68

  
				

 

 iv

Participation Agreement

THIS PARTICIPATION AGREEMENT (this “Participation Agreement”), dated as of March 26, 2007, is
entered into by and among ADOBE SYSTEMS
INCORPORATED, a Delaware corporation (“Adobe”),
as the Lessee (the “Lessee”); SELCO SERVICE CORPORATION, an Ohio
corporation doing business in California as OHIO
SELCO SERVICE CORPORATION, as
Lessor (together with its permitted successors and assigns, the “Lessor”); KEYBANK
NATIONAL ASSOCIATION, and ADOBE
SYSTEMS INCORPORATED, as the Purchaser (together with their respective
permitted successors and assigns, the “Purchasers”);  KEYBANK NATIONAL
ASSOCIATION, as the Lender (together with its permitted successors and
assigns, the “Lender”); and KEYBANK NATIONAL ASSOCIATION, as
administrative agent for the Participants (together with its permitted
successors and assigns in such capacity, the “Administrative
Agent”).

W I T N E S S E T H:

WHEREAS, the Lessor and the Lessee previously
entered into a lease financing (the “Prior Transaction”)
pursuant to that certain Participation Agreement dated as of September 26, 2001
(the “Prior Participation Agreement”), in
order to construct Improvements on the parcel of land described on Schedule III hereto (together with all Appurtenant Rights
relating thereto, the “Land”;  the Lessor’s interest in the Land, together
with all Improvements from time to time located on the Land and all attachments
and accessions thereto, collectively, the “Property”);

WHEREAS, the Lessor and the Lessee desire to
refinance and extend the Prior Transaction;

WHEREAS, the Lessor desires to continue to
lease to the Lessee, and the Lessee desires to continue to lease from the
Lessor, the Property;

WHEREAS, the Lessor is willing to provide the
funding of a portion of the costs of (a) the refinancing of the Property and
(b) the Transaction Expenses incurred in connection with the transactions
contemplated hereby;

WHEREAS, the Purchasers are willing to provide
funding for a portion of the foregoing costs by purchasing undivided ownership
interests in the Purchased Interests from the Lessor;

WHEREAS, the Lenders are willing to provide
financing for a portion of the foregoing costs by making non-recourse Loans to
the Lessor; and

WHEREAS, to secure such fundings (a) the Lessor
will have the benefit of a first priority Lien on all of the right, title and
interest of the Lessee in the Property and (b) the Lenders and Purchasers will
have the benefit of (i) a Lien on the Lessor’s right, title and interest in the
Property and (ii) an assignment of certain of the Lessor’s rights against the
Lessee under the Lease;

NOW, THEREFORE, in consideration of the mutual
agreements contained in this Participation Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:

ARTICLE I

DEFINITIONS; INTERPRETATION

SECTION 1.1.   Definitions; Interpretation.  Unless the context shall otherwise require,
capitalized terms used and not defined herein shall have the meanings assigned
thereto in Appendix A hereto for all purposes hereof (as such Appendix A may be
amended, supplemented, amended and restated or otherwise modified from time to
time, “Appendix A”); and the rules of
interpretation set forth in Appendix A shall apply to this Participation
Agreement.

ARTICLE II

[Reserved].

ARTICLE III

FUNDING OF ADVANCES

SECTION 3.1.   Advances.

(a)           Advances.  Subject to the conditions and terms hereof
(including the conditions set forth in Section 6.1), the Lessor shall take the
following actions at the written request of the Lessee:

(i)            the Lessor shall make Advances
hereunder (out of funds provided by itself, out of funds constituting Loan
proceeds and out of funds representing the proceeds of the sale of the Purchased
Interests) for the purpose of refinancing the Prior Transaction and paying the
Fees and the Transaction Expenses due and payable on the Closing Date;

(ii)           the Lessor shall lease the Property
to the Lessee under the Lease and the Lease Supplement.

Notwithstanding
any other provision hereof, there shall be only one (1) Advance hereunder,
which shall be made on the Closing Date.

SECTION 3.2.   Lessor’s Commitment.  Subject to the conditions and terms hereof,
the Lessor shall make available to the Lessee on the Closing Date an amount
(the “Lessor Amount”) in immediately
available funds equal to the Lessor Percentage of the amount of the Advance
being funded on the Closing Date.

SECTION 3.3.   Purchasers’ Commitment.  Subject to the conditions and terms hereof
and of the Receivables Purchase Agreement, on the Closing Date, each Purchaser
shall purchase an undivided percentage ownership interest in the Purchased
Interests from the Lessor in an aggregate amount in immediately available funds
equal to such Purchaser’s Pro Rata Share of such undivided percentage ownership
interests.

 2
 

SECTION 3.4.   Lenders’ Commitment.  Subject to the conditions and terms hereof
and of the Loan Agreement, on the Closing Date, each Lender shall fund a Loan
to the Lessor in an aggregate amount in immediately available funds equal to
such Lender’s Pro Rata Share of such Loan.

SECTION 3.5.   Procedures for Advances.

(a)           General Procedures.  With respect to the Advance being made
hereunder on the Closing Date, the Lessee has given the Lessor and the
Administrative Agent a Funding Request substantially in the form of Exhibit A hereto (the “Funding Request”)
(which Funding Request was delivered to the Administrative Agent not later than
2:00 p.m., (New York time), two (2) Business Days prior to the proposed Closing
Date) specifying:  (i) the amount of
Advance requested, and (ii) wire transfer instructions for the disbursement of
the proceeds of such Advance to the Administrative Agent under the Prior
Transaction or to such other Persons specified in the Funding Request.  Based upon the Funding Request, the
Administrative Agent shall calculate the amounts of the Lessor Amounts, Capital
and Loans required to fund the requested Advance, which amounts are equal to
the Lessor Percentage, Purchaser Percentage and the Loan Percentage,
respectively, of the Advance.  On the
basis of the Funding Request, on the Closing Date, (x) each Purchaser
shall make its Pro Rata Share of the Capital available to the Lessor in care of
the Administrative Agent at the Account by 2:00 p.m. (New York time) on
the requested Closing Date, (y) each Lender shall make Loans in an amount
equal to its respective Loan Commitment available to the Lessor in care of the
Administrative Agent at the Account by 2:00 p.m. (New York time) on the
requested Closing Date, and (z) the Lessor shall make its Commitment
Percentage of the Advance available to the Administrative Agent at the Account
by 2:00 p.m. (New York time) on the requested Closing Date.  Promptly upon the Administrative Agent’s
receipt of such funds from the Participants, the Administrative Agent shall
wire such funds on the Closing Date to the Persons entitled thereto and to such
accounts as the Lessee shall have indicated in the Funding Request.

(b)           Use of Proceeds of
Advance.  The Advance has been
made solely to provide the funds required to refinance the Prior Transaction
and to pay the related Fees and Transaction Expenses.

ARTICLE IV

CALCULATION OF BASIC RENT; YIELD;

RETURN; INTEREST; FEES; PAYMENT

SECTION 4.1.   Calculation of Basic Rent.  Basic Rent shall be payable from time to time
on each Rent Payment Date during the Lease Term in an amount equal to the sum
of (a) all interest then due on the Loans, as calculated in accordance with
Sections 4.2 and 4.11, (b) all Return then due on the Capital, as calculated in
accordance with Sections 4.3 and 4.11, and (c) all Yield then due on the Lessor
Amounts, as calculated in accordance with Sections 4.4 and 4.11.

 3
 

SECTION 4.2.   Interest on Loans.

(a)           The Loans shall accrue interest
computed and payable in accordance with the terms of the Loan Agreement.  The Loans shall become due and payable at the
dates and times provided under the Loan Agreement.

(b)           The Administrative Agent shall
distribute, in accordance with Article VII, the Lender Basic Rent and all
other amounts due with respect to the Loans paid to the Administrative Agent by
the Lessee under the Lease from time to time.

SECTION 4.3.   Return on Capital.

(a)           The Capital shall accrue Return
computed and payable in accordance with the terms of the Receivables Purchase
Agreement.  The Capital shall become due
and payable at the dates and times provided under the Receivables Purchase
Agreement.

(b)           The Administrative Agent shall
distribute, in accordance with Article VII, the Purchaser Basic Rent and
all other amounts due with respect to the Capital paid to the Administrative
Agent by the Lessee under the Lease from time to time.

SECTION 4.4.   Yield.

(a)           The Lessor Amounts outstanding from
time to time shall accrue yield (“Yield”) at a
rate per annum equal to the Yield Rate. 
If all or any portion of the Lessor Amounts, any Yield payable thereon
or any other amount payable hereunder shall not be paid when due (whether at
stated maturity, acceleration thereof or otherwise), such overdue amount shall
bear interest at a rate per annum which is equal to the Default Rate.

(b)           All Yield on the Lessor Amounts and
all other amounts due with respect to the Lessor Amounts shall be distributed
by the Administrative Agent to the Lessor in accordance with Article VII.

(c)           During the Lease Term, accrued Yield
on the Lessor Amounts shall be due and payable (i) on each Rent Payment Date,
(ii) on the date of any payment or prepayment, in whole or in part, of any
Lessor Amount, on the Lessor Amount so paid or prepaid, and (iii) on the
Expiration Date.

(d)           If not repaid sooner, the aggregate
outstanding amount of Lessor Amounts shall be repaid in full on the Expiration
Date, subject to the provisions of Article XX of the Lease.

SECTION 4.5.   Computation of Basic Rent and
Yield.  Interest on the Loans,
Return on Capital and Yield on the Lessor Amounts shall be calculated on the
basis of a 360-day year for the actual days elapsed at all times that such
interest rate, Return Rate or Yield Rate, as the case may be, is determined by
reference to the BBA LIBO Rate and, at all other times, on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed.  Any change in the interest rate on the Loans,
Return or the Yield Rate resulting from a change in the Base Rate or BBA LIBO
Rate shall become effective as of the opening of business on the day on which
such 

 4
 

change becomes
effective.  Each determination of the
interest rate, Return Rate or Yield Rate by the Administrative Agent pursuant
to any provision of this Participation Agreement or any other Operative
Document shall be binding on the Lessee and the Participants in the absence of
manifest error.

Any
increase or decrease in the Applicable Capital Margin or the Applicable Loan
Margin resulting from a change in the Consolidated Leverage Ratio shall become
effective as of the first Business Day following the date a Compliance
Certificate is delivered pursuant to Section 9.1(b)(i)(a); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then the Applicable Capital
Margin and the Applicable Loan Margin shall be determined based upon a
Consolidated Leverage Ratio of greater than 2.00 to 1.00 as of the first
Business Day after the date on which such Compliance Certificate was required
to have been delivered until such Compliance Certificate has been delivered by
Lessee.  The Applicable Capital Margin
and the Applicable Loan Margin in effect from the Closing Date through the date
the Compliance Certificate in respect of the fiscal quarter ending
March 1, 2007 is delivered or required to be delivered shall be determined
based upon a Consolidated Leverage Ratio of less than 1.00 to 1.00.

SECTION 4.6.   Prepayments.

(a)           Voluntary Prepayments.  The Lessee shall have the right to prepay an
amount equal to the aggregate outstanding Property Balance pursuant to the
exercise of purchase options permitted under the Lease without premium or
penalty; provided, however, that the Lessee shall
pay all Break Costs in connection with any such prepayment.  Each such prepayment with respect to the
Property Balance shall be applied to the Loans, Capital and Lessor Amounts in
the manner set forth in Article VII.

(b)           Mandatory
Prepayments.  All amounts
payable by the Lessee pursuant to Article XV, XVI, XVIII or XX of the Lease
shall be used to prepay the Property Balance and shall be applied to the Loans,
the Capital and the Lessor Amounts in the manner set forth in Article VII.

(c)           Notice.  The
Lessee will provide notice to the Administrative Agent (which shall promptly
notify the Lessor, Purchasers and Lenders) of any voluntary prepayment by 11:00
a.m. (New York time) on at least three (3) Business Days prior to the date of
such voluntary prepayment.

SECTION 4.7.   Fees.  The fees of the Structuring Agent, as
separately agreed to by the Lessee and the Structuring Agent (collectively, the
“Fees”), are due and payable by Lessee
on the Closing Date and shall be included in and paid from the Advance.

SECTION 4.8.   Place and Manner of Payments.  Except as otherwise specifically provided
herein, all payments hereunder shall be made to the Administrative Agent (as
assignee of the Lessor pursuant to the Assignment of Lease and Rent) in Dollars
in immediately available funds, without offset, deduction, counterclaim or
withholding of any kind, to the Account not later than 2:00 p.m. (New York
time) on the date when due, and the Lessor hereby directs the Lessee to pay to
the Administrative Agent the Rent from time to time due under the Lease for 

 5
 

distribution by the
Administrative Agent in accordance with Article VII.  Payments received after such time shall be
deemed to have been received on the next succeeding Business Day.  The Lessee shall, at the time it makes any
payment under any Operative Document, specify to the Administrative Agent the
Basic Rent, Supplemental Rent, Property Cost, Fees or other amounts payable by
the Lessee hereunder to which such payment is to be applied (and in the event
that it fails so to specify, or if such application would be inconsistent with
the terms hereof, the Administrative Agent shall distribute such payment to the
Participants in such manner as the Participants may determine to be appropriate
in respect of obligations owing by the Lessee). 
The Administrative Agent will distribute such payments to the
Participants in accordance with Article VII if any such payment is received
prior to 2:00 p.m. (New York time) on a Business Day in like funds as received
prior to the end of such Business Day and otherwise the Administrative Agent
will distribute such payment to the Participants on the next succeeding
Business Day.  Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and fees for the period of such extension), except that
in the case of LIBOR Loans/Capital/Lessor Amounts, if the extension would cause
the payment to be made in the next following calendar month, then such payment
shall instead by made on the preceding Business Day.

SECTION 4.9.   [Reserved].

SECTION 4.10.   Accounting Terms; Computations.  Unless otherwise indicated in this
Participation Agreement or any other Operative Document, all accounting terms
used in this Participation Agreement or any other Operative Document shall be
construed, and all accounting and financial computations hereunder or
thereunder shall be computed, in accordance with GAAP.  If GAAP changes during the term of this
Participation Agreement such that any covenants contained herein would then be
calculated in a different manner or with different components, the Lessee, the
Participants and the Administrative Agent agree to negotiate in good faith to
amend this Participation Agreement in such respects as are necessary to conform
those covenants as criteria for evaluating the Lessee’s financial condition to
substantially the same criteria as were effective prior to such change in GAAP;
provided, however, that, until the
Lessee, the Participants and the Administrative Agent so amend this
Participation Agreement, all such covenants shall be calculated in accordance
with GAAP as in effect immediately prior to such change.

SECTION 4.11.   Late Payments; Default
Rate.  If all or any portion
of Rent, Property Balance or any other amount payable to any Participant
hereunder or under the other Operative Documents (whether in respect of
interest, Return, Yield or other amounts) shall not be paid when due (whether
at the stated maturity thereof, by acceleration or otherwise), then such
overdue amount shall bear interest payable on demand, at a rate per annum that
is equal to the Default Rate.  Without
duplication of the foregoing, upon the occurrence and during the continuance of
any Lease Event of Default, the outstanding Property Balance and any other
amounts owing to the Participants or the Administrative Agent hereunder or
under the other Operative Documents shall bear interest, payable on demand, at
a rate per annum that is equal to the Default Rate.

 6
 

ARTICLE V

CERTAIN INTENTIONS OF THE PARTIES

SECTION 5.1.   Intent.

(a)           The parties hereto intend that, with
respect to the Property and the Lease, (i) for financial accounting purposes
with respect to the Lessee, (A) the Lease will be treated as an “operating lease” pursuant to Statement of Financial
Accounting standards (SFAS) No. 13, as amended, (B) the Lessor will be treated
as the owner and the lessor of the Property to which it holds title and the
Lessee will be treated as the lessee of the Property, (ii) for federal and all
state and local income tax purposes and bankruptcy purposes, (A) the Lease will
be treated as a financing arrangement, and (B) the Lessee under the Lease will
be treated as the owner of the Property and will be entitled to all tax
benefits ordinarily available to an owner of property like such Property for
such tax purposes, and (iii) all risks relating to environmental matters shall
be borne by the Lessee in accordance with the provisions of this Participation
Agreement and the Lease.

(b)           Specifically, without limiting the
generality of the foregoing, the parties hereto intend and agree that in the
event of any insolvency or receivership proceedings or a petition under the
United States bankruptcy laws or any other applicable insolvency laws or
statutes of the United States of America or any state or commonwealth thereof
affecting the Lessee or any other party to this Participation Agreement or any
collection actions, the transactions evidenced by the Operative Documents are a
financing made to the Lessee by the Lessor (using its own funds as well as
funds provided by the Lenders and by the Purchasers as unrelated third
parties).

(c)           Notwithstanding anything else to the
contrary set forth herein, each of the Lessee, each Participant and the
Administrative Agent acknowledges and agrees that none of the other parties to
this Participation Agreement has made any representations or warranties
concerning the tax, accounting or (except as otherwise expressly contained in
this Participation Agreement or other Operative Documents) legal
characteristics of the Operative Documents and that each party to the
Transaction, respectively, has obtained and relied upon such tax, accounting
and legal advice concerning the Operative Documents as it deems appropriate.

(d)           In furtherance of the intent of the
parties as set forth in this Section 5.1, the Lessee hereby absolutely,
unconditionally and irrevocably (i) agrees to pay in full when due (after
giving effect to any applicable grace period), whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise, all
amounts owing by the Lessee under the Operative Documents (including all such
amounts which would become due but for the operation of the automatic stay
under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §362(a),
and the operation of Section 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. §502(b) and §506(b)), and (ii) indemnifies and holds harmless
each party to this Participation Agreement for any and all costs and expenses
(including reasonable attorneys’ fees and expenses) incurred by such Person in
enforcing any rights under this Section 5.1.

 7
 

SECTION 5.2.   Amounts Due Under Lease.  Anything else herein or elsewhere to the
contrary notwithstanding, it is the intention of the Lessee and the
Participants that:  (a) the amount and
timing of installments of Basic Rent due and payable from time to time from the
Lessee under the Lease shall be equal to the aggregate payments due and payable
as interest on the Loans, Return on Capital and Yield on the Lessor Amounts on
each Rent Payment Date; (b) if the Lessee elects the Purchase Option or becomes
obligated to purchase the Property under the Lease, then the Loans, the
Capital, the Lessor Amounts, all accrued and unpaid interest, Return, Yield and
Fees and all other obligations of the Lessee owing to the Administrative Agent,
the Structuring Agent, and the Participants shall be due and payable in full by
the Lessee on the date set forth in the Lease; (c) if the Lessee properly
elects the Remarketing Option, the Lessee shall only be required to pay to the
Lessor the proceeds of the sale of the Property, amounts payable pursuant to
clause (i) of Section 20.1(m) of the Lease (not to exceed the Maximum Recourse
Amount) and any amounts due pursuant to Article XIII hereof and Section 20.2 of
the Lease; (d) upon the occurrence of a Lease Event of Default (and an
acceleration of the Lessee’s obligation to purchase the Property or pay the
Property Cost), the amounts then due and payable by the Lessee under the Lease
shall include all amounts necessary to pay in full the Property Balance plus all other amounts then due from the Lessee under the
Operative Documents; and (e) if the Lessee elects to purchase or is required to
purchase the Property pursuant to Section 15.1, 16.2(e) or Article XVIII of the
Lease, the amounts then due and payable by the Lessee shall include all amounts
necessary to pay the Property Balance.

ARTICLE VI

CLOSING DATE

SECTION 6.1.   Closing Date.   Subject to satisfaction or waiver of the
following conditions precedent, the Closing Date (the “Closing
Date”) for the transactions contemplated by this Participation
Agreement (the “Transactions”) shall be deemed
to have occurred as of the date of this Participation Agreement, and the
obligations of (i) the Lessor to make available the Lessor Amount on the
Closing Date, (ii) the Purchasers to purchase the Purchased Interests on the
Closing Date, and (iii) each Lender to make the Loan on the Closing Date shall
be subject to satisfaction or waiver of the following conditions precedent:

(a)           Participation
Agreement.  This Participation
Agreement shall have been duly authorized, executed and delivered by the
parties hereto.

(b)           Lease; Memorandum of Lease.  The Lessor and the Lessee shall have duly
authorized, executed and delivered the Lease and the Memorandum of Lease.

(c)           Loan Agreement;  Notes.  The Loan Agreement and the Notes issued
thereunder shall have been duly authorized, executed and delivered by the
parties thereto.

(d)           Receivables Purchase
Agreement;  Certificates.  The Receivables Purchase Agreement and the
Certificates issued thereunder shall have been duly authorized, executed and
delivered by the parties thereto.

 8
 

(e)           Assignment of Lease and
Rent.  The Assignment of Lease
and Rent shall have been duly authorized, executed and delivered by the Lessor,
as assignor, to the Administrative Agent, as assignee, and the Assignment of
Lease and Rent shall have been consented to and acknowledged by the Lessee.

(f)            Security and Assignment
Agreement.  The Lessee shall
have duly executed and delivered to the Administrative Agent counterparts of
the Security and Assignment Agreement, in form and substance satisfactory to
the Administrative Agent and the Participants.

(g)           Corporate Documents of the
Lessee.  Each Participant and
the Administrative Agent shall have received the following:

(i)            Incumbency Certificate.  An incumbency certificate, executed by the
Secretary or Assistant Secretary of the Lessee, which shall identify by name
and title and bear the signature of the officers of the Lessee authorized to
sign the Operative Documents to which the Lessee is or shall be a party, upon
which certificate the Participants and the Administrative Agent shall be
entitled to rely until informed of any change in writing by the Lessee.

(ii)           Certificate of
Incorporation.  Copies of the
certificate of incorporation of the Lessee, together with all amendments thereto,
certified to be true and complete as of a recent date by the appropriate
governmental authority of the state of its organization.

(iii)          Resolutions.  Copies of resolutions of the Board of
Directors of the Lessee approving the transactions contemplated by the
Operative Documents, and authorizing the execution and delivery by the Lessee
of each Operative Document to which it is or shall be a party, certified by the
Secretary or an Assistant Secretary of the Lessee as of the Closing Date to be
true and correct and in force and effect as of such date.

(iv)          Bylaws.  A copy of the bylaws of the Lessee certified
by the Secretary or an Assistant Secretary of the Lessee as of the Closing Date
to be true and correct and in force and effect as of such date.

(v)           Good Standing.  A certificate of good standing for the
Lessee, certified as of a recent date by the appropriate governmental officer
in its jurisdiction of incorporation, together with a certificate of the
Secretary of State of the State of California (certified as of a recent date)
to the effect that the Lessee is qualified to do business in the State of
California.

(h)           Corporate Documents of the
Lessor.  The Lessee, each
Lender, each Purchaser and the Administrative Agent shall have received the
following:

(i)            Incumbency Certificate.  An incumbency certificate, executed by the
Secretary or Assistant Secretary of the Lessor, which shall identify by name
and title and bear the signature of the officers of the Lessor authorized to 

 9
 

sign the Operative
Documents to which the Lessor is or shall be a party, upon which certificate
the Lessee, the Lenders and the Administrative Agent shall be entitled to rely
until informed of any change in writing by the Lessor.

(ii)           Articles of Incorporation.  Copies of the articles of incorporation of
the Lessor, together with all amendments thereto, certified to be true and
complete as of a recent date by the appropriate governmental authority of the
state of its organization.

(iii)          Resolutions.  Copies of resolutions of the Board of
Directors of the Lessor approving the transactions contemplated by the
Operative Documents, and authorizing the execution and delivery by the Lessor
of each Operative Document to which it is or shall be a party, certified by the
Secretary or an Assistant Secretary of the Lessor as of the Closing Date to be
true and correct and in force and effect as of such date.

(iv)          Bylaws.  A copy of the bylaws of the Lessor certified
by the Secretary or an Assistant Secretary of the Lessor as of the Closing Date
to be true and correct and in force and effect as of such date.

(v)           Good Standing.  A certificate of good standing for the
Lessor, certified as of a recent date by the appropriate governmental officer
in its jurisdiction of incorporation, together with a certificate of the
Secretary of State of the State of California (certified as of a recent date)
to the effect that the Lessor is qualified to do business in the State of
California.

(i)            Opinion of Counsel to the
Lessee.  Each Participant
shall have received opinions of (i) Shartsis Friese LLP,  special
counsel for the Lessee and (ii) internal counsel for the Lessee, each dated the
Closing Date and addressed to each Participant, covering the matters set forth
respectively in Exhibits F-1 and F-2 and otherwise in form and substance reasonably
satisfactory to the Administrative Agent and the Participants.

(j)            Representations and
Warranties.  On the Closing
Date, the representations and warranties of each of the parties set forth in
Sections 8.1, 8.2 and 8.3 shall be true and correct in all respects as though
made on and as of such date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct in all respects on and as of
such earlier date.

(k)           No Default.  No Lease Default or Lease Event of Default
shall have occurred and be continuing under the Prior Transaction on the
Closing Date.

(l)            Governmental Approvals.  All Governmental Actions required by any
Requirement of Law for the purpose of authorizing the Lessee, the
Administrative Agent and each Participant to enter into the Operative Documents
shall have been obtained or made and be in full force and effect.

 10
 

(m)          Litigation.  No action or proceeding shall have been
instituted or threatened, nor shall any governmental action be instituted or
threatened before any Governmental Authority, nor shall any order, judgment or
decree have been issued or proposed to be issued by any Governmental Authority,
to set aside, restrain, enjoin or prevent the performance of this Participation
Agreement or any transaction contemplated hereby or by any other Operative
Document or that is reasonably likely, in the sole opinion of each Participant,
to be reasonably expected to have a Material Adverse Effect.

(n)           Requirements of Law.  In the opinion of each Participant, no change
shall have occurred or been proposed in Applicable Law that would make it
uneconomic or illegal for any party to any Operative Document to participate in
any of the transactions contemplated by the Operative Documents or otherwise
would prohibit the consummation of any transaction contemplated by the
Operative Documents or expand the duties, obligations and risks of any
Participant.

(o)           Funding Request.  The Lessor shall have received a fully
executed counterpart of the applicable Funding Request in accordance with
Section 3.5.

(p)           Ground Lease.  On or prior to the Closing Date, the Ground
Lessor shall have delivered to the Lessor a satisfactory agreement concerning
the Ground Lease, which agreement shall be substantially in the form of Exhibit C attached hereto

(q)           Mortgages.  On or prior to the Closing Date, (i) the
Lessee shall have delivered to the Lessor (or, at the request of the Lessor, to
the Title Company) the original counterpart of the Lessor Mortgage, executed by
the Lessee and in proper form for recordation in the official records of the
County of Santa Clara in the State of California and (ii) the Lessor shall have
delivered to the Administrative Agent (or, at the request of the Administrative
Agent, to the Title Company) the original counterpart of the Lender Mortgage,
executed by the Lessor and in proper form for recordation in the official
records of the County of Santa Clara in the State of California.

(r)            Financing Statements; UCC,
Tax and Judgment Lien Searches. 
On or prior to the Closing Date, (i) the Lessee shall have delivered to
the Administrative Agent all UCC Financing Statements relating to the Property
as the Administrative Agent or any Participant may reasonably request in order
to perfect the interests of the Lessor in any Fixtures and personal property
constituting part of the Property and all other Collateral under the Security
and Assignment Agreement; (ii) the Lessor shall have delivered to the
Administrative Agent all UCC financing statements relating to the Property as
the Administrative Agent or any Participant may reasonably request in order to
perfect the interests of the Administrative Agent in the Lessor’s interest in
any Fixtures and personal property constituting part of the Property and the
Collateral under the Security and Assignment Agreement; and (iii) each of
Lessee and the Lessor shall have delivered to the Administrative Agent copies
of recent UCC, state and federal tax lien and judgment searches from all
relevant filing offices or jurisdiction and in each case indicating no conflict
with first and prior rights intended to be conveyed by the Lessee to the
Lessor, and by the Lessor to the Administrative Agent, hereunder and under the
other Operative Documents.

 11
 

(s)           Recordation of Memorandum
of Lease, Lessor Mortgage, Lender Mortgage; UCC Financing Statements and
Assignment of Lease and Rent. 
Each of the Participants shall have received evidence or a commitment
reasonably satisfactory to it that each of (i) the Memorandum of Lease, (ii)
the Lessor Mortgage, (iii) the Lender Mortgage, (iv) the UCC financing
statements described in clause (e) above and (v) the Assignment of Lease and
Rent, has been, or are being, recorded in a manner sufficient to properly
perfect each of their interests therein.

(t)            Title Insurance.  On or prior to the Closing Date, the Lessee
shall have delivered to the Administrative Agent a commitment from the Title
Company to deliver (A) an ALTA extended coverage leasehold owner’s policy and
lenders policy covering the Property in favor of the Lessor, and (B) an ALTA
extended coverage lenders policy covering the Property in favor of the
Administrative Agent, each such policy in the amount of the Advance and to be
satisfactory to the Administrative Agent and the Lessor with only such
customary endorsements issued by the Title Company as a routine matter, and
which are in any event satisfactory to the Administrative Agent and the Lessor,
insuring first mortgage liens on the Property, subject only to matters approved
by the Lessor and the Administrative Agent.

(u)           Survey.  At
least three (3) days prior to the Closing Date, the Lessee shall have delivered
to the Administrative Agent and the Lessor, an American Land Title
Association/American Congress on Surveying and Mapping 1992 (Urban) Survey of
the Property certified to the Participants and the Title Company and otherwise
in form reasonably acceptable to the Administrative Agent and the Lessor.

(v)           Authorized Officer’s
Certificates.  Each
Participant shall have received an Authorized Officer’s Certificate of the
Lessee, substantially in the form of Exhibit B
attached hereto, dated as of the Closing Date, stating that (i) to such
Authorized Officer’s knowledge after reasonable inquiry, each and every
representation and warranty of the Lessee contained in each Operative Document
to which it is a party is true and correct in all material respects on and as
of the Closing Date; (ii) to such Authorized Officer’s knowledge after
reasonable inquiry, no Lease Default has occurred and is continuing under any
Operative Document to which Lessee is a party with respect to it; (iii) to such
Authorized Officer’s knowledge after reasonable inquiry, each Operative Document
to which Lessee is a party is in full force and effect with respect to it; and
(iv) the Lessee has duly performed and complied with all conditions contained
herein or in any other Operative Document required to be performed or complied
with by it on or prior to the Closing Date.

(w)          Evidence of Insurance.  The Lessor and the Administrative Agent shall
have received evidence that the insurance maintained by the Lessee with respect
to the Property satisfies the requirements set forth in Article XIII of
the Lease setting forth the respective coverage, limits of liability, carrier,
policy number and period of coverage, and shall have received a letter and/or
certificate signed by the Lessee’s insurance broker confirming that the
coverage with respect to the Property complies with the requirements of
Article XIII of the Lease.

 

 12

(x)            Representations and
Warranties.  On the Closing
Date, the representations and warranties of the Lessee herein and in each of
the other Operative Documents shall be true and correct in all material
respects as though made on and as of such date (except for representations and
warranties expressly made as of a specified date, which shall be true and
correct in all material respects as of such date).

(y)           Residual Value Insurance.  On the Closing Date, the Lessor shall have
received residual value insurance in form and substance satisfactory to the
Lessor and the Administrative Agent with respect to the Property.

(z)            Taxes.  All
Taxes, fees and other charges in connection with the execution, delivery,
recording, filing and registration of the Operative Documents shall have been
paid or provisions for such payment shall have been made by the Lessee to the
reasonable satisfaction of the Participants.

(aa)         No Default.  As of the Closing Date, there shall not have
occurred and be continuing any Lease Default under any of the Operative
Documents or the Prior Transaction, and no Lease Default under any of the
Operative Documents will have occurred after giving effect to the making of the
Advance requested by the Funding Request.

(bb)         Fees.  All fees
due and payable pursuant to this Participation Agreement and the other
Operative Documents and, to the extent invoiced, all Transaction Expenses of
the type described in clause (a) or (c) of the definition thereof and other
amounts due and owing pursuant to Section 14.1, shall have been paid or shall
be paid out of the proceeds of the Advance.

(cc)         Additional Matters.  On the Closing Date, the Lessor and the
Administrative Agent shall have received such additional documents and
instruments related to the acquisition and financing of the Property as either
of them shall reasonably request in order to establish the rights and interests
of the Administrative Agent and the Lessor intended to be created under the
Operative Documents in respect of the Property.

All
documents and instruments required to be delivered pursuant to this Section 6.1
shall be or deemed to be delivered at the offices of Schiff Hardin LLP, 6600
Sears Tower, Chicago, Illinois, 60606, or at such other location as may be
determined by the Administrative Agent, the Participants and the Lessee, and
the Administrative Agent and each Participant hereby agree that delivery of any
document or instrument to such offices or other location shall constitute
delivery to the Administrative Agent and each Participant for all purposes of
the Operative Documents.

ARTICLE VII

DISTRIBUTIONS

SECTION 7.1.   Basic Rent.  Each payment of Basic Rent (and any payment
of interest on overdue installments of Basic Rent) received by the Lessor or
the Administrative Agent (including each payment of Basic Rent made in
connection with a payment of Property Cost or Maximum Recourse Amount) shall be
distributed by the Administrative Agent to the Participants 

 13
 

pro rata in
accordance with, and for application to, all accrued and unpaid interest,
Return and Yield then owing on such Participant’s Loans, Capital or Lessor
Amounts (including, in each case, any overdue interest, Return or Yield due to
the Lenders, the Purchasers or the Lessor); provided, that
if there is any shortfall in such payment of interest, Return and Yield, the
Lenders shall be paid all interest then due and owing on the Loans (and,
subject to the terms of Section 7.5 hereof, the Purchasers shall be paid all
Return then due and owing on the Capital)  prior to any
payment of Yield due to the Lessor.

SECTION 7.2.   Purchase Payments by the Lessee.  Any payment of the Property Balance received
by the Lessor or the Administrative Agent as a result of:

(a)           the purchase of the Property in
connection with the exercise of the Purchase Option under Section 18.1 of the
Lease, or

(b)           compliance with the obligation to
purchase (or cause its designee to purchase) the Property in accordance with
Section 16.2(e) of the Lease, or

(c)           failure to fulfill one or more of the
Return Conditions pursuant to Article XX of the Lease, or

(d)           the payment of the Property Cost
pursuant to Section 15.1 of the Lease, or

(e)           the payment of the Property Cost from
the proceeds of any Casualty or Condemnation pursuant to Section 14.3 of the
Lease, shall be distributed in the following order of priority:

first, to each Participant for
application to all accrued and unpaid interest, Return and Yield then owing on
such Participant’s Loans, Capital or Lessor Amounts, as the case may be, pro rata among the Participants in accordance with the
amount of such interest, Return or Yield payable to such Person.

second, to the Lenders and
Purchasers, pro rata in accordance with their
respective Participant Balances, for application to pay in full all outstanding
Loans and Capital;

third, to the Lessor for
application to pay in full all outstanding Lessor Amounts;

fourth, so much of such payment
or amount as shall be required to reimburse the Administrative Agent and the
Lessor for any Taxes or reasonable costs or expenses (including reasonable
attorneys’ fees and legal expenses) incurred by the Administrative Agent or the
Lessor (to the extent not previously reimbursed and to the extent incurred in
connection with any duties as the Administrative Agent or as the Lessor), shall
be distributed to such Person for its own account;

fifth, to the Participants pro rata in accordance with, and for application to
reimburse such Persons for, any Taxes or reasonable costs or expenses
(including reasonable attorney’s fees and legal expenses) incurred by such
Participant in connection with the Property; and

 14
 

sixth, the balance, if any, of
such payment or amounts remaining after satisfaction of all Obligations shall
be promptly distributed to, or as directed by, the Lessee.

SECTION 7.3.   Payment of Maximum Recourse
Amount.  Any payment of any
portion of the Property Cost (not to exceed Maximum Recourse Amount) received
by the Lessor or the Administrative Agent from the Lessee pursuant to clause
(i) of Section 20.1(m) of the Lease upon the exercise of the Remarketing Option
shall be distributed as follows:

first, to the Purchasers, pro rata in accordance with their respective Participant
Balances, for application to repay in full all outstanding Capital;

second, to the extent any amount
remains after distribution as set forth above, to the Lenders, pro rata in accordance with their respective Participant
Balances, for application to repay in full all outstanding Loans; and

third, to the extent any amount
remains after distribution as set forth above, to the Lessor for application to
the repayment of the Lessor Amounts.

SECTION 7.4.   Sales Proceeds of Remarketing
of Property.  Any payments
received by the Lessor or the Administrative Agent as proceeds from the sale of
the Property sold pursuant to the exercise of the Remarketing Option pursuant
to Article XX of the Lease, together with any payment made as a result of an
appraisal pursuant to Section 13.2 of this Participation Agreement, shall be
distributed in the funds so received in the following order of priority:

first,
to the extent not previously or concurrently paid by the Lessee, to the Lessor
and the Administrative Agent to pay in full all Taxes or reasonable costs or
expenses (including reasonable attorneys’ fees and legal expenses) incurred in
connection with such sale and any reasonable costs, expenses and losses
incurred in connection with the Property (including without limitation, any
costs incurred in connection with any reletting or sale of the Property or any
portion thereof);

second,
to the Participants pro rata in
accordance with, and for application to pay in full, (a) all accrued and unpaid
interest on the Loans, Return on Capital, and Yield on the Lessor Amounts and
(b) if any such sale is consummated after the Expiration Date, the Imputed
Return on the Participants’ Loans, Capital and Lessor Amounts to such date of
payment;

third,
to the extent any Loans and any Capital remain outstanding, to the Lenders and
Purchasers, pro rata in accordance with their
respective Participant Balances, for application to pay in full all outstanding
Loans and Capital;

fourth,
to the Lessor for application to pay in full all outstanding Lessor Amounts;

fifth,
to the Lessee in an amount not to exceed the amount paid by the Lessee pursuant
to clause (i) of Section 20.1(m) of the Lease; and

 15
 

sixth,
the balance, if any, remaining after satisfaction of all Obligations shall be
promptly distributed to, or as directed by, the Lessee.

SECTION 7.5.   Distribution of Payments After Lease Event of
Default.

(a)           Notwithstanding Sections 7.1, 7.2 and
7.3 above, all amounts received by the Lessor or the Administrative Agent
during the continuance of a Lease Event of Default, shall, except as provided
in clause (b) below, be distributed in the following order of priority:

first, so much of such payment or
amount as shall be required to reimburse the Administrative Agent and the
Participants for any Taxes, reasonable costs or expenses or other loss incurred
by the Administrative Agent or any Participant (to the extent not previously
reimbursed and to the extent incurred in connection with any duties as the
Administrative Agent, Lessor or as a Participant), shall be distributed to such
Person for its own account;

second, so much of such payments
or amounts as shall be required to pay the Administrative Agent and the
Participants the amounts payable to them pursuant to any expense reimbursement
or indemnification provisions of the Operative Documents shall be distributed
to such Persons without priority of one over the other in accordance with the
amount of such payment or payments payable to each such Person;

third, to each Participant for
application to all accrued and unpaid interest, Return and Yield then owing on
such Participant’s Loans, Capital or Lessor Amounts, as the case may be, pro rata among the Participants in accordance with the
amount of such interest, Return or Yield payable to such Person;

fourth, to each Lender that is
not Lessee Party, pro rata in accordance with their
respective Participant Balances, for application to pay in full all outstanding
Loans  owing to such Lenders;

fifth, to each Purchaser that is
not Lessee Party, pro rata in accordance with their
respective Participant Balances, for application to pay in full all outstanding
Capital  owing to such Purchasers;

sixth, to each Lender that is a
Lessee Party, pro rata in accordance with their
respective Participant Balances, for application to pay in full all outstanding
Loans  owing to such Lenders;

seventh, to each Purchaser that
is a Lessee Party, pro rata in
accordance with their respective Participant Balances, for application to pay
in full all outstanding Capital  owing to such
Purchasers;

eighth, to the Lessor for
application to pay in full all outstanding Lessor Amounts;

 16
 

ninth, to the Participants and
the Administrative Agent for any other amounts payable to them under the
Operative Documents, pro rata, based
on the amounts payable and

tenth, the balance, if any, of
such payment or amounts remaining shall be promptly distributed to the Lessee.

(b)           Notwithstanding clause (a) above, all
payments received and amounts realized by the Lessor or the Administrative
Agent in connection with any Casualty or Condemnation during the continuance of
a Lease Event of Default shall be distributed as follows:

(i)            in the event that the Required
Participants elect or are required to pay all or a portion of such amounts to
the Lessee for the repair of damage caused by such Casualty or Condemnation in
accordance with Section 14.3(a) of the Lease, then such amounts shall be
distributed to the Lessee; and

(ii)           in the event that the Required
Participants elect or are required to apply all or a portion of such amounts to
the purchase price of the Property in accordance with Section 14.3(a) and
Article XV of the Lease, then such amounts shall be distributed in accordance
with clause (a).

SECTION 7.6.   Casualty and Condemnation
Amounts.  Subject to Section
7.5(b) any amounts received by the Administrative Agent or the Lessor as a
result of a Casualty or Condemnation pursuant to Section 14.3 of the Lease
shall be distributed as follows:

(a)           all amounts payable to the Lessee for
the repair of damage caused by such Casualty or Condemnation in accordance with
Section 14.3(a) of the Lease shall be distributed to the Lessee; and

(b)           all amounts that are to be applied
towards the payment of the Property Cost shall be distributed by the
Administrative Agent in accordance with Section 7.2; provided,
however, if any such payment relates to the termination of the
transaction contemplated hereby or the liquidation or disposition of the
Property, such payment shall be distributed as provided in Section 7.5.

SECTION 7.7.   Supplemental Rent.  All payments of Supplemental Rent received by
the Administrative Agent (but excluding any amounts payable pursuant to the
preceding provisions of this Article VII) shall be paid directly to, and shall
be directly enforceable by, the party specified in the applicable Operative
Documents.  To the extent any such amount
is paid to the Lessor or to the Administrative Agent, the same shall hold it in
trust for the intended payee and shall as soon as possible remit the full
amount thereof in immediately available funds to such payee.

SECTION 7.8.   Other Payments.

(a)           Any payment received by the Lessor or
the Administrative Agent for which no provision as to the application thereof
is made in the Operative Documents or 

 17
 

elsewhere in this Article
VII shall be distributed pro rata among
the Participants without priority of one over the other, in the proportion that
the Participant Balance of each bears to the aggregate of all the Participant
Balances; provided, however, if any such payment
relates to the termination of the transactions contemplated hereby or the
liquidation or disposition of the Property, such payment shall be distributed
by the Lessor or the Administrative Agent as provided in Section 7.5.

(b)           Except as otherwise provided in the
preceding provisions of this Article VII, all payments received and amounts
realized by any Participant under the Lease or otherwise with respect to the
Property to the extent received or realized at any time after payment in full
of all outstanding Loans, return of Capital and payment in full of all
outstanding Lessor Amounts and all other amounts due and owing to the Administrative
Agent or the Participants, shall be distributed forthwith by the Administrative
Agent to the Lessee.

(c)           Any payment received by any
Participant for which provision as to the application thereof is made in an
Operative Document but not elsewhere in this Article VII shall be distributed
forthwith by such Participant to the Person and for the purpose for which such
payment was made in accordance with the terms of such Operative Document.

SECTION 7.9.   Order of Application.  To the extent any payment distributed to any
Participant pursuant to Section 7.2, 7.4, 7.5 or 7.6 is insufficient to pay in
full the Participant Balance of any Participant plus
all accrued interest, Return and Yield (as applicable) thereon, then each such
payment shall first be applied to accrued
interest, Return or Yield and then to
outstanding principal on the Loans, outstanding Capital or any outstanding
Lessor Amounts, as applicable.

SECTION 7.10.   Payments to Account.  Unless otherwise expressly provided, all payments made pursuant to the Operative Documents
shall be made to the Account maintained at the Administrative Agent.

SECTION 7.11.   Pro Rata Treatment.  Except to the extent otherwise provided
herein, payment or prepayment of (a) principal of any Loan shall be allocated pro rata among the Lenders, without priority of one over the
other, in accordance with their outstanding Participant Balances and (b)
Capital on any Purchased Interests shall be allocated pro rata
among the Purchasers, without priority of one over the other, in accordance
with their outstanding Participant Balances.

SECTION 7.12.   Sharing of Payments.  The Participants agree among themselves that,
in the event that a Participant shall obtain payment in respect of any Loan,
Capital or Lessor Amount or any other obligation owing to such Participant
under the Operative Documents by any means other than the distributions set
forth in Sections 7.1 through 7.8 hereof (including, without limitation,
through the exercise of a right of setoff, banker’s lien counterclaim, or
secured claim), such Participant shall pay over such amount to the
Administrative Agent for distribution in accordance with this Article VII.  The Participants further agree among
themselves that if any such amount received by a Participant and paid over to
the Administrative Agent must be returned by such Participant for any reason,
each Participant will return its share of such payment (together with its share
of any accrued interest, Return or Yield payable with 

 18
 

respect thereto) to the
Participant that must return such payment. 
Except as otherwise expressly provided herein, if a Participant shall
fail to remit to any other Participant an amount payable by such Participant to
the other Participant pursuant to the Operative Documents on the date when such
amount is due, such payments shall be made together with interest thereon (at
no additional expense to the Lessee) from the date such amount is due until the
date such amount is paid to such other Participant at a rate per annum equal to
the Federal Funds Effective Rate.  If
under any applicable bankruptcy, insolvency or other similar law, a Participant
receives a secured claim in lieu of a setoff to which this Section 7.12
applies, such Participant shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
other Participant under this Section 7.12 to share in the benefits of any
recovery on such secured claim.

ARTICLE VIII

REPRESENTATIONS

SECTION 8.1.   Representations of the Lessee.  In order to induce the Participants and the
Administrative Agent to enter into this Participation Agreement and in order to
induce the Participants to advance Loans, purchase the Purchased Interests and
advance Lessor Amounts as provided for herein, the Lessee makes the following
representations and warranties to, and agreements with, the Administrative
Agent and each Participant, all of which shall survive the execution and
delivery of this Agreement and the Closing Date:

(a)           Due Incorporation,
Qualification, etc.  Each of
the Lessee and the Lessee’s Material Domestic Subsidiaries (i) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) has the power and authority to own, lease
and operate its properties and carry on its business as now conducted; and
(iii) is duly qualified, licensed to do business and in good standing as a
foreign corporation in each jurisdiction where the failure to be so qualified
or licensed is reasonably likely to have a Material Adverse Effect.  The Lessee is organized under the laws of the
State of Delaware and is a “registered entity”
under the laws of the State of Delaware. 
The Lessee’s exact name is as set forth in the preamble to this Participation
Agreement.  The chief executive office
and principal place of business of the Lessee is located at 345 Park Avenue,
San Jose, California.

(b)           Authority.  The execution, delivery and performance by
the Lessee of each Operative Document executed, or to be executed, by the
Lessee and the consummation of the transactions contemplated thereby (i) are
within the power of the Lessee and (ii) have been duly authorized by all
necessary actions on the part of the Lessee.

(c)           Enforceability.  Each Operative Document executed, or to be
executed, by the Lessee has been, or will be, duly executed and delivered by
the Lessee and constitutes, or will constitute, a legal, valid and binding
obligation of the Lessee, enforceable against the Lessee in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

 19
 

(d)           Non-Contravention.  The execution and delivery by the Lessee of
the Operative Documents executed by the Lessee and the performance and
consummation of the transactions contemplated thereby do not (i) violate any
Requirement of Law applicable to the Lessee; (ii) violate any provision of, or
result in the breach or the acceleration of, or entitle any other Person to
accelerate (whether after the giving of notice or lapse of time or both), any
Contractual Obligation of the Lessee required by Regulation S-K to be made part
of the Lessee’s public filings; or (iii) result in the creation or imposition
of any Lien (or the obligation to create or impose any Lien) upon any property,
asset or revenue of the Lessee (except such Liens as may be created in favor of
the Administrative Agent or the Lessor pursuant to this Participation Agreement
or the other Operative Documents).

(e)           Approvals.  No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Authority is
required in connection with the execution and delivery of the Operative
Documents executed by the Lessee or the performance or consummation of the
transactions contemplated thereby, except for those which have been made or
obtained and are in full force and effect and except for the filing of the
Operative Documents with the SEC as material agreements of the Lessee, which
SEC filing will be made by the Lessee in the ordinary course of its SEC
filings, if necessary.

(f)            No Violation or Default.  Neither the Lessee nor any of its
Subsidiaries is in violation of or in default with respect to (i) any
Requirement of Law applicable to such Person or (ii) any Contractual Obligation
of such Person (nor is there any waiver in effect which, if not in effect,
would result in such a violation or default), where, in each case, such
violation or default is reasonably likely to have a Material Adverse
Effect.  Without limiting the generality
of the foregoing, neither the Lessee nor any of its Subsidiaries (i) has
violated any Environmental Laws, (ii) has any liability under any Environmental
Laws or (iii) has received notice or other communication of an investigation or
is under investigation by any Governmental Authority having authority to
enforce Environmental Laws, where such violation, liability or investigation is
reasonably likely to have a Material Adverse Effect.  No Lease Default has occurred and is
continuing.

(g)           Litigation.  Except as disclosed in the latest filings by
the Lessee with the SEC, no actions (including derivative actions), suits,
proceedings or investigations are pending or, to the knowledge of the Lessee,
threatened against the Lessee or any of its Subsidiaries at law or in equity in
any court or before any other Governmental Authority which (i) is reasonably
likely (alone or in the aggregate) to have a Material Adverse Effect or (ii)
seeks to enjoin, either directly or indirectly, the execution, delivery or
performance by the Lessee of the Operative Documents to which it is a party or
the transactions contemplated thereby.

 20
 

(h)           Title; Possession Under
Leases.  The Lessee and its
Material Doemstic Subsidiaries own and have good and marketable title, or a
valid leasehold interest in, or licenses with respect to, all their respective
properties and assets as reflected in the most recent Financial Statements
delivered to the Administrative Agent (except those assets and properties
disposed of in the ordinary course of business or otherwise in compliance with
this Agreement since the date of such Financial Statements) and all respective
assets and properties acquired by the Lessee and its Material Domestic
Subsidiaries since such date (except those disposed of in the ordinary course
of business or otherwise in compliance with this Agreement).  Such assets and properties are subject to no
Lien, except for Permitted Liens.  Each
of the Lessee and its Material Domestic Subsidiaries has complied with all
material obligations under all material leases to which it is a party and
enjoys peaceful and undisturbed possession under such leases subject only to
rights of sublessees of the Lessee or its Material Domestic Subsidiaries.

(i)            Financial Statements.  The Financial Statements of the Lessee and
its Subsidiaries which have been made available to the Lessor and the
Administrative Agent, (i) are in accordance with the books and records of the
Lessee and its Subsidiaries, which have been maintained in accordance with good
business practice; (ii) have been prepared in conformity with GAAP; and (iii)
fairly present in all material respects the financial conditions and results of
operations of the Lessee and its Subsidiaries as of the date thereof and for
the period covered thereby.

(j)            Equity Securities.  All Equity Securities of the Lessee have been
offered and sold in compliance with all federal and state securities laws and
all other Requirements of Law, except where any failure to comply is not
reasonably likely to have a Material Adverse Effect.

(k)           No Agreements Regarding
Mergers, Etc.  The Lessee does
not have any legal obligation, absolute or contingent, to any Person to effect
any merger, consolidation or other reorganization of the Lessee (except as
permitted by Section 9.2(c)) or to enter into any agreement with respect
thereto.

(l)            Employee Benefit Plans.

(i)            Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the Actual
Knowledge of the Company, nothing has occurred which would prevent, or cause
the loss of, such qualification.  The
Lessee and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412
of the Code has been made with respect to any Plan.

(ii)           There are no pending or, to the
Actual Knowledge of the Lessee, threatened claims, actions or lawsuits, or
action by any Governmental Authority, with respect to any Plan that could
reasonably be expected to have a 

 21
 

Material Adverse
Effect.  There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a Material
Adverse Effect.

(iii)          (A) No ERISA Event has occurred
or is reasonably expected to occur that, when taken together with all other
ERISA Events for which liability could, if enforced in accordance with
Applicable Law, reasonably be expected to result in a Material Adverse Effect;
(B) no Pension Plan has any Unfunded Pension Liability; (C) neither
the Lessee nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA);
(D) neither the Lessee nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such
liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (E) neither the Lessee nor any ERISA Affiliate has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

(m)          Other Regulations.  The Lessee is not subject to regulation under
the Investment Company Act of 1940, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code or to any other Governmental Rule
limiting its ability to incur indebtedness.

(n)           Patent and Other Rights.  The Lessee and its Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”)
that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person, except for those for
which the failure to own or possess the right to use could not reasonably be
expected to result in a Material Adverse Effect.  To the Actual Knowledge of the Lessee, no
slogan or other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed, by the
Lessee or any Subsidiary infringes upon any rights held by any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.  Except as specifically disclosed in Schedule 8.1(n),
no claim or litigation regarding any of the foregoing is pending or, to the
Actual Knowledge of the Lessee, threatened, which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

(o)           Governmental Charges.  The Lessee and its Subsidiaries have filed or
caused to be filed all Federal, state and other material tax returns and
reports required to be filed (or extensions therefor have been obtained in
accordance with applicable Law), and have paid or caused to be paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which 

 22
 

adequate reserves
have been provided in accordance with GAAP. 
There is no proposed tax assessment against the Lessee or any Subsidiary
that would reasonably be expected to have a Material Adverse Effect.

(p)           Margin Stock.  The Lessee owns no Margin Stock which, in the
aggregate, would constitute a substantial part of the assets of the Lessee, and
no proceeds of the Advance will be used to purchase or carry, directly or
indirectly, any Margin Stock or to extend credit, directly or indirectly, to
any Person for the purpose of purchasing or carrying any Margin Stock.

(q)           Subsidiaries, Etc.  As of the Closing Date, the Lessee has no
Subsidiaries other than those specifically disclosed in Item 8.1(q) of Schedule
IV, and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by Lessee or a
Subsidiary in the amounts specified on Item 8.1(q) of Schedule IV free and clear
of all Liens.

(r)            Solvency, Etc.  The Lessee is Solvent and, after the
execution and delivery of the Operative Documents and the consummation of the
transactions contemplated thereby, will be Solvent.  The Lessee is not entering into the Operative
Documents with the actual intent to hinder, delay or defraud its current or
future creditors, and the Lessee does not intend to or believe that it will
incur, as a result of entering into this Participation Agreement and the
transactions contemplated hereby, debts beyond its ability to repay.  The Lessee is not, as of the date of this
Participation Agreement, “insolvent” as
that term is defined in 11 U.S.C. § 101(34), and the consummation of the
transactions contemplated by this Participation Agreement will not render the
Lessee insolvent (giving effect to the fair valuation of its assets) or result
in the Lessee having unreasonably small capital for the conduct of its
business.

(s)           Catastrophic Events.  Neither the Lessee nor any of its properties
is or has been affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or
other casualty that is reasonably likely to have a Material Adverse
Effect.  There are no disputes presently
subject to grievance procedure, arbitration or litigation under any of the
collective bargaining agreements, employment contracts or employee welfare or
incentive plans to which the Lessee is a party, and there are no strikes,
lockouts, work stoppages or slowdowns, or, to the best knowledge of the Lessee,
jurisdictional disputes or organizing activities occurring or threatened which
alone or in the aggregate are reasonably likely to have a Material Adverse
Effect.

(t)            Disclosure.  The Lessee has disclosed in filings made in
accordance with applicable Securities Laws all agreements, instruments and
corporate or other restrictions to which it or any of its Subsidiaries is
subject, and all other matters of which it has Actual Knowledge, that, in each
case individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.  No written
report, financial statement, certificate or other information furnished in
writing by or on behalf of Lessee to the Administrative Agent or any
Participant with respect to the Lessee or its Subsidiaries in connection with
the transactions contemplated hereby and the negotiation of this 

 23
 

Participation
Agreement or delivered hereunder or under any other Operative Document (in each
case, as modified or supplemented by other information so furnished) contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that,
with respect to projected financial information and other forward-looking
statements, the Lessee represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

(u)           The Property.  The Property complies in all material
respects with all Applicable Law (including, without limitation, all zoning and
land use laws and Environmental Laws) and all Insurance Requirements, except
for such Applicable Law as the Lessee shall be contesting in good faith by appropriate
proceedings that do not involve (i) any material risk of (A) foreclosure, sale,
forfeiture or loss of, or imposition of any material Lien on, the Property or
any part thereof, (B) the impairment of the ownership, use, operation or
maintenance of the Property or (C) any civil liability being incurred by any
Participant or the Administrative Agent or (ii) any risk of criminal liability
being incurred by any Participant or the Administrative Agent.

(v)           No Proceedings with
Respect to Property.  There is
no action, suit or proceeding (including any proceeding with respect to a
Condemnation or under any Environmental Law) pending or, to the best of its
knowledge, threatened with respect to the Lessee, the Land or the Improvements
that adversely affects the use, operation, title to or value of the Property.

(w)          Separate Parcel.  Pursuant to that certain Grant Deed executed
by the Redevelopment Agency of the City of San Jose and recorded on June 6,
2001, as Document No. 15717130 in the Official Records of the Recorder of Santa
Clara County, California, the Land was established as a separate legal
parcel.  As a consequence of the
establishment of the Land as a separate legal parcel pursuant to said Grant
Deed, the Land was established as a separate tax parcel on the rolls of the
Santa Clara County Assessor as of July 1, 2002.

(x)            Utilities.  All water, sewer, electric, gas, telephone
and drainage facilities and all other utilities required to adequately service
the applicable Improvements for the Property’s intended use as a first class
office building are available pursuant to adequate permits (including any that
may be required under applicable Environmental Laws).

(y)           Access, Rights-of-Way, Etc.  All utilities serving the Property are
located in, and vehicular access to the Improvements on the Property is
provided by, either irrevocable public rights-of-way abutting the Property or
irrevocable, title insured, Appurtenant Rights.

(z)            Necessary Permits.  All Necessary Permits have been obtained from
the appropriate Governmental Authorities having jurisdiction or from private
parties, as the case may be, for any use or operation for which such Necessary
Permit is required.

(aa)         [Reserved].

 

 24

(bb)         Perfection of Liens.  The Security Documents create a valid and
enforceable Lien on the Collateral in favor of the Lessor and, upon (i) the
recordation of the UCC Financing Statement covering Fixtures on the Land in the
real estate records of Santa Clara County, California, (ii) the filing of the
UCC Financing Statement covering personal property with the Secretary of State
of the State of Delaware and (iii) the recordation of the Lessor Mortgage in
the real estate records of Santa Clara County, California, the Lessor will have
a first priority perfected Lien on the Collateral.  No filing, recording, registration or notice
to any Governmental Authority will be necessary to establish, perfect and give
record notice of the Lien on the Collateral in favor of the Lessor except for
the filing of the UCC Financing Statements and recordation of the Lessor
Mortgage described in the preceding sentence. 
There are no fees, taxes, charges or other sums payable to any Governmental
Authority with respect to the filing and recordation described in this clause
(dd) or the enforcement of any rights or remedies under the documents referred
to above, except for customary recording fees.

(cc)         No Transfer Taxes.  No sales, use, excise, transfer or other Tax,
fee or imposition shall result from the execution and delivery of the Lease or
the conveyance of the interests conveyed thereby.

(dd)         No Casualty.  Except as disclosed in writing by the Lessee
to the Administrative Agent, no fire or other casualty with respect to the Property
has occurred which fire or other casualty has materially and adversely affected
the use, value, operation or useful life of the Property.

(ee)         Insurance.  On and after the Closing Date, the Lessee has
obtained or arranged on behalf of the Lessor, insurance coverage covering the
Property, which meets the requirements of the Lease, and such coverage is in
full force and effect on and after the Closing Date.

(ff)           Flood Hazard Areas.  Except as disclosed by the Survey provided
for in Section 6.1(o), no portion of the Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable agency.

SECTION 8.2.   Warranties and Representations
of the Lessor.  The Lessor
warrants and represents to the other parties hereto that:

(a)           The Lessor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio, is qualified as of the Closing Date as a foreign corporation in the State
in which the Property is located and has all requisite corporate power and
authority to execute and deliver, and to perform its obligations under, the
Operative Documents to which it is a party.

(b)           The Operative Documents to which the
Lessor is, or will be, a party have been duly authorized by all requisite
corporate action, have been duly executed and delivered by the Lessor, and
constitute, and each other Operative Document to which Lessor is a party when
executed and delivered by Lessor will constitute, the valid and binding obligations
of the Lessor enforceable against the Lessor in accordance with the 

 25
 

respective terms
thereof, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

(c)           The Lessor is not in violation of any
term of any of the Operative Documents.

(d)           Neither the execution and delivery of
the Operative Documents, the consummation of the transactions contemplated
thereby nor the fulfillment of or compliance with the provisions thereof will
require consent, approval, authorization, filing, registration or qualification
under or conflict with or violate any Applicable Law having jurisdiction over
the Lessor or any of its property of the Lessor, except as contemplated by the
Operative Documents.

(e)           The Lessor has not conveyed any
interest in the Collateral, any Property or any part thereof to any Person or
subjected the Collateral, any Property or any part thereof to any Lien, except
pursuant to the Operative Documents.

(f)            The Lessor’s exact legal name is “SELCO
Service Corporation.”  The Lessor is
registered to do business in the State of California as “Ohio SELCO
Service Corporation.”

(g)           Neither the Lessor nor any Person
authorized by the Lessor to act on its behalf has offered or sold any interest
in the Lease, or in any similar security relating to the Property, or in any
security the offering of which for the purposes of the Securities Act would be
deemed to be part of the same offering as the offering of the aforementioned
securities to, or solicited any offer to acquire any of the same from, any Person
other than the Administrative Agent and the other Participants, and neither the
Lessor nor any Person authorized by the Lessor to act on its behalf will take
any action which would subject the issuance or sale of any interest in the
Lease or the Property to the provisions of Section 5 of the Securities Act or
any state securities laws or require the qualification of any Operative
Document under the Trust Indenture Act of 1939, as amended.

(h)           The Lessor is not and will not be
funding its Lessor Amounts hereunder, and is not performing its obligations
under the Operative Documents, with the assets of an “employee benefit plan”
(as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA, or “plan”
(as defined in Section 4975(e)(1) of the Code).

(i)            The Lessor is participating in the
Transactions for its own account and not with a view toward redistribution; provided, that disposition of its rights hereunder shall
remain in its control and the foregoing shall not affect the ability of the Lessor
to assign, transfer or sell participations in its rights in accordance with the
Operative Documents.

(j)            There are no actions or proceedings
pending, or to the knowledge of the Lessor, threatened, against or affecting
the Lessor in or before any Governmental Authority which, if adversely
determined, would materially and adversely affect the ability of the Lessor to
enter into or perform the Operative Documents to which it is a party.

 26
 

(k)           The Lessor and each corporation
consolidated with the Lessor for federal income tax purposes has (a) made or
filed all material federal, state and local income tax returns, required by any
jurisdiction to which it is subject or properly filed for and received
extensions with respect thereto which are still in full force and effect and
which have been fully complied with in all material respects, (b) paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith by appropriate proceedings and for which adequate reserves, to the
extent required by GAAP, have been established and (c) to the extent required
by GAAP, set aside on their books provisions reasonably adequate for the
payment of all estimated taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. 
Notwithstanding the foregoing, the Lessor shall not be deemed to have
breached any of its representations contained in this clause (k) unless such
breach would have a material adverse effect on the Property, Liens or other
rights in the Property.

(l)            As of the Closing Date (i) the fair
value of the Property is less than fifty percent (50%) of the fair value of the
total assets of the Lessor, excluding the fair value of assets of the Lessor
funded with more than 95% non-recourse capital, (ii) no more than 95% of the
Property Cost is or will be financed or encumbered by non-recourse capital.
Lessor shall from time to time, upon request of the Lessee, confirm the foregoing
representations.

As used herein, “fair value” means, with respect to any asset, the amount
for which the asset could be bought or sold in a current transaction negotiated
at arms length between willing parties without regard to residual value guarantees, remarketing agreements,
non-recourse financings, purchase options or other contractual
arrangements, whether made by Lessor with Lessee or with other parties, that
might otherwise impact the fair value of such assets.  With respect to leveraged leases pursuant to
FAS 13, fair value is determined on a gross basis prior to the application
of leveraged lease accounting.  With
respect to direct financing leases pursuant to FAS 13, fair value is
determined as the sum of the fair values of the corresponding finance lease
receivables and related unguaranteed residual values.  As used herein, “non-recourse capital”
includes non-recourse financing, targeted equity, bank participations or
similar arrangements.

SECTION 8.3.   Representations of the
Participants.  Each Lender and
Purchaser represents and warrants to the other parties hereto that:

(a)           Source of Funds.  Such Participant is not and will not be
making its Loans or purchasing its Purchased Interests (as the case may be)
hereunder, and is not performing its obligations under the Operative Documents,
with the assets of an “employee benefit plan”
(as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA, or “plan” (as defined in Section 4975(e)(1) of the Code).

 27
 

(b)           Status.  Such Participant is a commercial bank, branch
or agency of a foreign bank or other similar financial institution, or an
Affiliate thereof, or in the case of Adobe Affiliate Systems Incorporated, a
corporation duly organized and existing under the laws of its state of incorporation.

(c)           Acquisition for Investment.  Each Participant is participating in the
Transactions for its own account and not with a view toward redistribution; provided, that disposition of its rights hereunder shall
remain in its control and the foregoing shall not affect the ability of any
Participant to assign or sell participations in its rights in accordance with
the Operative Documents; and provided, further, that the Purchasers may always make dispositions in
accordance with Section 16.15 hereof.

(d)           Lessor Liens.  There are no Lessor Liens attributable to
such Participant on Collateral, the Property or any part thereof, and the
execution, delivery and performance by such Participant of the Operative
Documents to which it is or will be a party will not subject the Collateral,
the Property or any part thereof to any Lessor Liens attributable to such
Participant.

(e)           Offer of Securities, Etc.  Neither such Participant nor any Person
authorized to act on its behalf has, directly or indirectly, offered to sell
any of its rights under the Operative Documents or solicited any offer to
acquire any rights under the Operative Documents for any Person, except in
connection with the transactions contemplated by the Operative Documents or as
otherwise expressly permitted therein.

(f)            No Registration.  Such Participant understands and acknowledges
that (i) neither the Notes representing the Loans nor the Certificates
representing the Purchased Interests have been and the same will not be
registered under the Securities Act, in reliance upon the exemption provided in
Section 4(2) of the Securities Act, (ii) neither the Notes representing the
Loans nor the Certificates representing the Purchased Interests have been and
the same will not be registered or qualified under securities or “blue sky” laws of any jurisdiction, and (iii) neither the
Notes representing the Loans nor the Certificates representing the Purchased
Interests may be resold or otherwise transferred except as permitted by Section
12.1 and only if so registered or qualified or if an exemption from
registration or qualification is available. 
Such Participant will comply with all applicable federal and state
securities laws in connection with any subsequent resale of any such notes or
certificates held by it.

(g)           Institutional Investor.  Such Participant is a sophisticated
institutional investor and is an “accredited investor”
as defined in paragraphs (1), (2), (3) or (7) of Rule 501(a) of the Securities
Act, and has substantial knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of its participation
in the transactions under the Operative Documents including, without
limitation, its investment in the Notes or the Purchased Interests and is able
to bear the economic risk of such investment for an indefinite period of
time.  Such Participant has been given
all information concerning the transactions under the Operative Documents, the
Notes, the Purchased Interests, the Property, the Lessor and the Lessee, as requested
by such Participant.

 28
 

ARTICLE IX

COVENANTS

SECTION 9.1.   Affirmative Covenants.  The Lessee hereby covenants and agrees that
on the Closing Date and thereafter for so long as this Participation Agreement
is in effect and until such time as all Obligations have been paid in full, the
Lessee shall, and shall (except in the case of the covenants set forth in
Sections 9.1(a), (b), (c) (n) and (o)) cause each Subsidiary to:

(a)           Financial Statements.  Deliver to the
Administrative Agent and each Participant, in form and detail satisfactory to
the Administrative Agent:

(i)            as soon as available, but in any
event within ninety (90) days after the end of each fiscal year of the Lessee,
a consolidated balance sheet of the Lessee and its Subsidiaries as at the end
of such fiscal year, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all in reasonable detail and prepared in accordance with GAAP, such
consolidated statements to be audited and accompanied by (A) a report and
opinion of a Registered Public Accounting Firm of nationally recognized
standing reasonably acceptable to the Required Participants, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and applicable Securities Laws and shall not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit or with respect to the
absence of any material misstatement and (B) an opinion of such Registered
Public Accounting Firm independently assessing the Lessee’s internal controls
over financial reporting in accordance with Item 308 of SEC Regulation S-K,
PCAOB Auditing Standard No. 2, and Section 404 of Sarbanes-Oxley
expressing a conclusion that contains no statement that there is a material
weakness in such internal controls, except for such material weaknesses not
reasonably expected to result in a misstatement in any financial information
delivered or to be delivered to the Administrative Agent or the Participants
with respect to covenant compliance calculations, or the assets, liabilities,
financial condition or results of operations of the Lessee and its Subsidiaries
on a consolidated basis; and

(ii)           as soon as available, but in any
event within forty-five (45) days after the end of each of the first three (3)
fiscal quarters of each fiscal year of the Lessee, a consolidated balance sheet
of the Lessee and its Subsidiaries as at the end of such fiscal quarter, and
the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal quarter and for the portion of the Lessee’s
fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and
the corresponding portion of the previous fiscal year, all in reasonable
detail, such consolidated statements to be certified by the chief executive
officer, chief financial officer, treasurer or controller of the Lessee as
fairly presenting the financial condition, results of operations, shareholders’

 29
 

equity and cash
flows of the Lessee and its Subsidiaries in accordance with GAAP, subject only
to normal year-end audit adjustments and the absence of footnotes.

As
to any information contained in materials furnished pursuant to
Section 9.1(b)(ii), the Lessee shall not be separately required to furnish
such information under clause (i) or (ii) above, but the foregoing shall not be
in derogation of the obligation of the Lessee to furnish the information and
materials described in clauses (i) and (ii) above at the times specified
therein.

(b)           Certificates; Other Information.

(i)            Deliver to the Administrative Agent
for distribution to each Participant, in form and detail satisfactory to the
Administrative Agent and the Lessor:

a.             concurrently with the delivery of
the financial statements referred to in Sections 9.1(a)(i) and (ii), a duly
completed Compliance Certificate signed by the chief executive officer, chief
financial officer, treasurer or controller of the Lessee, together with such
supporting information in relation thereto as the Administrative Agent or the
Required Participants may request;

b.             promptly after the same are
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of the Lessee, and copies of
all annual, regular, periodic and special reports and registration statements
which the Lessee may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, and not
otherwise required to be delivered to the Administrative Agent pursuant hereto;
and

c.             promptly, such additional
information regarding the business, financial or corporate affairs of the
Lessee or any Subsidiary, or compliance with the terms of the Operative
Documents, as the Administrative Agent or any Participant may from time to time
reasonably request.

(ii)           Documents required to be delivered
pursuant to Section 9.1(a)(i) or (ii) or Section 9.1(b)(i)(b) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Lessee posts such
documents, or provides a link thereto on the Lessee’s website on the Internet
at the website address listed on Schedule II; or (ii) on which such
documents are posted on the Lessee’s behalf on an Internet or intranet website,
if any, to which each Participant and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent).  Notwithstanding
anything contained herein, in every instance the Lessee 

 30
 

shall be required
to provide paper copies of the Compliance Certificates required by
Section 9.1(b)(i)(a) to the Administrative Agent.  Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Lessee with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery
to it or maintaining its copies of such documents.

(iii)          Lessee hereby acknowledges that (A)
the Administrative Agent will make available to the Participants materials
and/or information provided by or on behalf of Lessee hereunder (collectively, “Lessee Materials”) by posting the Lessee Materials on
IntraLinks or another similar electronic system (the “Platform”)
and (B) certain of the Participants (each, a “Public
Participant”) may have personnel who do not wish to receive material
non-public information with respect to Lessee or its Affiliates, or the
respective securities of any of the foregoing, and who may be engaged in
investment and other market-related activities with respect to such Person’s
securities.  Lessee hereby agrees that
(1) all Lessee Materials that are to be made available to Public Participants
shall be clearly and conspicuously marked “PUBLIC” which,
at a minimum, shall mean that the word “PUBLIC” shall
appear prominently on the first page thereof; (2) by marking Lessee Materials “PUBLIC,” the Lessee shall be deemed to have authorized the
Administrative Agent, and the Participants to treat such Lessee Materials as
not containing any material non-public information with respect to the Lessee
or its respective securities for purposes of United States Federal and state
securities laws (provided, however, that to the
extent such Lessee Materials constitute Information, they shall be treated as
set forth in Section 16.17); (3) all Lessee Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Investor;”
and (4) the Administrative Agent shall be entitled to treat any Lessee
Materials that are not marked “PUBLIC” as
being suitable only for posting on a portion of the Platform not designated “Public Investor.” 
Notwithstanding the foregoing, Lessee shall not be under any obligation
to mark any Lessee Materials “PUBLIC.”

(c)           Notices.  Promptly after the Lessee obtains Actual
Knowledge thereof, notify the Administrative Agent (which in turn shall notify
each Participant):

(i)            of the occurrence of any Default;

(ii)           of any matter that has resulted or
could reasonably be expected to result in a Material Adverse Effect, including
(A) breach or non-performance of, or any default under, a Contractual
Obligation of the Lessee or any Subsidiary; (B) any dispute, litigation,
investigation, proceeding or suspension between the Lessee or any Subsidiary
and any Governmental Authority; or (C) the commencement of, or any
material development in, any litigation or proceeding affecting the Lessee or
any Subsidiary, including pursuant to any applicable Environmental Laws;

 31
 

(iii)          of the occurrence of any ERISA Event;

(iv)          of any change in accounting policies
or financial reporting practices by the Lessee or any Subsidiary that would
reasonably be expected to result in a material change in the computation of any
financial ratio set forth herein; provided that such disclosure may be made in
conjunction with the next ensuing Compliance Certificate delivered hereunder;

(v)           of the determination by the
Registered Public Accounting Firm providing the opinion required under Section
9.1(a)(i)(B) (in connection with its preparation of such opinion) or the Lessee’s
determination at any time of the occurrence or existence of any Internal
Control Event that has resulted in or could reasonably be expected to result in
a misstatement in any material respect, in any financial information delivered
or to be delivered to the Administrative Agent or the Participants, of
(i) covenant compliance calculations provided hereunder or (ii) the
assets, liabilities, financial condition or results of operations of the Lessee
and its Subsidiaries on a consolidated basis; and

(vi)          of any announcement by Moody’s or
S&P of the commencement of or any change or possible change in a Debt
Rating.

Each
notice pursuant to this Section 9.1(c) (other than Section 9.1(c)(vi)
shall be accompanied by a statement of a Responsible Officer of the Lessee
setting forth details of the occurrence referred to therein and stating what
action the Lessee has taken and proposes to take with respect thereto.  Each notice pursuant to
Section 9.1(c)(i) shall describe with particularity any and all provisions
of this Participation Agreement and any other Operative Document that have been
breached.

(d)           Payment of Obligations.  Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (i) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Lessee or such Subsidiary;
(ii) all lawful claims which, if unpaid, would by law become a Lien upon
its property; and (iii) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness, unless such failure to pay or discharge
such Indebtedness would not reasonably be expected to have a Material Adverse
Effect.

(e)           Preservation of Existence,
Etc.  (i) Preserve, renew
and maintain in full force and effect its legal existence and good standing
under the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 9.2(c) or 9.2(d); (ii) take all reasonable
action to maintain all rights, privileges, permits, licenses and franchises
necessary or desirable in the normal conduct of its business, except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (iii) preserve or renew all of its registered
patents, trademarks, trade names and service 

 32
 

marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

(f)            Maintenance of Properties.  (i) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
(ii) make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (iii) use the standard of care typical
in the industry in the operation and maintenance of its facilities.

(g)           Maintenance of Insurance.  Maintain with financially sound and reputable
insurance companies not Affiliates of the Lessee (other than Eligible Captive
Insurance Subsidiaries), insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons.

(h)           Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (i) such requirement of Law or order, writ, injunction or decree is
being contested in good faith by appropriate proceedings diligently conducted;
or (ii) the failure to comply therewith could not reasonably be expected
to have a Material Adverse Effect.

(i)            Books and Records.  (a) 
Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all material financial transactions and matters involving the assets and
business of the Lessee or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with
all applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Lessee or such Subsidiary, as the case may be.

(j)            Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent (or, if there exists at such time no
Administrative Agent hereunder, of the Participants) to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably deemed necessary to carry out the purposes of this
Participation Agreement, upon reasonable advance notice to the Lessee; provided, however, that when an Event of Default exists the
Administrative Agent or (subject to the limitations of Section 16.16 hereof)
any Participant (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Lessee at any
time during normal business hours and without advance notice.

(k)           [Reserved].

 33
 

(l)            Approvals
and Authorizations.  Maintain all authorizations, consents,
approvals and licenses from, exemptions of, and filings and registrations with,
each Governmental Authority of the jurisdiction in which the Lessee is organized
and existing, and all approvals and consents of each other Person in such
jurisdiction, in each case that are required in connection with the Operative
Documents.

(m)          [Reserved].

(n)           Separate Parcel.  Maintain the Land as a separate parcel for
all real estate tax and assessment purposes, and no part of the Land shall be
aggregated with any other parcel for such purposes.

(o)           Notices In Respect of
Ground Lease, Etc.  Furnish to
the Administrative Agent and the Lessor, promptly (but in any event within ten
(10) days) of the Lessee’s receipt or delivery thereof, copies of any notices
and other written communications that the Lessee receives or delivers under, or
otherwise in connection with, the Ground Lease and/or any easements, covenants
and restrictions, or other agreements recorded against or affecting the
ownership, use or occupancy of the Property.

SECTION 9.2.   Negative Covenants.  The Lessee hereby covenants and agrees that
on the Closing Date and thereafter for so long as this Participation Agreement
is in effect and until such time as all Obligations have been paid in full, the
Lessee shall not, nor shall it permit any Subsidiary to, directly or
indirectly:

(a)           Liens.  Create, incur, assume or suffer to exist any
Lien upon the Property, other than Permitted Property Liens.

(b)            [Reserved].

(c)           Fundamental Changes; Acquisitions.

(i)            Merge, dissolve, liquidate,
consolidate with or into another Person, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:

a.             any Subsidiary may merge with
(i) the Lessee, provided that
the Lessee shall be the continuing or surviving Person, or (ii) any one or
more other Subsidiaries;

b.             any Subsidiary may Dispose of all
or substantially all of its assets (upon voluntary liquidation, dissolution or
otherwise) to the Lessee or to another Subsidiary; and

c.             the Lessee may merge or consolidate
with any other Person or sell all or substantially all of its assets to any
Person, provided that:

 34
 

(A)            in the case of any merger or
consolidation, either (1) the Lessee is the surviving corporation or (2) the
surviving Person (x) is a solvent Person organized under the laws of a country
member to the Organization for Economic Cooperation and Development, or
Bermuda, Barbados or the Cayman Islands, and (y) assumes all of the obligations
of the Lessee in a manner reasonably acceptable to the Administrative Agent
and, if requested by the Administrative Agent, delivers one or more opinions of
counsel from counsel reasonably acceptable to the Administrative Agent as to
the enforceability of the Obligations against the surviving Person and such other
matters as the Administrative Agent may reasonably request;

(B)            in the case of any merger or
consolidation, if the Lessee is not the surviving Person, or in the case of a
disposition of all or substantially all of the Lessee’s assets, the surviving
or acquiring Person, after giving effect to such merger or consolidation or
such acquisition of the Lessee’s assets:

(1)            shall have a rating of its unsecured
and non-credit enhanced senior obligations of at least “BBB+”
from S&P or “Baa1” from Moody’s; provided
that if such obligations are not rated by S&P or Moody’s, the Lessee or the
surviving or acquiring Person shall have presented evidence reasonably
satisfactory to the Administrative Agent that such obligations are rated,
pursuant to the internal scoring or rating procedures of an internationally
recognized financial institution not an Affiliate of the Lessee, at a level not
less than the equivalent of “BBB+” by
S&P or “Baa1” by Moody’s; and

(2)            shall present an acceptable exposure
to the Administrative Agent, in accordance with the Administrative Agent’s then
current guidelines regarding the Administrative Agent’s existing outstanding
credits to such surviving or acquiring Person, the industry that constitutes
such Person’s primary business activities, and the country(ies) in which such
Person conducts its primary business activities, based on the Administrative
Agent’s exposures at the time of such merger, consolidation or disposition of
assets;

(C)            In each case, no Lease Default has
occurred and is continuing at the time of such merger, consolidation or
disposition or will occur after giving effect to such merger, consolidation,
acquisition or disposition; and

(D)            in
each case in which the Lessee is not the surviving Person, the chief executive
officer, chief financial officer or treasurer of the surviving Person shall
have delivered a Compliance Certificate as of the date of such merger,
consolidation or disposition certifying as to the matters in clause (C) above
and showing the calculation of the financial ratio set forth in Section 9.3.

 

 35

 

(ii)           Enter into or consummate any
Acquisitions, provided that the Lessee or its
Subsidiaries may enter into or consummate Acquisitions if (A) the Acquired
Entity related to any such Acquisition is not engaged in any material line of
business that is not the same as or reasonably related to those lines of
business conducted by the Lessee and its Subsidiaries on the date such
Acquisition is consummated; (B) no Default exists or would result from the
consummation of such Acquisition; and (C) other than in conjunction with
an Exempt Acquisition, the Lessee shall provide to the Administrative Agent, no
later than the date the next ensuing Compliance Certificate is required to be
delivered hereunder, such financial and other information regarding the Person
who is being so acquired, including historical financial statements (not
exceeding the preceding four full fiscal quarter period) and a description of
such Person, as the Administrative Agent shall reasonably request.

(d)           Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except:

(i)            Dispositions of obsolete or worn out
property, whether now owned or hereafter acquired, in the ordinary course of
business;

(ii)           Dispositions of inventory in the
ordinary course of business;

(iii)          Dispositions of equipment or real
property to the extent that (i) such property is exchanged for credit
against the purchase price of similar replacement property or (ii) the
proceeds of such Disposition are reasonably promptly applied to the purchase price
of such replacement property;

(iv)          Dispositions of property by any
Subsidiary to the Lessee or to a wholly-owned Subsidiary; provided that if the
transferor of such property is a Subsidiary Guarantor, the transferee thereof
must either be the Lessee or a Subsidiary Guarantor;

(v)           Dispositions permitted by
Section 9.2(c);

(vi)          non-exclusive licenses of IP Rights in
the ordinary course of business and substantially consistent with past practice
for terms not exceeding five years;

(vii)         Dispositions of Investments other than
Dispositions prohibited by Section 9.2(c);

(viii)        sales or assignments of defaulted
receivables to a collection agency in the ordinary course of business; and

(ix)           other Dispositions by the Lessee and
its Subsidiaries not otherwise permitted under this Section 9.2(d), provided that (A) no Default has occurred and is
continuing on the date of, or will result after giving effect to, any such
Disposition and (B) the aggregate book value of all such Dispositions made

 36
 

during the term of
this Participation Agreement does not together exceed the greater of
(1) $300,000,000 and (2) 20% of Consolidated Tangible Net Worth
determined as of the last day of the most recent fiscal year for which
financial statements have been provided hereunder;

provided, however, that any
Disposition pursuant to clauses (i) through (ix) shall be for fair market
value.

(e)           Restricted Payments.  Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so if
there exists or would result therefrom any Default; except as follows:

(i)            The Lessee or any of its
Subsidiaries may pay dividends on its capital stock or other Equity Interests
payable solely in such Person’s own capital stock or Equity Interests;

(ii)           The Lessee may purchase, redeem,
retire, defease or otherwise acquire for value (together, “Repurchase”)
its Equity Interests issued to employees of the Lessee or its Subsidiaries in
exchange solely for other Equity Interests of the Lessee, provided such Repurchase
shall occur pursuant to a Contractual Obligation entered into by the Lessee
prior to and not in anticipation of any Default and approved by the Board of
Directors of the Lessee;

(iii)          Any Subsidiary of the Lessee may pay
dividends to or repurchase its Equity Interests from the Lessee or another
wholly-owned Subsidiary;

(iv)          Any Adobe VC Partnership may make
ordinary course distributions to its partners in ratable fashion, according to
their respective interests; and

(v)           The Lessee may Repurchase its Equity
Interests from an employee of the Lessee or its Subsidiaries (A) in an
amount equal to any taxes payable by such employee upon the exercise of options
to purchase Equity Interests of the Lessee approved by the Board of Directors
of the Lessee, or (B) upon termination of such employee’s employment with
the Lessee or its Subsidiaries; provided the
aggregate cash amount of such Repurchase, together with all other cash
Repurchases by the Lessee under this subsection (v), shall not exceed
$20,000,000 in the aggregate.

(f)            Change in Nature of
Business.  Engage in any
material line of business substantially different from those lines of business
conducted by the Lessee and its Subsidiaries on the date hereof or any business
substantially related or incidental thereto, provided
the Lessee may establish and maintain an Eligible Captive Insurance Subsidiary.

(g)           Transactions with
Affiliates.  Enter into any
transaction of any kind with any Affiliate of the Lessee, whether or not in the
ordinary course of business, except (i) for agreements with officers and
directors of the Lessee or its Subsidiaries for 

 37
 

(A) indemnification
or participation under the Lessee’s equity plans or (3) loans to or
retention or severance agreements with officers and directors of the Lessee or
its Subsidiaries, each as approved by the Board of Directors of the Lessee;
(ii) on fair and reasonable terms substantially as favorable to the Lessee
or such Subsidiary as would be obtainable by the Lessee or such Subsidiary at
the time in a comparable arm’s length transaction with a Person other than an
Affiliate; (iii) loans to Affiliates in which the Lessee or its
Subsidiaries have made venture capital Investments, provided the material terms
thereof are fair and reasonable as compared with other, similar venture capital
Investments; or (iv) in connection with the provision of insurance to the
Lessee and its Subsidiaries by an Eligible Captive Insurance Subsidiary as
contemplated by Section 9.1(g).

SECTION 9.3.   Financial Covenant.  Until the termination of this Participation
Agreement and the satisfaction in full by the Lessee of all Obligations, the
Lessee shall not permit its Consolidated Leverage Ratio as of the end of any
fiscal quarter (commencing with the fiscal quarter ended December 1, 2006)
for any consecutive four-quarter period to be greater than 3.00 to 1.00.

ARTICLE X

GROUND LEASE

SECTION 10.1.   Ground Lease.  The Lessee will, for the benefit of the
Lessor, perform all obligations, covenants and agreements to be performed by the
Lessor, as tenant, under the Ground Lease, and the Lessor shall have no
responsibility for compliance with such obligations, covenants and
agreements.  In addition to and not in
limitation of any of the Lessee’s other obligations under the Lease, the Lessee
shall punctually pay and perform for the benefit of the Lessor all of the
obligations and liabilities whatsoever of the Lessor under the Ground Lease,
including, without limitation, paying all rent due from time to time under the
Ground Lease and indemnifying the Lessor from and against all claims for which
the Lessor is liable under the Ground Lease to the landlord thereunder.  The Lessee agrees that it will not take any
action, or omit to take any action, that could result in a default under the
Ground Lease or the termination of the Ground Lease.

ARTICLE XI

EXTENSION OF LEASE TERM;

SECTION 11.1.   Right of Lessee to Extend.  Lessee shall have the right, so long as no
Lease Default shall have then occurred and be continuing (or shall have later
occurred prior to the Original Expiration Date), to extend the Scheduled Lease
Term Termination Date to March 26, 2017 (the “Renewal
Option”).  If the Lessee
elects to exercise the Renewal Option, the Lessee shall, not later than the
date occurring one-hundred and eighty (180) days prior to March 26, 2012 (the “Original Expiration Date”), give written notice (a “Term Extension Notice”) to the Lessor, the Lenders and the
Purchasers that Lessee elects to extend the Scheduled Lease Term Termination
Date to March 26, 2017; provided, however,
that unless the Lessee has either (i) exercised the option to purchase the
Property pursuant to Article XVIII of the Lease or the 

 38
 

Remarketing Option
pursuant of Article XX of the Lease, or (ii) delivered a written notice to the Lessor
that the Lessee is electing not tot extend the then current Scheduled Lease
Term Termination Date, prior to the 180th day prior to the Original Expiration Date,
Lessee shall be deemed to have exercised the Renewal Option, whether or not
Lessee timely delivers a term Extension Notice as provided above.  The Lessee and the Participants shall enter
into such documentation evidencing and memorializing the exercise of the
Renewal Option as each such party shall reasonably request.  Such documentation shall, inter alia, contain (A) a recitation that each of the
representations and warranties made by the Lessee in or pursuant to the
Operative Documents shall be true and correct in all material respects as if
made on and as of such date (except to the extent any such representation or
warranty specifically relates to an earlier date, in which case such
representation or warranty shall have been true and correct in all material
respects on and as of such earlier date), (B) satisfactory evidence (which may
include legal opinions of counsel satisfactory to Lessor and Administrative
Agent) of Lessee’s corporate authorization to enter into the Renewal Option,
the continued enforceability of the Operative Documents as so amended and such
other matters as Lessor and Administrative Agent shall reasonably request, and
(C) any changes to the Maximum Recourse Amount that may be then required by
GAAP.

ARTICLE XII

TRANSFERS OF PARTICIPANTS’ INTERESTS

SECTION 12.1.   Assignments by Participants.

(a)           Assignments by Lenders.  Each Lender may, with the prior written
consent of the Lessee, the Administrative Agent and the Lessor (which consents
shall not be unreasonably withheld, provided, however,
that (i) the consent of the Lessee shall not be required if a Lease Default
shall have occurred and be continuing and (ii) no such consents shall be
required in the case of an assignment by a Lender to another Lender or an
Affiliate of a Lender), assign all or a portion of its rights and obligations
hereunder to one or more commercial banks, financial institutions or “accredited investors” (as defined in Regulation D of the
SEC); provided, that (i) each such assignment
shall be of a constant, not varying, percentage of all of the assigning Lender’s
rights and obligations under the Operative Documents; and (ii) any such
assignment shall be in a minimum aggregate amount of $5,000,000 of the
assigning Lender’s Commitment (or the balance of such Commitment, if
less).  The Administrative Agent agrees
that upon notice of any such assignment and surrender of the appropriate Note
or Notes, it will promptly provide to the assigning Lender and to the assignee
separate promissory Notes in the amount of their respective interests
substantially in the form of the original Note (but with notation thereon that
it is given in substitution for and replacement of the original Note or any
replacement notes thereof).

(b)           Assignments by Purchasers.  Each Purchaser may assign all or a portion of
its rights and obligations hereunder to one or more commercial banks, financial
institutions or “accredited investors” (as
defined in Regulation D of the SEC); provided, that
(i) each such assignment shall be of a constant, not varying, percentage of all
of the assigning Purchaser’s rights and obligations under the Operative
Documents; and (ii) any such assignment shall be in a minimum aggregate amount
of $5,000,000 of the assigning Purchaser’s Commitment (or the 

 39
 

balance of such
Commitment, if less) pursuant to an assignment agreement in form and substance
reasonably satisfactory to the Administrative Agent.  Upon surrender of any Certificate to the
Administrative Agent for registration of transfer or exchange (and in the case
of a surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the Purchaser of such
Certificate or its attorney duly authorized in writing and accompanied by the
address for notices of each transferee of such Certificate or part thereof),
the Lessor shall execute and deliver, at the Lessor’s expense (except as
provided below), one or more new Certificates (as requested by the Purchaser
thereof) in exchange therefor, in an aggregate principal amount equal to the
Purchaser Balance of the surrendered Certificate.  Each such new Certificate shall name such new
Person as such Purchaser may request and shall be substantially in the form of
the Certificate originally issued hereunder or under any Receivables Purchase
Agreement.  The Lessor may require payment
of a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Purchased Interests.  Certificates shall not be transferred in
denominations of less than $5,000,000, provided that
if necessary to enable the registration of transfer by a Purchaser of its
entire Purchased Interest, one Certificate may be in a denomination of less
than $5,000,000.

(c)           Assignments by Lessor.  The Lessor may, with the prior written
consent of the Lessee and the Administrative Agent (which consents shall not be
unreasonably withheld; provided, however,
that the consent of the Lessee shall not be required if any Lease Default shall
have occurred and be continuing) assign all of its rights and obligations
hereunder to any other Person pursuant to an assignment agreement in form and
substance reasonably satisfactory to the Lessee and the Administrative Agent (provided, that Lessee’s approval shall not be required if a
Lease Default shall have occurred and be continuing), which assignment
agreement shall, in the case of any assignment of less than all outstanding
Lessor Amounts, include such agency provisions as the original Lessor may deem
necessary or appropriate.  The Lessor
shall make such filings and give such notices as shall be necessary to evidence
such assignment in all public offices where filings have been made under the
Operative Documents, and the Lessee and the Administrative Agent shall
cooperate with the Lessor in effecting such filings and notices.  In connection with any assignment pursuant to
this Section 12.1(c), the Lessee and the Administrative Agent will, promptly
upon the request of the Lessor, execute and deliver an acknowledgment of such
assignment and the succession of the transferee to all rights and obligations
of the transferor Lessor under the Operative Documents in such form as the
transferee may reasonably request in connection with an assignment pursuant to
this Section 12.1(c).

(d)           Effectiveness of
Assignments.  Upon (i) the
delivery to the Lessee, the Lessor and the Administrative Agent of an assignment
agreement in accordance with this Section 12.1, (ii) the receipt of any
applicable consents required hereunder in connection therewith and (iii) in the
case of any assignment by a Lender, the payment by the assignor or assignee
Participant to the Administrative Agent for its own account of a transfer fee
of $5,000, then, from and after the effective date specified in such Assignment
Agreement, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment Agreement, have the rights and
obligations of a Participant under this Participation Agreement and the other
Operative Documents and become a “Purchaser,”  “Lender” or “Lessor” (as
applicable) for all purposes of the Operative Documents and the assigning
Participant shall, to the extent of the interest assigned by such Assignment
Agreement release and be released from its rights and obligations under this
Participation Agreement and the other Operative Documents.

 40
 

SECTION 12.2.   Participations.  Any Participant may, at any time, sell to one
or more financial institutions (each, a “Sub-Participant”)
participating interests in all or a portion of its rights and obligations under
the Operative Documents, its Loans, its Purchased Interests or its Lessor Amounts;
provided, however, that (a) no
participation contemplated in this Section 12.2 shall relieve the applicable
Participant from any of its obligations hereunder or under the other Operative
Documents; (b) the Participant shall remain solely responsible for the
performance of its obligations hereunder and under the other Operative
Documents; (c) the Lessee and the other parties hereto shall continue to deal
solely and directly with the Participant in connection with their respective
obligations hereunder and under the other Operative Documents; (d) no
Sub-Participant (unless such Sub-Participant is also a Participant) shall be
entitled to require the Participant to take or refrain from taking any action
hereunder or under the other Operative Documents, except that such Participant
may agree with any Sub-Participant that such Participant will not, without the
Sub-Participant’s consent, take any actions of the type described in Section
16.5(b) or agree to any amendment, waiver or modification that would (A) reduce
(i) the principal amount of any Loan, (ii) the amount of Capital or (iii) the
amount of any Lessor Amount participated in by such Sub-Participant, or reduce
the interest rate, Return or Yield Rate applicable to or fees payable in
respect of, any such Loan, Purchased Interests or Lessor Amount or (B) extend
the Scheduled Lease Term Termination Date (except as otherwise provided
herein); and (e) the Lessee shall not be required to pay any amount under this
Participation Agreement that is greater than the amount which it would have
been required to pay had no participating interest been sold.

SECTION 12.3.   Pledge Under Regulation A.  Anything in this Article XII to the contrary
notwithstanding, each Participant may without the consent of the Lessee or any
other Person assign and pledge all or any portion of its Loans, Purchased
Interests or Lessor Amounts, as applicable, held by it to any Federal Reserve
Bank or to the United States Treasury as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by the Federal Reserve System and/or the Federal
Reserve Bank or otherwise.

SECTION 12.4.   Acknowledgment of Assignment of
Lease and Rent.  Lessee hereby
acknowledges that the right of the Lessor to receive Rent and certain other
rights under the Lease (other than the right to receive certain Excepted
Payments) will be transferred by the Lessor to the Administrative Agent (for
further distribution to the Purchasers and the Lenders as their interests may
appear under the Operative Documents) pursuant to the Assignment of Lease and
Rent; provided, however, that all Basic Rent
and Supplemental Rent (other than Supplemental Rent in respect of Contingent
Payments) shall be paid to the Administrative Agent for distribution as set
forth in Article VII.

 41
 

ARTICLE XIII

INDEMNIFICATION

SECTION 13.1.   General Indemnification.

(a)           Lease Term.  During the Lease Term, the Lessee shall
assume liability for, and indemnify, protect, defend, save and keep harmless
each Indemnitee, on an After Tax Basis, from and against, any and all Claims
arising during the Lease Term or thereafter that may be imposed on, incurred by
or asserted against such Indemnitee (whether because of action or omission by
such Indemnitee or otherwise), whether or not such Indemnitee shall also be
indemnified as to any such Claim by any other Person, in any way relating to or
arising in whole or in part out of (or alleged to in any way relate to or arise
in whole or in part out of):

(i)            any agreement for the purchase or
ground lease of the Land (including the Ground Lease), or the assignment to the
Lessor of any such purchase agreement or ground lease, any other document,
instrument or agreement relating thereto or any of the transactions
contemplated by any of the foregoing;

(ii)           any of the Operative Documents or any
of the transactions contemplated thereby, and any amendment, modification or
waiver in respect thereof;

(iii)          the Property or any part thereof or
interest therein;

(iv)          the purchase, design, construction,
preparation, installation, inspection, delivery, nondelivery, acceptance,
rejection, ownership, management, possession, operation, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification, addition
or substitution, storage, transfer of title, redelivery, use, financing,
refinancing, disposition, operation, condition, sale (including, without
limitation, any sale pursuant to Section 16.2(c) or 16.2(e) of the Lease or any
sale pursuant to Article XV, XVIII or XX of the Lease), return or other
disposition of all or any part or any interest in the Property or the
imposition of any Lien (or incurring of any liability to refund or pay over any
amount as a result of any Lien) thereon, including, without limitation:  (A) Claims or penalties arising from any
violation of law or in tort (on the basis of strict liability or otherwise),
(B) latent or other defects, whether or not discoverable, (C) any Claim based
upon a violation or alleged violation of the terms of any restriction,
easement, condition or covenant or other matter affecting title to any of the
Property, (D) the making of any Modifications in violation of any standards
imposed by any insurance policies required to be maintained by the Lessee pursuant
to the Lease which are in effect at any time with respect to the Property or
any part thereof, (E) any Claim for patent, trademark or copyright
infringement, and (F) Claims arising from any public improvements with respect
to the Property resulting in any change or special assessments being levied
against the Property or any plans to widen, modify or realign any street or
highway adjacent to the Property, or any Claim for utility “tap-in”
fees;

 42
 

(v)           the breach or alleged breach by the
Lessee of any covenant, representation or warranty made by it in any Operative
Document or any certificate required to be delivered by any Operative Document;

(vi)          the retaining or employment of any
broker, finder or financial advisor by the Lessee to act on its behalf in
connection with this Participation Agreement or any other Operative Document or
pursuant to the acquisition of the Property or any part thereof pursuant to
this Participation Agreement;

(vii)         the existence of any Lien on or with
respect to the Property, the Improvements, any Basic Rent or Supplemental Rent,
title thereto, or any interest therein including any Liens which arise out of
the possession, use, occupancy, construction, repair or rebuilding of the
Property or by reason of labor or materials furnished or claimed to have been
furnished to the Lessee, or any of its contractors or agents or by reason of
the financing of any personalty or equipment purchased or leased by the Lessee
or Modifications constructed by the Lessee, except Lessor Liens and Liens in
favor of the Lessor and/or the Participants; or

(viii)        the transactions contemplated by the
Lease or by any other Operative Document, in respect of the application of
Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction
described in Section 4975(c) of the Code.

(b)           Exclusions from General
Indemnity.  Notwithstanding
the provisions of clause (a) of this Section 13.1, the Lessee shall not be
required to indemnify any Indemnitee under this Section 13.1 for any of
the following:  (i) any Claim to the
extent resulting from the willful misconduct or gross negligence of such
Indemnitee (it being understood that the Lessee shall be required to indemnify
an Indemnitee even if the ordinary (but not gross) negligence of such
Indemnitee caused or contributed to such Claim), (ii) any Claim resulting from
Lessor Liens that the applicable Indemnitee is responsible for discharging
under the Operative Documents, (iii) any Claim to the extent attributable to
such Indemnitee’s breach of any of its covenants or obligations under the
Operative Documents, (iv) any Claim to the extent attributable to acts,
circumstances or events occurring or existing solely after (1) the Expiration
Date and (2) the return or remarketing of the Property in full compliance with
all of the requirements of the Operative Documents, so long as no Lease Event
of Default has occurred and is continuing, and (v) any Claim arising from a
breach by such Indemnitee of any agreement entered into in connection with the
assignment or participation of any Loan, Purchased Interest or Lessor
Amount.  It is expressly understood and
agreed that the indemnity provided for herein shall survive the expiration or
termination of and shall be separate and independent from any remedy under the
Lease or any other Operative Document.

(c)           No Guaranty of Residual
Value.  Without limiting the
express rights of the Indemnitees under this Section 13.1, this Section 13.1
shall be construed as an indemnity only and not a guaranty of the residual
value of the Property or as a guarantee of the Loans, Purchased Interests or
Lessor Amounts.

 43
 

SECTION 13.2.   End of Term Indemnity.

(a)           If the Lessee elects the Remarketing
Option and there would, after giving effect to the proposed remarketing
transactions, be a Shortfall Amount, then prior to the Expiration Date and as a
condition to the Lessee’s right to complete the remarketing of the Property
pursuant to Section 20.1 of the Lease, the Lessee shall cause to be delivered
to the Lessor at least thirty (30) days prior to the Expiration Date, at the
Lessee’s sole cost and expense, a report from the Appraiser in form and
substance satisfactory to the Lessor (the “End of the Term Report”)
which shall state the Appraiser’s conclusions as to the reason for any decline
in the Fair Market Sales Value of the Property from the Property Cost.

(b)           If the Lessee elects the Remarketing
Option, then on or prior to the Expiration Date, the Lessee shall pay to the
Lessor, for distribution in accordance with Section 7.4, an amount (not to
exceed the Shortfall Amount) equal to the portion of the Shortfall Amount that
the End of the Term Report demonstrates was the result of a decline in the Fair
Market Sales Value of the Property due to:

(i)            extraordinary use, failure to use,
use contrary to the limitations imposed by the Lease or the intended purposes
as contemplated by Section 8.2 of the Lease; or any failure to maintain, to
repair, to restore, to rebuild or to replace the Property as required under the
Lease; or any failure of the Property to be in compliance with all Applicable
Laws, or

(ii)           any Modification made to, or any
rebuilding of, the Property or any part thereof by the or any Sublessee,
whether or not permitted pursuant to the Operating Documents, or

(iii)          the existence of any Hazardous
Activity, Hazardous Materials or Environmental Violations, the indemnity for
which shall not exceed the cost of the remediation thereof, or

(iv)          any grant, release, dedication,
transfer, annexation or amendment made pursuant to Section 12.2 of the Lease,
or

(v)           any restoration or rebuilding carried
out by the Lessee or any sublessee; or the removal of Modifications or fixtures
pursuant to the last paragraph of Section 10.1 of the Lease, or

(vi)          any Condemnation of any portion of the
Property, or

(vii)         the failure of the Lessor to have good
and marketable title to the Property free and clear of all Liens (other than
Permitted Property Liens of the type described in clauses (a), (b), (g), or (h)
of the definition thereof), or

(viii)        the existence of any sublease relating
to the Property.

(c)           In addition to the foregoing and not
in limitation of the other provisions hereof, including the provisions of this
Article XIII, in the event that all of the structural 

 44
 

Modifications,
restoration and rebuilding of the Property, if any, pursuant to Section 10.1
and 14.1 (as the case may be) of the Lease shall not have been completed in
accordance with the provisions of such Section(s) prior to the Expiration Date,
then the report from the Appraiser shall state the Appraiser’s opinion as to
the amount determined by subtracting the Fair Market Sales Value of the
Property given the state and condition of non-completion of such structural
Modifications, restoration and rebuilding of the Property; and giving effect to
scheduled and funded construction to the Expiration Date from the Appraiser’s
determination of the Fair Market Sales Value of the Property as if such
structural Modifications, restoration and rebuilding had been completed (such
difference in amount being referred to herein as the “Property
Completion Differential”), and the Lessee shall on the Expiration
Date pay to the Lessor the amount of the Property Completion Differential for
the Property; provided, however, that the
foregoing shall in no event exceed the Shortfall Amount.

SECTION 13.3.   Environmental Indemnity.  Without limitation of the other provisions of
this Article XIII, the Lessee hereby agrees (at all times, including without
limitation, whether or not the Lease Term shall have commenced) to indemnify,
hold harmless and defend each Indemnitee from and against any and all Claims
(including, without limitation, third party claims for personal injury or real
or personal property damage), losses (including, but not limited to, to the
extent the Property Cost has not been fully paid, any loss of value of the
Property related thereto), damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings (including informal proceedings) and
orders, judgments, remedial action, requirements, enforcement actions of any
kind, and all reasonable and documented costs and expenses incurred in
connection therewith (including, but not limited to, reasonable and documented
attorneys’ and/or paralegals’ fees and expenses), including, but not limited
to, all costs incurred in connection with any investigation or monitoring of
site conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local government agency, in any way relating to or arising in
whole or in part, out of (or alleged to in any way relate to or arise in whole
or in part out of):

(a)           the presence on or under any of the
Property of any Hazardous Materials, or any releases or discharges of any
Hazardous Materials on, under, from or onto any of the Property;

(b)           any activity, including, without
limitation, construction, carried on or undertaken on or off any of the
Property, and whether by the Lessee or any predecessor in title or any
employees, agents, contractors or subcontractors of the Lessee or any
predecessor in title, or any other Persons (including such Indemnitee), in
connection with the handling, treatment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Materials that at any time are
located or present on or under or that at any time migrate, flow, percolate,
diffuse or in any way move onto or under any of the Property;

(c)           loss of or damage to any property or
the environment (including, without limitation, clean-up costs, response costs,
remediation and removal costs, costs of corrective action, costs of financial
assurance, fines and penalties and natural resource damages), or death or
injury to any Person, and all expenses associated with the protection of
wildlife, aquatic species, vegetation, flora and fauna, and any mitigative 

 45
 

action required by
or under Environmental Laws arising from the Property or related thereto;

(d)           any Claim concerning lack of
compliance with Environmental Laws at the Property, or any act or omission
causing an Environmental Violation that requires remediation or would allow any
Governmental Authority to record a Lien on the land records of the Property; or

(e)           any residual contamination on or
under any of the Land, or affecting any natural resources, and to any
contamination of any property or natural resources arising in connection with
the generation, use, handling, storage, transport or disposal of any such
Hazardous Materials on or relating to the Land, and irrespective of whether any
of such activities were or will be undertaken in accordance with applicable
laws, regulations, codes and ordinances,

provided, however, that the
Lessee shall not be required to indemnify any Indemnitee under this
Section 13.3 for (i) any Claim to the extent resulting from the willful
misconduct or gross negligence of such Indemnitee (it being understood that the
Lessee shall be required to indemnify an Indemnitee even if the ordinary (but
not gross) negligence of such Indemnitee caused or contributed to such Claim)
or (ii) any Claim to the extent attributable solely to acts, circumstances or
events occurring after (1) the expiration of the Lease Term and (2) the return
or remarketing of the Property in full compliance with the provisions of the
Operative Documents, so long as no Lease Default or Lease Event of Default has
occurred.  It is expressly understood and
agreed that the indemnity provided for herein shall survive the expiration or
termination of and shall be separate and independent from any remedy under the
Lease or any other Operative Document.

SECTION 13.4.   Proceedings in Respect of
Claims.  With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of
Section 13.1 or 13.3, such Indemnitee shall, if so requested by the Lessee and
prior to any payment, submit such additional information to the Lessee as the
Lessee may reasonably request and which is in the possession of such Indemnitee
to substantiate properly the requested payment.

In
case any action, suit or proceeding shall be brought against any Indemnitee,
such Indemnitee shall notify the Lessee of the commencement thereof, (but the
failure to effect such notification shall not affect any debt, duty or
obligation of Lessee hereunder except to the extent that the Lessee has been
effectively precluded from contesting such action, suit or proceeding as a
result of such failure), and the Lessee shall be entitled, at the Lessee’s
expense, to participate in, and, to the extent that the Lessee desires to,
assume and control the defense thereof; provided, however,
that the Lessee shall have acknowledged in writing its obligation to fully
indemnify such Indemnitee in respect of such action, suit or proceeding, and,
the Lessee shall keep such Indemnitee fully apprised of the status of such
action, suit or proceeding and shall provide such Indemnitee with all material
information with respect to such action, suit or proceeding as such Indemnitee
shall reasonably request, and provided, further,
that the Lessee shall not be entitled to assume and control the defense of any
such action, suit or proceeding if and to the extent that (i) in the reasonable
opinion of such Indemnitee (A) such action, suit or proceeding involves any
risk of imposition of criminal liability or will involve a material risk of the
sale, forfeiture or loss 

 46
 

of, or the creation of any Lien (other than a
Permitted Property Lien of the type described in clause (a), (b) or (h) of the
definition thereof) on the Property or any part thereof or (B) the control of
such action, suit or proceeding would involve an actual or potential conflict
of interest, (ii) such proceeding involves Claims not fully indemnified by the
Lessee which the Lessee and the Indemnitee have been unable to sever from the
indemnified claim(s), or (iii) any Lease Event of Default has occurred and is
continuing.  The Indemnitee may
participate in a reasonable manner at its own expense and with its own counsel
in any proceeding conducted by the Lessee in accordance with the foregoing; the
fees and expenses of any such counsel shall be for the applicable Indemnitee’s
account except to the extent that representation of such Indemnitee and of the
Lessee by the same counsel is inappropriate due to actual or potential
conflicts of interest between them.  The
Lessee shall not enter into any settlement or other compromise with respect to
any Claim which is entitled to be indemnified under Section 13.1 or 13.3  without
the prior written consent of the Indemnitee, which consent shall not be
unreasonably withheld in the case of a money settlement not involving an
admission of liability of such Indemnitee.

Each
Indemnitee shall at the expense of the Lessee supply the Lessee with such
information and documents reasonably requested by the Lessee as are necessary
or advisable for the Lessee to participate in any action, suit or proceeding to
the extent permitted by Section 13.1 or 13.3. 
Unless a Lease Default or Lease Event of Default shall have occurred and
be continuing, no Indemnitee shall enter into any settlement or other
compromise with respect to any Claim that is entitled to be indemnified under
Section 13.1 or 13.3 without the prior written consent of the Lessee, which
consent shall not be unreasonably withheld, unless such Indemnitee waives its
right to be indemnified under Section 13.1 or 13.3 with respect to such Claim.

Upon
payment in full of any Claim by the Lessee pursuant to Section 13.1 or 13.3 to
or on behalf of an Indemnitee, the Lessee, without any further action, shall be
subrogated to any and all claims that such Indemnitee may have relating thereto
(other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and, at the Lessee’s sole cost and expense,
such Indemnitee shall execute such instruments of assignment and conveyance,
and evidence of claims and payment as may reasonably be necessary to preserve
any such subrogation claims.

Any
amount payable to an Indemnitee pursuant to Section 13.1 or 13.3 shall be paid
to such Indemnitee promptly upon receipt of a written demand therefor from such
Indemnitee, accompanied by a written statement describing in reasonable detail
the basis for such indemnity and the computation of the amount so payable.

SECTION 13.5.   General Tax Indemnity.

(a)           Indemnification.  The Lessee shall pay and assume liability for,
and does hereby agree to indemnify, protect and defend the Property and all Tax
Indemnitees, and hold them harmless against, all Impositions on an After Tax
Basis.  The determination of all
Impositions to be paid or indemnified against by the Lessee on an After Tax
Basis shall be made (in good faith) by the Tax Indemnitee.  Such determination shall state with
reasonable clarity and detail the basis for such determination and shall,
absent manifest error, be final and conclusive and binding on the Lessee.

 

 47

(b)           Contests.  If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee
(including a written notice of such proceeding) for any Imposition as to which
the Lessee may have an indemnity obligation pursuant to this Section 13.5, or
if any Tax Indemnitee shall determine that any Imposition to which the Lessee
may have an indemnity obligation pursuant to this Section 13.5 may be payable,
such Tax Indemnitee shall within thirty (30) days notify the Lessee in writing
(provided, that failure to so notify the
Lessee within thirty (30) days shall not alter such Tax Indemnitee’s rights
under this Section 13.5 except to the extent such failure precludes the ability
to conduct a contest of any Impositions) and shall not take any action with
respect to such claim, proceeding or Imposition without the written consent of
the Lessee (such consent not to be unreasonably withheld or unreasonably
delayed) for thirty (30) days after the receipt of such notice by the Lessee; provided, however, that in the case of any such claim or
proceeding, if such Tax Indemnitee shall be required by Applicable Law to take
action prior to the end of such thirty (30) day period, such Tax Indemnitee
shall in such notice to the Lessee, so inform the Lessee, and such Tax
Indemnitee shall not take any action with respect to such claim, proceeding or
Imposition without the consent of the Lessee (such consent not to be
unreasonably withheld or unreasonably delayed) for ten (10) days after the
receipt of such notice by the Lessee unless such Tax Indemnitee shall be
required by Applicable Law or regulation to take action prior to the end of
such ten (10) day period, provided, further,
however, that the failure of the Tax Indemnitee to give notice referred to in
this sentence shall not diminish Lessee’s obligations hereunder except to the
extent that such failure precludes Lessee from contesting such claim.

The
Lessee shall be entitled for a period of thirty (30) days from receipt of such
notice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee
has notified the Lessee is required by Applicable Law for such Tax Indemnitee
to commence such contest) to request in writing that such Tax Indemnitee
contest the imposition of such Tax, at the Lessee’s sole cost and expense.  If (i) such contest can be pursued in the
name of the Lessee and independently from any other proceeding involving a Tax
liability of such Tax Indemnitee for which the Lessee has not agreed to
indemnify such Tax Indemnitee, (ii) such contest must be pursued in the name of
such Tax Indemnitee, but can be pursued independently from any other proceeding
involving a Tax liability of such Tax Indemnitee for which the Lessee has not
agreed to indemnify such Tax Indemnitee or (iii) such Tax Indemnitee so
requests, then the Lessee shall be permitted to control the contest of such
claim, provided, that in the case of a contest
described in clause (ii), if such Tax Indemnitee reasonably determines that
such contest by the Lessee could have an adverse impact on the business or
operations of such Tax Indemnitee, such Tax Indemnitee may elect to control or
reassert control of the contest, and provided, that
by taking control of the contest, the Lessee acknowledges that it is responsible
for the Imposition ultimately determined to be due by reason of such
claim.  In all other claims requested to
be contested by the Lessee, such Tax Indemnitee shall control the contest of
such claim, acting through counsel reasonably acceptable to the Lessee.  In no event shall the Lessee be permitted to
contest (or such Tax Indemnitee required to contest) any claim (A) if such Tax
Indemnitee provides the Lessee with a legal opinion of counsel reasonably
acceptable to the Lessee that such action, suit or proceeding involves a risk
of imposition of criminal liability or could involve a material risk of the
sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Property Lien of the type described in clause (a), (b), (g) or (h) of
the definition thereof) on the 

 48
 

Property or any part of any thereof unless the Lessee
shall have posted and maintained a bond or other security satisfactory to the
relevant Tax Indemnitee in respect to such risk, (B) if a Lease Event of
Default has occurred and is continuing unless the Lessee shall have posted and
maintained a bond or other security satisfactory to the relevant Tax Indemnitee
in its sole discretion in respect of the Taxes subject to such claim and any
and all expenses for which the Lessee is responsible hereunder reasonably
foreseeable in connection with the contest of such claim, (C) unless the Lessee
shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all
reasonable out-of-pocket costs, losses and expenses that such Tax Indemnitee
may incur in connection with contesting such Imposition including all
reasonable legal, accounting and investigatory fees and disbursements, or (D)
if such contest shall involve the payment of the Tax prior to the contest,
unless the Lessee shall provide to such Tax Indemnitee an interest-free advance
in an amount equal to the Imposition that the Tax Indemnitee is required to pay
(with no additional net after-tax costs to such Tax Indemnitee).  In addition, for Tax Indemnitee controlled
contests and claims contested in the name of such Tax Indemnitee in a public
forum, no contest shall be required unless: 
(A) the amount of the potential indemnity (taking into account all
similar or logically related claims that have been or could be raised in any
audit involving such Tax Indemnitee with respect to any period for which the
Lessee may be liable to pay an indemnity under this Section 13.5(b)) exceeds
$50,000, (B) if requested by such Tax Indemnitee, the Lessee shall have
provided to such Tax Indemnitee an opinion of counsel selected by the Lessee
(except, in the case of income taxes indemnified hereunder, in which case such
opinion shall be an opinion of independent tax counsel selected by such Tax
Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis
exists to contest such claim (or, in the case of an appeal of an adverse
determination, an opinion of such counsel to the effect that there is
substantial authority for the position asserted in such appeal) and (C) Lessee
shall have acknowledged in writing to the Tax Indemnitee its obligation to pay
the costs and expenses thereof and to indemnify such Tax Indemnitee pursuant to
this Section 13.5 for the Taxes subject to the proposed contest, if such
contest is unsuccessful.  In no event
shall a Tax Indemnitee be required to appeal an adverse judicial determination
to the United States Supreme Court.  In
addition, a Tax Indemnitee shall not be required to contest any claim in its
name (or that of an Affiliate) if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely by a court
of competent jurisdiction pursuant to the contest provisions of this Section
13.5(b), unless there shall have been a Change in Law and the Tax Indemnitee shall
have received, at the Lessee’s expense, an opinion of independent tax counsel
selected by the Lessee and reasonably acceptable to the Tax Indemnitee stating
that, as a result of such Change in Law, it is more likely than not that the
Tax Indemnitee will prevail in such contest.

The
party conducting the contest shall consult in good faith with the other party
and its counsel with respect to the contest of such claim for Taxes, provided, however, that the decisions regarding what actions
to be taken shall be made by the controlling party in its sole judgment.  In addition, the controlling party shall keep
the non-controlling party reasonably informed as to the progress of the
contest, and shall provide the non-controlling party with a copy of (or appropriate
excerpts from) any reports or claims issued by the relevant auditing agents or
taxing authority to the controlling party thereof, in connection with such
claim or the contest thereof.

Each
Tax Indemnitee shall, at the Lessee’s sole cost and expense, supply the Lessee
with such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by 

 49
 

this Section 13.5(b); provided,
however, that such Tax Indemnitee shall not be required to provide
to the Lessee copies of (i) any information, documentation or materials that it
reasonably deems to be confidential or proprietary or (ii) its tax returns or
any other information, documentation or materials in respect of such Tax
Indemnitee’s financial position. 
Notwithstanding anything in this Section 13.5(b) to the contrary, no Tax
Indemnitee shall enter into any settlement or other compromise or fail to
appeal an adverse ruling with respect to any claim which is entitled to be
indemnified under this Section 13.5 (and with respect to which contest is
required under this Section 13.5(b)) without the prior written consent of the
Lessee, unless such Tax Indemnitee waives its right to be indemnified under
this Section 13.5 with respect to such claim. 
No settlement of any contest may be made by the Lessee without the Tax
Indemnitee’s written consent (which consent shall not be unreasonably
withheld).

Notwithstanding
anything contained herein to the contrary, a Tax Indemnitee will not be
required to contest (and the Lessee shall not be permitted to contest) a claim
with respect to the imposition of any Tax if such Tax Indemnitee shall waive
its right to indemnification under this Section 13.5 with respect to such claim
(and any claim with respect to such year or any other taxable year the contest
of which is materially adversely affected as a result of such waiver).

(c)           Payments.  Any Imposition indemnifiable under this
Section 13.5 shall be paid directly when due to the applicable taxing authority
if direct payment is practicable and permitted. 
If direct payment to the applicable taxing authority is not permitted or
is otherwise not made, any amount payable to a Tax Indemnitee pursuant to
Section 13.5 shall be paid within twenty (20) days after receipt of a written
demand therefor from such Tax Indemnitee accompanied by a written statement
describing in reasonable detail the amount so payable, but in no event shall
the Lessee be required to pay such reimbursement prior to fifteen (15) days
before the date that the relevant Taxes are due.  Any payments made pursuant to this Section
13.5 shall be made directly to such Tax Indemnitee entitled thereto or the
Lessee, as the case may be, in immediately available funds at such bank or to
such account as specified by the payee in written directions to the payor, or,
if no such direction shall have been given, by check of the payor payable to
the order of the payee by certified mail, postage prepaid at its address as set
forth in Schedule II hereto.  Upon the request of any Tax Indemnitee with
respect to a Tax that the Lessee is required to pay, the Lessee shall furnish
to such Tax Indemnitee the original or a certified copy of a receipt for the
Lessee’s payment of such Tax or such other evidence of payment as is reasonably
acceptable to such Tax Indemnitee.

(d)           Reports.  In the case of any report, return or
statement required to be filed with respect to any Taxes that are subject to
indemnification under this Section 13.5 and of which the Lessee has knowledge,
the Lessee shall promptly notify such Tax Indemnitee of such requirement and,
at the Lessee’s expense  (i) if the
Lessee is permitted (unless otherwise requested by such Tax Indemnitee) by
Applicable Law, timely file such report, return or statement in its own name or
(ii) if such report, return or statement is required to be in the name of or
filed by such Tax Indemnitee, advise such Tax Indemnitee of such fact, prepare
such return, statement or report for filing by such Tax Indemnitee in such
manner as shall be satisfactory to such Tax Indemnitee and send the same to
such Tax Indemnitee for filing no later than fifteen (15) days prior to the due
date thereof.  In any case in which such
Tax Indemnitee will file any such report, return 

 50
 

or statement, the
Lessee shall, upon written request of such Tax Indemnitee, provide such Tax
Indemnitee with such information as is reasonably necessary to allow such Tax
Indemnitee to timely file such report, return or statement.

(e)           Tax Ownership.  Each Tax Indemnitee represents and warrants
that, except as required by a Governmental Authority, it will not, prior to the
termination of the Lease, claim ownership of (or any tax benefits, including
depreciation, with respect to) the Property for any income tax purposes, it
being understood that the Lessee is and will remain the owner of the Property
for such income tax purposes until the termination of the Lease.  The Lessee represents and warrants to each
Indemnitee that, for tax purposes, the Lessee will report for the transactions
contemplated by the Operative Documents as indebtedness of the Lessee from the
Lessor maturing on the Expiration Date and bearing interest at a rate
equivalent to the interest on the Loans, Return on Capital and Yield on the
Lessor Amounts.  Without limiting any
other indemnification obligation of the Lessee under any of the Operative
Documents, the Lessee indemnifies and holds harmless, on an After Tax Basis,
the Lessor, the Purchasers and the Lenders from any and all loss, cost, expense
or damages suffered or incurred by reason of the Lease not being treated as
indebtedness of the Lessee for purposes of federal income taxation; provided, however, that (i)  Purchasers and the Lenders
shall promptly notify Lessee of any claim asserted by any Governmental
Authority with respect to the Purchasers or the Lenders or any proceeding
commenced against a Purchaser or a Lender pursuant to which such Governmental
Authority contends that the Lease should not be treated as such indebtedness of
the Lessee for purposes of federal income taxation, (ii) the Lessee shall
have the right to consult with the Purchasers or the Lenders with respect to
the contest of such claim or proceeding for federal income tax purposes, regardless
of the amount, if any, potentially in controversy, provided,
however, that the Purchasers or the Lenders shall retain the right
to settle or resolve the claim or proceeding in its exclusive discretion, and
(iii) the foregoing indemnification obligation of the Lessee shall be
determined on the basis of the excess, if any, of the aggregate loss, cost,
expense or damage suffered or incurred by the Purchasers or the Lenders if the
Lease is not treated as indebtedness of the Lessee for federal income tax purposes
(including any costs incurred in contesting such dispute) over the amount of
any such aggregate loss, cost, expense or damage (including federal income tax)
that would have been suffered or incurred by the Purchasers or the Lenders if
the Lease were treated as indebtedness of the Lessee, taking into account the
actual utilization by the Purchasers or the Lenders, as applicable, of any
deduction or credits (it being understood that the Purchasers and the Lenders
are not expected to be able to utilize such deductions or credits).

(f)            Disclosure.  The parties agree that, notwithstanding any
contrary implication in any of the Operative Documents, any party to this
Participation Agreement (and each employee, representative or other agent of
such party) may disclose the tax aspects of the transactions contemplated by
the Participation Agreement and the structural aspects of these transactions as
they relate to such tax aspects without limitation of any kind on such
disclosure.

 51
 

(g)           Separate Agreement.  It is expressly understood and agreed that
the indemnity provided for in this Section 13.5 shall survive expiration or
termination of, and shall be separate and independent from any remedy under,
any Operative Document.

SECTION 13.6.   Indemnity Payments in Addition
to Lease Obligations.  The
Lessee acknowledges and agrees that the Lessee’s obligations to make indemnity
payments under this Article XIII are separate from, in addition to, and do
not reduce, the Lessee’s obligation to pay under the Lease that portion of the
Property Cost constituting the Maximum Recourse Amount.

SECTION 13.7.   Illegality.  If, after the date of this Participation
Agreement, the adoption of any Governmental Rule, any change in any
Governmental Rule or the application or requirements thereof (whether such
change occurs in accordance with the terms of such Governmental Rule as
enacted, as a result of amendment or otherwise), any change in the
interpretation or administration of any Governmental Rule by any Governmental
Authority, or compliance by any Lender with any request or directive (whether
or not having the force of law) of any Governmental Authority (a “Change of Law”) shall make it unlawful or impossible for
any Participant to make or maintain any Loan, Purchased Interest or Lessor Amount
as a LIBOR Loans/Capital/Lessor Amount, such Participant shall immediately
notify the Administrative Agent and the Lessee of such Change of Law.  Upon receipt of such notice, (i) the Lessee’
s right to request the making of, conversion to or a new Basic Rent Period for
LIBOR Loans/Capital/Lessor Amounts shall be terminated, and the Lessee shall,
at the request of the such Participant, (A) convert any outstanding LIBOR
Loans/Capital/Lessor Amounts into Base Rate Loans/Capital/Lessor Amounts at the
end of the current Basic Rent Period for such LIBOR Loans/Capital/Lessor
Amounts or (B) immediately convert any such LIBOR Loans/Capital/Lessor Amounts
if the Participant shall notify the Lessee that it may not lawfully continue to
fund and maintain such LIBOR Loans/Capital/Lessor Amounts.  Any conversion of LIBOR Loans/Capital/Lessor
Amounts made pursuant to the preceding sentence prior to the last day of the
Basic Rent Period for such LIBOR Loans/Capital/Lessor Amounts shall be deemed a
prepayment thereof for purposes of Section 13.10. After such Participant
notifies the Administrative Agent and the Lessee of such a Change of Law and
until such Participant notifies the Administrative Agent and the Lessee that it
is no longer unlawful or impossible for such Person to make or maintain a Loan,
Purchased Interest or Lessor Amount, all Loans, Capital or Lessor Amounts, as
applicable, of such Person shall be Base Rate Loans/Capital/Lessor Amounts.

SECTION 13.8.   Inability to Determine Rates.  If, on or before the first day of any Basic
Rent Period for any Loan, Purchased Interest or Lessor Amount, (i) any
Participant shall advise the Administrative Agent that the BBA LIBO Rate for
such Basic Rent Period cannot be adequately and reasonably determined due to
the unavailability of funds in or other circumstances affecting the London
interbank market or (ii) the Lessor or Required Participants shall advise the
Administrative Agent that the rate of interest for such Loan, the rate of
Return for such Purchased Interests or the Yield for such Lessor Amount does
not adequately and fairly reflect the cost to such Participant of making or
maintaining such Loan, Purchased Interest or Lessor Amount, the Administrative
Agent shall immediately give notice of such condition to the Lessee, the Lessor
and the other Participants.  After the
giving of any such notice and until the Administrative Agent shall otherwise
notify the Lessee that the circumstances giving rise to such condition no
longer exist, the Lessee’s right to request the making of, conversion to or a
new 

 52
 

Basic Rent Period for
LIBOR Loans/Capital/Lessor Amounts shall be suspended.  Any LIBOR Loans/Capital/Lessor Amounts
outstanding at the commencement of any such suspension shall begin to bear
interest, Return or Yield, as applicable, by reference to the Base Rate on the
last day of the then current Basic Rent Period, and shall be deemed to be
converted at the end of the then current Basic Rent Period for such LIBOR
Loans/Capital/Lessor Amounts into Base Rate Loans/Capital/Lessor Amounts,
unless such suspension has then ended.

SECTION 13.9.   Increased Costs.  If, after the date of this Participation
Agreement, any Change of Law:

(a)           Shall subject any Affected Party to
any tax, duty or other charge with respect to any Loan, Purchased Interests or
Lessor Amount, or shall change the basis of taxation of payments by the Lessee
or the Lessor to any Affected Party under any Operative Document (except for
changes in the rate of taxation on the overall net income of any Affected Party
imposed by its jurisdiction of incorporation or the jurisdiction in which its
principal executive office is located); or

(b)           Shall impose, modify or hold
applicable any reserve (excluding any Reserve Requirement or other reserve to
the extent included in the calculation of the BBA LIBO Rate for any Loans,
Purchased Interests or Lessor Amounts), special deposit or similar requirement
against assets held by, deposits or other liabilities in or for the account of,
advances or loans by, or any other acquisition of funds by any Affected Party;
or

(c)           Shall impose on any Affected Party
any other condition;

and
the effect of any of the foregoing is to increase the cost to such Affected
Party of making, renewing, or maintaining its Commitment, any Loan, Purchased
Interests or Lessor Amount (or any commitment to provide the same, or to
provide liquidity or other fundings in respect thereof) or to reduce any amount
receivable by such Affected Party hereunder or under any Operative Document;
then the Lessee shall from time to time, within five (5) Business Days after
demand by such Affected Party, pay to such Affected Party additional amounts
sufficient to reimburse such Affected Party for such increased costs or to
compensate such Affected Party for such reduced amounts; provided,
however, that the Lessee shall have no obligation to make any
payment to any demanding party under this Section 13.9 on account of any such
increased costs or reduced amounts unless the Lessee receives notice of such
increased costs or reduced amounts from the demanding party within six (6)
months after they are incurred or realized. A certificate setting forth in
reasonable detail the amount of such increased costs or reduced amounts,
submitted by such Affected Party to the Lessee shall constitute prima facie evidence of such costs or amounts.  The obligations of the Lessee under this
Section 13.9 shall survive the termination of this Participation Agreement and
the other Operative Documents and the payment of the Loans, Purchased
Interests, Lessor Amounts and all other amounts payable under the Operative
Documents.

SECTION 13.10.   Funding Losses.  The Lessee agrees that it shall, within five
(5) Business Days after demand by any Affected Party, reimburse such Affected
Party for and hold such Affected Party harmless (on an After Tax Basis) from
all losses, costs and expenses (but 

 53
 

excluding any loss of
anticipated profit) that such Affected Party may sustain or incur (other than
through such Person’s own gross negligence or willful misconduct) as a
consequence of (a) the Lessee’s payment of Rent other than on a Rent Payment
Date (except for Rent not due on a Rent Payment Date), (b) any Advance not
being made on the date specified therefor in the applicable Funding Request
(other than, if such Affected Party is a Participant, as a result of a breach
by such Participant of its obligation under Section 3.1, 3.2 or 3.3, as the
case may be, to make Advances or Lessor Amounts available to the Lessor), (c)
the Lessee’s payment of the Property Cost or any portion thereof (including any
payment of Maximum Recourse Amount or Purchase Price) on any date other than a
Rent Payment Date, or (d) any conversion of LIBOR Loans/Capital/Lessor Amounts
in accordance with Section 13.7 or 13.8 on a day other than a Rent Payment
Date; provided, however, that the Lessee shall
have no obligation to make any payment to any demanding party under this
Section 13.10 on account of any such costs or losses unless the Lessee receives
notice of such costs or losses from the demanding party within six (6) months
after they are incurred or realized.  The
Lessee understands that such costs and losses may include, without limitation,
losses incurred by an Affected Party as a result of funding, hedging and other
contracts entered into by such Affected Party to fund a Loan, Purchased
Interests or Lessor Amount.  Each
Affected Party demanding payment under this Section 13.10 shall deliver to
the Lessee, with a copy to the Administrative Agent, a certificate setting
forth the amount of costs and losses for which demand is made, which
certificate shall set forth in reasonable detail the calculation of the amount
demanded.  Such a certificate so
delivered to the Lessee shall constitute prima facie
evidence of such costs and losses.  This
covenant shall survive the termination of this Participation Agreement and the
other Operative Documents and the payment of the Loans, Purchased Interests,
Lessor Amounts and all other amounts payable under the Operative Documents.

SECTION 13.11.   Capital Requirements.  If, after the date of this Participation
Agreement, any Affected Party determines that (i) any Change of Law affects the
amount of capital required or expected to be maintained by such Affected Party
or any Person controlling such Lender (a “Capital Adequacy
Requirement”) and (ii) the amount of capital maintained by such
Affected Party or such Person that is attributable to or based upon the Loans,
Purchased Interests or Lessor Amounts, the Commitments or this Participation
Agreement or any other Operative Document must be increased as a result of such
Capital Adequacy Requirement (taking into account such Affected Party’s or such
Person’s policies with respect to capital adequacy), the Lessee shall pay to
such Affected Party or such Person, within five (5) Business Days after demand
of such Affected Party, such amounts as such Affected Party or such Person
shall determine are necessary to compensate such Affected Party or such Person
for the increased costs to such Affected Party or such Person of such increased
capital; provided, however, that the Lessee shall
have no obligation to make any payment to any demanding party under this
Section 13.11 on account of any such increased costs unless the Lessee receives
notice of such increased costs from the demanding party within six (6) months
after they are incurred or realized.  A
certificate setting forth in reasonable detail the amount of such increased
costs, submitted by any Affected Party to the Lessee shall constitute prima facie evidence of such costs.  The obligations of the Lessee under this
Section 13.11 shall survive the termination of this Participation Agreement and
the other Operative Documents and the payment of the Loans, Purchased
Interests, Lessor Amounts and all other amounts payable under the Operative
Documents.

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SECTION 13.12.   Mitigation.  Any Participant that becomes aware of (i) any
Change of Law that will make it unlawful or impossible for such Participant to
make or maintain any Loan, Purchased Interest or Lessor Amount or (ii) any
Change of Law or other event or condition that will obligate the Lessee to pay
any amount pursuant to Section 13.9 or Section 13.11 shall notify the Lessee
and the Administrative Agent thereof as promptly as practical.  If any Participant has given notice of any
such Change of Law or other event or condition and thereafter becomes aware
that such Change of Law or other event or condition has ceased to exist, such
Participant shall notify the Lessee and the Administrative Agent thereof as
promptly as practical.  Each Participant
affected by any Change of Law that makes it unlawful or impossible for such
Participant to make or maintain any Loan, Purchased Interests or Lessor Amount
or to which the Lessee is obligated to pay any amount pursuant to Section 13.9
or Section 13.11 shall use reasonable commercial efforts (including changing
the jurisdiction of its Applicable Funding Office) to avoid the effect of such
Change of Law or to avoid or materially reduce any amounts which the Lessee is
obligated to pay pursuant to Section 13.9 or Section 13.11 if, in the
reasonable opinion of such Participant, such efforts would not be
disadvantageous to such Participant or contrary to such Participant’s normal
practices.

SECTION 13.13.   Taxes on Payments.

(a)           Payments Free of Taxes.

(i)            All payments made by the Lessee
under this Participation Agreement and the other Operative Documents shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income (but excluding those Taxes described in
clause (i) and (ii) of the definition of Impositions), excise, stamp,
transfer or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever (including interest and penalties) now
or hereafter imposed (the “Withholding Taxes”)
by any Governmental Authority or taxing authority domestic or foreign (the “Taxing Authority”), whether or not such Withholding Taxes
were correctly or legally asserted.  If
any Withholding Taxes are required to be withheld or deducted from any amounts
payable to, or for the benefit of, any Tax Indemnitee or any Affiliate thereof
under this Participation Agreement or the other Operative Documents, the
amounts so payable to such Tax Indemnitee shall be increased to the extent
necessary to yield on an After Tax Basis such amounts payable under this
Participation Agreement and the other Operative Documents at the rates or in
the amounts specified in this Participation Agreement and the other Operative
Documents.  Whenever any Withholding
Taxes are payable by the Lessee with respect to any payment to or for the
account of a particular Tax Indemnitee, as promptly as possible thereafter, the
Lessee shall send to such Tax Indemnitee a certified copy of an original
official receipt received by the Lessee showing payment thereof.  If the Lessee fails to pay any Withholding
Taxes when due to the appropriate taxing authority or fails to remit to the Tax
Indemnitee required receipts or other required documentary evidence, the Lessee
shall indemnify the Tax Indemnitee for any obligations that may become payable
by the Tax Indemnitee as a result of any such failure.

(ii)           All payments made by the Lessor under
this Participation Agreement and the other Operative Documents to any other Tax
Indemnitee shall be 

 55
 

made net of any
deduction or withholding for Withholding Taxes. 
If any Withholding Taxes are required to be withheld or deducted from
any amounts payable by the Lessor to, or for the benefit of, any other Tax
Indemnitee under this Participation Agreement or any other Operative Document,
then the Lessee shall indemnify and pay such Tax Indemnitee on an After Tax
Basis an amount necessary to yield such Tax Indemnitee (after payment of all
Withholding Taxes) such amounts payable under this Participation Agreement and
the other Operative Documents at the rates or in the amounts specified in this
Participation Agreement and the other Operative Documents.

(iii)          Moreover, if any Taxes (the “Indirect Withholding Taxes”) in the nature of Withholding
Taxes are directly asserted by any Taxing Authority against any of the
Participants with respect to any payment received by such Participant, such
Participant may pay such Taxes and the Lessee will pay to the Administrative
Agent for the benefit of such Participant, as Supplemental Rent, within fifteen
(15) Business Days after receipt of a written demand therefor accompanied by a
written statement describing in reasonable detail the amount so payable from
such Participant such additional amounts (including any interest, reasonable
costs or expenses and any penalties incurred in connection therewith) as are
necessary in order that on a fully After Tax Basis the net amount received by
such Person after the payment of such Indirect Withholding Taxes (including any
Taxes on such additional amount) shall equal the amount such Person would have
received had such Indirect Withholding Taxes not been asserted plus interest on such additional amounts at the Base Rate,
calculated (on the basis of actual days elapsed in a year of 360 days) from the
date of payment of such Indirect Withholding Taxes by such Purchaser to the
date of payment of such additional amounts by the Lessee.  If the Lessee fails to pay any such Indirect
Withholding Taxes as and when due to the appropriate Taxing Authority or fails
to remit to the Administrative Agent for the benefit of the relevant
Participant the required receipts or other required documentary evidence, then
the Lessee shall indemnify such Participant for any incremental Taxes (whether
or not constituting Withholding Taxes), interest, penalties and reasonable
expenses that may become payable by such Participant as a result of any such
failure.

(iv)          The obligations of the Lessee under
this Section 13.13(a) shall survive the termination of this Participation
Agreement and the other Operative Documents and the payment of the Loans,
Purchased Interests, Lessor Amounts and all other amounts payable under the
Operative Documents.

(b)           Withholding Exemption
Certificates.  On or prior to
the date of the initial Advance or, if such date does not occur within thirty
(30) days after the date of this Participation Agreement, by the end of such
30-day period, each Participant that is not organized under the laws of the
United States of America or a state or political subdivision thereof shall
deliver to the Lessee and the Administrative Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI (or successor
applicable form), as the case may be, certifying in each case that such
Participant is entitled to receive payments under this Participation Agreement
without deduction or withholding or with reduced deduction or withholding of
any United States federal income taxes. 
Each such Participant further agrees (i) promptly to notify the Lessee
and the Administrative Agent of any change of circumstances that would prevent
such Participant from receiving payments hereunder without any deduction or 

 56
 

withholding or with
reduced deduction or withholding of such taxes as indicated on the most recent
such certificate or other form previously delivered by such Participant and
(ii) if such Participant has not so notified the Lessee and the Administrative
Agent of any change of circumstances which would prevent such Participant from
receiving payments hereunder without any deduction or withholding or with
reduced deduction or withholding of taxes as indicated on the most recent such
certificate or other form previously delivered by such Participant, then on or
before the date that any certificate or other form delivered by such
Participant under this Section 13.13(b) expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent such
certificate or form previously delivered by such Participant, to deliver to the
Lessee and the Administrative Agent a new certificate or form, certifying that
such Participant is entitled to receive payments under the Operative Documents
without deduction or withholding or with reduced deduction or withholding of
such taxes. If any Participant fails to provide to the Lessee or the
Administrative Agent pursuant to this Section 13.13(b) (or, in the case of any
Person that becomes a Participant through an assignment by another Participant,
pursuant to Section 12.1) any certificates or other evidence required by such
provision to establish that such Participant is, at the time it becomes a
Participant hereunder, entitled to receive payments under the Operative
Documents without deduction or withholding or with reduced deduction or
withholding of any United States federal income taxes, such Participant shall
not be entitled to any indemnification under Section 13.13(a) for any
withholding taxes to the extent imposed on such Participant primarily as a
result of such failure.

(c)           Mitigation.  If the Administrative Agent or any
Participant claims any additional amounts to be payable to it pursuant to this
Section 13.13, such Person shall use reasonable commercial efforts to file any
certificate or document requested in writing by the Lessee (including copies of
Internal Revenue Service Form W-8BEN (or successor forms)) reflecting a reduced
rate of withholding or to change the jurisdiction of its Applicable Funding
Office if the making of such a filing or such change in the jurisdiction of its
Applicable Funding Office would avoid the need for or materially reduce the
amount of any such additional amounts which may thereafter accrue and if, in
the sole opinion of such Person, in the case of a change in the jurisdiction of
its Applicable Funding Office, such change would not be disadvantageous to such
Person or otherwise contrary to such Person’s normal banking practices.

(d)           Tax Returns.  Nothing contained in this Section 13.13 shall
require the Administrative Agent or any Participant (or any other Person) to
make available any of its Tax returns (or any other information relating to its
Taxes, which it deems to be confidential).

SECTION 13.14.   Survival.  The obligations of the Lessee under this
Article XIII shall survive the termination of this Participation Agreement and
the other Operative Documents and the payment of the Loans, Purchased
Interests, Lessor Amounts and all other amounts payable under the Operative
Documents.

ARTICLE XIV

PAYMENT OF CERTAIN EXPENSES

SECTION 14.1.   Payment of Costs and
Expenses.

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(a)           The Lessee shall pay, or cause to be
paid, from time to time all Transaction Expenses in respect of the Closing
Date.

(b)           The Lessee shall pay or cause to be
paid when due the Fees described in Section 4.7.  In addition, the Lessee shall pay or cause to
be paid, on demand, (i) all reasonable out-of-pocket expenses of the
Structuring Agent, the Administrative Agent, and the Participants (including
reasonable attorneys’ fees and legal expenses) incurred in connection with this
Participation Agreement and the other Operative Documents, (ii) all costs and
expenses (including reasonable attorneys’ fees and legal expenses) incurred by
the Administrative Agent or any Participant in entering into any future
amendments or supplements with respect to any of the Operative Documents,
whether or not such amendments or supplements are ultimately entered into, or
giving of waivers of consents hereto or thereto, (iii) all costs and expenses
(including reasonable attorneys’ fees and legal expenses) incurred by the
Administrative Agent or any Participant in connection with any purchase of the
Property by the Lessee, respectively, or any other Person in connection with
the purchase of the Property by the Lessee or any other Person pursuant to
Articles XVIII and XIX of the Lease and (iv) all costs and expenses (including
reasonable attorneys’ fees and legal expenses) incurred by any of the other
parties hereto in respect of (A) the enforcement of any of their rights or
remedies against the Lessee under any of the Operative Documents or (B) the
negotiation of any restructuring or “work-out” with
the Lessee, whether or not consummated, of any obligations of the Lessee under
the Operative Documents.

SECTION 14.2.   Brokers’ Fees and Stamp Taxes.  The Lessee shall pay during the Lease Term,
from the proceeds of the Advance or otherwise any brokers’ fees and any and all
stamp, transfer and other similar Taxes, fees and excises, if any, including
any interest and penalties, which are payable in connection with the
transactions contemplated by this Participation Agreement and the other
Operative Documents.

ARTICLE XV

THE ADMINISTRATIVE AGENT

SECTION 15.1.   Appointment.  Each Participant hereby irrevocably
designates and appoints the Administrative Agent as the agent of such
Participant under this Participation Agreement and the other Operative
Documents, and each such Participant irrevocably authorizes the Administrative
Agent, in such capacity, to take such action on its behalf under the provisions
of this Participation Agreement and the other Operative Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Participation Agreement and the other
Operative Documents, together with such other powers as are reasonably
incidental thereto.  Notwithstanding any
provision to the contrary elsewhere in this Participation Agreement, the
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein and in the other Operative Documents, or any
fiduciary relationship with any Participant or any other party to the Operative
Documents, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Participation Agreement or
any other Operative Document or otherwise exist against the Administrative
Agent.

 58
 

SECTION 15.2.   Delegation of Duties.  The Administrative Agent may execute any of
its duties under this Participation Agreement and the other Operative Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of its agents or attorneys-in-fact
selected by it with reasonable care.

SECTION 15.3.   Exculpatory Provisions.  Neither the Administrative Agent (in its
capacity as such) nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Participation Agreement or any other Operative Document, except for its or
such Person’s own willful misconduct or gross negligence (or negligence in the
handling of funds) or (b) responsible in any manner to any of the Participants
or any other party to the Operative Documents for any recitals, statements,
representations or warranties made by any Party or the Lessor or any officer of
any Party or the Lessor contained in this Participation Agreement or any other
Operative Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Participation Agreement or any other Operative
Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Participation Agreement or any other
Operative Document or for any failure of any Party or the Lessor to perform its
obligations hereunder or thereunder.  The
Administrative Agent shall not be under any obligation to any Participant or
any other party to the Operative Documents to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Participation Agreement or any other Operative Document, or to inspect
the properties, books or records of any Party.

SECTION 15.4.   Reliance by Administrative
Agent.  The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, Certificate, writing, resolution, notice, consent, certificate,
affidavit, letter, facsimile message, statement, order or other document or
other written communication believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Lessee), independent accountants and other experts selected by the
Administrative Agent.  The Administrative
Agent may deem and treat the payee of any Note or the holder of any Certificate
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been delivered to the Administrative
Agent in accordance with Section 12.1 of the Participation Agreement.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Participation Agreement
or any other Operative Document unless it shall first receive the advice or
concurrence of the Required Participants, or it shall first be indemnified to
its satisfaction by the applicable Participants against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Participation Agreement and the other Operative Documents in
accordance with a request of the Required Participants, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Participants and all future holders of the applicable Participations
(including their respective successors and assigns).

 59

SECTION 15.5.   Notice of Default.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Lease Default or Lease
Event of Default unless the Administrative Agent has received notice from any
Participant or the Lessor referring to this Participation Agreement or any
other Operative Document, describing such Lease Default or Lease Event of
Default and stating that such notice is a “notice of default.”  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall promptly give notice
thereof to the Participants, the Lessor and the Lessee.  The Administrative Agent shall take such
action with respect to such Lease Default or Lease Event of Default as shall be
directed by the Required Participants; provided, however,
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such default
or event of default as it shall deem advisable in the best interests of the
Participants.

SECTION 15.6.   Non-Reliance on Administrative
Agent and Other Participants. 
Each Participant expressly acknowledges that neither the Administrative
Agent, nor the Structuring Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates, has made any
representations or warranties to it and that no act by the Administrative Agent
or the Structuring Agent hereinafter taken, including any review of the affairs
of the Lessee or the Lessor, shall be deemed to constitute any representation
or warranty by the Administrative Agent or the Structuring Agent to any
Participant.  Each Participant represents
to the Administrative Agent and the Structuring Agent that it has,
independently and without reliance upon the Administrative Agent, the
Structuring Agent or the Lessor, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Lessee and the Lessor and made its own decision to
enter into this Participation Agreement. 
Each Participant also represents that it will, independently and without
reliance upon the Administrative Agent, the Structuring Agent or any other
Participant, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Participation Agreement
and the other Operative Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Lessee and the Lessor.  Except for notices, reports and other
documents expressly required to be furnished to the Participants by the
Administrative Agent hereunder, neither the Administrative Agent nor the
Structuring Agent shall have any duty or responsibility to provide any
Participant with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Lessee or the Lessor which may come into the possession
of the Administrative Agent, the Structuring Agent or any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

SECTION 15.7.   Indemnification.  The Administrative Agent agrees that it will
be entitled to indemnification with respect to the Operative Documents and the
transactions contemplated thereby solely from the Lessee and as contemplated by
Article XIII hereof.

SECTION 15.8.   Administrative Agent in Its
Individual Capacity.  Each
Participant acknowledges that KeyBank National Association is acting as the
Administrative Agent hereunder.  KeyBank
National Association and its Affiliates may make Participations to, issue 

 60
 

letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Lessee, the Lessor and their respective Affiliates as though
it was not the Administrative Agent hereunder and under the other Operative Documents
and without notice to or consent of the Participants.  Each Participant acknowledges that, pursuant
to such activities, KeyBank National Association or its Affiliates may receive
information regarding the Lessee, the Lessor or their respective Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Lessee, the Lessor or such Affiliates) and acknowledges that such
Persons shall be under no obligation to provide such information to them.

SECTION 15.9.   Successor Administrative Agent.  The Administrative Agent may resign as the
Administrative Agent upon twenty (20) Business Days’ notice to the Participants
and the Lessee provided, that no such
resignation shall take effect until the appointment, acceptance and
qualification of a successor Administrative Agent.  The Administrative Agent may be removed for
cause as the Administrative Agent upon twenty (20) Business Days’ notice to the
Administrative Agent and the Lessee from the Required Participants, which notice
shall specify the conduct constituting the cause for removal.  The Required Participants shall appoint from
among the Participants a successor Administrative Agent for the Participants
subject to prior approval by the Lessee (such approval not to be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall include such successor agent
effective upon its appointment, and the resigning or removed Administrative
Agent’s rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Participation Agreement.  After the retiring Administrative Agent’s
resignation or removal hereunder as the Administrative Agent, the provisions of
this Article XV shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under the Operative
Documents.  In the event of the
resignation, or removal, of the Administrative Agent if no successor shall have
been appointed and qualified within thirty (30) days, the resigning
Administrative Agent or any Lender may petition a court of competent
jurisdiction to appoint a successor.

SECTION 15.10.   Eligibility of the
Administrative Agent.  The
Administrative Agent shall at all times have a combined capital and surplus of
at least $100,000,000 (or a combined capital and surplus in excess of
$50,000,000 and the obligations of which, whether or not in existence or
hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States, any state or
territory thereof or the District of Columbia that has a combined capital and
surplus of at least $100,000,000).  If
such corporation publishes reports of condition at least annually, pursuant to
law or to requirements of Federal, State, Territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section
15.10, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
conditions so published.  The
Administrative Agent shall not be an Affiliate of the Lessee.

 61
 

ARTICLE XVI

MISCELLANEOUS

SECTION 16.1.   Survival of Agreements.  The representations, warranties, covenants,
indemnities and agreements of the parties provided for in the Operative
Documents, and the parties’ obligations under any and all thereof, shall
survive the execution and delivery of this Participation Agreement, the
transfer of any or all of the Property to the Lessee, the Lessor or any other
Person, the construction of any Improvements, any disposition of any interest
of the Lessor or any Participant in the Property or any Improvements and the
payment of the Obligations and any disposition thereof and shall be and
continue in effect notwithstanding any investigation made by any party and the
fact that any party may waive compliance with any of the other terms,
provisions or conditions of any of the Operative Documents.  Except as otherwise expressly set forth
herein or in the other Operative Documents, the indemnities of the parties provided
for in the Operative Documents shall survive the expiration or termination of
the Operative Documents.

SECTION 16.2.   No Broker, etc.  Each of the parties hereto represents to the
others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Participation Agreement or
the transactions contemplated herein or in the other Operative Documents, nor
has it authorized any broker, finder or financial adviser retained or employed
by any other Person so to act.  Any party
who is in breach of this representation shall indemnify and hold the other
parties harmless from and against any liability arising out of such breach of
this representation.

SECTION 16.3.   Notices.  Unless otherwise specifically provided
herein, all notices, consents, directions, approvals, instructions, requests
and other communications required or permitted by the terms hereof to be given
to any Person shall be given in writing by United States mail, by nationally
recognized courier service and any such notice shall become effective five (5)
Business Days after being deposited in the mails, certified or registered
return receipt requested with appropriate postage prepaid or one (1) Business
Day after delivery to a nationally recognized courier service specifying
overnight delivery and shall be directed to the address of such Person as
indicated on Schedule II.  From time to time any party may designate a
new address for purposes of notice hereunder by written notice to each of the
other parties hereto in accordance with this Section 16.3.

SECTION 16.4.   Counterparts.  This Participation Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument. 
Delivery of an executed counterpart hereof by facsimile or other
electronic means shall be equally effective as delivery of an originally
executed counterpart.

SECTION 16.5.   Amendments.

(a)           The provisions of this Participation
Agreement may, subject to the provisions of clause (b) below, from time to time
be amended, modified or waived, provided, however,
that such amendment, modification or waiver is in writing and consented to by
the Lessee, the Lessor, and, subject to the limitations of Section 16.16
hereof, the Required Lenders and the Required Purchasers.

 62
 

(b)           Neither any Operative Document nor
any of the terms thereof may be terminated (except upon payment in full of the
Property Cost and accrued Basic Rent and all other amounts due and owing by the
Lessee under the Operative Documents, or effective exercise and consummation of
the Remarketing Option in accordance with Article XX of the Lease and payment
in full of all amounts due in accordance therewith), amended, supplemented,
waived or modified without the written agreement or consent of the Required
Participants (regardless of whether the Lenders and the Lessor are parties
thereto); provided, however, that:

(i)            no such termination, amendment,
supplement, waiver or modification shall without written agreement or consent
of each Participant (A) modify any of the provisions of this Section 16.5 or
Section 16.16, (B) change the definition of “Required Participants,”
(C) modify or waive any requirement under any Operative Document that any
particular action be taken by all Participants, (D) extend the Expiration Date
or Scheduled Lease Term Termination Date (except as expressly provided for
herein), (E) amend, modify, waive or supplement any of the provisions of
Article VII of this Participation Agreement, (F) reduce, modify, amend or waive
any Fees, other fees or indemnities in favor of any Participant, including
without limitation amounts payable pursuant to Section 4.7 and Article XIII
(except that any Person may consent to any reduction, modification, amendment
or waiver of any Fee or other fee or indemnity payable to it), (G) modify,
postpone, reduce or forgive, in whole or in part, any payment of Rent (other than
pursuant to the terms of any Operative Document), any Loan, Purchased Interests
or Lessor Amount, Property Cost, Maximum Recourse Amount, Purchase Price,
amounts due pursuant to Article XX of the Lease, interest, Return or Yield or,
subject to clause (D) above, any other amount payable under the Lease or this
Participation Agreement, (H) modify the definition or method of calculation of
Rent (other than pursuant to the terms of any Operative Document), Loans,
Purchased Interests or Lessor Amounts, Property Cost, Maximum Recourse Amount,
Fees, Shortfall Amount, Participant Balance or any other definition which would
affect the amounts to be advanced or which are payable under the Operative
Documents, (I) release the Lessee from its Obligations under the Operative
Documents or permit any assignment of the Lease by the Lessee releasing the
Lessee from its Obligations under the Operative Documents or changing the
absolute and unconditional character of such obligations, in each case, except
as expressly permitted by the Operative Documents, or (J) except as expressly
permitted or required under the Operative Documents, release the Property from
the Lien of the Lessor Mortgage or release or terminate any UCC Financing
Statements covering the Property or any other Collateral;

(ii)           no such termination, amendment,
supplement, waiver or modification shall, without the written agreement or
consent of each Lender (but subject at all times to the terms of Section 16.16
hereof), (A) change the definition of “Required Lenders,”
(B) modify or waive any requirement under any Operative Document that any
particular action be taken by all Lenders, or (C) extend the Expiration Date
(except as expressly provided for herein);

 63
 

(iii)          no such termination, amendment,
supplement, waiver or modification shall, without the written agreement or
consent of each Purchaser (but subject at all times to the terms of Section
16.16 hereof), (A) change the definition of “Required Purchasers,”
(B) modify or waive any requirement under any Operative Document that any
particular action be taken by all Purchasers, or (C) extend the Expiration Date
(except as expressly provided for herein);

(iv)          no such termination, amendment,
supplement, waiver or modification shall, without written agreement or consent
of the Lessor, (A) modify or waive any requirement under any Operative Document
that any particular action be taken by or consented to by the Lessor,
(B) extend the Scheduled Lease Term Termination Date (except as expressly
provided for herein), or (C) amend, modify, waive or supplement the Loan
Agreement, the Receivables Purchase Agreement, the Lease, or the Ground Lease
(it being understood that the Lessor may condition any such written agreement
or consent on the receipt of the written consent of the Ground Lessor to such
termination, amendment, supplement, waiver or modification);

(v)           no such termination, amendment,
supplement, waiver or modification that would increase the obligations of the
Lessee thereunder or deprive the Lessee of any of its rights thereunder or
alter the rights of the Lessee to its detriment shall be effective against the
Lessee without the written agreement or consent of the Lessee; and

(vi)          no such termination, amendment,
supplement, waiver or modification shall be made to any provision of Article XV
without the written agreement or consent of the Administrative Agent.

SECTION 16.6.   Headings, etc.  The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.

SECTION 16.7.   Parties in Interest.  Except as expressly provided herein, none of
the provisions of this Participation Agreement is intended for the benefit of
any Person except the parties hereto. 
The Lessee shall not assign or transfer any of its rights or obligations
under the Operative Documents except in accordance with the terms and
conditions thereof.

SECTION 16.8.   GOVERNING LAW.  THIS PARTICIPATION AGREEMENT AND THE OTHER
OPERATIVE DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA.

SECTION 16.9.   Severability.  Any provision of this Participation 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.

 64
 

SECTION 16.10.   Liability Limited.

(a)           The parties hereto agree that except
as specifically set forth herein or in any other Operative Document, the Lessor
shall have no personal liability whatsoever to any other Participant, the
Lessee or their respective successors and assigns for any claim or obligation
based on or in respect hereof or any of the other Operative Documents
(including, without limitation, the repayment of the Loans) or arising in any
way from the transactions contemplated hereby or thereby and recourse, if any,
shall be solely had against the Lessor’s interest in the Property or from
payments (other than payments due to the Lessor with respect to indemnities,
reimbursement of expenses or fees, in each case payable to the Lessor for its
own account) received from the Lessee (it being acknowledged and agreed by each
party hereto that all such personal liability of the Lessor is expressly waived
and released as a condition of, and as consideration for, the execution and
delivery of the Operative Documents by the Lessor); provided,
however, that the Lessor shall be liable in its individual capacity
(i) for its own willful misconduct or gross negligence, (ii) for breach of its
representations set forth in Section 8.3, (iii) for any Lessor Lien
attributable to it and (iv) for any Tax based on or measured by any fees,
commission or compensation received by it for acting as the Lessor as
contemplated by the Operative Documents. 
It is understood and agreed that the Lessor shall have no personal
liability under any of the Operative Documents as a result of acting pursuant
to and consistent with any of the Operative Documents.

(b)           No Participant shall have any
obligation to the other Participant or to the Lessee with respect to
transactions contemplated by the Operative Documents, except those obligations
of such Participant expressly set forth in the Operative Documents or except as
set forth in the instruments delivered in connection therewith, and no
Participant shall be liable for performance by any other party hereto of such
other party’s obligations under the Operative Documents except as otherwise so
set forth.

(c)           The obligations of the parties under
this Section 16.10 shall survive the termination of this Participation
Agreement.

SECTION 16.11.   Further Assurances.  The parties hereto shall promptly cause to be
taken, executed, acknowledged or delivered, at the sole expense of the Lessee,
all such further acts, conveyances, documents and assurances as the other
parties may from time to time reasonably request in order to carry out and
preserve the security interests and liens (and the priority thereof) intended
to be created pursuant to this Participation Agreement, the other Operative
Documents, and the transactions thereunder (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties
hereto may from time to time request to be filed or effected).  The Lessee, at its own expense and without
need of any prior request from any other party, shall take such action as may
be necessary (including any action specified in the preceding sentence), or as
so requested, in order to maintain and protect all security interests provided
for hereunder or under any other Operative Document.

SECTION 16.12.   SUBMISSION TO JURISDICTION.  EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF CALIFORNIA FOR PURPOSES 

 65
 

OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR ANY OF THE OTHER
OPERATIVE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

SECTION 16.13.   Setoff.  Each Participant and the Administrative Agent
shall, upon the occurrence of any Lease Event of Default, have the right to
appropriate and, subject to Section 7.12 and Section 13.1 hereof,
apply to the payment of the Lessee’s obligations under the Lease as security
for the payment of such obligations, any and all balances, credits, deposits,
accounts or moneys of the Lessee then or thereafter maintained with such
Participant or the Administrative Agent. 
The rights of the Participants and the Administrative Agent under this
Section are in addition to other rights and remedies (including other rights of
setoff under applicable law or otherwise) which such Person may have.

SECTION 16.14.   WAIVER OF JURY TRIAL.  THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS 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 PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY OF THE PARTIES HERETO.  THE PARTIES
HERETO HEREBY AGREE THAT THEY WILL NOT SEEK TO CONSOLIDATE ANY SUCH LITIGATION
WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL HAS NOT OR CANNOT BE
WAIVED.  THE PROVISIONS OF THIS
SECTION 16.14 HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL
BE SUBJECT TO NO EXCEPTIONS.  LESSEE
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER OPERATIVE DOCUMENT
TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
EACH OF THE PARTICIPANTS ENTERING INTO THIS PARTICIPATION AGREEMENT AND EACH
SUCH OTHER OPERATIVE DOCUMENT.

SECTION 16.15.   Special Provisions re Sales of
Receivables.  Notwithstanding
anything else to the contrary in any of the Operative Documents, the following
provisions shall apply with respect to the Purchased Interests:

(a)           All
purchases hereunder (and under the Receivables Purchase Agreement) shall be
made without recourse, but shall be made pursuant to, and in reliance upon, the
representations, warranties and
covenants of the Lessor set forth in this Participation Agreement and each
other Operative Document.  No obligation
or liability to the Lessee on any Purchased Interest is intended to be assumed
by the Purchaser hereunder, and any such assumption is expressly disclaimed.  The Lessor will not claim any ownership
interest in the Purchased Interests and each Purchaser is assuming all risks of
credit loss associated with the Purchased Interests.

 66
 

(b)           It
is the express intent of the parties hereto that the transfers of the Purchased
Interests by the Lessor to the Purchasers, as contemplated by this
Participation Agreement and the Receivables Purchase Agreement be, and be
treated as, sales and not as loans secured by the Purchased Interests.  If, however, notwithstanding the intent of
the parties, such transactions are deemed to be loans, Lessor hereby grants to
the Administrative Agent (for the benefit of each Purchaser) a first priority
security interest in all of such Lessor’s right, title and interest in and to
the Purchased Interests now existing and hereafter created by the Lessor, all
Purchaser Basic Rent, all Supplemental Rent owing to any Purchaser and all
amounts received with respect thereto, and all proceeds thereof, to secure all
of such Lessor’s obligations hereunder.

(c)           The
Purchasers shall have no obligation to account for, to replace, to substitute
or to return any Purchased Interest (or portion thereof) to the Lessor.  Subject to Applicable Law the Purchasers
shall have the unrestricted right to further assign, transfer, deliver,
hypothecate, subdivide or otherwise deal with the Purchased Interests on
whatever terms such Purchaser shall determine.

(d)           Each
sale made by the Lessor pursuant to this Participation Agreement and the
Receivables Purchase Agreement shall constitute a valid sale, transfer, and
assignment of Purchased Interests to the Purchasers, enforceable against
creditors of, and purchasers from, the Lessor and each such sale shall have
been made for “reasonably equivalent value”
(as such term is used under Section 548 of the Bankruptcy Code) and not
for or on account of “antecedent debt”
(as such term is used under Section 547 of the Bankruptcy Code) owed by
the Lessor to any Purchaser; and this Participation Agreement constitutes, and
each other Operative Document to be signed by the Lessor, when duly executed
and delivered, will constitute, a legal, valid and binding obligation of the
Lessor, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law.

(e)           The
Lessor shall also maintain and implement administrative and operating
procedures (including an ability to recreate records evidencing Purchased
Interests and Lease in the event of the destruction of the originals thereof),
and keep and maintain (or cause the Administrative Agent to keep and maintain)
all documents, books, records and other information reasonably necessary or
advisable for the identification and collection of all Purchased Interests.

(f)            The
Lessor shall, at its expense, take, and shall cause to be taken, all action
necessary or desirable in the reasonable determination of the Purchasers to
establish and maintain a valid and enforceable ownership interest in the
Purchased Interests with respect thereto, in favor of Purchaser, including
taking such action to perfect, protect or more fully evidence the interest of
the Purchaser as the Purchaser may reasonably request.

 67
 

(g)           At
its expense, the Lessor shall mark its records relating to both the Purchased
Interests and the Lease, including with the following legend, or such other
marking reasonably acceptable to the Purchasers evidencing that the ownership
interests with regard to such Purchased Interests and the Lease have been sold
in accordance with the Receivables Purchase Agreement: “AN UNDIVIDED,
FRACTIONAL OWNERSHIP INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN
SOLD BY SELCO SERVICE CORPORATION TO [NAME OF APPLICABLE PURCHASER(S)] PURSUANT
TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF MARCH 26, 2007, AS AMENDED,
AMONG SELCO SERVICE CORPORATION, KEYBANK NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT AND KEYBANK NATIONAL ASSOCIATION, AS PURCHASER.”

SECTION 16.16.   Special Provisions re Sales of
Receivables to Lessee Parties. 
Notwithstanding anything else to the contrary in any of the Operative
Documents, with respect to any Purchased Interests or Loans held by any Lessee
Party, under no circumstances shall (a) such Lessee Party be entitled to offset
rights as set forth in Section 7.12 hereof, and (b) such Lessee Party’s Pro
Rata Shares be used in the calculation of “Required Lenders”,
“Required Purchasers” or “Required Participants” for purposes of directing remedies,
inspection rights, receiving or approving information, granting waivers,
consents, approvals or amendments at any time. 
In addition to the foregoing, neither the Administrative Agent, the
Lessor nor any other Participant shall have any fiduciary obligation to any
Lessee Party at any time, it being expressly acknowledged and agreed that the
Administrative Agent, the Lessor and each other Participant may deal with all
matters arising under the Operative Documents as if no Lessee Party was a
Participant.

SECTION 16.17. Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent and the
Participants 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 connection with
the exercise of any remedies hereunder or under any other Operative Document or
any action or proceeding relating to this Agreement or any other Operative
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 any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (g)
with the consent of the Lessee, 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 Participant or any
of their respective Affiliates on a nonconfidential basis from a source other
than the Lessee.

For
purposes of this Section, “Information” means all information received from the
Lessee or any Subsidiary relating to the Lessee or any Subsidiary or any of
their respective 

 68
 

businesses, other
than any such information that is available to the Administrative Agent or any
Participant on a nonconfidential basis prior to disclosure by the Lessee or any
Subsidiary, provided that, in the case of information received from the Lessee
or any 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 and the Participants acknowledges that (A) the Information
may include material non-public information concerning the Lessee 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 non-public information in accordance with applicable Law,
including Federal and state securities Laws.

[THE REMAINDER OF THIS PAGE HAS

BEEN INTENTIONALLY LEFT BLANK]

 69

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

	
  

  	
  ADOBE SYSTEMS INCORPORATED,

  
	
   

  	
  as Lessee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Mark Garrett

  	
   

  
	
   

  	
   

  	
  Mark Garrett

  
	
   

  	
   

  	
  Executive Vice
  President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  ADOBE SYSTEMS INCORPORATED,

  
	
   

  	
  as Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Mark Garrett

  	
   

  
	
   

  	
   

  	
  Mark Garrett

  
	
   

  	
   

  	
  Executive Vice
  President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  SELCO SERVICE
  CORPORATION

  
	
   

  	
  as Lessor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Raed Alfayoumi

  	
   

  
	
   

  	
   

  	
  Raed Alfayoumi

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
  as Adminstrative
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Raed Alfayoumi

  	
   

  
	
   

  	
   

  	
  Raed Alfayoumi

  
	
   

  	
   

  	
  Vice President

  

 

 70
 

 

	
  

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
  as Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Raed Alfayoumi

  	
   

  
	
   

  	
   

  	
  Raed Alfayoumi

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Raed Alfayoumi

  	
   

  
	
   

  	
   

  	
  Raed Alfayoumi

  
	
   

  	
   

  	
  Vice President

  

 

 71

EXECUTION

 

APPENDIX A

TO PARTICIPATION AGREEMENT

DEFINITIONS AND INTERPRETATION

Extension of Lease
Financing of Office Tower

Located in City of San Jose, Santa Clara County, California

for Adobe Systems Incorporated

 

A.            Interpretation.  In each Operative Document, unless a clear
contrary intention appears:

(i)            the singular number includes the
plural number and vice versa;

(ii)           reference to any Person includes such
Person’s successors and assigns but, if applicable, only if such successors and
assigns are permitted by the Operative Documents, and reference to a Person in
a particular capacity excludes such Person in any other capacity or
individually;

(iii)          reference to any gender includes each
other gender;

(iv)          reference to any agreement (including
any Operative Document or any attachment or schedule thereto), document or
instrument means such agreement (or attachment or schedule thereto), document
or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the other
Operative Documents; and reference to any promissory note includes any
promissory note which is an extension or renewal thereof or a substitute or
replacement therefor;

(v)           reference to any Applicable Law means
such Applicable Law as amended, modified, codified, replaced or reenacted, in
whole or in part, and in effect from time to time, including rules and
regulations promulgated thereunder and reference to any section or other
provision of any Applicable Law means that provision of such Applicable Law
from time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section or other
provision;

(vi)          reference in any Operative Document to
any Article, Section, Appendix, Schedule or Exhibit means such Article or
Section thereof or Appendix, Schedule or Exhibit thereto;

(vii)         “hereunder,”  “hereof,”  “hereto” and
words of similar import shall be deemed references to an Operative Document as
a whole and not to any particular Article, Section or other provision thereof;

 A-1
 

(viii)        “including”
(and with correlative meaning “include”)
means including without limiting the generality of any description preceding
such term; and

(ix)           with respect to any rights and
obligations of the parties under the Operative Documents, all such rights and
obligations shall be construed to the extent permitted by Applicable Law.

B.            Computation of Time
Periods.  For purposes of
computation of periods of time under the Operative Documents, the word “from” means “from and including”
and the words “to” and “until”
each mean “to but excluding”.

C.            Accounting Terms and
Determinations.  All terms of
an accounting or financial nature shall be interpreted, all accounting
determinations under the Operative Documents shall be made, and all financial
statements required to be delivered under the Operative Documents shall be
prepared, as set forth in Section 4.10 of the Participation Agreement.

D.            Conflict in Operative
Documents.  If there is any
conflict between any Operative Documents, such Operative Document shall be
interpreted and construed, if possible, so as to avoid or minimize such
conflict but, to the extent (and only to the extent) of such conflict, the
Participation Agreement shall prevail and control.

E.             Legal Representation of
the Parties.  The Operative
Documents were negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation otherwise
requiring the Operative Document to be construed or interpreted against any
party shall not apply to any construction or interpretation hereof or thereof.

F.             Defined Terms.  Unless a clear contrary intention appears,
terms defined herein have the respective indicated meanings when used in each
Operative Document.

“Acceptable Condition” means,
after the occurrence of any Casualty or Condemnation affecting the Property,
that the Property has been restored to substantially its condition as it
existed immediately prior to the applicable Casualty or Condemnation.

“Account” means the account
established with the Administrative Agent pursuant to which all payments by the
Lessee under the Operative Documents shall be made.  The Account shall be specified on
Schedule II to the Participation Agreement.

“Acquired
Entity” means (a) any Person that becomes a Subsidiary
of the Lessee as a result of an Acquisition or (b) any business entity or
division thereof, all or substantially all of the assets and business of which
are acquired by a Subsidiary of the Lessee pursuant to an Acquisition.

“Acquisition”
means any transaction or series of related transactions for the purpose of or
resulting, directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any business or division of
a Person (other than a Person that is a Subsidiary), (b) the acquisition
of in excess of 50% of the capital stock, partnership interests, membership
interests or equity of any Person (other than a Person that is a Subsidiary),
or otherwise causing 

 A-2
 

any Person to
become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary).

“Actual
Knowledge” means, with respect to any information or event,
that a Responsible Officer of the Lessee has, or with the exercise of
reasonable care and diligence would have, actual knowledge of such information
or event.

“Administrative Agent” means
KeyBank National Association, as Administrative Agent for the Participants,
together with its successors and assigns (including any successor
administrative agent pursuant to Section 15.9 of the Participation
Agreement).

“Adobe VC
Partnerships” means Adobe Ventures, L.P., Adobe
Ventures II, L.P., Adobe Ventures III, L.P., Adobe Ventures IV,
L.P. and any other venture capital partnership in which all of the limited
partners are the Lessee, its Subsidiaries, its Affiliates or employees of the
Lessee or its Subsidiaries, provided, that
at the time a venture capital investment is made in any Person, such Person
either operates or is expected to operate in an industry related to the
business operations of the Lessee or its Subsidiaries (including Persons which
possess or may possess technologies, sales and services capabilities,
operations or content related to any product of the Lessee or its Subsidiaries)
or has been identified by the Lessee as a candidate for a strategic
relationship with the Lessee or its Subsidiaries.

“Advance” means an advance of
funds by the Lessor (including Lessor Amounts and any sums advanced to Lessor
by Lenders or Purchasers) pursuant to Article III of the Participation
Agreement.

“Affected Party” means any
Participant.

“Affiliate” means, with respect
to any Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.

“After Tax Basis” means, with
respect to any payment to be received or accrued by a Person (“base payment”), the sum of (a) the amount of such base
payment plus (b) a further payment, if
necessary, to such Person such that after reduction for all Taxes imposed on
such Person as a result of the receipt or accrual of both the base payment and
such further payments, such Person receives a net amount equal to the base
payment otherwise required to be made.

“Aggregate Commitment Amount”
means $103,600,000.

“Applicable Funding Office”
means, with respect to any Participant, (a) in the case of its Base Rate
Loans/Capital/Lessor Amounts, its Domestic Funding Office, and (b) in the
case of its LIBOR Loans/Capital/Lessor Amounts, its Euro-Dollar Funding Office.

 A-3
 

“Applicable Capital Margin”
means, with respect to any Purchased Interests having a Return Rate determined
by reference to the BBA LIBO Rate, the percentage per annum set forth in
the table below based on the Pricing Level in effect on such date:

	
  Consolidated Leverage Ratio

  	
   

  	
  Applicable

  Capital Margin

  	
   

  
	
  Less than or
  equal to 0.50 to 1.00

  	
   

  	
  0.40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to 1.00 to 1.00 

  and Greater than
  0.50 to 1.00

  	
   

  	
  0.525

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to 1.50 to 1.00 

  and Greater than
  1.00 to 1.00

  	
   

  	
  0.65

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to 2.00 to 1.00 

  and Greater than
  1.50 to 1.00

  	
   

  	
  0.775

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 2.00 to
  1.00

  	
   

  	
  0.90

  	
  %

  

 

Provided,
however, that if any Capital or Purchased Interests are held
by a Lessee Party then the Applicable Capital Margin with respect to such
Lessee Party is 0.25%.

“Applicable Law” means all
existing and future applicable laws, rules, regulations (including Environmental
Laws), statutes, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by, any Governmental Authority, and applicable
judgments, decrees, injunctions, writs, orders or like action of any court,
administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction (including those pertaining to health, safety or the environment
(including, without limitation, wetlands) and those pertaining to the zoning,
construction, use or occupancy of the Property) or in each case affecting the
Lessee, a Tax Indemnitee, an Indemnitee, the Property or any material interests
in any other kind of property or asset, whether real, personal or mixed, or
tangible or intangible, of the Lessee.

“Applicable Loan Margin” means,
with respect to any Loan having an Interest Rate determined by reference to the
BBA LIBO Rate, the percentage per annum set forth in the table below based
on the Pricing Level in effect on such date:

	
  Consolidated Leverage Ratio

  	
   

  	
  Applicable

  Loan Margin

  	
   

  
	
  Less than or
  equal to 0.50 to 1.00

  	
   

  	
  0.40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to 1.00 to 1.00 

  and Greater than
  0.50 to 1.00

  	
   

  	
  0.525

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to 1.50 to 1.00 

  and Greater than
  1.00 to 1.00

  	
   

  	
  0.65

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to 2.00 to 1.00 

  and Greater than
  1.50 to 1.00

  	
   

  	
  0.775

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 2.00 to
  1.00

  	
   

  	
  0.90

  	
  %

  

 

“Appraisal” means an appraisal of
the Property by the Appraiser, which Appraisal complies in all material
respects with all of the provisions of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, the rules and regulations
adopted pursuant 

 A-4
 

thereto, and all other Applicable Law addressed to the
Lessor and the Administrative Agent and which appraises the Fair Market Sales
Value of the Property as of the Expiration Date (or such other date as Lessor
and Administrative Agent shall agree).

“Appraiser” means an appraiser
(MAI) selected by the Lessor and the Administrative Agent.

“Appurtenant Rights” means, with
respect to the Land, (i) all agreements, easements, rights of way or use,
rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to the Land or the Improvements thereon, including, without limitation, the use
of any streets, ways, alleys, vaults or strips of land adjoining, abutting,
adjacent or contiguous to the Land and (ii) all permits, licenses and
rights, whether or not of record, appurtenant to the Land.

“Assigned Agreement” is defined
in Section 2.1(a) of the Security and Assignment Agreement.

“Assignment of Lease and Rent”
means the Assignment of Lease and Rent and dated as of the date of the
Participation Agreement, from the Lessor, as assignor, to the Administrative
Agent, as assignee.

“Attributable
Indebtedness” means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease
that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease, net
of amounts owing directly or indirectly to such Person.

“Audited
Financial Statements” means the audited consolidated balance
sheet of the Lessee and its Subsidiaries for the fiscal year ended
December 1, 2006, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year of the
Company and its Subsidiaries, including the notes thereto.

“Authorized Officer” means any
officer of the Lessee designated as such in writing to the Administrative Agent
by the Lessee.

“Authorized Officer’s Certificate”
means, with respect to the Lessee, a certificate signed by any Authorized
Officer, which certificate shall certify as true and correct the subject matter
being certified to in such certificate.

“Base Rate” means, for any
period, a fluctuating interest rate per annum as shall be in effect from time
to time which rate per annum shall at all times be equal to the higher of
(a) the rate of interest established by the Administrative Agent at its
principal office, from time to time, as its prime rate, whether or not publicly
announced, which interest rate may or may not be the lowest rate charged by it
for commercial loans or other extensions of credit and (b) the sum of
(i) the Federal Funds Effective Rate plus
(ii) 1⁄2 of 1% per annum.

 A-5
 

“Base Rate Loan(s)/Capital/Lessor Amount(s)”
means a Loan, Capital or Lessor Amount, as the case may be, accruing interest,
Return or Yield at the Base Rate.

“Basic Rent” means, as determined
as of any Rent Payment Date, the amounts payable pursuant to Section 4.1
of the Participation Agreement.

“Basic Rent Period” means, with
respect to any Loan, Capital or Lessor Amount outstanding during the Lease
Term:

(i)            initially, the period commencing on
the day the Lease Term begins and ending on the last Business Day of the next
succeeding month; and

(ii)           thereafter, each period commencing on
the day after the last day of the preceding Basic Rent Period applicable to
such Loan, Capital or Lessor Amount and ending on the date occurring one
(1) month thereafter.

The
foregoing provisions relating to Basic Rent Periods are subject to the
following:

(1)           if any Basic Rent Period would
otherwise end on a day that is not a Business Day, such Basic Rent Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Basic Rent Period into another calendar month
in which event such Basic Rent Period shall end on the immediately preceding
Business Day; and

(2)           any Basic Rent Period that would
otherwise extend beyond the Expiration Date shall end on the Expiration Date.

“BBA LIBO Rate” means, with
respect to any Basic Rent Period for any LIBOR Loan/Capital/Lessor Amount, a
rate per annum equal to the quotient (rounded upward if necessary to the
nearest 1/100 of one percent) of:

(a)           the arithmetic mean (rounded upward
if necessary to the nearest 1/100 of one percent) of the rates per annum
appearing (i) on the British Bankers’ Association internet web page
(www.bba.org.uk/businesses/), or via (ii) Reuters (BBALIBORS), Bloomberg,
Bridge Telerate (Page 3750), or any other information provider of the British
Bankers’ Association daily Libor rates on the second Business Day prior to the
first day of such Basic Rent Period at or about 11:00 a.m. (London time)
(for delivery on the first day of such Basic Rent Period) for a term comparable
to such Basic Rent Period;

divided
by

(b)           One minus
the Reserve Requirement for such LIBOR Loan/Capital/Lessor Amount in effect
from time to time.

If,
for any reason, the BBA LIBO Rate is not available from the aforementioned
sources for any Basic Rent Period, the Administrative Agent shall determine the
BBA LIBO Rate for such Basic Rent Period based upon the Reference Bank Rate.

 A-6
 

“Break Costs” means any amounts
due and payable by the Lessee pursuant to Section 13.10 of the
Participation Agreement.

“Business Day” means any day on
which (a) commercial banks are not authorized or required to close in San
Francisco, California or New York, New York and (b) if such Business Day
is related to a LIBOR Loan/Capital/Lessor Amount, dealings in Dollar deposits
are carried out in the London interbank market.

“Capital” means the amount paid
to the Lessor in respect of the Purchased Interests by the Purchasers pursuant
to the Participation Agreement and the Receivables Purchase Agreement.

“Capital Adequacy Requirement” is
defined in Section 13.11 of the Participation Agreement.

“Casualty” means any damage or
destruction of all or any portion of the Property as a result of a fire, flood,
earthquake or other casualty or catastrophe.

“Certificate” is defined in
Section 2.3 of the Receivables Purchase Agreement.

“Certifying Party” is defined in
Section 21.1 of the Lease.

“Change of Law” is defined in
Section 13.7 of the Participation Agreement.

“Claims” means any and all
obligations, liabilities, losses, actions, suits, judgments, penalties, fines,
claims, demands, settlements, costs and expenses (including, without
limitation, reasonable legal fees and expenses) of any nature whatsoever.

“Closing Date” means the date,
which date shall be a Business Day on which each of the conditions precedent
set forth in Section 6.1 of the Participation Agreement have been
satisfied or waived by the applicable parties set forth therein.

“Code” means the Internal Revenue
Code of 1986, as amended from time to time, and the regulations promulgated and
the rulings issued thereunder.  Section
references to the Code are to the Code, as in effect at the Closing Date and
any subsequent provisions of the Code, amendatory thereof, supplemental thereto
or substituted therefor.

“Collateral” is defined in
Section 2.1 of the Security and Assignment Agreement.

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

“Condemnation” means, with
respect to the Property, any condemnation, requisition, confiscation, seizure
or other taking or sale of the use, access, occupancy, easement rights or title
to the Property or any part thereof, wholly or partially (temporarily or
permanently), by or on account of any actual or threatened eminent domain
proceeding or other taking of action by any Person having the power of eminent
domain, including an action by a Governmental Authority to change the grade of,
or widen the streets adjacent to, the Property or alter the pedestrian or 

 A-7
 

vehicular traffic flow to the Property so as to result
in change in access to the Property (such that there is a material adverse
effect on the operation of the Property), or by or on account of an eviction by
paramount title or any transfer made in lieu of any such proceeding or
action.  A “Condemnation”
shall be deemed to have occurred on the earliest of the dates that use,
occupancy or title vests in the condemning authority.

“Consolidated EBITDA” means, for
any period, for the Lessee and its Subsidiaries on a consolidated basis, an
amount equal to Consolidated Net Income for such period plus
(a) the following to the extent deducted in calculating such Consolidated
Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for Federal, state, local and foreign income taxes
payable by the Lessee and its Subsidiaries for such period,
(iii) depreciation and amortization expense and (iv) expenses of the
Lessee and its Subsidiaries reducing such Consolidated Net Income which do not
represent a cash item in such period or any future period, and minus (b) the following to the extent included in
calculating such Consolidated Net Income: (i) Federal, state, local and
foreign income tax credits of the Lessee and its Subsidiaries for such period
and (ii) all non-cash items increasing Consolidated Net Income for such
period; provided, however, that solely for the
purpose of the computations of the Consolidated Leverage Ratio, if there has
occurred an Acquisition during the relevant period, Consolidated EBITDA shall
be calculated, at the option of the Lessee on a pro forma
basis in accordance with the SEC pro forma reporting rules under the Exchange
Act, as if such Acquisition occurred on the first day of the applicable period.

“Consolidated Funded Indebtedness”
means, as of any date of determination, for the Lessee and its Subsidiaries on
a consolidated basis, the sum of (a) the outstanding principal amount of
all obligations, whether current or long-term, for borrowed money (including
Obligations hereunder) and all obligations evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, (b) all purchase
money Indebtedness, (c) all direct obligations arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, (d) all obligations in
respect of the deferred purchase price of property or services (other than
trade accounts payable in the ordinary course of business),
(e) Attributable Indebtedness in respect of capital leases and Synthetic
Lease Obligations, (f) without duplication, all Guarantees with respect to
outstanding Indebtedness of the types specified in clauses (a) through (e)
above of Persons other than the Lessee or any Subsidiary, and (g) all
Indebtedness of the types referred to in clauses (a) through (f) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Lessee or a Subsidiary
is a general partner or joint venturer, unless such Indebtedness is expressly
made non-recourse to the Lessee or such Subsidiary.

“Consolidated Interest Charges”
means, for any period, for the Lessee and its Subsidiaries on a consolidated
basis, the sum of (a) all interest, premium payments, debt discount, fees,
charges and related expenses of the Lessee and its Subsidiaries in connection
with borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, (b) the portion of rent expense of the
Lessee and its Subsidiaries with respect to such period under capital leases
that is treated as interest in accordance with GAAP, and (c) the portion
of rent expense of the Lessee and its Subsidiaries with respect to such period
constituting Synthetic 

 A-8
 

Lease Obligations to the extent such expenses would be
treated as interest if such leases were capital leases under GAAP.

“Consolidated Leverage Ratio”
means, as of any date of determination, the ratio of (a) Consolidated
Funded Indebtedness as of such date to (b) Consolidated EBITDA for the
period of the four (4) fiscal quarters most recently ended.

“Consolidated Net Income” means,
for any period, for the Lessee and its Subsidiaries on a consolidated basis,
the net income of the Lessee and its Subsidiaries (excluding extraordinary
gains and extraordinary losses) for that period.

“Consolidated Tangible Net Worth”
means, as of any date of determination, for the Lessee and its Subsidiaries on
a consolidated basis, Shareholders’ Equity on that date minus
the Intangible Assets of the Lessee and its Subsidiaries on that date.

“Contingent Payments” means
amounts payable to the Administrative Agent or any Participant pursuant to
Article XIII of the Participation Agreement.

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

“Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.

“Deed” means a quitclaim, grant
or special warranty deed, as applicable, with respect to the real property
comprising the Property, in conformity with Applicable Law and appropriate for
recording with the applicable Governmental Authorities, conveying fee simple
title to the transferee thereunder.

“Default Rate” means,
(a) with respect to any Loan, any interest on any Loan, Fees or any other
amount (other than amounts described in clauses (b) or (c)), the Interest
Rate (including any Applicable Loan Margin) then in effect for such Loan, plus two percent (2%) or, if no Interest Rate is applicable,
whether in respect of interest or other amounts, then the Default Rate shall be
the Base Rate plus the Applicable Loan Margin plus two percent (2%), (b) with respect to any Capital
or Return, the Return Rate  (including any
Applicable Capital Margin) plus two
percent (2%), and (c) with respect to any Lessor Amount or Yield, the
Yield Rate plus two percent (2%).  In the event that the Default Rate collected
by any Participant is in violation of any usury or similar law, then the
Default Rate shall be reduced to the extent necessary to cause the Default Rate
to comply with any usury or similar law.

“Disposition”
or “Dispose” means the sale, transfer,
license, lease or other disposition (including any sale and leaseback
transaction) of any property by any Person, including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated therewith.

 A-9

“Dollars” and “$” mean dollars in lawful currency of the United States of
America.

“Domestic Funding Office”
means, with respect to any Participant, (a) initially, its office
designated as such on Schedule II
to the Participation Agreement (or, in the case of any such Participant that
becomes a Participant by an assignment pursuant to Section 12.1 of the
Participation Agreement, its office designated as such in the applicable
assignment agreement) and (b) subsequently, such other office or offices
as such Participant may designate to the Administrative Agent as the office at
which such Participant’s Base Rate Loans/Capital/Lessor Amounts will thereafter
be maintained and for the account of which all payments of (i) outstanding
principal of and interest on (in the case of Loans), or (ii) outstanding
Capital and Return on (in the case of Capital), or (iii) outstanding Lessor
Amounts and Yield on (in the case of Lessor Amounts) such Participant’s Base
Rate Loans/Capital/Lessor Amounts will thereafter be made.

“Domestic Subsidiary” means any
Subsidiary that is organized under the laws of any political subdivision of the
United States.

“Eligible Captive Insurance
Subsidiary” means a corporation that is a wholly-owned
Subsidiary, duly organized and existing under the law of any state of the
United States or the laws of Ireland, Bermuda, Cayman Islands or the British
Virgin Islands, the activities of which are limited by such Subsidiary’s
Organization Documents to those necessary to providing property insurance
coverage solely to the Lessee and its Subsidiaries; provided
(i) such Subsidiary at all times maintains adequate capital and solvency
(as specified by law applicable to insurance providers organized under the law
of such Subsidiary’s jurisdiction of organization), and (ii) such
Subsidiary is at all times duly licensed as an insurer under such law.

“End of the Term Report”
is defined in Section 13.2(a) of the Participation Agreement.

“Environmental Audit”
means a Phase One environmental site assessment (the scope and performance of
which meets or exceeds the then most current ASTM Standard Practice E1527 for
Environmental Site Assessments:  Phase
One Environmental Site Assessment Process) of the Property.

“Environmental Laws”
means the Clean Air Act, 42 U.S.C. Section 7401 et seq.;
the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901 et seq.;
the Comprehensive Environment Response, Compensation and Liability Act of 1980
(including the Superfund Amendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C. Section 9601 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, 29
U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. Section 11001 et seq.;
the Mine Safety and Health Act of 1977, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300 et seq.; and all other
Governmental Rules relating to the protection of human health and the
environment, including all Governmental Rules pertaining to the reporting,
licensing, permitting, transportation, storage, disposal, investigation or
remediation of emissions, discharges, releases, or threatened releases of
Hazardous Materials into the air, surface water, groundwater, or land, or
relating to the 

 A-10
 

manufacture, processing, distribution, use, treatment,
storage, disposal, transportation or handling of Hazardous Materials.

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

“Environmental Violation”
means, with respect to the Property, any activity, occurrence or condition that
violates or results in non-compliance with any Environmental Law.

“Equipment”
means all equipment, apparatus, furnishings, fittings and personal property of
every kind and nature whatsoever purchased, leased or otherwise acquired by the
Lessor and now or subsequently attached to, contained in or used or usable in
any way in connection with any operation or letting of the Property, including
but without limiting the generality of the foregoing, all conveyor equipment,
shelving, racking, sortation equipment, mobile material handling equipment,
screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs,
storm doors and windows, display cases, counters, furniture and furnishings,
heating, electrical, switch gear, uninterrupted power supply equipment,
mechanical equipment, lighting, switchboards, plumbing, ventilation, air
conditioning and air-cooling apparatus, refrigerating and incinerating
equipment, escalators, generators, elevators, loading and unloading equipment
and systems, stoves, ranges, laundry equipment, cleaning systems (including
window cleaning apparatus), telephones, communications systems (including
satellite dishes and antennae), televisions, computers, sprinkler systems and
other fire prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description.

“Equity Interests” means, with
respect to any Person, all of the shares of capital stock of (or other ownership
or profit interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in
such Person (including partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options, rights
or other interests are outstanding on any date of determination.

“ERISA” means the Employee
Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade
or business (whether or not incorporated) under common control with the Lessee
within the meaning of Section 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).

 A-11
 

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

“Euro-Dollar Funding Office”
means, with respect to any Participant, (a) initially, its office
designated as such on Schedule II
to the Participation Agreement (or, in the case of any such Participant that
becomes a Participant by an assignment pursuant to Section 12.1 of the
Participation Agreement, its office designated as such in the applicable
assignment agreement) and (b) subsequently, such other office or offices
as such Participant may designate to the Administrative Agent as the office at
which such Participant’s LIBOR Loans/Capital/Lessor Amounts will thereafter be
maintained and for the account of which all payments of outstanding principal
and interest on (in the case of Loans) or outstanding Lessor Amounts and Yield
on (in the case of Lessor Amounts) or outstanding Capital and Return on (in the
case of Capital) such Participant’s LIBOR Loans/Capital/Lessor Amounts will
thereafter be made.

“Event of Loss”
means any of the following:

(a)           a
Condemnation that: (i) involves a taking of the Lessor’s entire interest
in the Land or (ii) is likely to have a material adverse effect on the
Fair Market Sales Value, use or residual value of the Property, or

(b)           a
Casualty that is likely to have a material adverse effect on the Fair Market
Sales Value, use or residual value of the Property (unless the insurance
proceeds received in connection with such event are sufficient to repair and
restore the Property to an Acceptable Condition and such repair and restoration
could reasonably be expected to be completed prior to the Expiration Date).

“Excepted Payments”
is defined in Section 2(c)(i) of the Assignment of Lease and Rent.

“Excess Casualty/Condemnation
Proceeds” means at any time the excess, if any, of
(a) the aggregate of all awards, compensation or insurance proceeds
payable in connection with a Casualty or Condemnation minus
(b) the sum of the Property Cost then outstanding, all accrued and unpaid
Basic Rent and all accrued and unpaid Contingent Payments.

“Excess Sales Proceeds”
means the excess, if any, of (a) the aggregate of all proceeds received by
the Lessor in connection with the Lessee’s exercise of the Remarketing Option
under

 A-12
 

Article XX of the
Lease, less all fees, costs and expenses of the Lessor in connection with the
exercise of its rights and remedies thereunder, minus
(b) the outstanding Property Cost.

“Exempt Acquisitions” means
(i) an Acquisition of a Person that is subject to periodic reporting
obligations under the Securities Exchange Act of 1934, and (ii) an
Acquisition of a Person the total consideration of which (including cash and
non-cash consideration and the assumption of debt and other liabilities) does
not exceed $750 million.

“Existing Synthetic Leases” means
those leases relating to Synthetic Lease Obligations (a) entered into on
or about September 26, 2001 by and between the Lessee (as lessee) and SELCO
Service Corporation (as lessor), as amended (including, without limitation, as
contemplated by the Participation Agreement), and (b) evidenced by that certain
Second Amended and Restated Master Lease of Land and Improvements entered into
as of August 11, 2004, by and between SMBC Leasing and Finance, Inc. (as
lessor) and the Lessee (as lessee).

“Expiration Date”
means the earliest of (a) the Scheduled Lease Term Termination Date (as
the same may be extended pursuant to Article XI of the Participation
Agreement), or (b) any date on which the Lease shall have been terminated
in accordance with the provisions of the Lease or any of the other Operative
Documents.

“Fair Market Sales Value”
means, with respect to the Property, the amount, which in any event shall not
be less than zero, that would be paid in cash in an arm’s-length transaction
between an informed and willing purchaser and an informed and willing seller,
neither of whom is under any compulsion to purchase or sell, respectively, for
the ownership of the Property.

“Federal Funds Effective Rate”
means, for any day, an interest rate per annum equal to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three (3) federal
funds brokers of recognized standing selected by the Administrative Agent.

“Fees” is
defined in Section 4.7 of the Participation Agreement.

“Financial Statements”
means, with respect to any accounting period for any Person, statements of
income, shareholders’ equity and cash flows of such Person for such period, and
a balance sheet of such Person as of the end of such period, setting forth in
each case in comparative form figures for the corresponding periods in the
preceding fiscal year if such period is less than a full fiscal year or, if
such period is a full fiscal year, corresponding figures from the preceding
annual audit, all prepared in reasonable detail and in accordance with GAAP.

“Fixtures”
means all fixtures relating to the Improvements, including all components
thereof, located in or on the Improvements, together with all replacements,
modifications, alterations and additions thereto.

“Funding Office”
means the office of each Participant identified on Schedule II to the
Participation Agreement as its Funding Office.

 A-13
 

“Funding Request”
is defined in Section 3.5(a) of the Participation Agreement.

“GAAP” means generally accepted
accounting principles in the United States set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently
applied.

“Governmental Action”
means all permits, authorizations, registrations, consents, approvals, waivers,
exceptions, variances, orders, judgments, written interpretations, decrees,
licenses, exemptions, publications, filings, notices to and declarations of or
with, or required by, any Governmental Authority, or required by any Applicable
Law, and shall include, without limitation, all such environmental and
operating permits and licenses that are required for the use, occupancy, zoning
and operation of the Property as provided in the Lease.

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

“Governmental Charges”
means, with respect to any Person, all levies, assessments, fees, claims or
other charges imposed by any Governmental Authority upon such Person or any of
its property or otherwise payable by such Person.

“Governmental Rule”
means any law, rule, regulation, ordinance, order, code interpretation,
judgment, decree, directive, guidelines, policy or similar form of decision of
any Governmental Authority which is made publicly available.

“Ground Lease”
means that certain Ground Lease dated as of November 9, 2001, between the
Ground Lessor, as landlord thereunder, and the Lessor, as tenant thereunder,
with respect to the Land, as amended, modified or supplemented from time to
time.

“Ground Lessor”
means Redevelopment Agency of the City of San Jose, a public body, corporate
and politic, established pursuant to the Community Redevelopment Law of the
State of California (Health and Safety Code Section 33000 et seq.), together with its permitted successors and
assigns.

“Guarantee” means, as to any
Person, any (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or
lease property, securities or services for the purpose of assuring the obligee
in respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
or level of income or

 A-14
 

cash flow of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other obligation of the
payment or performance thereof or to protect such obligee against loss in respect
thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien).  The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith.  The
term “Guarantee” as a verb has a
corresponding meaning.

“Hazardous Activity”
means any activity, process, procedure or undertaking that (a) directly or
indirectly (i) produces, generates or creates any Hazardous Material;
(ii) causes or results in the Release of any Hazardous Material into the
environment (including air, water vapor, surface water, groundwater, drinking
water, land (including surface or subsurface), plant, aquatic and animal life);
or (iii) involves the containment or storage of any Hazardous Material;
and (b) is regulated as hazardous waste treatment, storage or disposal
within the meaning of any Environmental Law.

“Hazardous Materials”
means all pollutants, contaminants and other materials, substances and wastes
which are hazardous, toxic, caustic, harmful or dangerous to human health or
the environment, including petroleum and petroleum products and byproducts,
radioactive materials, asbestos, polychlorinated biphenyls and all materials,
substances and wastes which are classified or regulated as “hazardous,”
“toxic” or similar descriptions under
any Environmental Law.

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

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

(b)           all direct or
contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;

(c)           net obligations of
such Person under any Swap Contract;

(d)           all obligations of
such Person to pay the deferred purchase price of property or services (other
than trade accounts payable in the ordinary course of business and, in each
case, not past due for more than 60 days after the date on which such trade
account payable was created);

(e)           indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under

 A-15
 

conditional
sales or other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;

(f)            capital leases and
Synthetic Lease Obligations;

(g)           all obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Equity Interest in such Person or any other Person, valued,
in the case of a redeemable preferred interest, at the greater of its voluntary
or involuntary liquidation preference plus accrued and unpaid dividends; and

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

For all purposes hereof, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or a joint venturer, unless
such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.  The amount of
any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such
date.

“Impositions”
means any and all liabilities, losses, expenses and costs of any kind
whatsoever for fees, taxes, levies, imposts, duties, charges, assessments or
withholdings of any nature whatsoever imposed by any Governmental Authority and
any interest, penalties and other additions thereon (“Taxes”)
(including, without limitation, (a) real and personal property taxes,
including personal property taxes on any property covered by the Lease that is
classified by Governmental Authorities as personal property, and real estate or
ad valorem taxes in the nature of property taxes; (b) sales taxes, use
taxes and other similar taxes (including rent taxes and intangibles taxes);
(c) any excise taxes; (d) real estate transfer taxes, conveyance
taxes, mortgage taxes, intangible taxes, stamp taxes and documentary recording
taxes and fees; (e) taxes that are, or are in the nature of, franchise,
income, value added, privilege and doing business taxes, license and registration
fees; and (f) assessments on the Property, including all assessments for
public improvements or benefits (whether or not such improvements are commenced
or completed during the Lease Term), and in each case all interest, additions
to tax and penalties thereon), which at any time may be levied, assessed or
imposed by any Federal, state, local or foreign authority upon or with respect
to (i) any Tax Indemnitee, the Property or any part thereof, or interest
therein, or any adjacent property or parcel that is aggregated with the
Property or any part thereof for real estate tax and assessment purposes, or
the Lessee or any sublessee or user of the Property; (ii) the financing,
refinancing, demolition, construction, substitution, subleasing, assignment,
control, condition, occupancy, servicing, maintenance, repair, ownership,
possession, purchase, rental, lease, activity conducted on, delivery, insuring,
use, operation, improvement, transfer, return or other disposition of the
Property or any part thereof or interest therein; (iii) the Loans (and any
Notes), the Capital (and any Certificates), the Lessor Amounts or interest
therein or transfer thereof; (iv) the rentals, receipts or earnings
arising from the Property or any part thereof or interest therein; (v) the
Operative Documents or any payment made or accrued pursuant thereto;
(vi) the income or other proceeds received with respect to the Property or
any part thereof or interest therein upon the sale or disposition thereof;
(vii) any contract relating to the construction, acquisition or delivery of
the Improvements or any part

 A-16
 

thereof or interest
therein; (viii) the issuance of the Notes and the Certificates; or
(ix) otherwise in connection with the transactions contemplated by the
Operative Documents.

Notwithstanding anything
in the first paragraph of this definition (except as provided in the final
paragraph of this definition) the term “Impositions”
shall not mean or include:

(i)            Taxes
(other than Taxes that are, or are in the nature of, withholding, sales, use, rental,
value added transfer or property taxes) that are imposed by the U.S. federal
government and that are based upon or measured by or with respect to the net
income (including any minimum taxes, capital gains taxes, or taxes on, measured
by or with respect to or in the nature of capital, net worth, excess profits,
items of tax preference and capital stock); provided, that
this clause (i) shall not be interpreted to prevent a payment from being
made on an After Tax Basis if such payment is otherwise required to be so made
and provided, further, that Taxes described
in this clause (i) shall not include Taxes that are, or are in the nature
of, withholding sales, use, rental, value added, transfer or property taxes;

(ii)           Taxes
(other than Taxes that are, or are in the nature of, withholding, sales, use,
rental, value added, transfer or property taxes) that are (A) imposed by
any U.S. state jurisdiction or any taxing authority within any U.S. state
jurisdiction to the extent that such Tax Indemnitee is organized or has its
Applicable Funding Office and (B) based upon or measured by income, except
that this clause (ii) shall not apply to (and thus shall not exclude) any
such Taxes imposed on a Tax Indemnitee by a state or political subdivision
thereof where the Property is located, possessed or used under the Lease unless
the Tax Indemnitee was subject to income taxes in such jurisdiction without
regard to the transactions contemplated by the Operative Agreements; provided, that this clause (ii) shall not be interpreted
to prevent a payment from being made on an After Tax Basis if such payment is
otherwise required to be so made;

(iii)          any
Tax with respect to the Property to the extent, but only to such extent, it
relates to any act, event or omission that occurs, or relates to a period,
after the termination of the Lease and the payment of all Obligations, except
that when such termination of the Lease is the result of the exercise of
remedies after a Lease Event of Default, such exclusion shall commence only after
the sale of the Property (but not any Tax or Imposition that relates to any
period prior to the termination of the Lease);

(iv)          any
interest or penalties imposed on a Tax Indemnitee as a result of a Tax
Indemnitee’s failure to file any return or other documents timely and as
prescribed by Applicable Law; provided, that
this clause (iv) shall not apply (A) if such interest or penalties
arise as a result of a position taken (or requested to be taken) by the Lessee
in a contest controlled by the Lessee under Section 13.5(b) of the
Participation Agreement or (B) if such failure is attributable to a
failure by the Lessee to fulfill its obligations under the Participation
Agreement;

(v)           any
Taxes imposed upon a Tax Indemnitee with respect to any voluntary transfer,
sale, financing or other voluntary disposition of any interest in the Property
or any part thereof, or any interest therein or any interest or obligation
under the Operative

 A-17
 

Documents or from any sale, assignment, transfer or other disposition
of any interest in a Tax Indemnitee or any Affiliate thereof (other than any
transfer, sale or other disposition (A) pursuant to the terms of the
Operative Documents in connection with the exercise by the Lessee of its
Purchase Option, the Remarketing Option, or any termination option or other
purchase of the Property by the Lessee, (B) after the occurrence of a
Lease Event of Default, (C) in connection with a Casualty or Condemnation
affecting the Property, or (D) in connection with any sublease, modification
or addition to the Property by the Lessee);

(vi)          any
Taxes imposed against or payable by a Tax Indemnitee to the extent resulting
from, or that would not have been imposed but for, the gross negligence or
willful misconduct of such Tax Indemnitee;

(vii)         Taxes
imposed on or payable by a Tax Indemnitee to the extent such Taxes solely
result from, or would not have been imposed but for, a breach by such Tax
Indemnitee of any representations, warranties or covenants set forth in the
Operative Documents (unless such breach is caused by Lessee’s breach of its
representations, warranties or covenants set forth in the Operative Documents);

(viii)        Taxes
imposed on a Tax Indemnitee to the extent resulting from such Tax Indemnitee’s
failure to comply with the provisions of Section 13.5(b) of the
Participation Agreement, which failure precludes the ability to conduct a
contest pursuant to Section 13.5(b) of the Participation Agreement (unless
such failure is caused by Lessee’s breach of its obligations under the
Operative Documents);

(ix)           Taxes
that would have been imposed in the absence of the transactions contemplated by
the Operative Documents;

(x)            Taxes
imposed on or with respect to or payable by a Tax Indemnitee resulting from, or
that would not have been imposed but for the existence of, any Lessor Lien
created by or through such Tax Indemnitee or an Affiliate thereof, unless
caused by acts or omissions of Lessee; and

(xi)           Taxes
imposed on or with respect to or payable by a Tax Indemnitee that would not
have been imposed but for an amendment, supplement, modification, consent or
waiver to any Operative Document not initiated, requested or consented to by
Lessee, unless such amendment, supplement, modification, consent or waiver
(A) arises due to, or in connection with there having occurred, a Lease
Event of Default or (B) is required by the terms of the Operative
Documents or is executed in connection with any amendment to the Operative
Documents required by Applicable Law;

Notwithstanding the
foregoing, the exclusions from the definition of Impositions set forth in
clauses (i) through (xi)above and shall not apply to any Taxes or any
increase in Taxes imposed on a Tax Indemnitee to the extent that the imposition
of such Taxes or such tax increase would not have occurred if on the Closing
Date the Tax Indemnitees, collectively, had advanced funds to the Lessee in the
form of a loan secured by the Property in an amount equal to the Advance funded
on the Closing Date, with debt service for such loans equal to the Basic Rent payable
on

 A-18
 

each Rent Payment Date
and a principal balance at the maturity of such loan in an amount equal to the
Property Cost at the end of the term of the Lease.

“Improvements”
means all Equipment, buildings, structures, Fixtures and other improvements of
every kind existing at any time and from time to time, on or under the Land,
together with any and all appurtenances to such buildings, structures or
improvements, including sidewalks, utility pipes, conduits and lines, parking
areas and roadways, and including all Modifications and other additions to or
changes in the Improvements at any time.

“Imputed Return”
means, with respect to any date after the Expiration Date, an imputed return to
each Participant equal to the Base Rate plus a margin
of two percent (2.00%) per annum on such Participant’s outstanding Loans,
Capital or Lessor Amounts, as the case may be, during the period from the
Expiration Date to such date of determination.

“Indemnitee”
means each of the Lessor, the Purchasers, the Lender, each Sub-Participant,
their respective Affiliates and their respective successors, assigns,
directors, shareholders, partners, officers, employees and agents.

“Indirect Withholding Taxes”
is defined in Section 13.13(a)(iii) of the Participation Agreement.

“Insurance Requirements”
means all terms and conditions of any insurance policy either required by the
Lease to be maintained by the Lessee, and all requirements of the issuer of any
such policy.

“Interest Rate”
means the rate of interest accruing on the Loans from time to time, as set
forth in Section 4.2(a) of the Participation Agreement.

“Internal Control Event” means a
fraud that involves management or other employees who have a significant role
in, the Lessee’s internal controls over financial reporting, in each case as
described in the Securities Laws.

“Investment” means, as to any
Person, any direct or indirect acquisition or investment by such Person,
whether by means of (a) the purchase or other acquisition of capital stock
or other securities of another Person, (b) a loan, advance or capital
contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. 
For purposes of covenant compliance, the amount of any Investment shall
be the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

“IP Rights” is
defined in Section 8.1(n) of the Participation Agreement.

“IRC” means the
Internal Revenue Code of 1986.

“Land” is
defined in the first recital of the Participation Agreement.

 A-19
 

“Lease” means
the Lease, dated as of the date of the Participation Agreement, between the
Lessor and the Lessee.

“Lease Default”
means (a) any Lease Event of Default or (b) any event or circumstance
not yet constituting a Lease Event of Default that, with the giving of any
notice or the lapse of any period of time or both, would became a Lease Event
of Default.

“Lease Event of Default”
is defined in Section 16.1 of the Lease.

“Lease Supplement”
means the Memorandum of Lease.

“Lease
Receivables” means all payments under the Operative Documents
in respect of (i) the Purchaser Basic Rent, (ii) the Maximum Recourse
Amount, (iii) the Purchaser Balance and (iv) any purchase by the Lessee of the
Property up to the amount of the Capital then outstanding.

“Lease Term” is
defined in Section 2.3 of the Lease.

“Lender Basic Rent”
means, as determined as of any Rent Payment Date, interest due on the Loans,
determined in accordance with Section 2.5 of the Loan Agreement and
excluding (i) any interest at the applicable Default Rate on any
installment of Lender Basic Rent not paid when due, and (ii) any fine,
penalty, interest or cost assessed or added under any agreement with a third
party for nonpayment or late payment of Lender Basic Rent.

“Lender Commitment”
means the Commitment of the Lender in the amount set forth on Schedule I of the Participation Agreement or, upon
delivery of an Assignment Agreement by any Person (whether as assignee Lender
or assignor Lender) to the Administrative Agent pursuant to Section 12.1
of the Participation Agreement, such Person’s Commitment described as a “Lender Commitment” in such Assignment Agreement.

“Lender Mortgage”
means a deed of trust on all of the interest of the Lessor in the Property, in
appropriate recordable form sufficient to grant to the Administrative Agent, a
first priority Lien on the Lessor’s interest in the Property, which deed of
trust shall be substantially in the form of Exhibit E-2
to the Participation Agreement.

“Lenders”
means, collectively, KeyBank National Association in its capacity as a lender
under the Loan Agreement, together with its successors and assigns permitted
pursuant to Section 12.1(a) of the Participation Agreement.

“Lessee” means
Adobe Systems Incorporated, a Delaware corporation, as lessee under the Lease,
and its successors and assigns expressly permitted under the Lease.

“Lessee Party”
means the Lessee or any Person that is an Affiliate of the Lessee and is also a
Purchaser or Lender hereunder.

“Lessor” means
SELCO Service Corporation, an Ohio corporation doing business in California as
Ohio SELCO Service Corporation, together with its successors and assigns permitted
pursuant to Section 12.1(c) of the Participation Agreement.

 A-20

“Lessor Amount” is defined at
Section 3.2 of the Participation Agreement.

“Lessor Commitment” means the
Commitment of the Lessor in the amount set forth on Schedule I
of the Participation Agreement or, upon delivery of an Assignment Agreement by
any Person (whether as assignee Lessor or assignor Lessor) to the
Administrative Agent pursuant to Section 12.1 of the Participation
Agreement, such Person’s Commitment described as a “Lessor
Commitment” in such Assignment Agreement.

“Lessor Lien” means any Lien, true
lease or sublease or disposition of title arising as a result of (a) any
act or omission of the Administrative Agent or any Participant (other than a
Lessee Party) that is not required or permitted by the Operative Documents or
is in violation of any of the terms of the Operative Documents, (b) any
claim against the Administrative Agent or any Participant (other than a Lessee
Party) against which the Lessee is not required to indemnify the Administrative
Agent or any Participant pursuant to Article XIII or XIV of the
Participation Agreement, (c) any claim against the Lessor arising out of
any transfer by the Lessor of all or any portion of the interest of the Lessor
in the Property or the Operative Documents other than the transfer of title to
or possession of the Property by the Lessor pursuant to and in accordance with
the Operative Documents or pursuant to the exercise of the remedies set forth
in Section 16.2 of the Lease, (d) the gross negligence or willful
misconduct of any Participant (other than a Lessee Party) or (e) any claim
against the Administrative Agent or any Participant (other than a Lessee Party)
that is unrelated to the transactions contemplated by the Operative Documents.

“Lessor Mortgage” means a deed of
trust on all of the interest of the Lessee in the Property, in appropriate
recordable form sufficient to grant to the Lessor a first priority Lien on the
Lessee’s interest in the Property, which deed of trust shall be substantially
in the form of Exhibit E-1 to the
Participation Agreement.

“Lessor Percentage” means 5.0%.

“LIBOR Loan(s)/Capital/Lessor Amount(s)”
means a Loan, Capital or Lessor Amount, as the case may be, accruing interest,
Return or Yield by reference to the BBA LIBO Rate.

“Lien” means, with respect to any
property, (a) any security interest, mortgage, pledge, lien, charge or
other encumbrance in, of, or on such property or the income therefrom,
including, without limitation, the interest of a vendor or lessor under a
conditional sale agreement, or other title retention agreement, or any
agreement to provide any of the foregoing, and (b) the filing of any
financing statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction other than filings made for notice purposes
only in connection with true (but not “synthetic”)
leases.

“Loan Percentage” means 8.7287%.

“Loans” is defined in
Section 2.1 of the Loan Agreement.

“Margin Stock” shall have the
meaning given to that term in Regulation U issued by the Federal Reserve Board.

 A-21
 

“Marketing Period” means the
period commencing on the date the Lessee gives notice of its election of the
Remarketing Option and ending on the earlier of (a) the date on which the
Property is sold to a purchaser in accordance with Article XX of the Lease
and (b) the Expiration Date.

“Material Adverse Effect” means a
material adverse effect on (a) the business, assets, operations or
financial condition of the Lessee and its Subsidiaries, taken as a whole;
(b) the ability of the Lessee to pay or perform the Obligations in
accordance with the terms of the Participation Agreement and the other
Operative Documents; or (c) practical realization of the material rights
and remedies of Administrative Agent or any Purchaser intended to be provided
under the Participation Agreement and the other Operative Documents.

“Material Domestic Subsidiary”
means, at any date of determination, based upon the Financial Statements then
most recently delivered to the Administrative Agent pursuant to Section 
9.1(a) of the Participation Agreement, any Domestic Subsidiary that has as of
such date total assets of at least 5% of total assets of the Lessee and its
Subsidiaries on a consolidated basis.

“Maximum Recourse Amount” means,
as of any date of determination, an amount equal to 86.2713% of the Property
Cost outstanding at such time.

“Memorandum of Lease” means a
Memorandum of Lease substantially in the form of Exhibit A
to the Lease.

“Modifications”
is defined in Section 10.1 of the Lease.

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

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

“Necessary Permits” means
certificates, licenses, approvals, consents, permits (including, without
limitation, building, demolition and environmental permits, licenses,
approvals, authorizations and consents), easements and rights-of-way, including
dedication, and all other authorizations of Governmental Authorities or other
Persons, that are required for the maintenance, use or operation of the
Property as a first class corporate office building.

“Net Property Proceeds” means all
amounts received by the Lessor in connection with any Casualty or Condemnation
or any sale of the Property pursuant to the Lessor’s exercise of remedies under
Section 16.2 of the Lease or the Lessee’s exercise of the Remarketing Option
under Article XX of the Lease, and all interest earned thereon, less any Impositions arising in connection with such
amounts, if any, and less the
expense of claiming and collecting such amounts, including all costs and
expenses in connection therewith for which the Lessor or any Participant is
entitled to be reimbursed pursuant to the Lease.

 A-22
 

“Net Remarketing Proceeds” means
the proceeds of the sale of the Property pursuant to the Remarketing Option less all Sales Costs incurred in connection therewith.

“Note” is defined in
Section 2.3 of the Loan Agreement.

“Obligations” means and includes,
with respect to the Lessee, all loans, advances, debts, liabilities, and
obligations, howsoever arising, of the Lessee to the Administrative Agent, any
Participant, any other Affected Party or any Indemnitee or Tax Indemnitee, of
every kind and description (whether or not evidenced by any note or instrument
and whether or not for the payment of money), direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising pursuant to
the terms of any of the Operative Documents, including without limitation all
Basic Rent, Supplemental Rent, fees, charges, expenses, attorneys’ fees and
accountants’ fees chargeable to the Lessee or payable by the Lessee thereunder.

“Operative Documents” means the
following:

(a)           the Participation Agreement;

(b)           the Ground Lease;

(c)           the Lease;

(d)           the Memorandum of Lease;

(e)           the Loan Agreement;

(f)            the Security and Assignment
Agreement;

(g)           the Receivables Purchase Agreement;

(h)           each Note;

(i)            each Certificate;

(j)            the Assignment of Lease and Rent;

(k)           the UCC Financing Statements;

(l)            the Lessor Mortgage and the Lender
Mortgage;

(m)          the RVI Policy; and

(n)           each other document, agreement,
certificate or instrument delivered in connection with the foregoing (including
any amendment or other modification to any of the foregoing).

“Original Expiration Date” is
defined in Article XI of the Participation Agreement.

“Original Executed Counterpart”
is defined in Section 24.10 of the Lease.

 A-23
 

“Participant Balance” means as of
any date of determination:  (a) with
respect to any Purchaser, an amount equal to its outstanding Capital, together
with all accrued and unpaid Return thereon and all other amounts due and
payable to such Purchaser under the Operative Documents, (b) with respect
to any Lender, an amount equal to its outstanding Loans, together with all
accrued and unpaid interest thereon and all other amounts due and payable to
such Lender under the Operative Documents, and (c) with respect to the
Lessor, an amount equal to the aggregate outstanding Lessor Amounts, together
with all accrued and unpaid Yield thereon and all other amounts due and payable
to the Lessor under the Operative Documents.

“Participants” means,
collectively, the Lessor, the Lender and the Purchasers, together with their
respective successors and assigns.

“Participation Agreement” means
the Participation Agreement, dated as of March 26, 2007, among the Lessee, the
Lessor, the Purchaser, the Lender and the Administrative Agent.

“PBGC” means the Pension Benefit
Guaranty Corporation.

“PCAOB”
means the Public Company Accounting Oversight Board.

“Pension Plan” means any “employee pension benefit plan” (as
such term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, that is subject to Title IV of ERISA and is sponsored or maintained by
the Lessee or any ERISA Affiliate or to which the Company or any ERISA
Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.

“Permitted Property Liens” means
any of the following:

(a)           the respective rights and interests
of the parties to the Operative Documents as provided in the Operative
Documents (including all Liens in favor of the Participants created under the
Security Documents);

(b)           Lessor Liens;

(c)           Liens for Taxes that are not yet due;

(d)           Liens arising by operation of law,
materialmen’s, vendors’, mechanics’, workers’, repairmen’s, employees’,
carriers’, warehousemen’s and other like Liens in connection with any
Modifications or arising in the ordinary course of business for amounts that
either are not more than sixty (60) days past due or are being diligently
contested in good faith by appropriate proceedings, so long as such proceedings
satisfy the conditions for the continuation of proceedings to contest Taxes set
forth in Section 12.1 of the Lease;

(e)           Liens of any of the types referred to
in clause (d) above that have been bonded for not less than the full
amount in dispute (or as to which other security arrangements satisfactory to
the Lessor have been made), which bonding (or 

 A-24
 

arrangements) shall comply with Applicable Law, and
has effectively stayed any execution or enforcement of such Liens;

(f)            Liens arising out of judgments or
awards with respect to which appeals or other proceedings for review are being
prosecuted in good faith and for the payment of which adequate reserves have
been provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the execution of
such judgments or awards and satisfy the conditions for the continuation of proceedings
to contest set forth in Section 12.1 of the Lease;

(g)           easements, rights of way and other
encumbrances on title to real property permitted pursuant to Section 12.2
of the Lease;

(h)           Liens described on the title
insurance policy delivered with respect to the Property pursuant to
Section 6.1(t) of the Participation Agreement other than Liens described
in clause (d) or (f) above that are not removed within thirty
(30) days of their origination;

(i)            Liens for Taxes that are being
contested in accordance with the provisions of Section 12.1 of the Lease;
and

(j)            subleases that are permitted under
Section 6.2 of the Lease.

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

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

“Plans and Specifications” means
the final plans and specifications for the Property.

“Platform” has the meaning
specified in Section 9.1(b) of the Participation Agreement.

“Property” is defined in the
first recital of the Participation Agreement.

“Property Balance” means the sum
of (a) the Property Cost and (b) any other amounts due and owing by
the Lessee under the Operative Documents (including all Contingent Payments
then due and owing).

“Property Completion Differential”
is defined in Section 13.2(c) of the Participation Agreement.

“Property Cost” means, at any
date of determination, (a) the amount of Advance made pursuant to Article III
of the Participation Agreement, minus (b) any
payments received by the Administrative Agent as insurance proceeds,
condemnation awards or liquidated damages and which are applied to reduce the
amount of the Advance then outstanding, minus (c) any
other payments received by the Administrative Agent that are distributed to the
Participants pursuant 

 A-25
 

to Article VII of the Participation Agreement for
application to pay the Loans, Capital or the Lessor Amounts (as the case may
be).

“Property Rents” is defined in
Section 22.1(c) of the Lease.

“Pro Rata Share” means with respect
to (a) a Lender, a percentage equal to such Lender’s pro rata
share of the Lender Commitment, in each case, as set forth next to such Lender’s
name on Schedule I to the Participation
Agreement or on any assignment pursuant to which such Lender becomes a party
hereto, and (b) a Purchaser, a percentage equal to such Purchaser’s pro rata share of the Purchaser Commitment, in each case, as
set forth next to such Purchaser’s name on Schedule I to
the Participation Agreement or on any assignment pursuant to which such
Purchaser becomes a party hereto.

“Purchased Interests” means, at
any time, the undivided percentage ownership interests in (i) the Lease
Receivables, and (ii) all payments with respect to, and other proceeds of, such
Lease Receivables and Collateral.

“Purchase Notice” means an irrevocable
written notice by the Lessee delivered to the Lessor pursuant to
Section 18.1 of the Lease, notifying the Lessor of the Lessee’s intention
to exercise its option pursuant to such Section, and specifying the proposed
purchase date therefor.

“Purchase Option” means the
Lessee’s option to purchase the Property in accordance with the provisions of
Section 18.1 of the Lease.

“Purchase Price” is defined in
Section 18.1 of the Lease.

“Purchaser” means, collectively,
KeyBank National Association and Adobe Systems Incorporated each in its
capacity as a purchaser under the Receivables Purchase Agreement, together with
its respective successors and assigns permitted pursuant to
Section 12.1(b) of the Participation Agreement.

“Purchaser Basic Rent” means, as determined
as of any Rent Payment Date, Return due on the Capital, determined in
accordance with Section 2.5 of the Receivables Purchase Agreement and
excluding (i) any return at the applicable Default Rate on any installment
of Purchaser Basic Rent not paid when due, and (ii) any fine, penalty,
interest or cost assessed or added under any agreement with a third party for
nonpayment or late payment of Purchaser Basic Rent.

“Purchaser Balance” means, as
of any date of determination, an amount equal to the sum of the outstanding
Capital together with all accrued and unpaid return thereon pursuant to the
Receivables Purchase Agreement and all other amounts due and payable to the
Purchasers under the Operative Documents.

“Purchaser Commitment” means the
aggregate Commitments of the Purchasers set forth on Schedule I
of the Participation Agreement, as such Schedule may be amended, supplemented,
amended and restated, reduced or otherwise modified from time to time.

 A-26
 

“Purchaser Percentage” means
86.2713%.

“Real Property” of any
person means all of the right, title and interest of such person in and to
land, improvements and fixtures, including Leaseholds.

“Receivables Purchase Agreement” means the
Receivables Purchase Agreement, dated as of March 26, 2007, among the Lessor,
the Purchasers and the Administrative Agent.

“Reference Bank Rate” means, with
respect to any Basic Rent Period for any LIBOR Loan/Capital/Lessor Amount, the
arithmetic mean (rounded upward if necessary to the nearest 1/100th of one percent) of
the rates per annum at which Dollar deposits are offered to each of the
Reference Banks in the London interbank market on the Second Business Day prior
to the first day of such Basic Rent Period at or about 11:00 a.m. (London
time) (for delivery on the first day of such Basic Rent Period in an amount
substantially equal to the amount of such LIBOR Loan/Capital/Lessor Amount and
for a term comparable to such Basic Rent Period).

“Reference Banks” means
(a) KeyBank National Association and (b) any Participant or Participants
selected as a Reference Bank by the Administrative Agent and the Required
Participants, provided, that if any of such
Reference Banks is no longer a Participant, such other Participant or
Participants as may be selected by the Administrative Agent acting on
instructions from the Required Participants.

“Registered Public Accounting Firm”
has the meaning specified in the Securities Laws and shall be independent of
the Lessee as prescribed by the Securities Laws.

“Release” means any
release, pumping, pouring, emptying, injecting, escaping, leaching, dumping,
seepage, spill, leak, flow, discharge, disposal or emission of a Hazardous
Material.

“Remarketing Option” is defined
in Section 20.1 of the Lease.

“Renewal Option” is defined in
Section 19.1 of the Lease.

“Rent” means, collectively, the
Basic Rent and the Supplemental Rent, in each case payable under the Lease.

“Rent Payment Date” means the
last day of each Basic Rent Period then in effect.

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

“Requesting Party” is defined in
Section 21.1 of the Lease.

“Required Lenders” means, at any
time, Lenders having Pro Rata Shares representing at least 66 2/3% of the
aggregate principal amount of the Loans outstanding.

“Required Modification” is defined
in Section 10.1(a) of the Lease.

 A-27
 

“Required Participants” means, at
any time, (i) the Lessor and (ii) subject to the limits on the rights of Lessee
Parties in Section 16.16 of the Participation Agreement, Participants having
Commitments representing at least 66-2/3% of the aggregate Commitments.

“Required Purchasers” means,
subject to the limits on the rights of Lessee Parties in Section 16.16 of the
Participation Agreement, at any time, Purchasers having Pro Rata Shares
representing at least 66-2/3% of the aggregate amount of Capital
outstanding.

“Requirement of Law” applicable
to any Person means (a) the Articles or Certificate of Incorporation and
By-laws, Partnership Agreement or other organizational or governing documents
of such Person, (b) any Governmental Rule applicable to such Person,
(c) any license, permit, approval or other authorization granted by any
Governmental Authority to or for the benefit of such Person or (d) any
judgment, decision or determination of any Governmental Authority or
arbitrator, in each case applicable to or binding upon such Person or any of
its property or to which such Person or any of its property is subject.

“Reserve Requirement” means, with
respect to any day in a Basic Rent Period for a LIBOR Loan/Capital/Lessor
Amount, the aggregate of the reserve requirement rates (expressed as a decimal)
in effect on such day for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the
Federal Reserve Board) maintained by a member bank of the Federal Reserve
System.  As used herein, the term “reserve requirement” shall include, without limitation, any
basic, supplemental or emergency reserve requirements imposed on any Lender by
any Governmental Authority.

“Responsible
Officer” means the chief executive officer, president, chief
financial officer, or treasurer of the Lessee. 
Any document delivered hereunder that is signed by a Responsible Officer
of the Lessee shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of the Lessee
and such Responsible Officer shall be conclusively presumed to have acted on
behalf of Lessee.

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

“Return” or “Return Rate”
means the rate of return accruing on the Capital from time to time, as set
forth in Section 4.3(a) of the Participation Agreement.

“Return Conditions” is defined in
Section 20.1 of the Lease.

“RVI Policy” means the Residual
Value Insurance Policy from the RVI Provider for the benefit of the Lessor and
all documents and agreements delivered pursuant thereto or in connection
therewith.

 A-28
 

“RVI Provider” means R.V.I.
America.

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

“Sales Costs” means any marketing, closing or other costs,
and commissions related to the sale of the Property, in each case in connection
with the Lessee’s exercise of its Remarketing Option.

“Sarbanes-Oxley”
means the Sarbanes-Oxley Act of 2002.

“Scheduled Lease Term Termination Date”
means March 26, 2012, or, if the same is extended pursuant to Section 11.2 of
the Participation Agreement, March 26, 2017.

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

“Secured Obligations” is defined
in Section 22.1(a) of the Lease.

“Secured Parties” means each of
the Administrative Agent, for the benefit of the Participants, as their
interests may from time to time appear.

“Securities Act” means the
Securities Act of 1933, and the rules and regulations of the SEC promulgated
thereunder.

“Securities
Laws” means the Securities Act, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.

“Security and Assignment Agreement”
means the Security and Assignment Agreement dated as of the date of the
Participation Agreement, from the Lessee, as grantor, in favor of the
Administrative Agent.

“Security Documents” means,
collectively, the Lessor Mortgage, the Lender Mortgage, the Security and
Assignment Agreement, the UCC Financing Statements and all other documents,
agreements and instruments executed and delivered in order to establish,
preserve, protect and perfect the Lien of the Secured Parties in the
Collateral.

“Shareholders’
Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Lessee and its Subsidiaries on that date,
determined in accordance with GAAP.

“Shortfall Amount” means, as of
the Expiration Date, an amount equal to (a) the Property Cost, minus (b) the portion of the Maximum Recourse Amount
received by the Lessor from the Lessee pursuant to Section 20.1(m)(i)
of the Lease, minus (c) the Net
Remarketing Proceeds received by the Lessor in accordance with  Section 20.1(l) of the Lease; provided, however, that if a sale of the Property is not
consummated on or prior to the Expiration Date, then the term 

 A-29
 

“Shortfall Amount” means an
amount equal to (i) the Property Cost, minus
(ii) the Maximum Recourse Amount received by the Lessor pursuant to
Section 20.1(m)(i) of the Lease.

“Solvent” means, with respect to
any Person on any date, that on such date (a) the fair value of the
property of such Person is greater than the fair value of the liabilities
(including contingent, subordinated, matured and unliquidated liabilities) of
such Person, (b) the present fair saleable value of the assets of such
Person is greater than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in or about to engage in
business or transactions for which such Person’s property would constitute an
unreasonably small capital.

“Structuring Agent” means Lease
Advisory Services, a division of Key Equipment Finance Inc.

“Sub-Participant” is defined in
Section 12.2 of the Participation Agreement..

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

“Supplemental Rent” means all
amounts, liabilities and obligations (other than Basic Rent) which the Lessee
assumes or agrees to pay to the Lessor or any other Person under the Lease, or
under any of the other Operative Documents, including, without limitation,
Contingent Payments, Fees, Break Costs, the Maximum Recourse Amount, and
payments pursuant to Section 15.2 of the Lease and Articles XVIII and
XX of the Lease.

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

 A-30
 

any related
schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

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

“Synthetic
Lease Obligation” means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease,
or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).

“Taxes” is defined in the
definition of Impositions.

“Tax Indemnitee” means the
Lessor, the Purchasers, the Lenders, the Administrative Agent, each
Sub-Participant, their respective Affiliates and their respective successors,
assigns, directors, shareholders, partners, officers, employees and agents.

“Taxing Authority” is defined in
Section 13.13(a) of the Participation Agreement.

“Term Extension Notice” is
defined in Article XI of the Participation Agreement.

“Termination Date” is defined in
Section 15.2 of the Lease.

“Termination Notice” is defined
in Section 15.1 of the Lease.

“Title Company” means First
American Title Insurance Company or such other title insurance company as may
be selected by the Lessee with the approval of the Lessor.

“Transactions” is defined in 6.1
of the Participation Agreement.

“Transaction Expenses” means all
costs, expenses and Impositions incurred in connection with the preparation,
execution and delivery of the Operative Documents and the transactions
contemplated by the Operative Documents including without limitation:

(a)           the reasonable fees, out-of-pocket
expenses and disbursements of Schiff Hardin LLP, special counsel for the
Lessor, KeyBank (as a Purchaser) and the Administrative Agent, in negotiating
the terms of the Operative Documents and the other transaction documents to be
delivered in connection with the Closing Date, preparing for, and rendering
opinions in connection with, the Transactions contemplated to occur on the
Closing Date, and in rendering other services in connection with the Closing
Date, 

 A-31
 

customary for counsel representing parties to
Transactions of the types involved in the transactions contemplated by the
Operative Documents;

(b)           the reasonable fees, out-of-pocket
expenses and disbursements of special counsel for the Lessee in negotiating the
terms of the Operative Documents and the other transaction documents to be
delivered in connection with the Closing Date, preparing for, and rendering
opinions in connection with, the transactions contemplated to occur on the
Closing Date, and in rendering other services in connection with the Closing
Date, customary for counsel representing parties to transactions of the types
involved in the transactions contemplated by the Operative Documents;

(c)           any and all costs and
expenses (including premiums) associated with obtaining the RVI Policy;

(d)           the Fees;

(e)           any and all Taxes, charges and fees
incurred in recording, registering or filing any Operative Document or any
other transaction document, any deed, declaration, mortgage, security
agreement, notice or financing statement with any public office, registry or
governmental agency in connection with the transactions contemplated by the
Operative Documents;

(f)            all
title insurance premiums and escrow and closing costs;

(g)           the
fees and expenses of Lessee’s accountants incurred in connection with the
analysis and review of the Transactions contemplated by the Operative
Documents;

(h)           all
survey, appraisal, inspection, environmental review and similar costs and
expenses related to the Property and incurred in connection with the
Transactions contemplated by the Operative Documents and the closing thereof;
and

(i)            all
advisory and consulting fees and charges incurred by Lessee in connection with
the evaluation, analysis and structuring of the Transactions contemplated by
the Operative Documents, including the fees and charges of 42 North Structured Finance.

“Trustee” is defined in
Section 22.1(a) of the Lease.

“UCC Financing Statements” means
UCC financing statements appropriately completed and executed for filing in the
applicable jurisdiction in order to protect the respective security interests
of the Administrative Agent, the Lessor and the other Participants in the
Property and other Collateral under the Lessor Mortgage, the Lender Mortgage
and the Security and Assignment Agreement.

“Uniform Commercial Code” and “UCC” means the Uniform Commercial Code as in effect in any
applicable jurisdiction.

“Withholding Taxes” is defined in
Section 13.13(a)(i) of the Participation Agreement.

 A-32
 

“Yield” is defined in
Section 4.4(a) of the Participation Agreement.

“Yield Rate” means at any date
(a) with respect to any Lessor Amount that is a LIBOR Loan/Capital/Lessor
Amount, the BBA LIBO Rate for the applicable Basic Rent Period then in effect
for Lessor Amounts plus a margin
of 1.50% per annum and (b) at any time that Yield on the Lessor Amounts is
to be calculated by reference to the Base Rate, the Base Rate.

 

 A-33

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