Document:

Exhibit 10.2

 

PARTICIPATION AGREEMENT

 

dated as of March 14, 2008

 

among

 

SILICON LABORATORIES INC.,

as Lessee,

 

BA LEASING BSC, LLC,

as Lessor,

 

WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION,

not in its individual capacity, except as expressly

stated herein, but solely as Collateral Agent,

and

 

THE FINANCIAL INSTITUTIONS NAMED ON
SCHEDULE II HERETO,

as Lenders

 

BANC
OF AMERICA LEASING & CAPITAL, LLC,

as Sole Lead Arranger

and Sole Book Runner

 

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent

 

 

 

TABLE
OF CONTENTS

 

	
  SECTION

  	
   

  	
  HEADING

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
  DEFINITIONS; INTERPRETATION

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Definitions;
  Interpretation

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  CLOSING DATE

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Effectiveness of
  Agreement

  	
   

  	
  2

  
	
  Section 2.2.

  	
   

  	
  Acquisition of Facility
  and Leasehold Interest in Land; Grants of Liens; Assignment of Related
  Agreements

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  FUNDING OF ADVANCE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Funding

  	
   

  	
  3

  
	
  Section 3.2.

  	
   

  	
  [Intentionally Omitted]

  	
   

  	
  4

  
	
  Section 3.3.

  	
   

  	
  Advance Request

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  YIELD, INTEREST

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Yield

  	
   

  	
  5

  
	
  Section 4.2.

  	
   

  	
  Interest on Loans

  	
   

  	
  5

  
	
  Section 4.3.

  	
   

  	
  Computations

  	
   

  	
  5

  
	
  Section 4.4.

  	
   

  	
  Payments of Rent;
  Payments and Prepayments of Loans and Lessor Amount

  	
   

  	
  5

  
	
  Section 4.5.

  	
   

  	
  Fees

  	
   

  	
  6

  
	
  Section 4.6.

  	
   

  	
  Obligations Several

  	
   

  	
  6

  
	
  Section 4.7.

  	
   

  	
  Highest Lawful Rate

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  CERTAIN INTENTIONS OF THE PARTIES

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Nature of Transaction

  	
   

  	
  8

  
	
  Section 5.2.

  	
   

  	
  Amounts Due Under Lease

  	
   

  	
  9

  
	
  Section 5.3.

  	
   

  	
  Distribution

  	
   

  	
  9

  
	
  Section 5.4.

  	
   

  	
  Adjustment

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  CONDITIONS PRECEDENT TO CLOSING DATE AND ADVANCE

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Conditions Precedent to
  the Closing Date and the Advance

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  [INTENTIONALLY OMITTED]

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  REPRESENTATIONS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Representations of the
  Lenders

  	
   

  	
  20

  
	
  Section 8.2.

  	
   

  	
  Warranties and
  Representations of the Lessee

  	
   

  	
  21

  
	
  Section 8.3.

  	
   

  	
  [Intentionally Omitted]

  	
   

  	
  31

  

 

i

 

	
  Section 8.4.

  	
   

  	
  Representations and
  Warranties of Lessor

  	
   

  	
  31

  
	
  Section 8.5.

  	
   

  	
  Representations and
  Warranties of Wells Fargo Bank Northwest, National Association, individually
  and as Collateral Agent

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  COVENANTS OF LESSEE

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Lessee Covenants

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
  OTHER COVENANTS AND AGREEMENTS

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
   

  	
  Covenants of the
  Participants and the Collateral Agent

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  	
  LESSEE’S RIGHT OF QUIET ENJOYMENT

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  	
  TRANSFERS OF PARTICIPANTS’ INTERESTS

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  Assignments

  	
   

  	
  40

  
	
  Section 12.2.

  	
   

  	
  Participations

  	
   

  	
  42

  
	
  Section 12.3.

  	
   

  	
  Withholding Taxes;
  Disclosure of Information; Pledge Under Regulation A

  	
   

  	
  43

  
	
  Section 12.4.

  	
   

  	
  Lessee Directions

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
   

  	
  Indemnification

  	
   

  	
  45

  
	
  Section 13.2.

  	
   

  	
  End of Term Indemnity

  	
   

  	
  47

  
	
  Section 13.3.

  	
   

  	
  Proceedings in Respect
  of Claims

  	
   

  	
  47

  
	
  Section 13.4.

  	
   

  	
  General Tax Indemnity

  	
   

  	
  49

  
	
  Section 13.5.

  	
   

  	
  After Tax Basis

  	
   

  	
  55

  
	
  Section 13.6.

  	
   

  	
  Environmental Indemnity

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
   

  	
  [INTENTIONALLY OMITTED]

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV

  	
   

  	
  CONTINGENT RENT AND OTHER COSTS

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.1.

  	
   

  	
  LIBO Rate Lending
  Unlawful

  	
   

  	
  57

  
	
  Section 15.2.

  	
   

  	
  Deposits Unavailable

  	
   

  	
  57

  
	
  Section 15.3.

  	
   

  	
  Increased Costs, etc

  	
   

  	
  57

  
	
  Section 15.4.

  	
   

  	
  Funding Losses

  	
   

  	
  58

  
	
  Section 15.5.

  	
   

  	
  Increased Capital Costs

  	
   

  	
  58

  
	
  Section 15.6.

  	
   

  	
  After Tax Basis

  	
   

  	
  59

  
	
  Section 15.7.

  	
   

  	
  Applicability of
  Certain Sections and Payments

  	
   

  	
  59

  
	
  Section 15.8.

  	
   

  	
  Funding Office;
  Mitigation of Costs

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVI

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 16.1.

  	
   

  	
  Survival of Agreements

  	
   

  	
  59

  

 

ii

 

	
  Section 16.2.

  	
   

  	
  No Broker, etc.

  	
   

  	
  60

  
	
  Section 16.3.

  	
   

  	
  Notices

  	
   

  	
  60

  
	
  Section 16.4.

  	
   

  	
  Counterparts

  	
   

  	
  60

  
	
  Section 16.5.

  	
   

  	
  Amendments

  	
   

  	
  60

  
	
  Section 16.6.

  	
   

  	
  Loan Agreement and
  Related Obligations

  	
   

  	
  61

  
	
  Section 16.7.

  	
   

  	
  Headings, etc.

  	
   

  	
  61

  
	
  Section 16.8.

  	
   

  	
  Parties in Interest

  	
   

  	
  61

  
	
  Section 16.9.

  	
   

  	
  Governing Law

  	
   

  	
  61

  
	
  Section 16.10.

  	
   

  	
  Severability

  	
   

  	
  62

  
	
  Section 16.11.

  	
   

  	
  Liability Limited

  	
   

  	
  62

  
	
  Section 16.12.

  	
   

  	
  Further Assurances

  	
   

  	
  62

  
	
  Section 16.13.

  	
   

  	
  Submission to Jurisdiction

  	
   

  	
  62

  
	
  Section 16.14.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  63

  
	
  Section 16.15.

  	
   

  	
  Confidentiality

  	
   

  	
  63

  
	
  Section 16.16.

  	
   

  	
  Limited Liability of
  Lessor

  	
   

  	
  63

  
	
  Section 16.17.

  	
   

  	
  Limited Liability of
  Collateral Agent

  	
   

  	
  64

  
	
  Section 16.18.

  	
   

  	
  Payment of Transaction
  Expenses and Other Costs

  	
   

  	
  64

  
	
  Section 16.19.

  	
   

  	
  Reproduction of
  Documents

  	
   

  	
  64

  
	
  Section 16.20.

  	
   

  	
  Role of Banc of America
  Leasing & Capital, LLC

  	
   

  	
  65

  
	
  Section 16.21.

  	
   

  	
  Deliveries to
  Participants

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVII

  	
   

  	
  THE COLLATERAL AGENT

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 17.1.

  	
   

  	
  Appointment

  	
   

  	
  65

  
	
  Section 17.2.

  	
   

  	
  Delegation of Duties

  	
   

  	
  66

  
	
  Section 17.3.

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  66

  
	
  Section 17.4.

  	
   

  	
  Reliance by Collateral
  Agent

  	
   

  	
  66

  
	
  Section 17.5.

  	
   

  	
  Notice of Default

  	
   

  	
  67

  
	
  Section 17.6.

  	
   

  	
  Non-Reliance on
  Collateral Agent and Other Participants

  	
   

  	
  67

  
	
  Section 17.7.

  	
   

  	
  Indemnification

  	
   

  	
  68

  
	
  Section 17.8.

  	
   

  	
  Collateral Agent in Its
  Individual Capacity

  	
   

  	
  68

  
	
  Section 17.9.

  	
   

  	
  Successor Collateral
  Agent

  	
   

  	
  68

  
	
  Section 17.10.

  	
   

  	
  Release of Collateral

  	
   

  	
  68

  
	
  Section 17.11.

  	
   

  	
  Collateral Agent
  Execution of Transfer Documents

  	
   

  	
  69

  

 

iii

 

	
  APPENDICES

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  APPENDIX 1

  	
   

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
   

  	
  Lessor Commitment

  	
   

  	
   

  
	
  SCHEDULE II

  	
   

  	
  Lenders’ Commitments

  	
   

  	
   

  
	
  SCHEDULE III

  	
   

  	
  Notice Information, Payment Offices and Applicable Lending
  Offices

  	
   

  	
   

  
	
  SCHEDULE 6.1(s)

  	
   

  	
  Filings and Recordings

  	
   

  	
   

  
	
  SCHEDULE 8.2

  	
   

  	
  Disclosure Schedule

  	
   

  	
   

  
	
  SCHEDULE 8.2(ff)

  	
   

  	
  Agreements to be Terminated

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  Form of Advance Request

  	
   

  	
   

  
	
  EXHIBIT B-1

  	
   

  	
  Form of Opinion of Special Counsel to the
  Participants

  	
   

  	
   

  
	
  EXHIBIT B-2

  	
   

  	
  Form of Opinion of Special New York Counsel to Lessee

  	
   

  	
   

  
	
  EXHIBIT B-3

  	
   

  	
  Form of Opinion of Special Texas Counsel to Lessee

  	
   

  	
   

  
	
  EXHIBIT B-4

  	
   

  	
  Form of Opinion of Associate General Counsel of
  Lessor

  	
   

  	
   

  
	
  EXHIBIT C

  	
   

  	
  Form of Assignment of Lease and Rent and Security
  Agreement

  	
   

  	
   

  
	
  EXHIBIT D

  	
   

  	
  Form of Assignment Agreement

  	
   

  	
   

  
	
  EXHIBIT E-1

  	
   

  	
  Form of Responsible Officer’s Certificate of Lessee

  	
   

  	
   

  
	
  EXHIBIT E-2

  	
   

  	
  Form of Responsible Officer’s Certificate of Lessor

  	
   

  	
   

  
	
  EXHIBIT F

  	
   

  	
  Form of Offeree Letter

  	
   

  	
   

  
	
  EXHIBIT G

  	
   

  	
  Form of Ground Lessor Estoppel Certificate

  	
   

  	
   

  

 

iv

 

PARTICIPATION
AGREEMENT

 

THIS PARTICIPATION AGREEMENT (this “Participation Agreement”), dated as of March 14, 2008,
is entered into by and among SILICON LABORATORIES INC., a Delaware corporation,
as Lessee (together with its permitted successors and assigns, in its capacity
as the Lessee, the “Lessee”); BA
LEASING BSC, LLC, as Lessor (the “Lessor”);
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly stated herein, but solely as Collateral Agent
(the “Collateral Agent”); and the financial
institutions listed on Schedule II hereto as Lenders (together with their
permitted successors, assigns and transferees, each a “Lender”,
and collectively, the “Lenders”).

 

W
I T N E S S E T H

 

                                                 A.                     Lessee, Collateral Agent, the Lenders and the Lessor
desire to enter into this Participation Agreement and the other Operative
Documents for the purpose of financing the Leased Property, title to which will
be held by Lessor, to secure Lessee’s performance under the Operative
Documents.

 

                                                   B.                     The Ground Lessor is the fee simple owner of the Land.

 

                                                   C.                     The Ground Lessor and the Seller have previously
entered into the Ground Lease pursuant to which the Ground Lessor leased to
Seller, and Seller leased from the Ground Lessor, the Land.

 

                                                  D.                     On the date hereof, pursuant to the Assignment of
Ground Lease the Seller will assign to Lessor its right, title and interest as
ground lessee under the Ground Lease and Lessor will assume certain obligations
thereunder.

 

                                                    E.                     On the date hereof, pursuant to the Assignment of
Purchase Agreement, Lessee will assign its rights under the Purchase Agreement
to Lessor and pursuant to the Purchase Agreement the Seller will (i) pursuant
to the Deed, convey to Lessor its right, title and interest in and to the
Facility, (ii) pursuant to the Assignment of Subleases, fully assign to
Lessor its right, title and interest as lessor or sublessor under the Related
Agreements which constitute leases and Lessor shall assume certain obligations
thereunder, and (iii) pursuant to (y) the Assignment of Ground Lease,
fully assign to Lessor its right, title and interest as a ground lessee in and
to the Land and Ground Lease, and (z) the Assignment of Related
Agreements, fully assign to Lessor its right, title and interest as lessor,
sublessor or interested party, as the case may be, under the other Related
Agreements and Lessor shall assume certain obligations thereunder.

 

                                                    F.                     On the date hereof, Collateral Agent, on behalf of
Lessor, using amounts Funded by the Lessor and the Lenders, will provide funds
to pay Lessor for acquisition of the Subject Property and other costs
(including transaction costs) related to the Subject Property, the CSC
Sublease, any Fifth Floor Sublease and the Overall Transaction.

 

1

 

 

                                                   G.                     Subject to the terms and conditions of this
Participation Agreement and the other Operative Documents, on the Closing Date,
among other things, Lessee and Lessor will enter into the Lease pursuant to
which Lessor will agree to lease to Lessee, and Lessee will agree to lease from
Lessor, the Leased Property pursuant to the Lease.

 

                                                  H.                     To secure the repayment of the Lessor’s and Lenders’
respective Lessor Amount and Loans, the Collateral Agent, on behalf of the
Participants, will have the benefit of a Lien on the Subject Property, the
other Lessor Collateral, the CSC Sublease and any Fifth Floor Sublease.

 

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, 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 1
hereto for all purposes hereof; and the rules of interpretation set forth
in Appendix 1 hereto shall apply to this Participation Agreement.

 

ARTICLE II

CLOSING DATE

 

                                                 Section 2.1.                     Effectiveness of Agreement.  (a) This
Participation Agreement shall be effective as of March 14, 2008 (the “Closing Date”), subject to the satisfaction or waiver as
set forth herein of all of the conditions precedent set forth in Article VI.

 

                                               (b)                     Subject to the conditions set forth in this
Participation Agreement and pursuant to the terms hereof, on the Closing Date, inter alia, Lessor and Lessee will enter into the Lease
pursuant to which Lessor shall lease to Lessee, and Lessee shall lease from
Lessor, the Leased Property for the Term.

 

                                                (c)                     Except for any documents to be executed and delivered
by Seller, Lessee and Lessor pursuant to the Purchase Agreement, which shall be
delivered through the Escrow, all documents and instruments required to be
delivered on the Closing Date and in connection with the Advance pursuant to
this Participation Agreement shall be delivered at the offices of Chapman and
Cutler LLP, 595 Market Street, 26th Floor, San Francisco, California 94105, or at
such other location as the Collateral Agent and the Lessee may mutually agree.

 

2

 

                                                 Section 2.2.                     Acquisition of Facility and
Leasehold Interest in Land; Grants of Lien; Assignment of Related Agreements. 
Subject to the terms and conditions of this Participation Agreement, on
the Closing Date, pursuant to the Assignment of Purchase Agreement, Lessee will
assign its right under the Purchase Agreement to Lessor and pursuant to the
Purchase Agreement (i) Seller and Lessor shall enter into the Assignment
of Ground Lease pursuant to which Seller shall assign to Lessor and Lessor shall
assume, Seller’s right, title and interest as ground lessee under the Ground
Lease, (ii) Seller shall convey to Lessor its right, title and interest in
the Facility pursuant to the Deed, (iii) Lessor and Seller shall enter
into the Assignment of Subleases pursuant to which Seller shall assign to
Lessor and Lessor shall assume Seller’s right, title and interest in the
Related Agreements which constitute leases, (iv) Lessor and Seller shall
enter into the Assignment of Related Agreements pursuant to which Seller shall
assign to Lessor and Lessor shall assume, Seller’s right, title and interest in
the other Related Agreements, (v) Lessor and Lessee shall enter into the
Lease pursuant to which Lessor shall lease to Lessee, and the Lessee shall
lease from Lessor, the Leased Property for the Term, and (vi) Lessee,
Lessor and Collateral Agent, as applicable, shall enter into and/or record the
Assignment of Ground Lease, the Assignment of Related Agreements, the Deed of
Trust, the Memorandum of Lease, the Assignment of Leases and Rents and
memoranda thereof and the UCC Financing Statements.

 

ARTICLE III

FUNDING OF ADVANCE

 

                                                 Section 3.1.                     Funding.

 

                                                (a)                     Amount of Funding.  Subject to the
terms and conditions of this Participation Agreement and in reliance on the representations
and warranties made as of the Closing Date of each of the parties hereto
contained herein or made pursuant hereto, upon receipt of the Advance Request,
on the Closing Date the Collateral Agent (on behalf of the Lessor) shall, to
the extent it has received amounts from the Participants, make the requested
Advance and each Participant will Fund the Advance, as and to the extent
provided herein, in each case by making available to Lessor or Collateral Agent
(on behalf of the Lessor) by wire transfer of immediately available funds in
accordance with the instructions set forth in the Advance Request, an amount
equal to (i) with respect to the Lenders, such Lender’s Loan Commitment
and (ii) with respect to the Lessor, the Lessor Commitment.  Notwithstanding the foregoing, the Funding by
each Participant on the Closing Date shall not exceed such Participant’s
Commitment.  The Lessor shall not issue
Notes or, except as otherwise expressly permitted by the Operative Documents,
otherwise incur indebtedness secured by the Subject Property or any portion
thereof in an amount in excess of the Aggregate Commitment Amount.  No amounts paid or prepaid with respect to
any Lessor Amount or the Loans may be readvanced.

 

                                               (b)                     Notes and Lessor Amount. 
Each Lender’s Loans shall be evidenced by a single Note issued to such
Lender and repayable in accordance with, and with Interest accruing pursuant
to, the terms of the Loan Agreement.  The
Lessor Amount shall accrue Yield at the Yield Rate.  Each Lender is authorized and entitled to
make notations on its Notes in accordance with the Loan Documents, each of
which notations shall constitute prima facie
evidence of the accuracy of the information so noted, absent manifest error.

 

3

 

                                                (c)                     Funding.  The Advance
required to be made by the Collateral Agent (on behalf of the Lessor) on the
Closing Date shall be funded by the Participants making a Funding directly to
the Collateral Agent.  Such Funding by
the Participants to the Collateral Agent with respect to the Advance shall be
deemed to constitute the required Funding from the Participants to Lessor, and
the corresponding payment by the Collateral Agent for the purposes provided in Section 3.1(d).

 

                                               (d)                     Use of Proceeds.  Pursuant to Section 3.3,
the Funding shall be used by the Collateral Agent on behalf of the Lessor
solely (i) to Advance the Aggregate Commitment Amount for the Subject
Property and (ii) to pay Transaction Expenses.

 

                                                (e)                     Advance.  All remittances made by the Participants
for the Funding of the Advance shall be made in immediately available federal
funds by wire transfer to the Collateral Agent at the Collateral Agent’s
address referred to in Schedule III hereto prior to 12:00 noon (New York City
time) on the Closing Date; provided, that
if the terms and conditions for the Advance set forth herein have not been
satisfied by 10:00 a.m. New York time on the Closing Date, no Participant
shall be obligated to maintain the availability of its funds for the Advance
unless such Participant has received a satisfactory indemnity for the overnight
investment of such funds.  Promptly upon
Collateral Agent’s receipt of such funds from the Participants, subject to the
conditions herein, Collateral Agent shall wire such funds on the Closing Date
to the Persons entitled thereto as provided for in the Advance Request.  The Funding by each Participant to the
Collateral Agent of its respective portion of the Advance shall constitute
authorization and direction by such party to Collateral Agent to make the
Advance pursuant to this Article III.

 

Section 3.2. [Intentionally Omitted].

 

Section 3.3. Advance Request.

 

                                                (a)                     Notice and Closing.  At least two (2) Business
Days prior to the Closing Date, Lessee shall deliver to Collateral Agent (which
shall promptly forward a copy of such Advance Request to each Participant) an
irrevocable written notice substantially in the form of Exhibit A (an “Advance Request”), setting forth:

 

                                                             (i)                        the proposed Closing Date;

 

                                                          (ii)                        a statement of the amount of the requested Advance
setting forth (A) a description of the use of proceeds of such Advance,
indicating which portions of such Advance will be used to pay the purchase
price for the Subject Property and which portion of such Advance will be used
to pay Transaction Expenses, and the identity of the Persons entitled to such
payments; and

 

                                                       (iii)                        wire transfer instructions for the disbursement of the
appropriate amount of funds to Lessee or to such other Persons as may be
entitled to the Advance.

 

4

 

                                               (b)                     On the Closing Date, and subject to the satisfaction
of the conditions set forth in Article VI, Participants shall, as and to
the extent provided herein, Fund the Advance by wire transfer directly to
Collateral Agent.

 

                                                (c)                     Concurrent with the making of the Advance, all
deposits previously made by Lessee under the Purchase Agreement and held in
escrow shall be refunded to Lessee.

 

ARTICLE IV

YIELD, INTEREST

 

                                                 Section 4.1.                     Yield.  The Lessor Amount shall accrue Yield at the Yield
Rate, calculated using the actual number of days elapsed and, during the
initial Interest Period and when the Yield Rate is based on the LIBO Rate
(Reserve Adjusted), a 360-day year basis and, at all other times, a 365-day
(or, if applicable, 366-day) year basis. 
If all or any portion of the Lessor Amount, 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 Overdue Rate.

 

                                                 Section 4.2.                     Interest on Loans. 
Each Loan shall accrue Interest computed and payable in accordance with
the terms of the Loan Agreement.

 

                                                 Section 4.3.                     Computations. 
Computations of Interest and other amounts payable in respect of the
Notes shall be made by Collateral Agent in accordance with the Loan Agreement
and this Article IV.  Lessor hereby
appoints Collateral Agent as its agent for purposes of computing the Yield in
respect of the Lessor’s Interest and determining the Yield Rate.  No later than thirty (30) days prior to
each Payment Date, Collateral Agent shall deliver to Lessee and each
Participant a written statement of the amount of Interest and Yield then due,
the due date therefor and the calculation thereof; provided
that in each case, the failure of Collateral Agent to provide such notice shall
not relieve Lessee from any liability that it may have under the Operative
Documents to pay any such amount; and provided, further
that Collateral Agent’s failure to give such notice shall result in no
liability to it.

 

                                                 Section 4.4.                     Payments of Rent; Payments and
Prepayments of Loans and Lessor Amount. (a) Notwithstanding any provisions in the Lease
to the contrary, the Lessor hereby directs the Lessee to pay to the Collateral
Agent all Basic Rent payable from time to time by Lessee and all Supplemental
Rent to the extent such Supplemental Rent is payable to Lessor under the Lease
(other than Excepted Payments or Supplemental Rent that is payable to Persons
other than Lessor, which the Lessor hereby directs the Lessee to make directly
to the applicable Person entitled thereto).

 

                                               (b)                     In the event that the Lessee pays the Lease Balance to
the Lessor in connection with the Lessee’s purchase of the Subject Property in
accordance with any of Sections 15.1, 16.2(e), 18.1 or 18.2 of the Lease
or Article XIX of the Lease, the Lessor will prepay the entire outstanding
principal amount of the Loans and the Lessor Amount.  Each of the Participants hereby acknowledges
that its Loans or the Lessor Amount, as the case may be, may be so prepaid
without any prepayment premium (other than Break Costs, if any).

 

5

 

                                                 Section 4.5.                     Fees. 
If and only if the Advance is made and Lessor consummates the purchase
of the Subject Property on the Closing Date, Lessee agrees to pay the fees set
forth in this Section 4.5 (collectively, the “Fees”).

 

                                                             (i)                        Upfront Fees.  Lessee agrees
to pay to the Collateral Agent on behalf of the Participants an up front fee
payable on the Closing Date to each Participant in an amount equal to, for each
Lender, the product of (a) the aggregate amount of the Loan Commitment of
such Lender, as applicable, multiplied by (b) 0.25%.

 

                                                          (ii)                        Other Fees.  The Lessee
also agrees to pay (x) to the Collateral Agent, for its own account, the
fees set forth in the Collateral Agent Fee Letter, payable in the amounts and
on the dates set forth therein and (y) to the Arranger, the fees set forth
in the Arrangement Fee Letter payable in the amounts and on the dates set forth
therein.

 

                                                 Section 4.6.                     Obligations Several. 
The obligations of the Participants hereunder or elsewhere in the
Operative Documents shall be several and not joint; and no Participant shall be
liable or responsible for the acts or defaults of any other party hereunder or
under any other Operative Document.

 

                                                 Section 4.7.                     Highest Lawful Rate. 
It is the intention of the parties hereto to conform strictly to
applicable usury laws and, anything herein to the contrary notwithstanding, the
obligations of (x) Lessee to Lessor under this Participation Agreement and
the Lease, (y) Lenders under the Loan Agreement and the Notes and (z) either
Lessee or Lessor or any other party under any other Operative Document shall,
in each case, be subject to the limitation that payments of interest or of
other amounts constituting interest under Applicable Laws shall not be required
to the extent that receipt thereof would be in excess of the Highest Lawful Rate,
or otherwise contrary to provisions of law applicable to the recipient limiting
rates of interest which may be contracted for, charged, received, taken or
reserved by the recipient.  Accordingly,
if the transactions or the amount paid or otherwise agreed to be paid for the
use, forbearance or detention of money under this Participation Agreement, the
Lease, the Loan Agreement, the Notes, the Lessor Amount or any other Operative
Document would exceed the Highest Lawful Rate or otherwise be usurious under
Applicable Laws (including, without limitation, the federal and state laws of
the United States of America, or of any other jurisdiction whose laws may be
mandatorily applicable) with respect to the recipient of any such amount,
whether due to the acceleration of the maturity of the Lease Balance, the
optional or mandatory purchase of the Leased Property or otherwise, then, in
that event, notwithstanding anything to the contrary in this Participation
Agreement, the Lease, the Loan Agreement, the Notes, the Lessor Amount or any
other Operative Document, it is agreed as follows as to the recipient of any
such amount:

 

                                                          (a)                        the provisions of this Section 4.7 shall govern
and control over any other provision in this Participation Agreement, the
Lease, the Loan Agreement, the Notes, the Lessor Amount and any other Operative
Document, and each provision set forth therein is hereby so limited;

 

6

 

                   (b)        the aggregate of all consideration which
constitutes interest under Applicable Laws that is contracted for, charged or
received under this Participation Agreement, the Lease, the Loan Agreement, the
Notes, the Lessor Amount or any other Operative Document shall under no
circumstances exceed the maximum amount of interest allowed by Applicable Laws
(such maximum lawful interest rate, if any, with respect to such recipient
herein called the “Highest Lawful Rate”), and all
amounts owed under this Participation Agreement, the Lease, the Loan Agreement,
the Notes, the Lessor Amount and any other Operative Document shall be held
subject to reduction and: (i) the amount of interest which would otherwise
be payable to the recipient hereunder and under the Lease, the Loan Agreement,
the Notes, the Lessor Amount and any other Operative Document shall be
automatically reduced to the amount allowed under Applicable Laws, and (ii) any
interest paid in excess of the Highest Lawful Rate shall be credited to the
Lease Balance (or, if such consideration shall have been paid in full, refunded
to the Lessee);

 

                   (c)        all sums paid, or agreed to be paid for
the use, forbearance and detention of the money under this Participation
Agreement, the Lease, the Loan Agreement, the Notes, the Lessor Amount or any
other Operative Document shall, to the extent permitted by Applicable Laws, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or computation of interest
on such indebtedness does not exceed the applicable usury ceiling;

 

                   (d)        if at any time the interest, together
with any other fees, late charges and other sums payable pursuant to or in
connection with this Participation Agreement, the Lease, the Loan Agreement,
the Notes, the Lessor Amount and any other Operative Document executed in
connection herewith or therewith and deemed interest under Applicable Laws,
exceeds that amount which would have accrued at the Highest Lawful Rate, the
amount of interest and any such fees, charges and sums to accrue to the
recipient of such interest, fees, charges and sums pursuant to the Operative
Documents shall be limited, notwithstanding anything to the contrary in the
Operative Documents, to that amount which would have accrued at the Highest
Lawful Rate for the recipient, but any subsequent reductions in the otherwise
applicable rate of interest or yield, as applicable, shall not reduce the
interest to accrue pursuant to the Operative Documents to an amount below the
recipient’s Highest Lawful Rate until the total amount of interest payable to
the recipient (including all consideration which constitutes interest) equals
the amount of interest which would have been payable to the recipient
(including all consideration which constitutes interest), but for the effect of
this Section 4.7; and

 

                   (e)        the right to accelerate the maturity of
the Lease Balance or to require the purchase of the Subject Property pursuant
to the Operative Documents does not include the right to accelerate any
interest (as determined under Applicable Law) which has not otherwise accrued
on the date of such acceleration or mandatory purchase.

 

7

 

ARTICLE V

CERTAIN INTENTIONS OF THE PARTIES

 

                Section 5.1.       Nature of
Transaction.  It is the
intention of the parties that:

 

                   (a)        the Overall Transaction constitutes an
operating lease from Lessor to Lessee for purposes of Lessee’s financial
reporting, including, without limitation, under FASB Statement No. 13;

 

                   (b)        for the purposes of all federal, state
and local income, franchise, transfer and other taxes; all bankruptcies,
insolvencies, conservatorships and receiverships (including the substantive law
upon which bankruptcy, conservatorship, insolvency and receivership proceedings
are based); and real estate law, commercial law and Uniform Commercial Code
purposes:

 

                    (i)        the Overall Transaction constitutes a
financing by the Participants to Lessee and preserves beneficial ownership in
the Subject Property in Lessee, Lessee will be entitled to all tax benefits
with respect to the Subject Property ordinarily available to owners of property
similar to the Subject Property for tax purposes, and the obligations of Lessee
to pay Basic Rent shall be treated as payments of  principal, if any, and interest to the
Participants, and the payment by Lessee of any amounts in respect of the Lease
Balance shall be treated as payments of principal to the Participants;

 

                   (ii)        the Lease grants a security interest or
Lien, as the case may be, in the Lessee’s interest in the Leased Property and
the other Lessee Collateral, in favor of the Lessor, and for the benefit of the
Participants, to secure Lessee’s payment and performance of its Obligations
under the Operative Documents; and

 

                  (iii)        the Security Instruments create Liens on
and security interests in the Subject Property and the other Lessor Collateral
and Lessee Collateral in favor of the Collateral Agent for the benefit of all
of the Participants to secure Lessor’s and Lessee’s payment and performance of
their respective obligations under the Operative Documents.

 

Each of the parties hereto agrees that it will not,
nor will it permit any Affiliate to at any time, take any action or fail to
take any action with respect to the preparation, filing or audit of any income
tax return, including an amended income tax return, to the extent that such
action or such failure to take action would be inconsistent with the intention
of the parties expressed in this Section 5.1.

 

Nevertheless, Lessee acknowledges and agrees that none
of the Lessor, the Collateral Agent, Arranger or any Lender has made any
representations or warranties concerning the tax, accounting or legal
characteristics of the Operative Documents or any aspect of the Overall
Transaction and that Lessee has obtained and relied upon such tax, accounting
and legal advice concerning the Operative Documents and the Overall Transaction
as it deems appropriate.

 

8

 

Specifically, without limiting the generality of the
foregoing, the parties hereto intend and agree that in the event of any
insolvency, conservatorship or receivership proceedings or matters or a
petition under the United States bankruptcy laws, or any other applicable
insolvency, conservatorship or receivership laws or statute of the United
States of America or any State thereof affecting Lessee, Lessor, or the Lenders
or any collection actions, the transactions evidenced by the Operative
Documents (including, without limitation, the Lease) shall be regarded as loans
made directly to Lessee by the Participants, in each case as unrelated third
party lenders, and that Lessor holds title to the Subject Property for the
benefit of the Participants to secure Lessee’s obligations to repay such loans
to the Participants and all other amounts due under any of the Operative
Documents.

 

                Section 5.2.       Amounts
Due Under Lease.  Anything
else herein or elsewhere to the contrary notwithstanding, it is the intention
of the Lessee, the Lessor and the Lenders that: 
(i) the amount and timing of installments of Basic Rent due and
payable from time to time under the Lease shall be equal to the aggregate
payments due and payable as Interest on the Loans and Yield on the Lessor
Amount due on each Payment Date; (ii) if the Lessee elects the Early
Termination Option, the Purchase Option or becomes obligated or otherwise
elects to purchase the Subject Property under the Lease, then the Loans, the
Lessor Amount, all accrued and unpaid Interest and Yield thereon, any Fees and
all other obligations of the Lessee owing to the Lessor and the Participants
shall be paid in full by the Lessee; (iii) if the Lessee properly elects
the Sale Option with respect to the Subject Property and subject to
Articles XX and XXI of the Lease, the Lessee shall only be required to pay
to the Collateral Agent the proceeds of the sale of the Subject Property, the
Sale Option Recourse Amount with respect to the Leased Property and any amounts
due pursuant to Section 20.2  of the Lease
(which amounts may be less than the aggregate amount of the unpaid principal of
the Notes and Lessor Amount), together with all other amounts due and payable
under Article XIII; and (iv) subject to the limitation in Section 16.5
of the Lease, upon an Event of Default resulting in an acceleration of the
Lessee’s obligation to purchase the Subject Property under the Lease, the
amounts then due and payable by the Lessee under the Lease shall include all
amounts necessary to pay in full the Lease Balance, plus
all other amounts then due from the Lessee to the Participants under the
Operative Documents.

 

                Section 5.3.       Distribution.  (a) Each payment of Basic Rent (and any
payment of interest on overdue installments of Basic Rent) received by the
Collateral Agent shall be distributed by the Collateral Agent to the
Participants pro-rata, in accordance with, and for application to, the amount
of Interest and Yield then due on the Loans and the Lessor Amount,
respectively, as well as any overdue Interest or Yield due to each Lender or
Lessor (to the extent permitted by Applicable Laws).

 

                (b)       Any payment received by the Collateral
Agent as a result of:

 

                    (i)        the purchase of all of the Subject
Property in connection with the Lessee’s exercise of its Early Termination
Option under Section 18.1 of the Lease or its Purchase Option under Section 19.1
of the Lease or pursuant to the penultimate paragraph of Section 20.1 of
the Lease, or

 

9

 

                   (ii)        the payment of the Lease Balance in
accordance with Section 15.1 of the Lease,

 

shall be distributed by the Collateral Agent to pay in
full, on a pro-rata basis, as applicable, the Participant Balance of each
Participant and the balance, if any, of such payment or amounts shall be
promptly distributed to, or as directed by, the Lessee.

 

                (c)       Any payments received by the Collateral
Agent as Sale Option Recourse Amount in accordance with Section 20.1(i) of
the Lease upon the Lessee’s exercise of the Sale Option shall be distributed by
the Collateral Agent in the following amounts and order of priority:

 

                first,        on a pro
rata basis based on their respective shares of the Loan Balance, to the Lenders
for application to pay in full the Loan Balance owing to them;

 

          second,        to
the Lessor to pay in full the Lessor Balance; and

 

              third,        the
balance, if any, shall be promptly distributed to, or as directed by, the
Lessee.

 

                (d)       (i)  Any payments received by the
Collateral Agent as Net Sales Proceeds from the sale of the Subject Property and
the CSC Sublease on or before the Expiration Date pursuant to the Lessee’s
exercise of the Sale Option pursuant to Article XX of the Lease, together
with any payment made as a result of the valuation process conducted pursuant
to Section 13.2 hereof shall be distributed by the Collateral Agent from
the funds so received in the following order of priority:

 

                first,        so much of such amount as shall be required to
reimburse Lessor and Collateral Agent for any Lessor Marketing Costs;

 

          second,        to
the Lessor for application to pay in full the Lessor Balance;

 

              third,        on a pro
rata basis based on their respective shares of the sum of the outstanding Loan
Balance, if any, to the Lenders for application to pay in full the outstanding
Loan Balance;

 

            fourth,        to Lessee
to pay in full the Sale Option Recourse Amount to the extent previously paid by
Lessee; and

 

                fifth,        the
balance, if any, shall be promptly distributed to, or as directed by, the
Lessee.

 

10

 

                (ii)       If possession of the Leased Property is
delivered to Lessor pursuant to Section 20.3 of the Lease, then at the end
of each calendar month following the Expiration Date, but prior to the last day
of the Extended Remarketing Period, any payments received by the Collateral
Agent during the calendar month then ended as Net Sales Proceeds from the sale
of the Subject Property and the CSC Sublease or proceeds from the rental, or
other disposition of the Subject Property and the CSC Sublease and any
insurance proceeds paid in connection with a Casualty or Condemnation relating
to the Subject Property and the CSC Sublease shall be distributed by the
Collateral Agent in the following order of priority:

 

                first,        so much
of such amount as shall be required to reimburse Lessor and Collateral Agent
for Lessor Marketing Costs;

 

          second,        to
the Lessor for application to pay in full the Lessor Balance as of the
Expiration Date;

 

              third,        solely
with respect to a sale of the Subject Property and the CSC Sublease prior to
the two-year anniversary of the Expiration Date, to Lessee to pay any
unreimbursed Sale Option Recourse Amount to the extent previously paid by
Lessee on the Expiration Date together with interest at the Lessee Interest
Rate on the portion of the unreimbursed Sale Option Recourse Amount distributed
to Lessee on such date, accruing from the Expiration Date to, but not
including, the date of such distribution pursuant to this Section 5.3(d)(ii);
and

 

            fourth,        the
balance, if any, shall be promptly distributed to, or as directed by the
Lessor.

 

               (iii)       Except as provided in Section 5.3(g)(ii),
any payments received by the Collateral Agent pursuant to the sixth sentence of
Section 14.1(a) of the Lease, shall be distributed by the Collateral
Agent, on the Payment Date immediately following the receipt by the Collateral
Agent of any such payment, in the funds so received in the following order of
priority:

 

                first,        on
a pro rata basis based on their respective shares of the sum of the outstanding
principal amount of the Loans and Lessor Amount, as the case may be, to the
Participants for application to pay in full the outstanding principal amount of
the Loans and Lessor Amount;

 

          second,        on a pro
rata basis based on the amount of accrued Interest and Yield payable to each
Participant, to the Participants for application to pay all accrued Interest
and Yield; and

 

              third,        the
balance, if any, shall be promptly distributed to, or as directed by, the
Lessee.

 

                (e)       All payments of Supplemental Rent
received by the Collateral Agent (excluding any amounts payable pursuant to the
preceding provisions of this Section 5.3) shall be distributed promptly by
the Collateral Agent upon receipt thereof to the Persons entitled thereto
pursuant to the Operative Documents.

 

11

 

                 (f)       Notwithstanding any other provision of
this Section 5.3, any Excepted Payment received at any time by the
Collateral Agent shall be distributed promptly to the Person entitled to
receive such Excepted Payment pursuant to the Operative Documents.

 

                (g)       (i)  All amounts received by the
Collateral Agent in connection with any sale, lease or other disposition of all
or any part of the Subject Property, the CSC Sublease and any Fifth Floor
Sublease as a result of, or following, an Event of Default (including a Limited
Recourse Event Default) or any Event of Loss or Significant Environmental
Event  after the occurrence and during
the continuance of an Event of Default shall be distributed by the Collateral
Agent in the following order of priority:

 

                first,        so much of such payments or amounts as shall be
required in accordance with the Operative Documents to pay or reimburse
Collateral Agent for any costs or fees incurred or owing as a result of such
Event of Default;

 

          second,        so much of such payments or amounts as shall be
required to pay the then existing or prior Participants the amounts payable to
them pursuant to any expense reimbursement or indemnification provisions of the
Operative Documents or any other amount (including, without limitation, Fees,
but not including amounts referred to in second and third below) due pursuant to the Operative Documents shall
be distributed to each such Participant without priority of one over the other
in accordance with the amount of such payment or payments payable to each such
Person;

 

              third,        on
a pro rata basis based on their respective shares of the Participant Balance,
to the Participants for application to pay in full the Participant Balance; and

 

            fourth,        the
balance, if any, of such payment or amounts remaining thereafter shall be
promptly distributed to, or as directed by, the Lessee.

 

                (ii)       All payments received and amounts
realized (other than payments or amounts described in clause (g)(i) above)
by the Collateral Agent as a result of, or following, an Event of Default
(including a Limited Recourse Event of Default) shall, if received by the
Collateral Agent, be distributed by the Collateral Agent in the following order
of priority:

 

                first,        so much of such payment or amounts as shall be
required in accordance with the Operative Documents to pay or reimburse
Collateral Agent for any costs or fees incurred or owing as a result of such
Event of Default;

 

          second,        so
much of such payments or amounts as shall be required to pay the then existing
or prior Participants the amounts payable to them pursuant to any expense
reimbursement or indemnification provisions of the Operative Documents or any
other amount (including, without limitation, Fees, but not including amounts
referred to in second and third
below) due pursuant to the Operative Documents shall be distributed to each
such Participant without priority of one over the other in accordance with the
amount of such payment or payments payable to each such Person;

 

12

 

              third,        on
a pro rata basis based on their respective shares of the Participant Balance,
to the Participants for application to pay in full the Participant Balance; and

 

            fourth,        the
balance, if any, of such payment or amounts remaining thereafter shall be
promptly distributed to, or as directed by, the Lessee.

 

               (iii)       During the occurrence and continuance of
an Event of Default, all amounts (other than Excepted Payments) received or
realized by the Collateral Agent and otherwise distributable pursuant to Section 5.3(a) shall
be distributed as provided for in clause (g)(ii) above.

 

                (h)       (i)  Any payment received by the
Collateral Agent for which no provision as to the application thereof is made
in the Operative Documents or elsewhere in this Section 5.3 shall be
distributed in accordance with Section 5.3(g)(ii).

 

                (ii)       Except as otherwise provided in Section 5.3(f),
all payments received and amounts realized by the Collateral Agent under the
Lease or otherwise with respect to the Subject Property, the CSC Sublease and
any Fifth Floor Sublease, or any proceeds thereof, to the extent received or
realized at any time after an indefeasible payment in full of the Participant
Balances of all of the Participants and all other amounts due and owing to the
Collateral Agent or the Participants, shall be distributed forthwith by the
Collateral Agent in the order of priority set forth in Section 5.3(g)(ii),
except that such payment shall be distributed omitting clause “third” of such Section 5.3(g)(ii).

 

                 (i)       Any payment received by the Collateral
Agent for which provision as to the application thereof is made in an Operative
Document, but not elsewhere in this Section 5.3, shall be distributed
forthwith by the Collateral Agent to the Person and for the purpose for which
such payment was made in accordance with the terms of such Operative Document.

 

                 (j)       Except to the extent clause (b) or
(g) is applicable thereto, all amounts payable to the Lessee for the
repair of damage caused by such Casualty or Condemnation in accordance with Section 14.1(a) of
the Lease shall be distributed to, or as directed by, the Lessee in accordance
with Section 14.1 of the Lease.

 

                (k)       Except as contemplated by
Sections 5.3(d)(ii) or 5.3(d)(iii), to the extent any payment made to
any Participant, personally, is insufficient to pay in full the Participant
Balance of such Participant plus all accrued Interest and Yield, as the case
may be, owing to such Participant, then each such payment which is payable to a
Lender shall first be applied to accrued Interest and then to principal
outstanding on the Loans and each such payment which is payable to Lessor shall
first be applied to accrued Yield and then to the Lessor Amount, as applicable.

 

                Section 5.4.       Adjustments.  (a) If any Participant (a “Benefited Participant”) shall at any time receive any
payment of all or part of its Loans or Lessor Amount, as applicable, or
Interest or Yield thereon, as applicable, or receive any of the collateral in
respect thereof (whether voluntarily or involuntarily, by setoff, or
otherwise), in an amount greater than the amount to which such Participant was
entitled pursuant to Section 5.3, such Participant shall return such
amount or collateral to the Collateral Agent for distribution to the Person(s) entitled
thereto in accordance with Section 5.3; provided,
however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such Benefited
Participant so that the excess payment or benefits returned by such Benefited
Participant exceed the remaining excess payment or benefits held by such
Benefited Participant, the excess payment or benefits, as applicable, returned
by such Benefited Participant shall be restored to the Benefited Participant,
to the extent of such recovery, but without interest.

 

13

 

ARTICLE VI

CONDITIONS
PRECEDENT TO CLOSING DATE AND ADVANCE

 

                Section 6.1.       Conditions
Precedent to the Closing Date and the Advance.  The obligations of the Lessor (which may be
performed by the Collateral Agent to the extent and in the manner set forth in
this Participation Agreement) to make the Advance on the Closing Date, the
obligations of the Lessor to Fund the related Lessor Amount on the Closing Date
and the obligation of the Lenders to make the related Funding of their Loans on
the Closing Date are subject to the satisfaction or waiver by the Participants
on or prior to the Closing Date of each of the following conditions precedent,
each of which shall be deemed fully satisfied or waived by the Participants and
the Collateral Agent if the Advance is made and such Advance is released by the
Participants from the escrow arrangement contemplated on the Closing Date:

 

                   (a)        Authorization, Execution
and Delivery of Documents; No Default.  Each of the Operative Documents shall have
been duly authorized, executed and delivered by each of the other parties
thereto, shall (to the extent the form and substance thereof shall not be
prescribed hereby) be in form and substance satisfactory to each Participant
and an executed counterpart of each thereof (except for the Notes, originals of
which shall only be delivered to the applicable Lender, and for each Fee
Letter, originals and copies of which shall only be delivered to the parties
thereto) shall have been received by each of the Participants and the
Collateral Agent.  Each Lender shall have
received an original, duly executed Note, registered in such Lender’s
name.  Each of the Operative Documents
listed in this clause (a) shall be in full force and effect as to all
other parties and no Default, Event of Default or Loan Agreement Event of
Default shall have occurred or be continuing.

 

                   (b)        Legality, Etc.  In the opinion of each Participant, the
Overall Transaction shall not violate any Applicable Laws and no change shall
have occurred or been proposed in Applicable Laws 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 such Participant.

 

                   (c)        Fees and Expenses.  The Collateral Agent shall be prepared to pay
and (concurrently with the closing hereunder) shall pay, using the proceeds of
the Advance, to the Persons entitled thereto, all Transaction Expenses and Fees
accrued as of the Closing Date pursuant to and as set forth in Section 4.5.

 

14

 

                   (d)        Lessee’s Resolutions and
Incumbency Certificate, Etc. 
The Lessee shall have delivered to the Collateral Agent and each
Participant (i) a good standing certificate with respect to Lessee from
the secretary of state of Lessee’s state of organization, issued by such office
no earlier than thirty (30) days prior to the Closing Date, and (ii) a
Responsible Officer’s Certificate of Lessee substantially in the form of Exhibit E-1,
attesting and certifying as to (A) the authority for the execution,
delivery and performance by Lessee of each Operative Document to which it is or
will be a party, (B) its organizational documents, (C) its
constituent documents and (D) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Operative Documents to
which it is a party.

 

                   (e)        Funding Indemnity
Letter.  The Collateral Agent
and the Participants shall have received a funding indemnity letter executed by
Lessee dated the Closing Date, and in form and substance satisfactory to each
Participant (the “Funding Indemnity Letter”).

 

                    (f)        Certificate of Lessor.  The Collateral Agent shall have received a
secretary’s certificate signed by an authorized signatory of the Lessor
substantially in the form of Exhibit E-2 and customarily provided by
Lessor in transactions of this type.

 

                   (g)        Opinion of Special Counsel
to the Participants.  Each
Participant shall have received an opinion of Chapman and Cutler LLP, special
counsel to the Participants, as to the matters set forth in Exhibit B-1,
which opinion shall be reasonably acceptable in form and substance to such
Participant.

 

                   (h)        Opinions of Special
Counsel to Lessee.  The
Collateral Agent and each Participant shall have received an opinion of DLA
Piper US LLP special New York counsel and special Texas counsel to the Lessee,
as to the matters set forth in Exhibit B-2 and B-3, respectively, which
opinion shall be reasonably acceptable in form and substance to the
Participants.

 

                    (i)        Taxes.  All taxes, fees and other charges payable in
connection with the execution, delivery, recording, filing and registration of
the Operative Documents, if any, and the transactions to consummated on the
Closing Date, or the provisions for such payments, shall have been made by the
Lessee to the satisfaction of the Collateral Agent.

 

                    (j)        Appraisal.  The Collateral Agent and each Participant
shall have received an Appraisal (the “Appraisal”)
performed by the Appraiser and in form and substance satisfactory to each
Participant which shall establish (by the use of appraisal methods reasonably
satisfactory to each Participant) the Fair Market Value of the Leased Property
as of the Closing Date and as of the end of the Base Term.

 

                   (k)        Requirements of Law.
The Overall Transaction does not and will not violate in any material respect
any Applicable Laws and does not and will not subject any such Person to any
material adverse regulatory prohibitions or constraints or cause any such
Person to violate any Applicable Laws.

 

15

 

 

                    (l)        Opinion of Counsel to
Lessor.  Each Lender and the
Collateral Agent shall have received an opinion of Dave W. Parr, Associate
General Counsel to Bank of America, National Association, as to matters set
forth in Exhibit B-4, which opinion shall be reasonably acceptable in form
and substance to such Lenders and the Collateral Agent.

 

                  (m)        Offeree Letter.  Collateral Agent and Lessee shall have
received a certificate, substantially in the form of Exhibit F, from the
Arranger, dated the Closing Date, with respect to offerees of the Notes (the “Offeree Letter”).

 

                   (n)        Environmental Report.  At least four (4) Business Days prior to
the Closing Date, an Environmental Audit satisfactory to each Participant with
respect to the Land shall have been received by Collateral Agent and each
Participant, and Collateral Agent and each Participant shall receive a letter
from the consultant performing the Environmental Audit which allows Collateral
Agent and the Participants to rely on such report.

 

                   (o)        Acquisition of Facility
and Leasehold Interest in Land; Assumption of Related Agreements.

 

                    (i)        Lessor and Seller and the City shall
have deposited with the Escrow Agent a fully executed original of the
Assignment of Ground Lease pursuant to which the Seller shall have assigned to
Lessor, and Lessor shall have assumed, Seller’s right, title and interest as
ground lessee, in and to the Ground Lease;

 

                   (ii)        Seller and Lessor shall have deposited
with the Escrow Agent a fully executed original of the special warranty deed
(the “Deed”), executed by the Seller and
dated the Closing Date with respect to the Facility and fixtures existing on
the Leased Property, sufficient to convey to Lessor good and marketable fee
simple title thereto free of all Liens, other than Permitted Liens;

 

                  (iii)        Lessor and Seller shall have deposited
with the Escrow Agent (y) a fully executed original of the Assignment of
Subleases pursuant to which the Seller shall have assigned to Lessor and Lessor
shall have assumed, Seller’s right, title and interest in and to the Related
Agreements which constitute leases and (z) a fully executed original of
the Assignment of Related Agreements pursuant to which Seller shall have
assigned to Lessor, and Lessor shall have assumed, Seller’s right, title and
interest in and to the Related Agreements (other than those Related Agreements
covered by the immediately preceding clause (v) above);

 

                  (iv)        Lessor and Lessee shall have deposited
with the Escrow Agent a fully executed original of the Assignment of Purchase
Agreement; and

 

16

 

                   (v)        Collateral Agent shall have received
evidence reasonably satisfactory to it that the Deed, the Lease or memoranda
thereof, the Ground Lease or memoranda thereof, the Assignment of Ground Lease,
the Assignment of Subleases, the Assignment of Related Agreements, the Deed of
Trust and the Assignment of Leases and Rents or any memoranda thereof shall
have been or in connection with the Advance are being recorded with the
appropriate Governmental Authorities in an order satisfactory to the Collateral
Agent (and the issuance of the title insurance policies in Section 6.1(r) shall
be satisfactory evidence of the foregoing), and the UCC Financing Statements
shall have been or are being filed with the appropriate Governmental
Authorities.

 

                   (p)        Searches.  Collateral Agent and each Participant shall
have received reports, acceptable to the Collateral Agent and Lessor, as to the
Lessee and Seller by the appropriate county and state filing or recording offices
of the state and county in which (i) each of the Lessee’s and Seller’s
chief executive office is located and (ii) each of Lessee and Seller is
organized, in each case dated not earlier than fifteen (15) Business Days prior
to the Closing Date, of the results of a search of the applicable UCC files and
any indices of Liens maintained by such offices (including, if applicable,
indices of judgment, revenue and tax liens).

 

                   (q)        Survey.  Lessee shall have, or shall have caused to
be, delivered and certified to Collateral Agent, each Participant and to the
Title Insurance Company an “as built” ALTA survey of the Subject Property, (i) dated
a satisfactory date to the Collateral Agent and each Participant, (ii) in
a form reasonably satisfactory to Collateral Agent, each Participant and the
Title Insurance Company, (iii) including any applicable flood zone
designation with property annotations based on Federal Flood Insurance Rate
Maps, (iv) enabling the Title Insurance Company to modify any standard
printed survey exception contained in the applicable title policy and to issue
the Title Policies, (v) in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by the
American Land Title Association and the National Society of Professional
Surveyors in 2005 and (vi) the location of all improvements thereon.  Without limiting the generality of the
foregoing, there shall be surveyed and shown on such survey, as applicable, the
following:  (A) the locations of any
established building setback lines; (B) the lines of streets abutting the
Subject Property and width thereof; (C) all access and other easements
appurtenant to the Land necessary to use the Subject Property; (D) all
roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the Subject Property, whether
recorded, apparent from a physical inspection of the Subject Property or
otherwise known to the surveyor; (E) any encroachments on any adjoining property;
(F) if the Subject Property is described as being on a filed map, a legend
relating the survey to said map and (G) a vicinity sketch showing the
closest thoroughfare intersection.

 

17

 

                    (r)        Title and Title Insurance.  (i) Lessor and Collateral Agent shall
have received from the Title Insurance Company a Texas Form (T-1) Owner’s
Policy of Title Insurance (the “Owner’s Policy”)
in form and substance acceptable to Collateral Agent, insuring that Lessor has
a good and marketable fee simple title to the Subject Property, subject, in
each case, to the Related Agreements which constitute leases and the CSC
Sublease, such exceptions to title as are acceptable to Collateral Agent, in an
amount equal to the aggregate Loan Commitment, together with complete, legible
copies of all encumbrances, maps and surveys of record, (ii) Collateral
Agent, for the benefit of the Participants, shall have received from the Title
Insurance Company, a Texas Form (T-2) Mortgagee Policy of Title Insurance
(the “Lenders’ Policy”; together with the
Owner’s Policy, the “Title Policies”),
in form and substance acceptable to Collateral Agent, insuring the Lien of
the Deed of Trust as a valid first priority Lien against the Subject Property
subject to such exceptions to title as are acceptable to Collateral Agent, in
an amount equal to the Aggregate Commitment Amount, together with complete,
legible copies of all encumbrances and plats of record, and (iii) the
Title Policies shall be dated as of the Closing Date and, to the extent
permitted under Applicable Laws, shall (to the extent available under Texas
law): (w) contain affirmative endorsements as to mechanics’ liens, doing
business, usury, zoning, comprehensive coverage, encroachments, the
nonviolation of covenants and restrictions, rights of access and survey
matters, (x) delete the creditors’ rights and survey exclusions, (y) contain
endorsements regarding the effect of recharacterization and (z) contain
such other endorsements reasonably requested by Collateral Agent.

 

                   (s)        Filings and Recordings.  All filings or recordings enumerated in
Schedule 6.1(s), as well as all other filings and recordings necessary or
advisable, including precautionary financing statements and/or mortgage filings,
reasonably deemed necessary by Collateral Agent, to perfect the rights, titles
and interests of the Participants and the Collateral Agent intended to be
created by the Operative Documents shall have been made in the appropriate
places or offices, including any recordings and filings necessary to create,
perfect, preserve and protect: (i) Lessor’s interest in the Lessee
Collateral, and (ii) first priority liens for the benefit of Collateral
Agent and the Participants on the Lessor Collateral and Lessee Collateral,
subject only to Permitted Liens.

 

                    (t)        Insurance.  Insurance complying with, and to the extent
required to be in place on the Closing Date pursuant to the provisions of Article XIII
of the Lease shall be in full force and effect as evidenced by certificates of
insurance, broker’s reports or insurance binders delivered to Collateral Agent
and Lessor, all in form and substance reasonably satisfactory to the
Participants.

 

                   (u)        Advance Request.  The Collateral Agent shall have received a
fully executed copy of the Advance Request, executed by the Lessee, in
accordance with Section 3.3(a).

 

                   (v)        Representation 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 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
material respects on and as of such earlier date.

 

18

 

                  (w)        Litigation.  No action or proceeding shall have been
instituted, nor shall any action or proceeding be threatened, before any
Governmental Authority, nor shall any order, judgment or decree have been
issued or proposed to be issued by any Governmental Authority (i) to set
aside, restrain, enjoin or prevent the full performance of this Participation
Agreement, any other Operative Document or any transaction contemplated as part
of the Overall Transaction, (ii) that questions the validity of the
Operative Documents or the rights or remedies of the Collateral Agent or the
Participants with respect to the Lessee, the Subject Property, the other Lessor
Collateral or the CSC Sublease under the Operative Documents, or (iii) which
in the reasonable judgment of the Required Participants may have a Material
Adverse Effect.

 

                    (x)        Defaults and Other Events.  There shall not have occurred and be
continuing any Default or Event of Default. 
There shall not have occurred and be continuing any Event of Loss or
Significant Environmental Event for which the Lessor has given a Termination
Notice pursuant to Section 15.1(a) of the Lease.  There shall not have occurred and be
continuing any Event of Loss or Significant Environmental Event, unless the
period given Lessor for delivery of a Termination Notice pursuant to Section 15.1(a) of
the Lease has expired without delivery of such Termination Notice and all
insurance proceeds and condemnation awards received in connection with such
Event of Loss or Significant Environmental Event have been applied toward the
payment of the repair, rebuilding or reconstruction of the Leased Property
under Section 14.1(d) of the Lease. 
No Default or Event of Default will have occurred after giving effect to
the making of the Advance requested by the Advance Request.

 

                   (y)        Consents and
Approvals.  All Governmental
Actions and other approvals, consents, licenses and easements required to be
taken, given or obtained, as the case may be, by or from any Governmental
Authority or another Person (including, but not limited to, the Ground Lessor
and the other parties to the Related Agreements), or by or from any trustee or
holder of any indebtedness or obligation of Lessee, and its affiliates, in each
case that are necessary in connection with the execution and delivery of the
Operative Documents and the consummation of the transactions contemplated
thereby by such persons and that are necessary to have been obtained by such
persons prior to the Closing Date in connection with any portion of the Overall
Transaction shall have been taken, given or obtained, as the case may be and
shall be in full force and effect, except for any such governmental actions,
approvals, consents, licenses or easements the failure of which to obtain or
maintain could not reasonably be expected to cause a Material Adverse Effect.

 

                    (z)        Ground Lessor Estoppel
Certificate.  The Collateral
Agent and each Participant shall have received the Estoppel Certificate
executed by the Ground Lessor in the form of Exhibit G hereto.

 

                 (aa)        Related Agreements.  The Collateral Agent and each Participant
shall have received an executed version of the Ground Lease, the CSC Sublease
and each of the Related Agreements, in each case certified by Lessee to its
knowledge as true, correct and complete.

 

19

 

                 (bb)        Purchase Agreement.  The Collateral Agent and each Participant
shall have received an executed version of the Purchase Agreement and the other
documents and certificates delivered pursuant thereto and evidence satisfactory
to it that each of the conditions contained in Section 7 of the Purchase
Agreement have been satisfied in full.

 

ARTICLE VII

[INTENTIONALLY OMITTED]

 

ARTICLE VIII

REPRESENTATIONS

 

                Section 8.1.       Representations
of the Lenders.  Each Lender
represents and warrants, severally and only as to itself, to the other Lenders,
Lessor, the Collateral Agent and the Lessee that as of the date hereof and as
of the Closing Date:

 

                   (a)        ERISA.  Such Lender is not and will not be making its
Loans 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).

 

                   (b)        Status.  Such Lender 
is a commercial bank, branch or agency of a bank or other similar
financial institution, or an Affiliate thereof.

 

                   (c)        Power and Authority.  Such Lender has the requisite power and
authority to enter into and perform its obligations under the Operative
Documents to which it is a party.

 

                   (d)        Lessor Liens.  There are no Lessor Liens attributable to
such Lender on the Lease or the Leased Property.

 

                   (e)        Organization, Etc.  Such Lender is a corporation, limited
liability company or banking association validly organized and existing and in
good standing under the laws of the State or jurisdiction of its creation.

 

                    (f)        Investment.  The Note being acquired by such Lender is
being acquired by such Lender for investment and not with a view to the resale
or distribution of such interest or any part thereof, but without prejudice,
however, to the right of such Lender at all times, subject to Article XII,
to sell or otherwise dispose of all or any part of such interest under a
registration available under the Securities Act or under an exemption from such
registration available under the Securities Act, it being understood that the
disposition by such Lender of the Note to be purchased by such Lender shall, at
all times, remain within its control, subject to Article XII.

 

20

 

                   (g)        Offer of Securities, Etc.  Neither such Lender nor any Person authorized
to act on its behalf has, directly or indirectly, offered to sell the Notes or
any other similar securities (the sale or offer of which would be integrated
with the sale or offer of the Notes), for sale to, or solicited any offer to acquire
any of the same from, any Person.

 

                   (h)        No Registration.  Such Lender understands and acknowledges that
the Notes have not been and will not be registered under the Securities Act in
reliance upon the exemption provided in Section 4(2) of the Securities
Act or any other applicable exemption, that the Notes have not and will not be
registered or qualified under the securities or “blue sky” laws of any
jurisdiction, that the Notes may be resold or otherwise transferred only if so
registered or qualified or if an exemption from registration or qualification
is available, that none of the Lessee, the Lessor or the Collateral Agent is
required to register the Notes and that any transfer must comply with the
provisions of the Operative Documents relating thereto.  Such Lender will comply with all applicable
federal and state securities laws in connection with any subsequent resale of
the Notes held by it.

 

                    (i)        Institutional Investor.  Such Lender is a sophisticated institutional
investor and an “accredited investor” as defined in paragraph (1), (2), (3) or
(7) of Rule 501(a) of the Securities Act, and has knowledge and
experience in financial and business matters and is capable of evaluating the
merits and risks of its investment in the Notes and is able to bear the
economic risk of such investment. Such Lender has been given such information
concerning the Notes, the other Operative Documents, the Leased Property, the
Lessor and the Lessee as it has requested.

 

                    (j)        [Intentionally Omitted].

 

                   (k)        Legend.  Such Lender understands and acknowledges that
the Note which it is acquiring will bear a legend as set forth in the form Note
included in the Loan Agreement.

 

The making of any Loan on the Closing Date or the
assignment of any interests therein pursuant to Article XII shall
constitute an affirmation by the subject assignee or acquiring Lender of the
preceding representations and warranties.

 

                Section 8.2.       Warranties
and Representations of the Lessee. 
The Lessee warrants and represents to each of the other parties that,
except as set forth in Schedule 8.2 attached hereto, as of the date hereof
and as of the Closing Date:

 

                   (a)        Existence and Power.  The Lessee is a corporation duly organized
and validly existing under the laws of the jurisdiction of its incorporation,
is duly qualified to do business as a foreign corporation in the State of Texas
and is in good standing in the State of Texas and in all other jurisdictions,
except where the failure to be so qualified would not have a Material Adverse
Effect, and has full corporate power and authority and all necessary licenses
and permits to carry on its present business and operations, to own or lease
its properties and to execute, deliver and perform its obligations under the
Operative Documents to which it is a party.

 

21

 

                   (b)        Authorization;
Enforceability.  The Operative
Documents to which the Lessee is a party have been duly authorized, executed
and delivered by the Lessee and constitute legal, valid and binding obligations
of the Lessee enforceable against the Lessee in accordance with the respective
terms thereof, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and general equitable principles
(whether in equity or at law).

 

                   (c)        No Contravention; Consents
and Approvals.  (i) The
execution and delivery by the Lessee of each of the Operative Documents to
which it is a party and compliance by the Lessee with all of the provisions
thereof do not and will not contravene any law, governmental rule or
regulation or any order of any court or Governmental Authority or agency
applicable to or binding on the Lessee or contravene the provisions of, or
constitute a default under, or result in the creation (except as contemplated
by the Operative Documents) of any Lien upon the property of the Lessee under,
its charter or by-laws or any indenture, mortgage, contract or other agreement
or instrument to which the Lessee is a party or by which it or any of its
properties may be bound or affected.

 

                   (ii)        No authorization, consent, approval,
license, exemption of, or filing or registration with, any Government
Authority, or approval or consent of any other Person, is required for the due
execution, delivery or performance by Lessee of any of the Operative Documents
or the consummation of the Overall Transaction, except those which have been
obtained or made and are in full force and effect.

 

                   (d)        Litigation.  Except as disclosed in the Lessee’s financial
statements described in Section 8.2(h)(i), there are no proceedings
pending or, to the knowledge of the Lessee, threatened against the Lessee in
any court or before any Governmental Authority or arbitration board or tribunal
as to which there exists a substantial likelihood of an adverse determination
which is reasonably likely, individually or in the aggregate (and after
consideration of payments made under any insurance policies then in effect),
when resolved, to have a Material Adverse Effect.  The Lessee is not in default with respect to
any order of any court or Governmental Authority or arbitration board or
tribunal.

 

                   (e)        Registrations; Filings.  Lessee has obtained all consents, approvals
and authorizations and made or obtained all filings, registrations or
qualifications required for the parties to consummate the transactions
contemplated by the Operative Documents.

 

22

 

                    (f)        Title to the Subject
Property.  Subject at all
times to Section 5.1 hereof, the Lessor will on the Closing Date have good
and marketable recorded title to the Subject Property, free and clear of all
Liens other than Permitted Liens.

 

                   (g)        No Violations.  None of the transactions contemplated by the
Operative Documents (including, without limitation, the funding by the Lessor
of the Lessor Amount and the purchase by the Lenders of the Notes) will result
in a violation of Section 7 of the Securities Exchange Act of 1934, as
amended, or any regulations issued pursuant thereto, including, without
limitation, Regulations T, U and X issued by the Board of Governors of the
Federal Reserve System.  The proceeds of
the sale of the Notes and the funding of the Lessor Amount will be used only
for the purpose of financing (i) the acquisition of the Subject Property, (ii) the
payment of the Transaction Expenses incurred in connection therewith and (iii) such
other purposes, if any, as may be indicated on the closing statements prepared
by the Escrow Agent or the Advance Request. 
None of the proceeds from the Notes or the funding of the Lessor Amount
will be used to purchase or carry (or refinance any borrowing the proceeds of
which were used to purchase or carry) any “security” within the meaning of the
Securities Exchange Act of 1934, as amended.

 

                   (h)        Financial Information. 
(i) The audited consolidated balance sheets of the Lessee as of December 29,
2007 and the related audited consolidated statements of income, stockholder’s
equity and cash flows for the fiscal year ending December 29, 2007,
accompanied by a report thereof containing an opinion unqualified as to scope
limitations imposed by the Lessee and otherwise without qualification (copies
of which are available on EDGAR), have been prepared in accordance with GAAP
consistently applied, and correctly set forth in all material respects the
financial condition of the Lessee and its Subsidiaries as of such date and the
results of its operations, earnings and cash flows for the period then ended.

 

                   (ii)        Since December 29, 2007, there has
been no event, circumstance or condition which could reasonably be expected to
have a Material Adverse Effect.

 

                    (i)        Creation of Liens;
Permitted Liens.  (i) On
the Closing Date, (a) all filings necessary or reasonably requested by the
Participants to establish and perfect the Lessor’s title to and interest in the
Subject Property and the Lessee Collateral as against the Lessee and any third
parties and to perfect the lien and security interest of the Lessor under the
Lease in the Leased Property and the other Lessee Collateral as against
creditors of and purchasers from the Lessee have been duly made, and the Lease
will on the Closing Date create a valid and perfected first priority lien and
security interest (subject to the Permitted Liens) in the Leased Property and
the other Lessee Collateral effective as against creditors of and purchasers
from the Lessee securing the payment of all obligations of the Lessee under the
Operative Documents, and (b) all filings necessary or reasonably requested
by the Participants to perfect the lien and security interest of the Collateral
Agent under the Assignment of Leases and Rents and the Deed of Trust  with respect to the Subject Property and the other Lessee
Collateral and Lessor Collateral as against creditors of and purchasers from
the Lessee and the Lessor have been duly made, and the Assignment of Leases and
Rents and the Deed of Trust will on the Closing Date create a valid and
perfected first priority lien and security interest (subject to the Permitted
Liens) in the Subject Property and the other Lessee Collateral and Lessor
Collateral effective as against creditors of and purchasers from the Lessee and
Lessor securing the payment of all obligations of the Lessee and Lessor under
the Operative Documents; and

 

23

 

                   (ii)        The Subject Property, and the Lessee’s
interest in the CSC Sublease are free and clear of all Liens other than
Permitted Liens.

 

                    (j)        Insurance.  On the Closing Date, the Subject Property
will be covered by the insurance required by Section 13.1 of the Lease to
the extent set forth therein.

 

                   (k)        Absence of Defaults;
Fulfillment of Master Agreement. 
(A)(i) No Default or Event of Default has occurred and is
continuing, (ii) the Lessee is not or, but for the passage of time, would
be in violation in any material respect of any term of any charter instrument
or by-law to which it is a party or by which it may be bound, (iii) the
Lessee is not or, but for the passage of time, would be in violation in any
respect of any term of any agreement or instrument to which it is a party or by
which it may be bound, except as would not have a Material Adverse Effect, (iv) the
Lessee is in compliance with all laws, ordinances, governmental rules and
regulations to which it is subject, the failure to comply with which would have
a Material Adverse Effect and (v) the Lessee has obtained all licenses,
permits, franchises and other governmental authorizations material to the
conduct of its business, except where the failure to so obtain would not have a
Material Adverse Effect;

 

                   (B)        No default has occurred or is continuing
(i) with respect to the Tenant, under and as defined in, the Ground Lease,
(ii) with respect to the Seller under any Related Agreement or the CSC
Sublease or (iii) with respect to any other party under any Related
Agreement or the CSC Sublease which, in the case of this clause (iii) only,
would have a Material Adverse Effect; and

 

                   (C)        All obligations of CSC under, and as
defined in, the Master Agreement have been fully discharged.

 

                    (l)        Sale of Notes and Funding
of Lessor Amount.  The
execution and delivery of this Agreement and the issue and sale of the Notes
and the funding of Lessor Amount under the Operative Documents will not involve
any transaction which is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section 4975
of the Code.  The representation by the
Lessee in the preceding sentence is made in reliance upon and subject to the
accuracy of the representations of the Participants in Section 8.1(a).

 

                  (m)        No Transfer Taxes.  On the Closing Date, all sales, use or
transfer taxes payable required to be paid as of the Closing Date upon the
acquisition by the Lessor of the Subject Property and on the lease of the
Leased Property to the Lessee will have been paid  (or provision for the payment thereof shall
have been made) or such transactions will then be exempt from any such taxes
and no taxes, fees or other charges in connection with the execution and
delivery of the Operative Documents or the issuance and sale of the Notes and
the funding of Lessor Amount are payable.

 

24

 

                   (n)        Taxes.  The Lessee has filed all tax
returns that are required to have been filed by it in any jurisdiction, or has
timely filed extension requests with respect thereto, and has paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
levied upon it or its properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have
become delinquent, except for any taxes and assessments (i) the amount of
which if not paid would not result in a Material Adverse Effect or (ii) the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the Lessee has
established adequate reserves in accordance with GAAP.  The Lessee knows of no basis for any other
tax or assessment that could reasonably be expected to have a Material Adverse
Effect on any of them.  The charges,
accruals and reserves on the books of the Lessee in respect of Federal, state
or other taxes for all fiscal periods are adequate.

 

                   (o)        Solvency.  The Lessee is Solvent.

 

                   (p)        Location of Chief
Executive Office and Principal Place of Business; Formation.  The Lessee’s chief executive office and
principal place of business, and the place where its records concerning the
Leased Property and all documents relating thereto are kept, is 400 West Cesar
Chavez Street, Suite 600, Austin, TX 78701.  The Lessee is only formed in the State of
Delaware and “Silicon Laboratories Inc.” is the name as it appears in the
official filings in the State of Delaware.

 

                   (q)        Title to Property; Leases.  (i) The Lessee has good and marketable
title to all of the properties and other assets (real or personal, tangible,
intangible or mixed) it owns or purports to own, except for such defects in title
as, in the aggregate, would not have a Material Adverse Effect on any of them.

 

                   (ii)        Leases.  All leases to which the Lessee is a party as
lessee or sublessee are in full force and effect, except for such defects in
title and such invalidity or unenforceability of leases as, in the aggregate,
would not have a Material Adverse Effect on any of them.

 

                    (r)        Not an Investment
Company/Public Utility Holding Company.  The Lessee is not an “investment company” or
a company “controlled” by an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940 or subject to
regulation under the Public Utility Holding Company Act of 1935.

 

25

 

                   (s)        Full Disclosure.  No information, report, financial statement,
exhibit or schedule furnished by or on behalf of the Lessee to the Lenders and
the Lessor in connection with the negotiation of any Operative Document or
included therein or delivered pursuant thereto contained or contains any
material misstatement of fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading.

 

                    (t)        Compliance with ERISA.  (i) The Lessee and each other member of
the ERISA Group have operated and administered each Plan, if any, in compliance
with all applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material
Adverse Effect on any of them.  Neither
the Lessee nor any other member of the ERISA Group has incurred any liability
with respect to any Plan pursuant to Title I or IV of ERISA (other than routine
benefit claims in accordance with Plan provisions) or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in Section 3
of ERISA), and no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any such liability
by the Lessee or any other member of the ERISA Group, or in the imposition of
any Lien on any of the rights, properties or assets of the Lessee or any ERISA
Group, in either case pursuant to Title I or IV of ERISA or to such penalty or
excise tax provisions or to Section 401(a)(29) or 412 of the Code, other
than such liabilities or Liens as would not individually or in the aggregate
result in a Material Adverse Effect.

 

                   (ii)        The present value of the aggregate
benefit liabilities under each of the Plans, if any, (other than Multiemployer
Plans), determined as of such Plan’s most recently ended plan year for which an
actuarial report has been prepared on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $0 on a non-termination
basis in the case of any such single Plan and by more than $0 on a non-termination
basis in the aggregate for all such Plans. 
The term “benefit liabilities” has the meaning specified in
section 4001 of ERISA and the terms “current value” and “present value”
have the meanings specified in section 3 of ERISA.  All calculations shall be made under Section 302
of ERISA.

 

                  (iii)        The Lessee and the other member of the
ERISA Group have not incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the aggregate are
Material.

 

                  (iv)        The expected post-retirement benefit
obligation, if any, (determined as of the last day of the Lessee’s most
recently ended fiscal year in accordance with Financial Accounting Standards
Board Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by section 4980B of the Code) of the Lessee
has been disclosed in the most recent Annual Report on Form 10-K filed by
the Lessee with the Securities and Exchange Commission.

 

                   (u)        [Intentionally Omitted].

 

26

 

 

 

                   (v)        Environmental Matters.

 

                    (i)        In the ordinary course of its business,
the Lessee from time to time conducts reviews of the effect of Environmental
Laws on its business, operations and properties, in the course of which it
attempts to identify and evaluate associated liabilities and costs.  On the basis of this review, the Lessee has
concluded that it is not subject to any Environmental Claims under
Environmental Laws in effect as of the Closing Date that are likely to have a
Material Adverse Effect;

 

                   (ii)        As of the Closing Date, to the knowledge
of the Lessee, no Environmental Claims, investigation or written inquiry
exists, and the Lessee is not aware of any circumstances which would warrant or
give rise to such an Environmental Claim, investigation or inquiry, with regard
to the Lessee or any facility owned, leased or operated by the Lessee, under
CERCLA, Environmental Laws in effect on the Closing Date that are likely to
have a Material Adverse Effect;

 

                  (iii)        except as otherwise could not reasonably
be expected to have a Material Adverse Effect, the Subject Property  (including soils, surface waters,
groundwaters on, at or under the Subject Property) does not contain and is not
otherwise affected by, and to the Lessee’s knowledge (other than certain Hazardous
Substances that previously have been cleaned up or remediated in accordance
with applicable commercial laws and which do not have a Material Adverse
Effect) has not previously contained or been affected by, any Hazardous
Substances in amounts or concentrations which (1) constitute or
constituted a violation of applicable Environmental Laws or (2) could give
rise to liability or obligation under applicable Environmental Laws;

 

                  (iv)        except as otherwise could not reasonably
be expected to have a Material Adverse Effect, the Subject Property and all
operations conducted in connection therewith are in compliance, and have been
in compliance, with all applicable Environmental Laws, and there are no
Hazardous Substances at, under or about the Subject Property or such operations
which could reasonably be expected to interfere with the continued operation of
the Subject Property;

 

                   (v)        except as otherwise could not reasonably
be expected to have a Material Adverse Effect, the Lessee has obtained, is in
compliance with, and has made all appropriate filings for issuance or renewal
of, all environmental permits with respect to the Subject Property, and all
such environmental permits are in full force and effect;

 

                  (vi)        except as otherwise could not reasonably
be expected to have a Material Adverse Effect, Lessee has not received any
notice of violation, alleged violation, noncompliance, liability or potential
liability regarding environmental matters or compliance with Environmental
Laws, in each case, with respect to the Subject Property, nor does Lessee have
knowledge or reason to believe that, any such notice has been received by
Seller or will be received or is being threatened;

 

27

 

                 (vii)        except as otherwise could not reasonably
be expected to have a Material Adverse Effect, Hazardous Substances have not
been transported or disposed of from the Subject Property in violation of, or
in a manner or to a location which could reasonably be expected to give rise to
liability under, applicable Environmental Laws, nor have any Hazardous
Substances been generated, treated, stored or disposed of at, on or under the
Subject Property in violation of, or in a manner which could reasonably be
expected to give rise to liability under, any applicable Environmental Laws;

 

                (viii)        except as otherwise could not reasonably
be expected to have a Material Adverse Effect, no judicial proceedings or
governmental or administrative action is pending, or threatened, under any
applicable Environmental Law with respect to the Subject Property, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any applicable Environmental Law with respect to the Subject
Property; and

 

                   (ix)        except as otherwise could not reasonably
be expected to have a Material Adverse Effect, there has been no release, or
threat of release, of Hazardous Substances at or from the Subject Property, in
violation of or in amounts or in a manner that could reasonably be expected to
give rise to liability under applicable Environmental Laws.

 

                  (w)        Applicable Law.  The Subject Property and the contemplated use
thereof is in material compliance with all Applicable Law (including, without
limitation, all zoning and land use laws and Environmental Laws) and Insurance
Requirements, except for Applicable Laws as it shall be contesting in good
faith by appropriate proceedings.  There
is no action, suit or proceeding (including any proceeding in condemnation or
eminent domain or under any Environmental Law) pending or, to the best of its
knowledge, threatened with respect to it, or the Subject Property which could
reasonably be expected to have a Material Adverse Effect.

 

                    (x)        USA Patriot Act.   Neither Lessee nor
any Subsidiary of Lessee (A) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (B) engages
in any material dealings or transactions with any such Person.  Lessee and its Subsidiaries are in compliance
with the USA Patriot Act.

 

                   (y)        Flood Hazard Area.  No portion of the Subject Property
is located in an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency.

 

                    (z)        [Intentionally Omitted].

 

28

 

                 (aa)        Purchase Agreement.  To Lessee’s actual knowledge, as of the
Closing Date each of the representations and warranties of the Seller set forth
in the Purchase Agreement is true and correct.

 

                 (bb)        Rights in Respect of the
Subject Property.

 

                    (i)        The Subject Property  is located in the City of Austin,
Travis County, Texas.  The Subject
Property and any present use and presently anticipated future use thereof by
Lessee and its agents, assignees, employees, invitees, lessees, licensees and
tenants comply with all Requirements of Law (including zoning and land use
laws) and Insurance Requirements, except for such instances of non-compliance
that could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.  No
notices, complaints or orders of violation or non-compliance or liability have
been issued to the Lessee or, to the best of its knowledge, threatened by any
Person with respect to the Subject Property  or
the present or intended future use thereof, except for such violations and
instances of non-compliance as could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and Lessee is not
aware of any circumstances which could give rise to the issuance of any such
notices, complaints or orders;

 

                   (ii)        The Improvements are located wholly
within the boundaries of the Land (other than as indicated in the survey
delivered pursuant to Section 6.1(q) hereof) and comply with
applicable building restrictions and requirements, and setback and sideyard
lines and will not encroach on or interfere with existing easements (whether
on, above or below ground), conditions or restrictions affecting the Subject
Property  and that there are
no encroachments (other than as indicated in the survey delivered pursuant to Section 6.1(q) hereof)
from the Subject Property extending to adjacent property or from adjacent
property onto the Subject Property nor are there any gaps or gores;

 

                  (iii)        The zoning classification applicable to
the Land on which the Subject Property is located (which zoning classification
and the governmental bodies have jurisdiction thereof shall be described)
permits the use of the Leased Property as contemplated by the Operative
Documents.  All licenses, permits and
approvals necessary for the operation and use of the Leased Property have been
obtained and are in full force and effect and the Subject Property and the
operation of the Leased Property as contemplated by the Operative Documents
will comply with all Requirements of Law in existence as of the Closing Date,
except where non-compliance would not result in a Material Adverse Effect;

 

                  (iv)        Adequate ingress and egress to and from
the Subject Property is available over dedicated and accepted public streets
and rights-of-way;

 

                   (v)        Adequate utility facilities are
available to the Subject Property over dedicated and accepted public streets
and rights of way; and

 

29

 

 

                  (vi)        Any exceptions to the title of the
Lessor to the Subject Property do not individually or in the aggregate
materially have a Material Adverse Effect.

 

                 (cc)        Casualties and
Condemnations.  As of the
Closing Date, no Casualty has occurred and is continuing and there is no action
pending or, to the best of the Lessee’s knowledge, threatened by any
Governmental Authority to initiate a Condemnation.

 

                 (dd)        Subjection to Government
Regulation.  As of the Closing
Date, to the Lessee’s knowledge neither Collateral Agent nor any Participant
will, solely by reason of entering into the Operative Documents or consummating
the transactions contemplated thereby, (i) become subject to ongoing
regulation of its operations by any Governmental Authority; or (ii) become
subject to ongoing regulation of its operations by any Governmental Authority
upon exercise of remedies (other than the operation of the Subject Property)
under the Operative Documents or upon the expiration thereof; or (iii) be
required to qualify to do business in any jurisdiction.

 

                 (ee)        Appraisal Data.  To the Lessee’s knowledge, the written
information provided by Lessee to the Appraiser, taken as a whole, was true and
correct in all material respects on the date so given and did not omit any
information known and available to Lessee necessary to make the information
provided not misleading.

 

                   (ff)        Related Agreements.  (i) Schedule I to the Deed of Trust
sets forth a complete and accurate list as of the Closing Date of each Related
Agreement; and

 

                   (ii)        Except for the agreements set forth on
Schedule 8.2(ff) which may terminate, as of the Closing Date, (x) the
Ground Lease and (y) except as would not have a Material Adverse Effect,
each other Related Agreement and the CSC Sublease are in all material respects
valid, binding and in full force and effect and are enforceable by Lessor (or
with respect to the CSC Sublease, by the Lessee) against the other parties
thereto in accordance with their respective terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting creditors’ rights generally and general equitable
principles (whether in equity or at law). 
As of the Closing Date, no party, (A) under the Ground Lease or, (B) except
as would not have a Material Adverse Effect or except with regard to the
agreements set forth on Schedule 8.2(ff) hereto, under any other Related
Agreement or the CSC Sublease has given notice of termination of, or taken any
action inconsistent with the continuation of, the Ground Lease,  any other Related Agreement or the CSC
Sublease.  As of the Closing Date, none
of such other parties will have any presently exercisable right to terminate
the Ground Lease or, except as would not have a Material Adverse Effect  or except with regard to the agreements set forth on
Schedule 8.2(ff) hereto,  any other
Related Agreement or the CSC Sublease for any reason, including as a result of
the execution, delivery or performance of the Operative Documents.

 

30

 

                 (gg)        Offer of Securities, Etc.  Neither the Lessee nor (assuming the accuracy
of the representations of the Participants set forth in Sections 8.1(i) and
8.4(g) hereof) any Person authorized to act on its behalf has, directly or
indirectly, offered to sell the Notes, the Lessor’s Interest or any other
similar securities (the sale or offer of which would be integrated with the
sale or offer of the Notes or the Lessor’s Interest), for sale to, or solicited
any offer to acquire any of the same from, any Person other than the
Participants and other “accredited investors” (as
defined in Regulation D of the Securities and Exchange Act).

 

                 (hh)        Subleases; Assignments.  Other than the subleases that constitute
Related Agreements, assignments that are referenced in the definition of
Related Agreements, and the CSC Sublease, as of the Closing Date, there are no
other subleases or assignments in effect with respect to the Subject Property,
other than such other subleases or assignments which do not have a Material
Adverse Effect.

 

Section 8.3. [Intentionally
Omitted].

 

                Section 8.4.       Representations
and Warranties of Lessor. 
Lessor hereby represents and warrants to each of the other parties
hereto as that as of the date hereof and as of the Closing Date:

 

                   (a)        Power and Authority.  The Lessor has the requisite power and
authority to enter into and perform its obligations under the Operative
Documents to which it is a party.

 

                   (b)        Lessor Liens.  There are no Lessor Liens attributable to
Lessor on the Leased Property or the other Lessor Collateral.

 

                   (c)        Organization, Etc.  The Lessor is a limited liability company
validly organized and existing and in good standing under the laws of the State
of Delaware.

 

                   (d)        Investment.  The Lessor’s Interest being acquired by the
Lessor as of the Closing Date is being acquired by Lessor for investment and
not with a view to the resale or distribution of such interest or any part
thereof, but without prejudice, however, to the right of Lessor at all times,
subject to Article XII, to sell or otherwise dispose of all or any part of
such interest under a registration available under the Securities Act or under
an exemption from such registration available under the Securities Act, it
being understood that the disposition by Lessor of the Lessor’s Interest to be
purchased by Lessor shall, at all times, remain within its control, subject to Article XII.

 

                   (e)        Offer of Securities, Etc.  Neither the Lessor nor any Person authorized
to act on its behalf has, directly or indirectly, offered to sell the Lessor’s
Interest or any other similar securities (the sale or offer of which would be
integrated with the sale or offer of the Lessor’s Interest), for sale to, or
solicited any offer to acquire any of the same from, any Person.

 

31

 

                    (f)        No Registration.  The Lessor understands and acknowledges that
the Lessor’s Interest has not been and will not be registered under the
Securities Act in reliance upon the exemption provided in Section 4(2) of
the Securities Act or any other applicable exemption, that the Lessor’s
Interest has not and will not be registered or qualified under the securities
or “blue sky” laws of any jurisdiction, that the Lessor’s Interest may be
resold or otherwise transferred only if so registered or qualified or if an
exemption from registration or qualification is available, that none of the
Lessee, the Lenders or the Collateral Agent is required to register the Lessor’s
Interest and that any transfer must comply with the provisions of the Operative
Documents relating thereto.  The Lessor
will comply with all applicable federal and state securities laws in connection
with any subsequent resale of the Lessor’s Interest held by it.

 

                   (g)        Institutional Investor.  The Lessor is a sophisticated institutional
investor and an “accredited investor” as defined in paragraph (1), (2), (3) or
(7) of Rule 501(a) of the Securities Act, and has knowledge and
experience in financial and business matters and is capable of evaluating the
merits and risks of its investment in the Lessor’s Interest and is able to bear
the economic risk of such investment. The Lessor has been given such
information concerning the Lessor’s Interest, the other Operative Documents,
the Leased Property, the Collateral Agent, the Lenders and the Lessee as it has
requested.

 

                   (h)        ERISA.   Lessor is not and will not be Funding the
Lessor Amount 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 a “plan” (as defined in Section 4975(e)(1) of
the Code.

 

                    (i)        Enforceability, Etc.  Each Operative Document to which Lessor is a
party constitutes the legal, valid and binding obligation of Lessor enforceable
against it in accordance with the terms thereof, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting the enforcement of creditors’ rights generally and
by general equitable principles.

 

                Section 8.5.       Representations
and Warranties of Wells Fargo Bank Northwest, National Association,
individually and as Collateral Agent.  Collateral Agent and Wells Fargo Bank
Northwest, National Association, in its individual capacity and not in its
capacity as Collateral Agent, each severally hereby represents and warrants to
each of the other parties hereto that as of the date hereof and as of the
Closing Date:

 

                   (a)        Organization and Authority.  It is duly organized as a national banking
association under the laws of the United States, and has the power and
authority to enter into and perform its obligations under the Operative
Documents.

 

                   (b)        Authorization; Binding Effect.  The Operative Documents to which Collateral
Agent is or will be a party have been or will be, on the date required to be
delivered hereby, duly authorized, executed and delivered by the Collateral
Agent.  This Participation Agreement is,
and each such other Operative Document is, or, when so executed and delivered
by the Collateral Agent will be, the valid, legal and binding obligation of the
Collateral Agent, enforceable against the Collateral Agent in accordance with
their respective terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.

 

32

 

                   (c)        Non-Contravention.  Neither the execution and delivery by the
Collateral Agent of the Operative Documents to which it is or will be a party,
either in its individual capacity, or as Collateral Agent, or both, nor
compliance with the terms and provisions thereof, conflicts with, results in a
breach of, constitutes a default under (with or without the giving of notice or
lapse of time or both), or violates any of the terms, conditions or provisions
of:  (i) its charter documents or
bylaws; (ii) any bond, debenture, note, mortgage, indenture, agreement,
lease or other instrument to which it is now a party or by which it or its
property, either in its individual capacity, or as Collateral Agent, or both,
is bound or affected, where such conflict, breach, default or violation would
be reasonably likely to materially and adversely affect the ability of the
Collateral Agent, either in its individual capacity, or as Collateral Agent, or
both, to perform its obligations under any Operative Document to which it is or
will be a party, either in its individual capacity, or as Collateral Agent, or
both; or (iii) any of the terms, conditions or provisions of any law,
rule, regulation, order, injunction or decree of any United States Governmental
Authority governing the banking or trust powers of Wells Fargo Bank Northwest,
National Association or Governmental Authority of the State of Utah, either in
its individual capacity or as Collateral Agent, or both, where such conflict,
breach, default or violation would be reasonably likely to materially and
adversely affect the ability of the Collateral Agent, either in its individual
capacity or as the Collateral Agent or both, to perform its obligations under
any Operative Document to which it is or will be a party.

 

                   (d)        Absence of Litigation, etc.  There is no litigation (including derivative
actions), arbitration or governmental proceedings pending or, to the best
knowledge of the Collateral Agent, threatened against it which would be
reasonably likely to have material adverse effect on the Collateral Agent’s
ability to perform its obligations under the Operative Documents to which it is
or will be a party.

 

                   (e)        Governmental Actions.  No action, consent or approval of,
registration or filing with or any other action by any United States
Governmental Authority governing the banking or trust powers of Wells Fargo
Bank Northwest, National Association, is or will be required for the execution,
delivery or performance by the Collateral Agent of the Operative Documents to
which it is a party, either in its individual capacity or as the Collateral
Agent or both or in connection with the Overall Transaction, except those which
have been made or obtained or will be obtained on a timely basis in the
ordinary course of the Collateral Agent’s business, and which are and shall
remain in full force and effect.

 

33

 

ARTICLE IX

COVENANTS OF LESSEE

 

                Section 9.1.       Lessee Covenants. 
The Lessee covenants that, until such time as the earlier to occur of
the date when:  (i) the Lease
Balance has been paid in full or (ii) Lessee returns the Leased Property
to the Lessor pursuant to Section 20.3 of the Lease, the Lessee will
comply with the following provisions:

 

                   (a)        Statutory Compliance.  Lessee will comply in all material respects
with all valid and applicable statutes, laws, ordinances, zoning and building
codes and other rules and regulations of the United States of America, of
the states and territories thereof and their counties, municipalities and other
subdivisions and of any foreign country or other jurisdictions applicable to
such Person, unless failure to comply would not have a Material Adverse Effect.

 

                   (b)        [Intentionally
Omitted].

 

                   (c)        Fiscal Year, Financial
Statements Etc.

 

                    (i)        Date of Annual Financial
Statements.  The annual
financial statements of the Lessee will be dated as of December 31 if such
date occurs on a Saturday or, if not, as of the Saturday nearest to December 31
in each year, unless Lessee changes its fiscal year.

 

                   (ii)        Annual Financial
Statements; Compliance Certificate. 
The Lessee will furnish to each Participant and the Collateral Agent as
soon as available, and in any event within 90 days after the end of each fiscal
year, the consolidated balance sheets and statements of income, stockholders’
equity and cash flows of the Lessee as at the end of such fiscal year (in
reasonable detail), setting forth in comparative form the corresponding figures
for the previous fiscal year and accompanied by (A) a report of
independent certified public accountants of recognized national standing which
are acting as the Lessee’s auditors stating that such financial statements have
been prepared in accordance with GAAP and fairly present the consolidated
financial position and results of operations of the Lessee as at the end of and
for such fiscal year, and without an explanatory paragraph for a going concern
uncertainty (provided that so long as the
Lessee is a reporting company under the Securities Exchange Act of 1934, as
amended, the Participants shall be deemed to have been furnished the foregoing
financial statements to the extent such financial statements are posted within
such time period on EDGAR) and (B) a certificate of the Lessee signed by a
Financial Officer to the effect that the Financial Officer has no knowledge of
any Default or Event of Default, or if such Financial Officer has such
knowledge, specifying such Default or Event of Default and the nature thereof,
and what action the Lessee has taken, are taking or propose to take with
respect thereto, together with a schedule, in form reasonably satisfactory to
the Participants, of the computations used by the Lessee in determining
compliance with the covenants contained in Sections 9.1(p) and (q).

 

34

 

                  (iii)        Quarterly Financial
Statements; Compliance Certificate. 
The Lessee will furnish to each Participant and the Collateral Agent as
soon as available and, in any event, within 45 days after the end of each of
the first three fiscal quarters of the Lessee, the internally prepared
consolidated balance sheets and statements of income and cash flows of the
Lessee as of the end of such fiscal quarter, in all comparative form (provided that so long as the Lessee is a reporting company
under the Securities Exchange Act of 1934, as amended, the Participants shall
be deemed to have been furnished the foregoing financial statements to the
extent such financial statements are posted within such time period on EDGAR)
accompanied by a certificate of the Lessee signed by a Financial Officer to the
effect that such financial statements have been prepared in accordance with
GAAP (subject to normal year-end adjustments), together with a schedule in form
reasonably satisfactory to the Participants, of the computations by the Lessee
in determining compliance with the covenants contained in Sections 9.1(p) and
(q).

 

                  (iv)        Notice of Litigation,
Defaults, Etc.  The Lessee
will, subject to Section 16.15, (A) promptly furnish to each
Participant written notice of any litigation or any administrative or
arbitration proceeding (x) which creates a material risk of resulting,
after giving effect to any applicable insurance, in the payment by Lessee of
more than $20,000,000, or (y) which has, or creates a material risk of
having, a Material Adverse Effect and (B) promptly, and in any event
within ten (10) Business Days of a Responsible Officer acquiring knowledge
thereof, notify each Participant in writing of the existence of any Default or
Event of Default, specifying the nature thereof and what action the Lessee has
taken, is taking or propose to take with respect thereto.

 

                   (v)        Other Information.  The Lessee will maintain accurate books,
accounts and records of the financial affairs of the Lessee and its Subsidiaries
sufficient to permit the preparation of financial statements therefrom in
accordance with GAAP and will prepare all financial statements required
hereunder in accordance with GAAP and in compliance with the regulations of any
Governmental Authority having jurisdiction thereof.  The Lessee will provide copies to each
Participant, promptly after the sending, making available or filing of all
reports and financial statements which the Lessee sends or makes available to
its stockholders, and all registration statements and amendments thereto, and
all reports on Form 8-K or any similar form hereafter in use which the
Lessee files with the Securities and Exchange Commission; provided
that so long as the Lessee is a reporting company under the Securities and Exchange
Act of 1934, as amended, the Participants shall be deemed to have been
furnished with the foregoing reports, financial statements, registration
statements and amendments thereto, reports on Form 8-K or any similar form
to the extent such documents are posted within such time period on EDGAR.  

 

35

 

At any time (i) the Lessee ceases to be a
reporting company under the Securities and Exchange Act of 1934, as amended, or
(ii) an Event of Default has occurred or is continuing, (A) from time
to time at reasonable intervals upon the request of any authorized officer of
any Participant and subject to Section 16.15, Lessee will furnish to each
Participant such other information regarding the business, assets, financial
condition, income or prospects of the Lessee as such officer may reasonably
request and (B) subject to Section 16.15, Lessee will permit,
representatives and independent contractors of the Collateral Agent or any
Participant 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 the expense of
Lessee and at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to Lessee, in each
case at the expense of Lessee at any time during normal business hours and
without advance notice.

 

                   (d)        Transactions with
Affiliates.  Lessee will not
effect any transaction with any of its respective Affiliates on a basis less
favorable to Lessee than would be the case if such transaction had been
effected with a non-Affiliate.

 

                   (e)        Environmental Laws.

 

                   (1)        Compliance with Law and
Permits.  Lessee will use and
operate the Subject Property in compliance with all Environmental Laws, keep
all necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
compliance therewith, and handle all Hazardous Substances in compliance with
all applicable Environmental Laws, other than an immaterial violation of which
could not reasonably be expected to have a Material Adverse Effect.

 

                   (2)        Notice of Claims, Etc.  Lessee will immediately notify each
Participant, and provide copies upon receipt, of all written material claims,
complaints, notices or inquiries from governmental authorities received by
Lessee relating to the condition of the Subject Property or compliance with
Environmental Laws.  The Lessee will
promptly cure and diligently defend any actions and proceedings relating to
compliance of the Subject Property with Environmental Laws by the Lessee.

 

                    (f)        Payment of Taxes, Etc.  Lessee will file all tax returns required to
be filed in any jurisdiction and pay and discharge, before the same become
delinquent, (i) all Taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property; provided,
however, that unless and until any Lien resulting therefrom attaches
to its property and becomes enforceable against its other creditors, no payment
will be required if such Tax, assessment, charge, levy or claim is being
contested in good faith and by proper proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
property subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof) or where the failure to file any such return or make
such payment would not have a Material Adverse Effect.

 

36

 

 

                   (g)        Preservation of Existence,
Etc.  Lessee will preserve and
maintain (i) its existence, good standing, legal structure and state of
incorporation necessary or desirable in the normal conduct of its business and (ii) except
as could not be reasonably expected to have a Material Adverse Effect, its
rights (charter and statutory), permits, licenses, approvals, privileges and
franchises.

 

                   (h)        Compliance with Terms of
Related Agreements the CSC Sublease and Fifth Floor Sublease; Notices.  (i) Lessee, on behalf of Lessor, will be
responsible for and comply with and perform all obligations, agreements and
covenants of Lessor set forth in the Related Agreements or as may otherwise be
required to be performed by Lessor with respect to the Subject Property, the CSC
Sublease (to the extent, if at all, that Lessor has any obligations
thereunder), any Fifth Floor Sublease (to the extent, if at all, that Lessor
has any obligations thereunder), pursuant to Applicable Law, Governmental
Actions or third parties with respect to the property subject thereto,
including without limitation, the payment of all rents and any other amounts
payable by the Lessor thereunder and (ii) upon receipt thereof, Lessee
will promptly provide each Participant with copies of any and all (x) notices
of default, (y) notices of termination and (z) any other information
that could reasonably be expected to have a Material Adverse Effect, in each
case, received by Lessee under any of the Related Agreements, the CSC Sublease
or any Fifth Floor Sublease.

 

                    (i)        Use of Proceeds. 
Lessee will use the proceeds of the Advance hereunder exclusively for
the purposes set forth herein and as described in the Advance Request.

 

                    (j)        Changes in Accounting.  Lessee will not make any material change in
accounting treatment or reporting practices, except as required or permitted by
GAAP.

 

                   (k)        [Intentionally Omitted].

 

                    (l)        [Intentionally Omitted].

 

                  (m)        Compliance with ERISA;
Notices.  (i) Lessee
will, and shall cause each ERISA Group Person to: (A) maintain each Plan
in compliance in all material respects with the applicable provisions of ERISA,
the Code and other federal or state law; (B) cause each Plan which is
qualified under Section 401(a) of the Code to maintain such
qualification; and (C) make all required contributions to any Plan subject
to Section 412 of the Code; and

 

                   (ii)        As soon as possible and in any event
within 30 days after receipt thereof by any Lessee or, to the extent Lessee has
knowledge thereof, by any ERISA Group Person, the Lessee will deliver to each
Participant copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer a Plan.  As soon as possible and in event within 30
days after receipt thereof by Lessee or, to the extent Lessee has knowledge
thereof, by any ERISA Group Person from the sponsor of a Multiemployer Plan,
copies of each notice concerning (A) the imposition of withdrawal
liability by any such Multiemployer Plan, (B) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such Multiemployer
Plan, or (C) the amount of liability incurred, or that may be incurred, by
Lessee or ERISA Group Person in connection with any event described in clause (A) or
(B).

 

37

 

                   (n)        [Intentionally Omitted].

 

                   (o)        Consolidation and Merger.  The Lessee will not merge, consolidate,
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that notwithstanding the
foregoing provisions of this clause (k), if after giving effect to a merger or
consolidation no Default or Event of Default exists, the Lessee may merge or
consolidate with any other Person if either (A) the Lessee shall be the
continuing or surviving corporation or (B) the Lessee shall not be the
continuing or surviving corporation and the corporation or other legal entity
so continuing or surviving (x) is a corporation or other legal entity
organized and duly existing under the law of any state of the United States and
(y) executes and delivers to the Collateral Agent and the Participants an
instrument in form and substance reasonably satisfactory to the Required
Participants pursuant to which it expressly assumes all of the obligations of
the Lessee under the Operative Documents, and procures for the Collateral Agent
and each Participant an opinion in form reasonably satisfactory to the Required
Participants and from counsel reasonably satisfactory to the Required
Participants in respect of the due authorization, execution, delivery and
enforceability of such instrument.

 

                   (p)        Cash.  Lessee will not permit its Cash on a
consolidated basis at any time to be less than $75,000,000.

 

                   (q)        Funded Debt to EBITDAR.  If the Lessee’s Cash on a consolidated basis
is less than $150,000,000 then the Lessee will  maintain
on a consolidated basis as of the last day of each fiscal quarter a ratio of
Funded Debt to EBITDAR for the four consecutive fiscal quarters ended as of
such day of not more than 2.00 to 1.00.

 

ARTICLE X

OTHER COVENANTS AND AGREEMENTS

 

              Section 10.1.       Covenants
of the Participants and the Collateral Agent.

 

                (a)       Lessor Liens.  Each of the Participants (severally and not
jointly with any other Participants) and the Collateral Agent hereby agrees
that so long as this Participation Agreement is in effect it:

 

                    (i)        will not create, incur, assume or suffer
to exist any Lessor Lien attributable to it upon the Lease or the Leased
Property (other than as contemplated by any of the Operative Documents); and

 

38

 

                   (ii)        will remove any Lessor Lien created or
incurred by it and use its best efforts to remove any Lessor Lien attributable
to it assumed or suffered to exist by it upon the Lease or the Leased Property
(other than the Liens of the Security Instruments and such other Liens as are
contemplated by any of the Operative Documents); provided,
however, that any action taken pursuant to this clause (ii) shall
not limit the Lessee’s rights or remedies under any of the Operative Documents.

 

                (b)       Acceptance of Provisions
of Lease.  The Participants
and the Collateral Agent hereby acknowledge and accept the terms of the Lease,
including the provisions of Sections 15.2, 19.1, 19.2 and 20.1 of the
Lease.

 

                (c)       Depreciation.  With respect to any taxable year or portion
thereof, prior to the Expiration Date, neither the Lessor nor any Lender shall
claim any federal or state or local tax attributes or benefits (including
depreciation) relating to the Subject Property, the CSC Sublease, any Fifth Floor
Sublease or any Modifications or otherwise claim ownership of the Subject
Property, the CSC Sublease, any Fifth Floor Sublease or any Modifications for
federal, state or local tax purposes unless required to do so by an appropriate
taxing authority or after a clearly applicable change in Applicable Laws or as
a protective response to a proposed adjustment by a Governmental Authority; provided, however, that if an appropriate taxing authority
shall require Lessor or any Lender to claim any such federal or state tax
attributes or benefits or if it proposes to claim any such federal or state tax
attributes or benefits as a protective response, such Person shall promptly
notify Lessee thereof and shall permit Lessee to contest such requirement in a
manner similar to the contest rights provided in, and subject to any applicable
limitation to a contest contained in, Section 13.4(b).

 

                (d)       Insolvency Proceedings.  Each of the Lenders, Lessor and Collateral
Agent, in its individual capacity, the Lessee covenants as to itself, not
jointly with any other Person, that it shall not (i) commence or join in
any action, proceeding or other case with respect to the Lessor under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, arrangement, winding up, liquidation,
dissolution, composition or other relief with respect to indebtedness, (ii) seek
appointment of a receiver, trustee, custodian or other similar official with
respect to the Lessor and for all or any substantial benefit of the creditors
of the Lessor, or (iii) take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
this Section 10.1(d), except in each case, as expressly permitted pursuant
to the Loan Agreement upon the occurrence of a Loan Agreement Event of Default.

 

                (e)       Release of Documents.  The Collateral Agent hereby agrees that, upon
a sale of the Subject Property, the CSC Sublease and any Fifth Floor Sublease
pursuant to Sections 15.1, 16.2, 18.1 or 20.1 of the Lease, payment of all
amounts due and owing from the Lessee under the Operative Documents or
repayment in full of all Loans and Lessor Amount and all other amounts due and
owing from Lessee under the Operative Documents to Collateral Agent and the
Participants, the Collateral Agent shall execute and deliver to the Lessee a
release of any Security Instrument, and releases of all other Liens created by
the Operative Documents, and termination statements for any financing
statements relating to the Subject Property, the CSC Sublease, any Fifth Floor
Sublease or any of the Lessor Collateral which are then of record naming the
Collateral Agent as secured party or assignee thereof.

 

39

 

                 (f)       Release of Liens.  Collateral Agent hereby agrees with the
Lessee (so long as no Event of Default shall have occurred and be continuing)
and the Lenders, except as otherwise expressly authorized or otherwise
permitted under the Operative Documents, not to release the Lien of any of the
Security Instruments on the Lessor Collateral.

 

                (g)       Requested Information.  From time to time at Lessee’s request, Lessor
shall provide Lessee with information similar to the information provided by
Lessor to Lessee on or before the Closing Date with respect to ownership and
control of the Lessor.

 

ARTICLE XI

LESSEE’S RIGHT OF QUIET ENJOYMENT

 

Notwithstanding anything contained herein to the
contrary, the provisions of Section 4.1 of the Lease shall be applicable
to the Participants and Collateral Agent under this Participation Agreement and
each Participant and Collateral Agent hereby agrees to be bound by the
provisions of such Section 4.1 of the Lease and to recognize the Lessee’s
rights to purchase the Subject Property as set forth in the Lease.

 

ARTICLE XII

TRANSFERS OF PARTICIPANTS’ INTERESTS

 

              Section 12.1.       Assignments.  (a) All or any part of the interest of
any Lender in, to or under this Participation Agreement, the other Operative Documents,
the Leased Property and its Notes, Loans and Commitment may be sold, assigned
or transferred by such Lender at any time to any Person; provided,
however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all such rights and obligations being
assigned, (ii) unless both parties to the assignment are Participants
immediately prior to giving effect to the assignment, the amount of the
Commitment of the assigning Lenders being assigned pursuant to each such
assignment shall not be less than $1,000,000 (or if less, the entire amount of
such Lender’s Commitment) and shall be an integral multiple of $100,000 (or
such Lender’s entire Commitment), (iii) each such assignment shall be to
an Eligible Assignee, (iv) the Lessor shall have received from the
assignee/transferee or the assignor/transferor a transfer fee in the amount of
$1,500, (v) each assignee or transferee shall have complied, as of the
date of the transfer or assignment, with the delivery requirements of Section 12.3(a),
and (vi) each assignee or transferee shall (A) acknowledge in
writing, addressed and delivered to each of the parties to this Participation
Agreement, that the obligations otherwise to be performed by the assignor or
transferor from and after the date of such transfer or assignment under this
Participation Agreement and all other Operative Documents are its obligations,
including the obligations imposed by this Section 12.1(a) (and the
transferor and transferee Lender shall deliver to the Lessee, the Collateral
Agent and the Lessor an Assignment Agreement, in substantially the form of Exhibit D,
executed by the assignee or transferee) and (B) represent and warrant to
Collateral Agent, each Participant and the Lessee in writing each of the
representations and warranties as set forth in Section 8.1 and that:

 

40

 

                  (w)        it has the requisite power and authority
to accept such assignment or transfer and to engage in the Overall Transaction;

 

                    (x)        it will not take any action with respect
to such Note that would violate any applicable securities laws;

 

                   (y)        it will not assign or transfer any
interest in its Note except in compliance with this Section 12.1; and

 

                    (z)        it will not transfer any Note unless the
proposed transferee makes the foregoing representations and covenants.

 

Any transfer or assignment made in violation of the
above requirements shall not be effective against the other parties to this
Participation Agreement until such requirements are satisfied.  Lessee shall not be responsible for any costs
or expenses in connection with any such sale, assignment or other transfer.

 

                (b)       Lessor may sell, assign or transfer all,
but not less than all, of the Lessor’s Interest at any time to any Person; provided, however, that (i) each such assignment shall
be to an Eligible Assignee, (ii) the Lessor shall give the Lessee,
Collateral Agent and the Lenders at least thirty (30) days’ prior written
notice of such transfer, which notice shall be conspicuously captioned “NOTICE
OF TRANSFER: URGENT ATTENTION REQUIRED. 
YOUR FAILURE TO RESPOND TO THIS NOTICE IN A TIMELY MANNER MAY RESULT
IN A TRANSFER OF THE LESSOR’S INTEREST IN THE SUBJECT PROPERTY WITHOUT YOUR
CONSENT”, shall make specific reference to the Lease and this Section 12.1(b) in
particular and shall include the name of the assignee or transferee, (iii) each
assignee or transferee shall have complied with the delivery requirements of Section 12.3(a),
and (iv) each assignee or transferee shall (A) acknowledge in
writing, addressed and delivered to each of the parties to this Participation
Agreement, that the obligations otherwise to be performed by the assignor or
transferor from and after the date of such transfer or assignment under this
Participation Agreement and all other Operative Documents are its obligations,
including the obligations imposed by this Section 12.1(b) (and the
transferor and transferee shall deliver to the Lessee and Collateral Agent an
Assignment and Assumption Agreement in the form of Exhibit D, executed by
the assignee or transferee) and (B) further represent and warrant to the
Lessee, the Collateral Agent and each Participant in writing each of the
representations and warranties as set forth in Section 8.4 and that:

 

                  (w)        it meets the criteria of an Eligible
Assignee, and it has the requisite power and authority to accept such
assignment or transfer and to engage in the Overall Transaction;

 

                    (x)        it will not take any action with respect
to its Lessor’s Interest that would violate any applicable securities laws;

 

                   (y)        it will not assign or transfer its
Lessor’s Interest except in compliance with this Section 12.1(b); and

 

41

 

                    (z)        it will not transfer its Lessor’s
Interest unless the proposed transferee makes the foregoing representations and
covenants.

 

Notwithstanding anything contained in the foregoing to
the contrary, so long as no Event of Default exists,  such
assignment shall not be made if (1) in the reasonable opinion of Lessee,
such assignment would cause Lessee to be required to cease reporting this Lease
as an operating lease in Lessee’s financial statements  and
(2) Lessee provides the Collateral Agent and the Participants written
notice of such determination within ten (10) Business Days of (A) Lessee’s
receipt of the notice described in clauses (b)(ii) above and (B) Lessee’s
receipt of all information needed regarding the proposed assignee as may be
reasonably requested by Lessee or Lessee’s independent public accountants,
which request shall be made within 10 Business Days after Lessee’s receipt
of the notice described in clause (b)(ii) above.  In the event Lessee has objected in writing
to the proposed assignee above, Lessee hereby agrees to cooperate with Lessor
to restructure the proposed assignment or find a replacement assignee which
shall be an Eligible Assignee and which shall comply with the terms and
conditions set forth above and to which Lessee shall not have objected in
writing pursuant to the terms hereof.  
The parties hereto and any such assignee will execute such documents and
make such filings and recordings as are reasonably requested by the Lessor or
the Collateral Agent to maintain the interests of the parties, preserve,
protect and perfect the interest of Collateral Agent and Lessor in the Leased
Property, the Lessor Collateral and the Lessee Collateral and/or any
Participant’s rights under this Participation Agreement and the other Operative
Documents.  Notwithstanding any of the
foregoing, Lessor shall at all times be permitted, without the consent of
Lessee, to transfer the Lessor’s Interest to an Eligible Assignee to effectuate
compliance with any law, rule, regulation or order issued by any federal or
state regulatory authority having jurisdiction over the Lessor (other than any
such law, rule, regulation or order that was published and effective prior to February 1,
2008).  In such event, Lessor shall, to
the extent possible in Lessor’s sole good faith judgment, notify Lessee of such
proposed transfer and shall, to the extent possible in Lessor’s sole good
faith, judgment, work in good faith with Lessee to cause the Lessor’s Interest
to be transferred to an Eligible Assignee in a manner such that, to the extent
possible in Lessee’s sole good faith judgment, Lessee shall not be required to
cease reporting the Lease as an operating lease.

 

Any transfer or assignment made in violation of the
above requirements shall not be effective against the other parties to this
Participation Agreement until such requirements are satisfied.

 

              Section 12.2.       Participations.  Any Lender may at any time sell to one or
more commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a “Sub-Participant”)
participating interests in all or a portion of its rights and obligations under
this Participation Agreement, the other Operative Documents and its Notes
(including, without limitation, all or portion of the Rent owing to it); provided, however, that:

 

                   (a)        no participation contemplated in this Section 12.2
shall relieve such Lender from its obligations hereunder or under any other
Operative Document;

 

42

 

                   (b)        such Lender shall remain solely
responsible for the performance of its obligations hereunder and under any
Operative Document;

 

                   (c)        the Lessee, the Lessor and the
Collateral Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Participation
Agreement and each of the other Operative Documents;

 

                   (d)        each such Sub-Participant will make
representations and warranties to the Participant that are consistent with Section 8.1, mutatis mutandis;

 

                   (e)        no Sub-Participant, unless such
Sub-Participant is an Affiliate of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from taking any action
hereunder or under any other Operative Document, except for matters requiring
consent of all Participants; and

 

                    (f)        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.       Withholding Taxes; Disclosure of
Information; Pledge Under Regulation A.  (a) If
any Participant or any assignee of, or Sub-Participant in, any Funding each
such assignee or Sub-Participant, a “Transferee”)
is organized under the laws of any jurisdiction other than the United States or
any State thereof, then such Lessor, Lender or Transferee, as applicable, shall
(as a condition precedent to acquiring or participating in any Funding) (i) furnish
to the Collateral Agent and the Lessee (unless such Participant or Transferee
is unable to so furnish due to a Change in Law, first effective after such
Participant or Transferee becomes a Participant or Transferee, as applicable)
in duplicate, for each taxable year of such Participant or Transferee during
the Term, a properly completed and executed copy of either Internal Revenue
Service Form W-8 ECI or Internal Revenue Service Form W-8 BEN and
Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9
and any additional form (or such other form) as is necessary to claim complete
exemption from United States withholding taxes on all payments hereunder, and (ii) provide
to the Lessor, the Collateral Agent and the Lessee a new Internal Revenue
Service Form W-8 ECI or Internal Revenue Service Form W-8 BEN and
Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9
and any such additional form (or any successor form or forms) upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations and
amendments duly executed and completed by such Participant or Transferee, and
to comply at all times such Participant or Transferee shall beneficially own a
Note or Lessor’s Interest with all applicable United States laws and
regulations and all provisions of any applicable tax treaty with regard to such
withholding tax exemption unless any Change in Law has occurred subsequent to
the date such Participant or Transferee became a Participant or Transferee as
applicable and prior to the date on which any such delivery otherwise would be
required which renders such form inapplicable or which would prevent such
Participant or Transferee from duly completing and delivering any such forms
and such Lender or Transferee so advises the Lessee; provided,
however, that if Lessor or any Participant or Transferee is not the
beneficial owner of a payment, as defined in Treasury Regulation
§1.1441-1(c)(6), and therefore is unable to provide a Form W-8BEN or
W-8ECI, then such Person may provide (i) one duly completed and executed
copy of Internal Service Form W-8IMY (in lieu of the Form W-8BEN or
W-8ECI), and all additional forms or certifications, as provided in Treasury
Regulation §1.1441-1(e)(3), required to be attached to such Form W-8IMY,
necessary to establish that such party is entitled to receive payments
hereunder without deduction or withholding of any United States Federal income
taxes, and (ii) any other form for other taxing jurisdictions confirming
that such Person is exempt from withholding from such jurisdiction.  

 

43

 

By its acceptance of a participation or assignment of
a Participant’s Note or Lessor’s Interest, each Transferee shall be deemed
bound by the provisions set forth in this Article XII. Notwithstanding
anything to the contrary in the Operative Documents, the Lessee shall not be
required to gross-up any payment for withholding taxes imposed on any Tax
Indemnitee which has failed to comply with its obligations under this Section 12.3
if such compliance would have avoided such withholding taxes, and the Lessee
shall be entitled to withhold from any payments to such Tax Indemnitee under
this Participation Agreement or any other Operative Document such amounts of
withholding taxes as may be required by law to be withheld.

 

                (b)       Anything in this Article XII to the
contrary notwithstanding, any Participant may, without the consent of the
Lessee, assign and pledge all or any portion of the Notes or Lessor’s Interest
held by it to any Federal Reserve Bank as collateral security pursuant to Regulation
A of the F.R.S. Board.

 

              Section 12.4.       Lessee
Directions.  Each of the
Participants and the Lessee hereby agree that:

 

                   (a)        the Lessee shall have the right to
replace any Participant (i) with respect to which, (A) the right to
pay Interest or Yield by reference to the LIBO Rate shall be suspended under Section 15.1
or 15.2, or (B) there are or would be any claim to reimbursement or
compensation under Section 15.3 or 15.5 or (ii) that fails to consent
to any amendment, extension or waiver requested by Lessee, in each case with an
Eligible Assignee selected by the Lessee and reasonably acceptable to the
Collateral Agent and which Eligible Assignee shall comply with the terms of
clause (vi) of Section 12.1(a) or clause (iv) of Section 12.1(b),
as applicable;

 

                   (b)        the Lessee shall have the exclusive
right to exercise the right under Section 12.4(a) above upon not less
than three (3) Business Days’ prior written notice from the Lessee to the
Collateral Agent and each Participant; and

 

                   (c)        the Collateral Agent and each
Participant hereby agree to cooperate with the 
Lessee, at Lessee’s sole cost and expense in Lessee’s efforts to arrange
one or more replacement Participants as contemplated by Section 12.4(a).

 

44

 

 

ARTICLE XIII

INDEMNIFICATION

 

              Section 13.1.       Indemnification.

 

                (a)       General Indemnification.  Subject to Sections 13.1(b) and 13.3,
whether or not any of the transactions contemplated hereby shall be
consummated, Lessee shall pay and assume liability for, and does hereby agree
to indemnify, protect, defend, save and keep harmless each General Indemnitee
on an After Tax Basis from and against any and all Claims that may be imposed
on, incurred by or asserted against such General Indemnitee (whether because of
action or omission by such General Indemnitee), whether or not such Claim is
covered by any other indemnification under this Article XIII or such
General Indemnitee shall also be indemnified as to any such Claim by any other
Person, and whether or not such Claim arises or accrues after the Expiration
Date, in each case under this Section 13.1(a), arising out of or in any
way relating to:

 

                    (i)        any of the Operative Documents, any of
the transactions contemplated thereby or any investigation, litigation or
proceeding in connection therewith, and any amendment, modification or waiver
in respect thereof;

 

                   (ii)        the Subject Property, the CSC Sublease,
any Fifth Floor Sublease, or any part thereof or interest therein;

 

                  (iii)        the purchase, manufacturing, mortgaging,
design, construction, preparation, installation, inspection, delivery,
non-delivery, acceptance, rejection, purchase, ownership, possession, use,
rental, lease, sublease, repossession, maintenance, repair, alteration,
modification, addition or substitution, storage, transfer of title, redelivery,
use, financing, refinancing, operation, condition, sale (including, without
limitation, any sale or other transfer pursuant to Section 15.1, 16.2,
18.1 or 18.2 of the Lease or any sale or transfer pursuant to Articles XX
or XXI of the Lease), return or other disposition of all or any part of any
interest in the Subject Property, the CSC Sublease or any Fifth Floor Sublease
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 under any agreements or obligations from any violation of law or in
tort (strict liability or otherwise) by Lessee, Collateral Agent, Lessor, any
Lender or any other Person or with respect to the use, ownership, possession,
operation or maintenance of the Subject Property, the CSC Sublease or any Fifth
Floor Sublease, (B) any Claim resulting from or related to latent or other
defects, whether or not discoverable relating to the Subject Property, the CSC
Sublease or any Fifth Floor Sublease, (C) any Claim resulting from or
related to the purchase, acquisition, lease or transfer of the Subject
Property, the CSC Sublease or any Fifth Floor Sublease, (D) 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 the Subject
Property, the CSC Sublease or any Fifth Floor Sublease, or (E) 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 Subject Property, the CSC
Sublease, any Fifth Floor Sublease or any part thereof;

 

45

 

                  (iv)        the offer, issuance, sale, transfer or
delivery of the Notes or Lessor’s Interest in accordance with the terms of the
Participation Agreement;

 

                   (v)        the breach by Lessee of any representation
or warranty made by it in any Operative Document or any certificate delivered
by it with respect to any agreement relating thereto;

 

                  (vi)        the transactions contemplated hereby 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;

 

                 (vii)        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

 

                (viii)        any other agreement entered into or
assumed by Lessee or its Affiliate in connection with the Subject Property, the
CSC Sublease or any Fifth Floor Sublease (including, in connection with each of
the matters described in this Section 13.1 to which this indemnity shall
apply, matters based on or arising from the negligence of any General
Indemnitee).

 

It is expressly
understood and agreed that the indemnities provided for herein shall, except as
otherwise provided in Section 13.1(b), survive the expiration or
termination of and shall be separate and independent from any remedy under the
Lease or any other Operative Document.

 

                (b)       Exclusions from
Indemnities.  Notwithstanding
the foregoing provisions of this Article XIII, Lessee shall not be
obligated to indemnify a General Indemnitee under Section 13.1(a) for
any Claim to the extent that such Claim is attributable to: (i) acts,
events or circumstances occurring after (but only to the extent not
attributable to or constituting acts, events or circumstances occurring prior
to), (A) the expiration or earlier termination of the Lease and (B) delivery
of possession of the Subject Property to Lessor pursuant to Article XX of
the Lease or, solely with respect to a Limited Recourse Event of Default, Article XVI
of the Lease, or to a third party; (ii) criminal acts of such Indemnitee
or the gross negligence or willful misconduct of such Indemnitee, provided that a default under, or the failure of Lessor to
perform any obligation, covenant or agreement in, any Related Agreement, the
CSC Sublease or any Fifth Floor Sublease or otherwise required by Applicable
Law, Governmental Action or third parties with respect to the Subject Property,
the CSC Sublease or any Fifth Floor Sublease shall not be deemed gross
negligence or willful misconduct; (iii) any Claim resulting from the
imposition of any Lessor Lien which such Indemnitee is responsible for
discharging under the Operative Documents; (iv) any Claim for Taxes or
Impositions other than those relating to a Claim of the type described at
clause (iv) of Section 13.1(a) above or the obligation of Lessee
to pay amounts under this Section 13.1 on an After Tax Basis (it being
understood that Claims for Taxes or Impositions are dealt with in Sections
13.4, 13.5 and 15.3 and in such provisions as require payments by Lessee to be
made on an After Tax Basis); (v) in the event that the Lessee has
exercised the Sale Option in accordance with Article XX of the Lease or
Lessor or the Collateral Agent has exercised remedies under Section 16.2
of the Lease solely as a result of a Limited Recourse Event of Default, any
Claim for the costs of selling or marketing the Subject Property, the CSC
Sublease and any Fifth Floor Sublease in excess of the amount of such costs
Lessee would be obligated to pay under the Lease in connection with the
exercise of the Sale Option and (vi) breach by such General Indemnitee of
its representations and warranties in Section 8.1 or 8.4, as the case may
be, or the breach by such General Indemnitee of its covenants as set forth in
this Participation Agreement or the Lease, or any SNDA to which it is a party; provided, however, that nothing in the foregoing
clauses (i) through (v) shall be deemed to exclude or limit any
remedy under or right to damages pursuant to Article XVI of the Lease.

 

46

 

              Section 13.2.       End of
Term Indemnity.  In the event
that (a) Lessee elects the Sale Option; and (b) after paying to
Collateral Agent or Lessor, as the case may be, for the benefit of the
Participants, any amounts due under Articles XX, XXI and XXII of the
Lease, the Lease Balance shall not have been reduced to zero, then Lessee shall
deliver a report from neutral MAI appraiser selected by the Lessor having at
least five (5) years of experience in the appraisal of commercial
properties comparable to the Leased Property. 
The report shall be in form and substance satisfactory to the
Lessor.  The appraisal shall use
customary and usual appraisal methods to determine the Fair Market Value of the
Leased Property as of the Expiration Date (the “Expiration
Date Fair Market Value”).  If
the appraiser concludes in his or her professional judgment that the reasons
for the Expiration Date Fair Market Value of the Leased Property being less
than the Fair Market Value as of the date of the Appraisal were due to any of
the following events, circumstances or conditions, then Lessee shall promptly
pay over to Collateral Agent or Lessor, as the case may be, any amount by which
the Fair Market Value of the Leased Property as specified in the Appraisal
exceeds the Expiration Date Fair Market Value to the extent attributable to any
of the following events:  (i) excessive
use of the Leased Property; (ii) the failure to maintain the Leased
Property as required by the Lease and the other Operative Documents, and in at
least as good a condition as it was as of the commencement of the Term,
ordinary wear and tear excepted; (iii) any Modification to or restoration
or rebuilding of the Leased Property, whether or not permitted pursuant to the
Operative Documents, except for Required Modifications performed in accordance
with Article X of the Lease; (iv) the existence on or before the
Expiration Date of any adverse environmental condition at or affecting the
Leased Property; or (v) any other cause or condition within the power of
Lessee or any Affiliate to control or affect, other than ordinary wear and
tear.

 

              Section 13.3.       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(a) or 13.2, such Indemnitee shall, if so
requested by the Lessee and prior to any payment, submit such additional
information to the Lessee as Lessee may reasonably request and which is in the
possession of such Indemnitee to substantiate properly the requested payment.

 

47

 

In case any action, suit or proceeding shall be
brought against any Indemnitee, such Indemnitee shall, within a reasonable
period notify the Lessee in writing of the commencement thereof provided that
failure to notify Lessee shall not alter such Indemnitee’s rights under this Section 13.3,
except to the extent such failure precludes or materially impairs Lessee’s
ability to conduct a defense, and the Lessee shall be entitled, at its expense,
to participate in, and, to the extent that the Lessee desires to, assume and
control the defense thereof through its own counsel, which shall be subject to
the reasonable approval of the Indemnitee; 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, at
the request of the Indemnitee, provide an indemnity and, if requested by such
Indemnitee, collateral security, reasonably satisfactory to the Indemnitee,
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 information
with respect to such action, suit or proceeding as such Indemnitee shall
reasonably request.  Lessee must indicate
its election to assume such defense by written notice to the Indemnitee within
90 days following receipt of Indemnitee’s notice of the Claim, or in the case
of a third party claim which requires a shorter time for response then within
such shorter period as specified in the Indemnitee’s notice of Claim, provided
that such Indemnitee has given Lessee notice thereof.  Lessee shall not be entitled to assume and
control the defense of any such action, suit or proceeding if and to the extent
that, (A) in the reasonable opinion of such Indemnitee, (x) such
action, suit or proceeding involves any risk of imposition of criminal
liability or any material risk of imposition of material civil liability on
such Indemnitee or will involve a material risk of the sale, forfeiture or loss
of, or the creation of any Lien (other than a Permitted Lien) on the Leased
Property unless, in the case of civil liability, the Lessee shall have posted a
bond or other security reasonably satisfactory to the relevant Indemnitees in
respect to such risk or (y) the control of such action, suit or proceeding
would involve an actual or potential conflict of interest, (B) 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 (C) an
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 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 13.2, as applicable,
without the prior written consent of the Indemnitee, which consent shall not be
unreasonably withheld or delayed in the case of a money settlement not
involving an admission of liability of such Indemnitee.

 

The party controlling the defense shall consult in
good faith with the other party and its counsel with respect to the defense and
shall keep the non-controlling party reasonably informed as to the progress of
the defense.  Each Indemnitee shall
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
13.2, as applicable, and Lessee shall reimburse the Indemnitee for the
reasonable out-of-pocket expenses of supplying such information and
documents.  Except during the occurrence
of an Event of Default where Lessee shall have failed to provide indemnity and,
if requested by an Indemnitee, collateral security, both in form, substance and
in such amounts reasonably satisfactory to each Indemnitee, no Indemnitee shall
enter into any settlement or other compromise with respect to any Claim which
is entitled to be indemnified under Section 13.1 or 13.2, as applicable,
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 13.2, as applicable, with respect to
such Claim, does not admit any criminal liability or civil liability on behalf
of the Lessee in connection with such Claim, and uses reasonable efforts to
advise the Lessee on the status of proceedings from time to time during the
pendency of such Claim.

 

48

 

Upon payment in full or other satisfaction of any
Claim by the Lessee pursuant to Section 13.1 or 13.2, as applicable, 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 such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to
preserve any such claims and otherwise cooperate with the Lessee and give such
further assurances as are necessary or advisable to enable the Lessee vigorously
to pursue such claims.

 

Any amount payable to an Indemnitee pursuant to Section 13.1
or 13.2 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 13.4.       General
Tax Indemnity.

 

                (a)       Indemnification.  Without limitation on the rights of any Tax
Indemnitee under any other indemnification provision of this Article XIII,
the Lessee shall pay and assume liability for, and does hereby agree to
indemnify, protect and defend the Subject Property, the CSC Sublease and any
Fifth Floor Sublease and all Tax Indemnitees, and hold it and them harmless
against, all Impositions relating to the Subject Property, the CSC Sublease,
any Fifth Floor Sublease or the Overall Transaction on an After Tax Basis.

 

                (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 13.4,
or if any Tax Indemnitee shall determine that any Imposition for which the
Lessee may have an indemnity obligation pursuant to this Section 13.4 may
be payable, such Tax Indemnitee shall promptly and in any event, within 30 days
after a Responsible Officer of such Tax Indemnitee has actual knowledge thereof
notify the Lessee in writing provided that failure to so notify the Lessee
within 30 days after a Responsible Officer of such Tax Indemnitee has actual
knowledge thereof shall not alter such Tax Indemnitee’s rights under this Section 13.4,
except to the extent such failure precludes or materially adversely affects the
ability to conduct a contest of any indemnified Taxes) 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 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 law
or regulation to take action prior to the end of such 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 10 days after the receipt of such notice
by the Lessee, unless the Tax Indemnitee shall be required by law or regulation
to take action prior to the end of such 10-day period.

 

49

 

The Lessee shall be entitled for a period of 60 days
from receipt of such notice from the Tax Indemnitee (or such shorter period as
the Tax Indemnitee has notified the Lessee is required by law or regulation for
the Tax Indemnitee to commence such contest), subject to the immediately
following sentence, to assume control of such contest or if such contest is of
a type that must be pursued, if at all, in the name of such Tax Indemnitee,
require that such Tax Indemnitee pursue such contest.  If (x) 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, (y) such contest must be pursued in the
name of the 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 (z) the 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 any
of clause (x), (y) or (z) if the Tax Indemnitee determines reasonably
and in good faith that such contest by the Lessee could have a material adverse
effect on the business or operations of the Tax Indemnitee and provides a
written explanation to the Lessee of such determination, the Tax Indemnitee may
elect to control or reassert control of the contest, and provided, that by taking
control of the contest, Lessee acknowledges that it is responsible for the
Imposition ultimately determined to be due by reason of such claim, and
provided, further, that in determining the application of clauses (x) and (y) of
the preceding sentence, each Tax Indemnitee shall take any and all reasonable
steps to segregate claims for any Taxes for which the Lessee indemnifies
hereunder from Taxes for which the Lessee is not obligated to indemnify
hereunder, so that the Lessee can control the contest of the former.  In all other claims requested to be contested
by the Lessee, the Tax Indemnitee shall control the contest of such claim,
acting through counsel of its selection reasonably acceptable to the Lessee.  In no event shall the Lessee be permitted to contest
(or the Tax Indemnitee required to contest) any claim, (A) if such Tax
Indemnitee provides the Lessee with a legal opinion of independent counsel that
such action, suit or proceeding involves a risk of imposition of criminal
liability or will involve a material risk of the sale, forfeiture or loss of,
or the creation of any Lien (other than a Permitted Lien) on the Subject
Property, the CSC Sublease, any Fifth Floor Sublease or any part of any thereof
unless the Lessee shall have posted and maintained a bond or other security
reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk,
(B) if an 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 respect of the Taxes subject to such claim and
any and all expenses for which Lessee is responsible hereunder, (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 as
well as the Impositions which are the subject of such claim to the extent the
contest is unsuccessful, or (D) if such contest shall involve the payment
of the Tax prior to the contest, unless the Lessee shall provide to the Tax
Indemnitee an interest-free advance in an amount equal to the Imposition that
the Indemnitee is required to pay (with no additional net after-tax costs
(including Taxes) to such Tax Indemnitee). 

 

50

 

In addition for Tax
Indemnitee controlled contests and claims contested in the name of the Tax
Indemnitee in a public forum, no contest by a Tax Indemnitee shall be
required:  (1) unless 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 for which the Lessee may be liable to pay an indemnity under this Section 13.4(b))
exceeds $50,000 and (2) unless, if requested by the Tax Indemnitee, the
Lessee shall have provided to the Tax Indemnitee an opinion from counsel or a
tax accountancy firm selected by the Lessee and reasonably acceptable to the
Tax Indemnitee confirming 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 it is more likely than not that the determination
may be reversed on appeal).  In no event
shall a Tax Indemnitee be required to appeal an adverse judicial determination
to the United States Supreme Court.

 

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 (or claim for refund). 
In addition, the controlling party shall keep the noncontrolling party
reasonably informed as to the progress of the contest, and shall provide the
noncontrolling 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 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 this Section 13.4(b), and the Lessee shall
promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of
supplying such information and documents. 
Except during the occurrence of an Event of Default where Lessee shall
have failed to provide indemnity and, if requested by an Indemnitee, collateral
security, both in form, substance and in such amounts reasonably satisfactory
to each Indemnitee, 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 13.4 (and with respect to
which contest is required under this Section 13.4(b)) without the prior
written consent of the Lessee, unless such Tax Indemnitee waives its right to
be indemnified under this Section 13.4 with respect to such claim.

 

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 (i) such Tax Indemnitee shall waive its right to
indemnification under this Section 13.4 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) or (ii) such
Tax is the sole result of a claim of a continuing and consistent nature, which
claim has previously been resolved against the relevant Tax Indemnitee (unless
a change in law or facts has occurred since such prior adverse resolution and
Lessee provides an opinion of independent tax counsel to the effect that it is
more likely than not that such change in law or facts will result in a
favorable resolution of the claim at issue).

 

                (c)       Payments.

 

                 (i)       To or For the Account of a Tax Indemnitee.  Any Imposition indemnifiable under this Section 13.4
shall be paid directly when the liability of the Tax Indemnitee has been
finally determined to the applicable taxing authority if direct payment is
practicable and permitted. 

 

51

 

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 this Section 13.4 shall be paid within thirty (30)
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 not before two Business Days prior to the date that the
relevant Taxes are due.  Any payments made
pursuant to this Section 13.4 shall be made directly to the Tax Indemnitee
entitled thereto in immediately available funds at such bank or to such account
as specified by the Tax Indemnitee in written directions to the Lessee, or, if
no such direction shall have been given, by check of the Lessee payable to the
order of the Tax Indemnitee by certified mail, postage prepaid at its address
as set forth in this Participation Agreement. 
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.

 

                (ii)       To the Lessee.  (x) If any Tax Indemnitee actually shall
realize a Tax benefit (whether by way of deduction, credit, allocation or
apportionment or otherwise) with respect to a Tax not indemnifiable hereunder
which would not have been realized but for any Tax with respect to which the
Lessee has reimbursed or indemnified such Tax Indemnitee pursuant to the
Operative Documents, which benefit was not previously taken into account in
determining the amount of the Lessee’s payment to such Tax Indemnitee, such Tax
Indemnitee shall pay to the Lessee an amount equal to the amount of such Tax
benefit, increased by any actual Tax savings realized by such Tax Indemnitee
and net of any additional Taxes actually borne by such Tax Indemnitee as a
result of such payment (a “Grossed-Up Basis”);
provided, however, that as long as an
Event of Default is continuing any such amounts may be applied against any
amounts due and owing by Lessee under the Lease; provided
further, however, that no Tax Indemnitee shall be required to pay to
the Lessee any Tax benefit to the extent such payment would be greater than the
amount of such Taxes in respect of which the reimbursement or indemnification
was paid by the Lessee, reduced by all prior payments by such Tax Indemnitee
under this Section 13.4(c)(ii)(x) in respect of such amount; any
payment to the Lessee which is so limited shall, to the extent of such unpaid
excess, be carried over and shall be available to offset any future obligations
of the Lessee under this Section 13.4. 
If such repaid Tax benefit is thereafter lost, the additional Tax
payable shall be treated as a Tax indemnifiable hereunder without regard to the
exclusions set forth in clauses (i) through (x) of the definition of
Impositions.

 

                (y)       Upon receipt by a Tax Indemnitee of a
refund or credit of all or part of any Taxes paid or indemnified against by the
Lessee, which refund or credit was not previously taken into account in
determining the amount of the Lessee’s payment to such Tax Indemnitee, such Tax
Indemnitee shall pay to the Lessee, on a Grossed-Up Basis, an amount equal to
the amount of such refund, plus any interest received by or credited to such
Tax Indemnitee with respect to such refund; provided, however,
that  as long as an Event of Default is
continuing any such amounts may be applied against any amounts due and owing by
Lessee under the Lease; provided, further,
however, that no Tax Indemnitee shall be required to pay to the
Lessee any refund or credit to the extent such refund or credit is greater than
the amount of Taxes in respect of which payment or indemnification was made by
the Lessee, reduced by all prior payments by such Tax Indemnitee under this Section 13.4(c)(ii)(y) in
respect of such amount.  If such repaid
refund or credit is thereafter lost, the additional Tax payable shall be
treated as a Tax indemnifiable hereunder without regard to the exclusions set
forth in clauses (i) through (x) of the definition of Impositions.

 

52

 

                (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 13.4 and of which the Lessee has
knowledge, the Lessee shall promptly notify the Tax Indemnitee of such
requirement and, at the Lessee’s expense (i) if the Lessee is permitted
(unless otherwise requested by the Tax Indemnitee) by Applicable Laws, 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 or the Tax Indemnitee otherwise requests that such report,
return or statement be filed in the name of or by such Tax Indemnitee, the
Lessee shall prepare such report, return or statement for filing by such Tax Indemnitee
in such manner as shall be satisfactory to such Tax Indemnitee and send the
same to the Tax Indemnitee for filing no later than 15 days prior to the due
date therefor.  In any case in which the
Tax Indemnitee will file any such report, return 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 the Tax Indemnitee to
file such report, return or statement.

 

                (e)       Withholding Taxes.

 

                    (i)        The Lessor or its agent shall withhold
any Taxes required by Applicable Laws to be withheld on any payment to the
Lessor or any Lender, except to the extent that the Lessor or any Lender has
furnished such information to the Lessor or its agent as set forth in Section 12.3
and such information is sufficient under Applicable Laws to entitle such Person
to an exemption from withholding Taxes. 
Except to the extent set forth in Section 13.6, the amount payable
to the Lessor, the Lenders, any other Participant or any Sub-Participant shall
be reduced by the amount of any withholding Taxes required to be withheld by
the Lessor or its Collateral Agent pursuant to the preceding sentence, and
except with respect to such withholding Taxes for which Lessee is liable pursuant
to Section 15.3, the Lessee and the Lessor shall have no liability or
obligation to the Lessor or the Lenders with respect to any such withholding
Taxes.  To the extent that the Lessor is
required to withhold such withholding Taxes as the result of a Change in Law
(only if such Change in Law occurs after the relevant Participant has become a
party to this Participation Agreement), Lessee shall be responsible for, and
shall indemnify and hold harmless Lessor (without duplication of any
indemnification required in Section 13.4(a)), on an After Tax Basis
against, any claims regarding such withholding taxes made against the Lessor,
to the extent, but only to the extent, Lessor has actually paid funds to a
taxing authority with respect to such withholding Taxes or receives a demand
for such payments from any taxing authority. 
In accepting and carrying out its duties with respect to withholding
Taxes pursuant to this Section 13.4(e), Lessor shall act as the duly
authorized agent of Lessee under the withholding provisions of Chapter 3
of the Code.  Lessee shall file notice of
such appointment with the Director of Foreign Operations District of the
Internal Revenue Service in accordance with Treas. Reg. §1.1441-7(c).  Such agency shall terminate in the event that
there is a Change in Law as to release Lessee of the obligation to withhold
Taxes with respect to payments made by Lessee under the Lease and in any event
upon termination or expiration of the Lease.

 

53

 

                   (ii)        If and to the extent the Lessor or its
agent has in good faith reasonably attempted to comply with its obligation to
withhold Taxes in accordance with clause (i) and a claim regarding
withholding Taxes is made against the Lessor or its agent, as between the
Lessee and the Lessor (or its agent), the Lessee shall be responsible for, and
the Lessee shall indemnify and hold harmless the Lessor (and its agent)
(without duplication of any indemnification required by subsection (a)) on an
After Tax Basis against, such claim to the extent, but only to the extent, the
Lessor or its agent has actually paid funds to a taxing authority with respect
to such withholding taxes or receives a demand for such payment from any taxing
authority.

 

                  (iii)        Each Lender agrees to reimburse the
Lessor and Collateral Agent for any withholding Taxes for which the Lessor or
Collateral Agent becomes liable and, except with respect to such Taxes for
which Lessee is liable pursuant to Section 15.3, to reimburse the Lessee
for any Taxes or other amounts paid by the Lessee (A) pursuant to clause (ii) hereof
and (B) to the extent Lessee has otherwise paid funds to a taxing
authority with respect to any withholding taxes or receives a demand for such
payment from any taxing authority.

 

                  (iv)        For purposes of this Section 13.4(e),
it shall be assumed that the Lease constitutes a loan for United States federal
income tax purposes (as is the parties’ intention).

 

                 (f)       Disclosure.  The parties agree that 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
this Participation Agreement and the structural aspects of these transactions
as they relate to such tax aspects without limitation of any kind on such
disclosure.

 

                (g)       Verification.  At the
Lessee’s request, the amount of any indemnity payment by the Lessee or any
payment by an Indemnitee to the Lessee pursuant to this Section 13.4 shall
be verified and certified by an independent public accounting firm mutually
acceptable to the Lessee and such Indemnitee. 
The costs of such verification shall be borne by the Lessee.  In no event shall the Lessee have the right
to review such Indemnitee’s tax returns or receive any other confidential
information from such Indemnitee in connection with such verification.  Any information provided to such accountants
by any Person shall be and remain the exclusive property of such Person and
shall be deemed by the parties to be (and the accountants will confirm in
writing that they will treat such information as) the private, proprietary and
confidential property of such Person, and no Person other than such Person and
the accountants shall be entitled thereto and all such materials shall be
returned to such Person.  Such accounting
firm shall be requested to make its determination within 30 days of the Lessee’s
request for verifications and the computations of the accounting firm shall be
final, binding and conclusive upon the Lessee and such Indemnitee.  The parties agree that the sole
responsibility of the independent public accounting firm shall be to verify the
amount of a payment pursuant to the Lease and that matters of interpretation of
the Lease are not within the scope of the independent accounting firm’s
responsibilities.

 

54

 

              Section 13.5.       After Tax
Basis.  If an Indemnitee shall
not be entitled to a corresponding and equal deduction with respect to any
payment or Tax which Lessee is required to pay or reimburse under any other
provision of this Article XIII (each such payment or reimbursement under
this Article XIII, an “Original Payment”)
and which Original Payment constitutes income to such Indemnitee when accrued
or received, then Lessee shall pay to, or for the account of, such Indemnitee
on demand the amount of such Original Payment on an After Tax Basis.

 

              Section 13.6.       Environmental
Indemnity.  (A) Without
limitation of the other provisions of this Article XII, the Lessee hereby
agrees to indemnify, hold harmless and defend each Indemnitee from and against
any and all claims, losses, 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 reasonable and documented attorneys’, expert
consultants’, expert witnesses’, and/or paralegals’ fees and expenses),
including all costs incurred in connection with any investigation or monitoring
of the condition of the Subject Property or any clean-up, remedial, removal or
restoration work by or required by any Governmental Authority relating to the
Subject Property (collectively, “Environmental  Claims”), and whether or not such Environmental Claim arises
or occurs after the Expiration Date, in each case under this Section 13.6,
arising in whole or in part, out of:

 

                   (a)        the presence on, under or around the Subject
Property or any portion thereof of any Hazardous Substance, or any releases or
discharges of any Hazardous Substance on, under, from, onto or around the
Subject Property or any portion thereof,

 

                   (b)        any activity, including, without
limitation, construction carried on or undertaken on or off the Subject
Property or any portion thereof, and whether by Lessee or any of its Affiliates
or any predecessor in title or any employees, agents, sublessees, contractors
or subcontractors of the Lessee, any of its Affiliates 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 Substance that at any time are located or present on,
under or around, or that at any time migrate, flow, percolate, diffuse or in
any way move onto or under the Subject Property or any portion thereof,

 

                   (c)        loss of or damage to any property or the
environment arising from, or in any way related to, the Subject Property or
Lessee or any of its Affiliates (including, without limitation, clean-up costs,
response costs, remediation and removal costs, cost 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
action required by or under Environmental Laws, in each case arising from, or
in any way related to, the Subject Property, Lessee or the Overall Transaction
or any portion thereof,

 

55

 

                   (d)        any claim concerning lack of compliance
with Environmental Laws in connection with the Subject Property (including,
without limitation, any claim arising from the failure or alleged failure to
obtain or comply with any permit required by any Environmental Laws for the
construction or operation of the Subject Property), or any act or omission
causing an environmental condition that requires remediation or would allow any
Governmental Authority to record a Lien against the Subject Property or any
portion thereof, or

 

                   (e)        any residual contamination on or under
any of the Subject Property, or adversely affecting any natural resources, and
any contamination of any property or natural resources arising in connection
with the generation, use, handling, storage, transport or disposal of any such
Hazardous Substance, in each case arising from, or in any way related to, the
Subject Property, Lessee or the Overall Transaction or any portion thereof, and
irrespective of whether any of such activities were or will be undertaken in
accordance with Applicable Laws.

 

               (B)       Notwithstanding the foregoing provisions
of this Section 13.6, Lessee shall not be obligated to indemnify an
Indemnitee under this Section 13.6 for any Claim or Environmental Claim to
the extent that such Claim or Environmental Claim is attributable to (i) the
gross negligence or willful misconduct of such Indemnitee; provided
that a default under, or the failure of Lessor to perform any covenant or
agreement in, any Related Agreement, the CSC Sublease or any Fifth Floor
Sublease or otherwise required by Applicable Law, Governmental Action or third
parties with respect to the property subject thereto shall not be deemed gross
negligence or willful misconduct or (ii) acts, events or circumstances
occurring after, and to the extent not attributable to or constituting acts,
events or circumstances occurring prior to (1) the expiration or earlier
termination of the Lease and (2) delivery of possession of the Subject
Property and, if applicable, the CSC Sublease to Lessor pursuant to Article XX
of the Lease or, solely with respect to a Limited Recourse Event of Default, Article XVI
of the Lease, or to a third party or (iii) any breach by such Indemnitee
of its representations and warranties in Section 8.1 or 8.4, as the case
may be, or the breach by such Indemnitee of its covenants as set forth in this
Participation Agreement or the Lease.

 

ARTICLE XIV

[INTENTIONALLY OMITTED].

 

56

 

ARTICLE XV

CONTINGENT RENT AND OTHER COSTS

 

              Section 15.1.       LIBO Rate
Lending Unlawful.  If, after
the Closing Date, any Participant shall reasonably determine (which
determination shall, upon notice thereof to the Lessee and the Participants, be
conclusive and binding on the Lessee and which notice shall be withdrawn
whenever the applicable circumstances no longer exist) that the introduction of
or any change in or in the interpretation of any Applicable Law makes it
unlawful, or any central bank or other Governmental Authority asserts that it
is unlawful, for such Participant to make available, continue or maintain any
Loan or Lessor Amount that bears Interest or Yield based upon the LIBO Rate, as
the case may be, the obligation of such Participant to make available, continue
or maintain any such Loan or Lessor Amount, as the case may be, shall, upon
such determination, forthwith be suspended until such Participant shall notify
the Lessee and the Lessor that the circumstances causing such suspension no
longer exist and, to the extent required by any such introduction of or change
in or in the interpretation of any law, all Loans, or Lessor Amount, as the
case may be, of such Participant shall automatically bear Interest or accrue
Yield at the Alternate Base Rate either (a) on the last day of the then
current Interest Period applicable to such Loan or Lessor Amount, as the case
may be, if such Participant may lawfully continue to maintain and fund such
Loan or Lessor Amount, or (b) immediately if such Participant shall
determine that it may not lawfully continue to maintain and fund such Loan or
Lessor Amount, as the case may be, to such day thereto or sooner, if required
by such law or assertion.

 

              Section 15.2.       Deposits
Unavailable.  If any of the
Participants shall have determined that:

 

                   (a)        Dollar deposits in the relevant amount
and for the relevant Interest Period are not available to such Participant in
its relevant market; or

 

                   (b)        by reason of circumstances affecting
such Participant’s relevant market, adequate means do not exist for
ascertaining the LIBO Rate applicable to such Participant’s Loans or Lessor
Amount,

 

then, upon notice from such Participant to the Lessee
and the other Participants, each outstanding Loan or Lessor Amount, as the case
may be, of the affected Participant shall begin to bear Interest or accrue
Yield at the Alternate Base Rate on the last day of the then current Interest
Period applicable thereto.

 

              Section 15.3.       Increased
Costs, Etc.  If any change in,
or the introduction, adoption, effectiveness, interpretation, reinterpretation
or phase-in of any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other Governmental Authority after the Closing Date hereof increases or
would increase the cost (other than in respect of Taxes, except for withholding
taxes imposed as the result of any change in law, regulation or treaty first
enacted, promulgated or signed after the later of the Closing Date and the date
such Participant becomes a Participant (and without limiting the Lessee’s
obligations pursuant to Sections 13.4, 13.5 or 15.6 hereof)), to any
Participant of, or reduces or would reduce the amount of any sum receivable by,
such Participant in respect of making available, continuing or maintaining (or
of its obligation to make available, continue or maintain) or prevents or would
prevent any Participant from being legally entitled to a complete exemption
from withholding as described in Section 12.3 with respect to, any Loans
or Lessor Amount, as the case may be, 
then the Lessee shall from time to time, within thirty (30) days of
demand by such Participant together with the certificate referred to below
(with a copy of such demand and certificate to the Collateral Agent), pay to
the Collateral Agent for the account of such Participant additional amounts
sufficient to compensate such Participant for such increased cost or reduced
amount receivable; provided, that
no Participant shall be entitled to demand such compensation more than ninety
(90) days following the last day of the Interest Period in respect of which
such demand is made; provided further, however,
that the foregoing provision shall in no way limit the right of any Participant
to demand or receive such compensation to the extent that such compensation
relates to the retroactive application of any law, regulation, guideline or
request if such demand is made within ninety (90) days after the implementation
of such retroactive law, interpretation, guideline or request.  A reasonably detailed certificate as to the
nature and amount of such increased cost, submitted to the Lessee and the
Collateral Agent by such Participant in good faith, shall be conclusive and
binding for all purposes, absent manifest error.

 

57

 

              Section 15.4.       Funding
Losses.  In the event any
Participant shall incur any loss or out-of-pocket expense (including any Break
Costs and any loss or out-of-pocket expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Participant to make available, continue or maintain any portion of the
principal amount of any Loan or Lessor Amount, as the case may be) as a result
of:

 

                   (a)        any repayment or prepayment of the
principal amount of any Loans or Lessor Amount, as the case may be, on a date
other than the scheduled last day of the Interest Period applicable thereto; or

 

                   (b)        any Loans or Lessor Amount, as the case
may be, not being made in accordance with the Advance Request therefor (unless
such failure to make such Loans or fund such Lessor Amount, as the case may be,
constitutes a breach by the applicable Participant of its obligations under Article III),

 

then, upon the written notice of such Participant to
the Lessee, the Lessee shall, within five days of its receipt thereof, pay
directly to such Participant as Supplemental Rent such amount (determined on
the basis of such Participant’s standard practices) as will reimburse such
Participant for such loss or out-of-pocket expense.  Such written notice (which shall include
calculations in sufficiently reasonable detail to indicate the incurrence and
amount of such loss and out-of-pocket expense) shall be presumed correct and
binding on the Lessee absent manifest error.

 

              Section 15.5.       Increased
Capital Costs.  If any
Participant reasonably determines that compliance with any law or regulation or
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law) issued, promulgated or made, as the
case may be, after the Closing Date (or, if later, the date on which such Participant
becomes a Participant) affects or would affect the amount of capital required
or expected to be maintained by such Participant or any corporation controlling
such Participant and that the amount of such capital is increased by or based
upon the existence of such Participant’s commitment hereunder or under the Loan
Agreement and other commitments of this type or the Loans or Lessor Amount,
then, within 30 days of demand by such Participant together with the
certificate referred to below (with a copy of such demand and certificate to
the Collateral Agent), the Lessee shall pay to the Collateral Agent for the
account of such Participant, from time to time as specified by such
Participant, additional amounts sufficient to compensate such Participant or such
corporation in the light of such circumstances, to the extent that such
Participant determines such increase in capital to be allocable to the
existence of such Participant’s commitment hereunder or under the Loan
Agreement or the Fundings made by such Participant hereunder, provided, that no
Participant shall be entitled to demand such compensation more than
90 days following the last day of the fiscal year of such Participant
during which such capital requirement was applicable and in respect of which such
Participant is seeking compensation; provided further, however,
that the foregoing proviso shall in no way limit the right of any Participant
to demand or receive such compensation to the extent that such compensation
relates to the retroactive application of any law, regulation, guideline or
request described above if such demand is made within 90 days after the
implementation of such retroactive law, interpretation, guidelines or
request.  

 

58

 

A reasonably detailed certificate as to such amounts
submitted to the Lessee and the Collateral Agent by such Participant in good
faith shall be conclusive and binding for all purposes, absent manifest error.

 

              Section 15.6.       After Tax
Basis.  Lessee shall pay all
amounts owing under this Article XV on an After Tax Basis.

 

              Section 15.7.       Applicability
of Certain Sections and Payments. 
The provisions of Sections 15.1 through 15.6 are applicable to the
Lenders and the Lessor in connection with any funding by reference to the LIBO
Rate, and not otherwise.

 

              Section 15.8.       Funding
Office; Mitigation of Costs. 
If the Lessee is required to pay additional amounts to or for the
account of any Participant pursuant to Sections 15.1 through 15.3, and
15.5 to the extent applicable, then such Participant will agree to use
reasonable efforts to reduce or eliminate any claim for compensation
thereunder, including, without limitation, to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the sole judgment of
such Participant, is not otherwise disadvantageous to such Participant.

 

ARTICLE XVI

MISCELLANEOUS

 

              Section 16.1.       Survival
of Agreements.  The
representations and warranties made as of the date hereof and as of the Closing
Date and the parties’ obligations under any and all the covenants, indemnities
and agreements of the parties provided for in the Operative Documents, arising
from events commencing prior to the expiration or earlier termination of this
Participation Agreement and any other Operative Document, shall survive the
execution and delivery and the termination or expiration of this Participation
Agreement and any of the other Operative Documents, the transfer of the
interest in the Leased Property, the Lessee’s interest as the sublessor under
the CSC Sublease and any Fifth Floor Sublease as provided herein or in any
other Operative Documents (and shall not be merged into any conveyance or
transfer document), any disposition of any interest of Lessor in the Leased
Property, the Lessee’s interest as the sublessor under the CSC Sublease and any
Fifth Floor Sublease, the purchase and sale of the Notes or Lessor’s Interest,
payment therefor and any disposition thereof, and shall be and continue in
effect notwithstanding any investigation made by any party hereto or to any of
the other Operative Documents and the fact that any such party may waive
compliance with any of the other terms, provisions or conditions of any of the
Operative Documents.

 

59

 

 

              Section 16.2.       No
Broker, Etc.  Except for the
Lessee’s dealing with Banc of America Leasing & Capital, LLC, as
Arranger, each of the parties hereto represents to the others that it has not
retained or employed any arranger, broker, finder or financial advisor to act
on its behalf in connection with this Participation Agreement, nor has it
authorized any arranger, broker, finder or financial adviser retained or
employed by any other Person so to act, nor has it incurred any fees or
commissions to which Collateral Agent or any Participant might be subjected by
virtue of their entering into the Overall Transaction.  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 specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be in writing and shall be deemed to have been duly given
and shall be effective:  (i) in the
case of notice by letter, the earlier of when delivered to the addressee by
hand or courier if delivered on a Business Day and, if not delivered on a
Business Day, the first Business Day thereafter or on the third Business Day
after depositing the same in the mails, registered or certified mail, postage
prepaid, return receipt requested, (ii) in the case of a prepaid delivery
to a reputable national overnight air courier service, on the Business Day
following such date of delivery, and (iii) in the case of notice by
facsimile or bank wire, when receipt is confirmed if delivered on a Business
Day and, if not delivered on a Business Day, the first Business Day thereafter,
addressed as provided on Schedule III hereto, or to such other address as
any of the parties hereto may designate by written notice.

 

              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.

 

              Section 16.5.       Amendments.  No Operative Document (other than the Related
Agreements pursuant to and in accordance with Section 6.2 of the Lease)
nor any of the terms thereof may be terminated, amended, supplemented, waived
or modified without the written agreement or consent of Lessor and the Required
Participants; provided that Section 16.20
hereof may not be terminated, amended, supplemented, waived or modified without
the written agreement or consent of the Arranger; provided,
further, that such termination,
amendment, supplement, waiver or modification shall require the written
agreement or consent of each Participant if such termination, amendment,
supplement, waiver or modification would:

 

                   (a)        modify any of the provisions of this Section 16.5,
change the definition of “Required Participants” or “Required Lenders” or modify
or waive any provision of an Operative Document requiring action by each
Participant (including, without limitation, Section 4.7 hereof);

 

                   (b)        (i) amend, modify, waive or
supplement any of the provisions of Section 4.1, 4.2 or 5.3 hereof or Section 2.5,
2.6 or 2.7 of the Loan Agreement or (ii) extend the maturity date of any
Note or extend the Expiration Date;

 

                   (c)        reduce, modify, amend or waive any fees
or indemnities in favor of any Participant, including without limitation
amounts payable pursuant to Article XIII (except that any Person may
consent to any reduction, modification, amendment or waiver of any indemnity
payable to it);

 

60

 

                   (d)        modify, postpone, reduce or forgive, in whole or in part, any
payment of Rent (other than pursuant to the terms of the Operative Documents),
any Loan or Lessor Amount or any amount payable in respect of the Lease
Balance, the Loan Balance, Sale Option Recourse Amount, amounts due pursuant to
Article XX of the Lease, Interest or Yield, subject to clause (c) above,
any other amount payable to it under the Lease or this Participation Agreement,
or modify the definition or method of calculation of Rent (other than pursuant
to the terms of the Operative Documents), Loans or Lessor Amount, Lease
Balance, Loan Balance, Lessor Balance, Sale Option Recourse Amount, Participant
Balance or any other definition which would affect the amounts to be advanced
or which are payable under the Operative Documents;

 

                   (e)        consent to any assignment of the Lease
by the Lessee, releasing the Lessee from its obligations in respect of the
payments of Rent, Loan Balance, Lessor Balance or Lease Balance or changing the
absolute and unconditional character of such obligations; or

 

                    (f)        release of any Lien granted by the
Lessee or the Lessor under the Operative Documents, except as provided in the
Operative Documents.

 

              Section 16.6.       Loan
Agreement and Related Obligations. 
The Lessee shall pay, as Supplemental Rent, when due, all costs,
expenses and other amounts (other than principal and Interest on the Loans
which are payable to the extent otherwise required by the Operative Documents)
required to be paid by the Lessor under the Loan Agreement and any Security
Instrument.

 

              Section 16.7.       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 16.8.       Parties
in Interest.  Except as
provided in Section 16.20 and as otherwise expressly provided herein, none
of the provisions of this Participation Agreement is intended for the benefit
of any Person except the parties hereto. Except as otherwise specifically provided
for in the Lease or any Operative Document, the Lessee shall not assign or
transfer any of its rights or obligations under the Operative Documents without
the prior written consent of the Required Participants.  Except as provided in Section 12.1, the
Participants shall not assign or transfer any of their respective rights or
obligations under the Operative Documents.

 

              Section 16.9.       Governing
Law.  This Participation
Agreement shall in all respects be governed by the internal law of the State of
New York as to all matters of construction, validity and performance, without
regard to conflicts of law principles to the extent permitted by Applicable
Law.

 

61

 

 

            Section 16.10.       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.

 

            Section 16.11.       Liability
Limited.  No Participant shall
have any obligation to any other Participant or to the Lessee or the Collateral
Agent with respect to the Overall Transaction, 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.

 

            Section 16.12.       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 more effectively the intent and purposes of this
Participation Agreement and the other Operative Documents and the Overall
Transaction, including, without limitation to establish, preserve, protect and
perfect the interest of Lessor in the Subject Property and the Lessee
Collateral, the Lien of Lessor in the Lessee Collateral and Collateral Agent in
the Lessor Collateral and Lessee Collateral, and/or any Participant’s rights
under this Participation Agreement and the other Operative Documents
(including, without limitation, the preparation, execution and filing of any
and all UCC Financing Statements (including precautionary financing statements)
and other filings or registrations which the parties hereto may from time to
time reasonably request to be filed or effected).  The Lessee, at its own expense and without
the 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
(if the Lessor shall so request) as so requested, in order to maintain and
protect all Liens and security interests provided for hereunder or under any
other Operative Document.

 

            Section 16.13.       Submission
to Jurisdiction.  Lessee
hereto irrevocably and unconditionally:

 

                   (a)        submits to the nonexclusive jurisdiction
of the state courts of the State of New York and to the nonexclusive general
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in the borough of Manhattan, and
appellate courts from any thereof, for the purpose of any suit, action or other
proceeding relating to or arising out of this Participation Agreement or any
other Operative Documents, or for recognition and enforcement of any judgment
in respect thereof; and

 

                   (b)        consents that any such action or
proceedings may be brought to such courts, and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same.

 

62

 

        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 AND
THERETO.  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.  THE LESSEE ACKNOWLEDGES AND
AGREES THAT THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER OPERATIVE DOCUMENT TO WHICH
THEY ARE A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTICIPANTS ENTERING INTO THIS PARTICIPATION AGREEMENT AND EACH OTHER
OPERATIVE DOCUMENT.

 

            Section 16.15.       Confidentiality.  Each party hereto shall keep confidential,
and shall not disclose, any information not otherwise publicly available it
obtains about the Lessee or the books and records of Lessee and each of its
Affiliates or relating to the Leased Property, except that such party may
disclose such information (i) as required by Applicable Laws, (ii) to
its attorneys, auditors, accountants and other professional advisors which have
been informed as to the confidential nature of such information, (iii) in
connection with the enforcement of the Operative Documents, (iv) to any
transferee or potential transferee permitted by the Operative Documents,
provided such transferee or potential transferee agrees to the terms of this
sentence, (v) to any federal or state banking authority or other
regulatory authority having jurisdiction over any Participant or Collateral
Agent or any of their respective Affiliates and (vi) to its Affiliates
which have been informed as to the confidential nature of such information.

 

            Section 16.16.       Limited
Liability of Lessor.  The
parties hereto agree that Lessor shall have no liability whatsoever to Lessee,
the Lenders, Collateral Agent or any of their respective successors and assigns
or any other Person for any Claim based on or in respect of this Participation
Agreement or any of the other Operative Documents or arising in any way from
the Overall Transaction; provided, however,
that Lessor shall be liable:  (a) for
its own willful misconduct or gross negligence (or negligence in the handling
of funds), provided that a default under or, the failure of Lessor to perform
any obligation, covenant or agreement in, any Related Agreement, the CSC
Sublease or any Fifth Floor Sublease or otherwise required by Applicable Law,
Governmental Action or third parties with respect to the Subject Property, the
CSC Sublease or any Fifth Floor Sublease shall not be deemed gross negligence
or willful misconduct, (b) any Lessor Lien attributable to it, (c) for
liabilities that may result from the inaccuracy or incorrectness of any
representation or warranty expressly made by it in Section 8.4 of this
Participation Agreement or (d) for the failure of Lessor to perform the
covenants and agreements set forth in the Lease and this Participation
Agreement.

 

63

 

            Section 16.17.       Limited
Liability of Collateral Agent. 
The parties hereto agree that Collateral Agent, in its individual
capacity, shall have no personal liability whatsoever to Lessee, the Lessor,
the Lenders or any of their respective successors and assigns for any Claim
based on or in respect of this Participation Agreement or any of the other
Operative Documents or arising in any way from the Overall Transaction; provided, however, that Collateral Agent shall be liable in
its individual capacity:  (a) for
its own willful misconduct or gross negligence (or negligence in the handling
of funds) and, to each Participant for the breach of its obligations to such
Participant in respect of the Operative Documents and the Leased Property, (b) for
liabilities that may result from the incorrectness of any representation or
warranty expressly made by it in this Participation Agreement or from its
failure to perform the covenants and agreements set forth in this Participation
Agreement or any other Operative Document, or (c) for any Tax based on or
measured by any fees, commission or compensation received by it for actions
contemplated by the Operative Documents. 
It is understood and agreed that, except as provided in the preceding
proviso, Collateral Agent 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.

 

            Section 16.18.       Payment
of Transaction Expenses and Other Costs

 

                (a)       Transaction Expenses and
Continuing Expenses.  Subject
to clause (b) below, as and when any portion of Transaction Expenses
becomes due and payable, including the continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of Lessor, as
Lessor under the Lease, with respect to the Collateral Agent under the
Operative Documents, such Transaction Expenses shall be paid by Lessee as
Supplemental Rent.

 

                (b)       Amendments, Supplements
and Appraisal.  In accordance
with the terms herein applicable to the payment of Transaction Expenses, Lessee
agrees to pay to the Participants and Collateral Agent all reasonable costs and
expenses (including reasonable legal fees and expenses of one special counsel
to the Collateral Agent and one special counsel to Lessor and one special
counsel for the Lenders) incurred by any of them in connection with:  (i) the considering, evaluating,
investigating, negotiating and entering into or giving or withholding of any
amendments or supplements or waivers or consents with respect to any Operative
Document (other than with respect to amendments, supplements, waivers or
consents not requested by Lessee); (ii) any Event of Loss or termination
of the Lease or any other Operative Document; (iii) the negotiation and
documentation of any restructuring or “workout”, whether or not consummated, of
any Operative Document; (iv) the enforcement of the rights or remedies
under the Operative Documents; or (v) any transfer by Lessor or a Lender
of any interest in the Operative Documents during the continuance of an Event
of Default.

 

            Section 16.19.       Reproduction
of Documents.  This
Participation Agreement, all documents constituting an Appendix, Schedule or Exhibit hereto,
and all documents relating hereto received by a party hereto, including,
without limitation:  (a) consents,
waivers and modifications that may hereafter be executed; (b) documents
received by the Participants in connection with the receipt and/or acquisition
of the Leased Property; and (c) financial statements, certificates, and
other information previously or hereafter furnished to Lessor, Collateral Agent
or any Lender may be reproduced by the party receiving the same by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process.  Each of the
parties hereto agrees and stipulates that, to the extent permitted by law, any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.  This
Section 16.19 shall not prohibit the Lessee or any other party hereto from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.

 

64

 

 Section 16.20. Role of Arranger and Syndication Agent

 

                (a)       Role of Banc of America Leasing & Capital, LLC.  Each party hereto acknowledges hereby that it
is aware of the fact that Banc of America Leasing & Capital, LLC has
acted and is acting as an “arranger” with respect to the Overall
Transaction.  The parties hereto
acknowledge and agree that Arranger and its Affiliates, including Bank of
America, have not made any representations or warranties concerning, and that
they have not relied upon Arranger as to, the tax, accounting or legal
characterization or validity of (i) the Operative Documents or (ii) any
aspect of the Overall Transaction.  The
parties hereto acknowledge and agree that Arranger has no duties, express or
implied, under the Operative Documents in its capacity as Arranger.  The parties hereto further agree that Section 5.1,
Section 17.6, Section 16.2, the first proviso in the first sentence
of Section 16.5, Section 16.18(a) and this Section 16.20(a) are
for the express benefit of Arranger, and Arranger shall be entitled to rely
thereon as if it were a party hereto.

 

                (b)       Role of JPMorgan Chase
Bank, N.A.  Each party hereto
acknowledges hereby that it is aware of the fact that JPMorgan Chase Bank, N.A.
has acted and is acting as the “syndication agent” with respect to the Overall
Transaction.  The parties hereto
acknowledge and agree that Syndication Agent and its Affiliates, including
JPMorgan Chase Bank, have not made any representations or warranties
concerning, and that they have not relied upon Syndication Agent as to, the
tax, accounting or legal characterization or validity of (i) the Operative
Documents or (ii) any aspect of the Overall Transaction.  The parties hereto acknowledge and agree that
this Section 16.20(b) is for the express benefit of Syndication
Agent, and Syndication Agent shall be entitled to rely thereon as if it were a
party hereto.

 

            Section 16.21.       Deliveries
to Participants.  Lessee may
fulfill its obligations hereunder and under each of the other Operative Documents
to provide any item (other than any notices) to any Participant or other party
hereto by providing sufficient copies of such item directly to the Collateral
Agent, with instructions to the Collateral Agent to deliver such item to such
Participant.

 

ARTICLE XVII

THE COLLATERAL AGENT

 

              Section 17.1.       Appointment.  Each Participant hereby irrevocably
designates and appoints the Collateral Agent as the Collateral Agent of such
Participant under this Participation Agreement and the other Operative Documents,
and each such Participant irrevocably authorizes the Collateral 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 Collateral
Agent by the terms of this Participation Agreement and the other Operative
Documents, together with such other powers as are reasonably incidental
thereto.  

 

65

 

Notwithstanding any provision to the contrary
elsewhere in this Participation Agreement, the Collateral 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 Collateral Agent.

 

              Section 17.2.       Delegation
of Duties.  The Collateral
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.

 

              Section 17.3.       Exculpatory
Provisions.  Except as
provided in Section 16.17, neither the Collateral 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 the Lessor or the
Lessee or any officer thereof 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 Collateral 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 the Lessor or the Lessee to perform
their respective obligations hereunder or thereunder. The Collateral 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 the Lessor or the Lessee.

 

              Section 17.4.       Reliance
by Collateral Agent.  The
Collateral Agent shall be entitled to rely, and shall be fully protected in
relying, upon any Note, Lessor’s Interest, 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 Lessor or the Lessee), independent accountants and other experts
selected by the Collateral Agent.  The
Collateral Agent may deem and treat the payee of any Note or Lessor’s Interest
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Collateral
Agent, in accordance with the Loan Agreement. 
The Collateral 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 and 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.  

 

66

 

The Collateral 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 Notes or Lessor’s Interest.  Wherever in the Operative Documents the
consent or approval of the Collateral Agent is required, in giving any such
consent or approval the Collateral Agent may rely upon, or make its approval
subject to, and if the Required Participants provide direction then Collateral
Agent shall consent or approve or withhold its consent or approval consistent
with, the directions of or consent or approval from the Required Participants.

 

              Section 17.5.       Notice of
Default.  The Collateral Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Collateral Agent has received notice
from a Participant or the Lessor referring to this Participation Agreement,
describing such Default or Event of Default and stating that such notice is a
“notice of default”.  In the event that
the Collateral Agent receives such a notice, the Collateral Agent shall
promptly give notice thereof to the Participants, the Lessor and the Lessee.  The Collateral Agent shall take such action
with respect to such Default or Event of Default as shall be directed by the
Required Participants or, except as set forth in Section 5.2 of the Loan
Agreement, the Required Lenders; provided, however,
that unless and until the Collateral Agent shall have received such directions,
the Collateral 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 17.6.       Non-Reliance
on Collateral Agent and Other Participants.  Each Participant expressly acknowledges that
neither the Collateral Agent, nor the Arranger, 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 Collateral
Agent or the Arranger hereinafter taken, including any review of the affairs of
the Lessor or the Lessee, shall be deemed to constitute any representation or
warranty by the Collateral Agent or the Arranger to any Participant.  Each Participant represents to the Collateral
Agent and the Arranger that it has, independently and without reliance upon the
Collateral Agent, the Arranger or any other Participant, 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 Lessor and the Lessee and made its
own decision to enter into this Participation Agreement.  Each Participant also represents that it
will, independently and without reliance upon the Collateral Agent, the
Arranger 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
Lessor and the Lessee.  Except for
notices, reports and other documents expressly required to be furnished to the
Participants by the Collateral Agent hereunder, neither the Collateral Agent
nor the Arranger 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 Lessor or the Lessee which may come into the possession
of the Collateral Agent, the Arranger or any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

 

67

 

              Section 17.7.       Indemnification.  Other than with respect to indemnification
provided to the Collateral Agent in accordance with Section 17.4, the
Collateral Agent agrees to look solely to the Lessee under Article XIII,
and not to any other party hereto, for any claim for indemnification which may
arise hereunder or under any other Operative Document.

 

              Section 17.8.       Collateral
Agent in Its Individual Capacity. 
Each Participant acknowledges that Wells Fargo Bank Northwest, National
Association is acting as Collateral Agent hereunder.  Wells Fargo Bank Northwest, National
Association and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Lessor, the Lessee and their Affiliates as though it was not
the Collateral 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, Wells Fargo Bank Northwest, 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 their
respective Affiliates) and acknowledges that such Persons shall be under no
obligation to provide such information to them.

 

              Section 17.9.       Successor
Collateral Agent.  The
Collateral Agent may resign at any time by giving not less than 30 days’ prior
written notice thereof to the Participants and the Lessee and may be removed at
any time with or without cause by the Required Participants.  Upon any such resignation or removal, the
Required Participants shall have the right to appoint a successor Collateral
Agent.  If no successor Collateral Agent
shall have been so appointed by the Required Participants, and shall have
accepted such appointment, within thirty (30) days after the retiring
Collateral Agent’s giving of notice of resignation or the Required
Participants’ removal of the retiring Collateral Agent, then the retiring
Collateral Agent may, on behalf of the Participants, appoint a successor Collateral
Agent, which shall be a commercial bank described in clause (i) or (ii) of
the definition of “Eligible Assignee” and having a combined capital and surplus
of at least $150,000,000.  Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations under this Participation
Agreement.  After any retiring Collateral
Agent’s resignation or removal hereunder as Collateral Agent, the provisions of
this Article XVII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent under this
Agreement.  Notwithstanding the foregoing
if no Event of Default and no Default, shall have occurred and be continuing,
then no successor Collateral Agent shall be appointed under this Section 17.9
without the prior written consent of the Lessee, which consent shall not be
unreasonably withheld or delayed.

 

            Section 17.10.       Release
of Collateral.  Collateral
Agent and the Participants acknowledge and agree that Lessee shall be a third
party beneficiary of Section 6.2 of the Loan Agreement, pursuant to which
the Subject Property shall be released from all Liens in favor of the
Collateral Agent or any Participant upon Lessee’s purchase of the Subject
Property in accordance with the Lease.

 

68

 

            Section 17.11.       Collateral Agent Execution of Transfer
Documents.  Collateral Agent agrees and acknowledges its
obligation to execute any documents that require its signature pursuant to a
transfer of the Lessee’s interest in the CSC Sublease and any Fifth Floor
Sublease as set forth in Section 21.4(vi) of the Lease

 

[END OF PAGE]

 

[SIGNATURE PAGES FOLLOW]

 

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.

 

	
  LESSEE:

  	
  SILICON LABORATORIES INC., as Lessee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William G. Bock

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William G. Bock

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President and Chief 

  Financial Officer

  	
   

  

 

S-1

 

	
  LESSOR:

  	
  BA LEASING BSC, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sonia T. Delen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Sonia T. Delen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  

 

S-2

 

	
  LENDERS:

  	
  BANK OF AMERICA, NATIONAL ASSOCIATION, as Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sonia T. Delen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Sonia T. Delen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  

 

S-3

 

	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION, as Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Stewart Kapnick

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Stewart Kapnick

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  

 

S-4

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., as Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steve
  Prichett

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Steve Prichett

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  

 

S-5

 

	
  COLLATERAL AGENT:

  	
  WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
  not in its individual capacity, except as expressly stated herein, but solely
  as Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Rosevear

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Scott Rosevear

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  

 

S-6

 

DEFINITIONS

 

appendix 1-1

 

 

LESSOR COMMITMENT

 

	
   

  	
  LESSOR

  	
   

  	
  COMMITMENT AMOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BA LEASING BSC, LLC

  	
   

  	
  $10,100,000.00

  	
   

  

 

schedule
i-1

 

 

 

LENDERS’ COMMITMENTS

 

	
  Lender

  	
   

  	
  Commitment Amounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, National Association

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  HSBC Bank USA, National Association

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Loan Commitments:

  	
   

  	
  $

  	
  40,000,000.00

  	
   

  

 

Schedule ii-1

 

 

 

NOTICE INFORMATION,
PAYMENT OFFICES 

AND APPLICABLE LENDING OFFICES

 

	
  LESSEE

  
	
   

  
	
  SILICON LABORATORIES INC.

  
	
  400 West Cesar Chavez
  Street, Suite 600

  
	
  Austin, TX 78701

  
	
  Attention: Corporate
  Treasurer

  
	
  Telephone: 512-464-9422

  
	
  Facsimile: 512-464-9479

  
	
   

  
	
  With a copy to:

  
	
   

  
	
  SILICON LABORATORIES
  INC.

  
	
  Attention: Chief
  Financial Officer

  
	
  400 West Cesar Chavez
  Street, Suite 600

  
	
  Austin, TX 78701

  
	
  Telephone: 512-464-9260

  
	
  Facsimilie:
  512-428-1666

  
	
   

  
	
  SILICON LABORATORIES
  INC.

  
	
  Attention: General
  Counsel

  
	
  400 West Cesar Chavez
  Street, Suite 600

  
	
  Austin, TX 78701

  
	
  Telephone: 512-464-9295

  
	
  Facsimile: 512-428-1504

  
	
   

  
	
  SILICON LABORATORIES
  INC.

  
	
  Attention: Worldwide
  Facilities Manager

  
	
  400 West Cesar Chavez
  Street, Suite 600

  
	
  Austin, TX 78701

  
	
  Telephone: 512-464-9448

  
	
  Facsimile: 512-464-9341

  
	
   

  
	
  Wire Instructions:

  
	
   

  
	
  Bank Name: Bank of
  America, N.A.

  
	
  ABA No.: 0260-0959-3

  
	
  Account No.: 004797976867

  
	
  Account Name: Silicon
  Laboratories Inc.

  
	
  Swift Code: BOFAUS3N

  
	
  Reference: 200 West
  Cesar Chavez

  

 

schedule
iii-1

 

 

 

 

LESSOR

 

BA LEASING BSC, LLC

One Financial Plaza

RI1-537-02-02

Providence, RI 02903

Attention:  David Cournoyer, SVP-Operations

Telephone:  401-278-7881

Facsimile:  401-278-7207

 

Wire Instructions:

Bank of America

Concord, Ca

ABA No.:  026-009-593

Account Of:  Banc of America Leasing & Capital
LLC

Account No. 
12334-01992

Reference:  Silicon Labs

 

 

COLLATERAL
AGENT

 

WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION

299
South Main Street, 12th Floor

Corporate
Trust Services

Salt
Lake City, Utah 84111

Attention: DeAnn Madsen

Telephone:
(801) 246-5809

Facsimile:
(801) 246-5053

 

Wire
Instructions:

Wells
Fargo Bank, N.A.

ABA No.: 121000248

CR:  Corporate Trust Department

A/C.: 0510922115

Re: Silicon Laboratories

 

SCHEDULE III - 3

 

 

LENDERS

 

BANK OF AMERICA, NATIONAL ASSOCIATION

 

Credit/Operations Contact:

One Financial Plaza

RI1-537-02-02

Providence, RI 02903

Attention:  David Cournoyer, SVP-Operations

Telephone:  401-278-7881

Facsimile:  401-278-7207

 

Wire Instructions:

Bank of America

Concord, Ca

ABA No.:  026-009-593

Account Of:  Banc of America Leasing & Capital
LLC

Account No. 
12334-01992

Reference:  Silicon Labs

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

	
  Credit Contact:

  	
  Administrative
  Contact:

  
	
  452 Fifth
  Avenue, Tower 5

  	
  One HSBC Center

  
	
  New York, NY
  10018

  	
  Buffalo, NY
  14203

  
	
  Attention:
  Stewart Kapnick

  	
  Attention: Maria
  Moncada

  
	
  Telephone: (212)
  525-5266

  	
  Telephone: (212)
  525-8786

  
	
  Facsimile: (212)
  525-8370

  	
  Facsimile: (212)
  525-8370

  

 

Wire Instructions:

Bank:  HSBC Bank, USA, National
Association

ABA No.:  021001088

Account No.:  713-006-382

Account Name:  AFS Wire Account

Reference:  Silicon Labs

Attention:  Stewart Kapnick

Tax
I.D. # 20-1177241

 

SCHEDULE III - 4

 

 

JPMORGAN CHASE BANK, N.A.

 

	
  Credit Contact:

  	
  Operations
  Contact:

  
	
  2200 Ross
  Avenue, 3rd Floor

  	
  10 South
  Dearborn, 7th Floor

  
	
  Dallas, Texas
  75201

  	
  Chicago,
  Illinois 60603

  
	
  Attention: John
  Horst

  	
  Attention:
  Cynthia Miller

  
	
  Telephone: (214)
  965-3572

  	
  Telephone: (312)
  385-7069

  
	
  Facsimile: (214)
  965-2884

  	
  Facsimile: (312)
  385-7096

  

 

Business Contact:

221 West Sixth Street, 1st Floor

Austin, Texas  78701

Attention:  Steve Prichett

Telephone:  (512) 479-2220

Facsimile:  (512) 479-2211

 

Wire Instructions:

Bank:  JPMorgan Chase Bank

ABA No.:  021000021

Account No.:  9008109962C1190

Account Name:  Loan Processing DP

Reference:  Silicon Laboratories

Attention:  Cynthia Miller

 

 

CERTAIN
FILINGS AND RECORDINGS

 

                  1.       The Memorandum of Second Amendment to
Ground Lease Agreement dated March 14, 2008 between the City of Austin and
Computer Sciences Corporation for filing in the appropriate offices of the
County of Travis, Texas;

 

                  2.       The Memorandum of Seventh Amendment to
the Master Agreement dated March 14, 2008 between City of Austin and
Computer Sciences Corporation for filing in the appropriate offices of the
County of Travis, Texas;

 

                  3.       The Special Warranty Deed dated March 14,
2008 from Computer Sciences Corporation to BA Leasing BSC, LLC for filing in
the appropriate offices of the County of Travis, Texas;

 

                  4.       The Assignment and Assumption of Ground
Lease dated March 14, 2008 from
Computer Sciences Corporation to BA Leasing BSC, LLC for filing in the
appropriate offices of the County of Travis, Texas;

 

                  5.       The General Assignment dated March 14,
2008 from Computer Sciences Corporation to BA Leasing BSC, LLC for filing in the
appropriate offices of the County of Travis, Texas;

 

                  6.       The Assignment of Leases, Security
Deposits and Prepaid Rents dated March 14, 2008 from Computer Sciences
Corporation to BA Leasing BSC, LLC for filing in the appropriate offices of the
County of Travis, Texas;

 

                  7.       The Memorandum of Lease, Deed of Trust
and Security Agreement dated as of March 14, 2008 between BA Leasing BSC,
LLC, as Lessor, and Silicon Laboratories Inc., as Lessee for filing in the
appropriate offices of the County of Travis, Texas;

 

                  8.       The Leasehold Deed of Trust, Security
Agreement and Fixture Filing with Assignment of Rents dated as of March 14,
2008 from BA Leasing BSC, LLC, as Lessor, to Gary S. Farmer, as Trustee, the
Deed of Trust Trustee named therein, for the benefit of Wells Fargo Bank
Northwest, National Association, as Collateral Agent, as beneficiary, with
Joinder by Silicon Laboratories Inc. for filing in the appropriate offices of
the County of Travis, Texas;

 

                  9.       The Assignment of Leases and Rents and
Security Agreement dated as of March 14, 2008 from BA Leasing BSC, LLC, to
Wells Fargo Bank Northwest, National Association, as Collateral Agent, with
Joinder by Silicon Laboratories Inc. for filing in the appropriate offices of
the County of Travis, Texas;

 

                10.       The Assignment of Purchase Agreement
dated as of March 14, 2008 from Silicon Laboratories Inc. to BA Leasing
BSC, LLC for filing in the appropriate offices of the County of Travis, Texas;

 

SCHEDULE 6.1(s) - 1

 

 

                11.       One (1) UCC-1 Financing Statement
from the Lessee, as debtor to the Lessor, as secured party (relating to the
Lease) for filing with the Secretary of State of the State of Delaware; and

 

                12.       One (1) UCC-1 Financing Statement
from the Lessor, as debtor to the Collateral Agent, as secured party (relating
to the Assignment of Leases and Rents) for filing with the Secretary of State
of the State of Delaware.

 

 

DISCLOSURE
SCHEDULE

 

None.

 

SCHEDULE 8.2

 

 

AGREEMENTS
TO BE TERMINATED

 

1.             View
Corridor Easement Agreement dated as of February 15, 2000 between the City
of Austin, Texas and the Seller.

 

2.             Amended
and Restated Underground Tunnel Agreement dated as of January 31, 2002,
between Seller and the City of Austin, Texas.

 

SCHEDULE 8.2(ff)

 

 

FORM OF
ADVANCE REQUEST

 

EXHIBIT A

 

 

FORM OF
OPINION OF SPECIAL COUNSEL TO THE PARTICIPANTS

 

EXHIBIT B-1

 

 

FORM OF
OPINION OF SPECIAL NEW YORK COUNSEL TO LESSEE

 

EXHIBIT B-2

 

 

FORM OF
OPINION OF SPECIAL TEXAS COUNSEL TO LESSEE

 

EXHIBIT B-3

 

 

FORM OF
OPINION OF ASSOCIATE GENERAL COUNSEL OF LESSOR

 

EXHIBIT B-4

 

 

FORM OF
ASSIGNMENT OF LEASE AND RENT AND SECURITY AGREEMENT

 

EXHIBIT C

 

 

FORM OF
ASSIGNMENT AGREEMENT

 

EXHIBIT D

 

 

FORM OF
RESPONSIBLE OFFICER’S CERTIFICATE OF LESSEE

 

EXHIBIT E-1

 

 

FORM OF
RESPONSIBLE OFFICER’S CERTIFICATE OF LESSOR

 

EXHIBIT E-2

 

 

FORM OF
OFFEREE LETTER

 

EXHIBIT F

 

 

FORM OF
GROUND LESSOR ESTOPPEL CERTIFICATE

 

EXHIBIT G

 

 

 

 

APPENDIX 1

TO

PARTICIPATION AGREEMENT

 

DEFINITIONS AND
INTERPRETATION

 

                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 the other gender;

 

                (iv)          reference
to any agreement (including any Operative Document), document or instrument
means such agreement, 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 Laws means such Applicable Laws 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 Laws means that
provision of such Applicable Laws 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;

 

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

 

 

                (ix)           relative
to the determination of any period of time, “from” means “from and including,” “to”
and “until” each mean “to but excluding;” and

 

                (x)            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.            Accounting Terms.  In
each Operative Document, unless expressly otherwise provided, accounting terms
shall be construed and interpreted, and accounting determinations and
computations shall be made, and all financial statements required to be
delivered thereunder shall be prepared, in accordance with GAAP, applied on a
basis consistent (except for changes concurred in by the Lessee’s independent
public accountants or otherwise required by a change in GAAP ) with the most
recent audited consolidated financial statements of the Lessee and its
Consolidated Subsidiaries delivered to the Participants.

 

C.            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.

 

D.            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.

 

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

 

“Acceleration” is defined in Section 5.2(a)(ii) of the
Loan Agreement.

 

“Advance” means the advance by the Collateral Agent (on behalf
of the Lessor) to the Seller to purchase the Subject Property and of funds to
pay Transaction Expenses, which shall be Funded by the Participants pursuant to
Article III of the Participation Agreement.

 

“Advance Request” is defined in Section 3.3(a) of the
Participation Agreement.

 

“Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person.  For
purposes of this definition, “control”, when used with respect to any Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

 

 

“After Tax Basis” means, with respect to any payment to be received (to
the extent the receipt of such payment constitutes taxable income to such
recipient), the amount of such payment increased so that, after deduction of
the amount of all Taxes (including any Taxes payable by reason of inclusion of
such amount in income otherwise excluded by the definition of Impositions, and
assuming for this purpose that the recipient of such payment is subject to
taxation at the highest Federal and applicable state and local marginal rates
applicable to such recipient for the year in which such income is taxable)
required to be paid by the recipient (less any tax savings, credits, deductions
or other quantifiable tax benefits realized, utilizing the same tax rate
assumptions as set forth in the immediately preceding parenthetical phrase, and
the present value of any tax savings projected, utilizing the same tax rate
assumptions as set forth in the immediately preceding parenthetical phrase, to
be realized by the recipient as a result of such payment) with respect to the
receipt by the recipient of such amounts, such increased payment (as so
reduced) is equal to the payment otherwise required to be made.

 

“Aggregate Commitment Amount” means $50,100,000.

 

“ALTA” means the American Land Title Association.

 

“Alternate Base Rate” means, on any date with respect to any
Loan or Lessor Amount, a fluctuating rate of interest per annum equal to the
higher of (A) the rate of interest most recently announced by Bank of
America at its principal lending office in the United States from time to time
as its “prime rate,” which need not be the lowest interest rate charged by Bank
of America, and (B) the Federal Funds Effective Rate most recently
determined by Bank of America plus .50% per annum.  If either of the aforesaid rates or their
equivalent changes from time to time after the Closing Date, the Alternate Base
Rate shall be automatically increased or decreased, if appropriate and as the
case may be, without notice to Lessee or the Lessor, as of the effective time
of each change.

 

“Applicable Lessor Margin” means, at any time of determination of
the LIBO Rate, 1.75%.

 

“Applicable Laws” at any time means all then existing 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, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction
(including those pertaining to health, safety or the environment (including,
without limitation, wetlands)).

 

“Applicable Lender Margin” means, at any time of determination of
the LIBO Rate, 1.50%.

 

“Applicable Lending Office” means, for each Participant, the office
of such Participant set forth as the Applicable Lending Office for such
Participant on Schedule III to the Participation Agreement, or such other
office of such Participant (or of an Affiliate of such Participant) as such
Participant may from time to time specify to the Collateral Agent and Lessee by
written notice as the office from which its Loans or Lessor Amount, as
applicable, accruing Interest or Yield, as applicable, at the LIBO Rate
(Reserve Adjusted) are made available and maintained.

 

 

“Appraisal” means the “Appraisal” as defined in Section 6.1(j) of
the Participation Agreement.

 

“Appraiser” means the AEGIS Group, Inc. or any independent
MAI appraiser selected by the Collateral 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, 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.

 

“Arrangement Fee Letter” means that certain letter agreement
dated December 12, 2007, between Arranger and Lessee.

 

“Arranger” means Banc of America Leasing & Capital,
LLC.

 

“Assignee” is defined in the caption of the Assignment of Leases
and Rents to mean the Collateral Agent.

 

“Assignment Agreement” means an Assignment Agreement,
substantially in the form of Exhibit D to the Participation Agreement, as
amended or modified from time to time.

 

“Assignment of Ground Lease” means the Assignment and Assumption of
Ground Lease dated as of March 14, 2008 from the Seller to Lessor.

 

“Assignment of Related Agreements” means the General Assignment in the form
of Exhibit M to the Purchase Agreement dated as of March 14, 2008 and
executed by Seller and Lessor.

 

“Assignment of Leases and Rents” means the Assignment of Leases and Rents
and Security Agreement in the Form of Exhibit C to the Participation
Agreement dated as of March 14, 2008 from Lessor to Collateral Agent, as
amended, modified or other supplemented from time to time.

 

“Assignment of Purchase Agreement” means the Assignment of Purchase
Agreement dated as of March 14, 2008 between the Lessee and the Lessor.

 

“Assignment of 
Subleases”
means the Assignment of Leases, Security Deposits and Prepaid Rents in the form
of Exhibit L  to the Purchase Agreement dated
as of March 14, 2008 and executed by Seller and Lessor.

 

“Assignor” is defined in the caption of the Assignment of Leases
and Rents to mean the Lessor.

 

 

“Authorized Officer” means any officer of Lessor who shall be duly
authorized to execute the Operative Documents.

 

“Bank of America” means Bank of America, National Association.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended.

 

“Basic Rent” means, for any Payment Date on which Basic Rent is
due, an amount equal to the sum of the aggregate amount of Interest and Yield
payable under the Operative Documents on such date on the Notes and the Lessor
Amount in respect of the applicable Interest Period.

 

“Benefited Lender” is defined in Section 8.6 of the Loan Agreement.

 

“Benefited Participant” is defined in Section 5.4 of the
Participation Agreement.

 

“Borrower” means Lessor, in its capacity as borrower under the
Loan Agreement.

 

“Break Costs” means an amount equal to the amount, if any, required
to compensate Lessor or any Lender for any additional losses (including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or funds acquired by Lessor or any
Lender to fund its obligations under the Operative Documents) it may reasonably
incur as a result of (x) the Lessee’s payment of Basic Rent other than on
a Payment Date, (y) the Advance not being made on the date specified
therefor in the Advance Request (other than as a result of a breach by Lessor
or such Lender, as the case may be, of its obligation under Section 3.1 of
the Participation Agreement to make the Advance to the Lessor or make Lessor
Amount or Loans available to the Lessor) or (z) any conversion of the LIBO
Rate during an Interest Period pursuant to and in accordance with the Operative
Documents.  A statement as to the amount
of such loss, cost or expense, prepared in good faith and in reasonable detail
and submitted by Lessor or any Lender, as the case may be, to the Lessee, shall
be presumed correct absent demonstrable error.

 

“Business Day” means (i) each Monday, Tuesday, Wednesday,
Thursday and Friday, which is not a day on which banks in New York, New York,
Austin, Texas, Salt Lake City, Utah or Providence, Rhode Island are generally
authorized or obligated, by law or executive order, to close and (ii) in
connection with the LIBO Rate, any day which is a Business Day under
clause (i) and is also a day on which dealings in Dollars are carried
on in the London interbank eurodollar market.

 

“Bylaws” means all written bylaws, rules, regulations and all
other documents relating to the management, governance or internal regulation
of any Person other than an individual or interpretive of the Charter of such
Person, all as from time to time in effect.

 

 

“Capitalized Leases” means, in the case of any Person, (a) all leases
that have been, should be or are expected to be recorded as capital leases on a
balance sheet of such Person in accordance with GAAP, and (b) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off balance sheet financing
transaction where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an operating lease in accordance with
GAAP.

 

“Cash”  means
the sum of (i) cash and cash equivalents, plus
(ii) short-term investments as stated on Lessee’s financial statements
rated at least A/A2 by S&P and Moody’s, respectively, that are included as
current assets in the Lessee’s financial statements prepared in accordance with
GAAP, in each case, which are not subject to any Lien of any kind.

 

“Casualty” means an event of damage or destruction relating to
all or any portion of the Leased Property.

 

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

 

“Certificate of Deposit Rate” means the highest rate of return for
certificates of deposit issued by Bank of America and having a maturity of one
month.

 

“Change in Law” means any change or proposed change in or any
introduction of or interpretation (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) after the Closing
Date of Applicable Law or any regulations, policies, directives or guidelines
issued by any governmental body, central bank or other fiscal or monetary or
accounting authority or other national, international, state or local
organization which purports to regulate or otherwise affects a Participant.

 

“Charter” means the articles of organization, certificate of
incorporation, statute, constitution, joint venture agreement, partnership
agreement, trust indenture, limited liability company agreement or other
charter document of any Person other than an individual, each as from time to
time in effect.

 

“City of Austin” means the City of Austin, Texas, a home rule city
and municipal corporation.

 

“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; provided, however,
“Claims” shall not include Taxes.

 

“Closing Date” is defined in Section 2.1 of the Participation
Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time, or any successor statute
thereto.

 

“Collateral Agent” means Wells Fargo Bank Northwest, National
Association, in its capacity as Collateral Agent, or any successor Collateral
Agent designated in accordance with the Operative Documents.

 

 

“Collateral Agent Fee Letter” means the fee letter dated March 14,
2008, between Lessee and Collateral Agent.

 

“Collateral Agent Response
Notice” has the meaning in Section 4.8 of the Participation
Agreement.

 

“Commitment” means (i) as to any Lender, its Loan Commitment,
and (ii) as to Lessor, its Lessor Commitment.

 

“Condemnation” means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use or title to the Subject Property or
any part thereof (temporarily or permanently) in, by or on account of any
eminent domain proceeding or other action by any Governmental Authority under
the power of eminent domain or otherwise or any transfer in lieu of or in anticipation
thereof.  A Condemnation shall be deemed
to have “occurred” on the earliest of the dates that use or title is taken or
transferred.

 

“Consolidated” means, with respect to any Person’s accounts, the
accounts of the Person and all of its Subsidiaries, or such of its Subsidiaries
as may be specified, consolidated (or combined) in accordance with GAAP.

 

“Credit Exposure” means (i) in the case of a Participant that is
the Lessor, the outstanding amount of the Lessor Amount owed to the Lessor, and
(ii) in the case of a Participant that is a Lender, the aggregate
outstanding amount of Loans made by such Lender.

 

“CSC” means Computer Sciences Corporation, a Nevada
corporation.

 

“CSC Sublease” means the Lease Agreement dated as of March 14,
2008 between CSC, as Tenant, and Lessee, as Landlord, in form and substance
attached as Exhibit D to the Lease, which shall become effective following
the effective date of the Lease and the other Operative Documents executed by
Lessee, the Collateral Agent and the Participants.

 

“Deed” is defined in Section 6.1(o) of the
Participation Agreement.

 

“Deed of Trust” means the Leasehold Deed of Trust, Security Agreement
and Fixture Filing with Assignment of Rents dated as of March 14, 2008,
from Lessor in favor of the Deed of Trust Trustee for the benefit of Collateral
Agent.

 

“Deed of Trust Trustee” means Gary S. Farmer, together with
his successor in trust pursuant to the Deed of Trust.

 

“Default” means any condition, occurrence or event which, after
notice or lapse of time or both, would constitute an Event of Default.

 

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

 

 

 

“Early Termination Option” means the Lessee’s option to purchase
the Subject Property in accordance with the provisions of Section 18.1 of
the Lease.

 

“EBITDAR” means, for any period, the sum of (a) Net Income
for such period (excluding the effect of any extraordinary gains), plus (b) an
amount which, in the determination of Net Income for such period, has been
deducted for (i) Interest Expense for such period, and (ii) total
federal, state and other income taxes for such period, and (iii) all
depreciation and amortization for such period, and (iv) total expenses
associated with the non-cash portion of all employee bonus plans for such
period, and (v) stock compensation expense in connection with stock
options or stock awards, and (vi) write-offs of in-process or acquired
research and development costs, and (vii) impairment charges related to
intangible assets, and (viii) impairment of tangible assets other than
investments, and (ix) restructuring charges  (other than cash costs relating to such
charges), and (x) Lease Expense for such period, all as determined in
accordance with GAAP.

 

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis
and Retrieval System or any successor system.

 

“Eligible Assignee” means (i) a commercial bank organized under the laws
of the United States, or any State thereof; (ii) a commercial bank
organized under the laws of any other country that is a member of the OECD or
has concluded special lending arrangements with the International Monetary Fund
associated with its general arrangements to borrow, or a political subdivision
of any such country, provided that
such bank is acting through a branch or agency located in the United States; (iii) a
finance company, leasing company or other financial institution or fund
(whether a corporation, partnership or other entity) primarily engaged in
making, purchasing or otherwise investing in commercial loans or lease
transactions in the ordinary course of its business; (iv) the central bank
of any country that is a member  of the
OECD; or (v) any Affiliate of any Participant; provided,
however, that any such Person described in clause (i), (ii), (iii), (iv) or
(v) above shall have, or be a subsidiary of an entity (and such entity
shall guarantee such subsidiary’s obligations under the Operative Documents)
that has, a combined capital and surplus (as established in its most recent
report of condition to its primary regulator) of not less than $75,000,000 (or
its equivalent in foreign currency).

 

“Eligible Sublessee”
means CSC or any Person who as of the date of the execution of the Fifth Floor
Subleases has a (i) net worth of not less than $5,000,000 or (ii) a
Dunn & Bradstreet Financial strength rating of “3A” and a composite
credit appraisal of “2.”  Notwithstanding
any provision of the Lease or the Operative Documents to the contrary, Lessee
shall have the right to sublease any portion of the Leased Premises (including
the fifth floor of the Facility) to a Person that is not an Eligible Assignee
in accordance with Section 6.1 of the Lease, provided that if such Person
is not an Eligible Sublessee, then Lessor and the Collateral Agent shall not be
required to execute an SNDA.  Nothing
contained herein or in the Lease shall preclude Lessee from requesting that
Lessor and the Collateral Agent execute an SNDA in favor of a Person that is
not an Eligible Assignee.

 

“Environmental Audit” means the Phase One environmental site
assessment (the scope and performance of which meets or exceeds ASTM Standard
Practice E1527-00 Standard Practice for Environmental Site Assessments:  Phase One Environmental Site Assessment
Process) of the Land prepared by Terracon Consultants, Inc. as it Job No. 96077948,
dated January 8, 2008.

 

 

“Environmental Claims” is defined in Section 13.6 of the
Participation Agreement.

 

“Environmental Laws” means any and all applicable federal, state and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, injunctions, permits, concessions, grants, licenses,
agreements and other governmental restrictions relating to the environment, the
effect of the environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or the clean-up or
other remediation thereof in effect in any jurisdiction in which the Lessee is
conducting or have conducted business or where the Subject Property.

 

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

 

“ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder, each as in effect and amended and modified from time to
time.

 

“ERISA Event” means (a) a Reportable Event with respect to a
Plan; (b) a withdrawal by an ERISA Group Person from a 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 which is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by an ERISA Group Person from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing, of a notice of intent to terminate under Section 4041(c) of
ERISA, the treatment of a Plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate
a Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007
of ERISA, upon an ERISA Group Person.

 

“ERISA Group” means the Lessee and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Lessee, are treated
as a single employer under Section 414 of the Internal Revenue Code.

 

“Escrow” is defined in Section 3 of the Purchase
Agreement.

 

“Escrow Agent” means Heritage Title Insurance Company of Austin, Inc.

 

 

“Estoppel Certificate” means the Ground Lessor Estoppel
Certificate dated the Closing Date and executed by the City of Austin in the
form of Exhibit G to the Participation Agreement.

 

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

 

“Event of Loss” means any Significant Casualty or Significant
Condemnation.

 

“Excepted Payments” means:

 

                (a)           all
indemnity payments (including indemnity payments made pursuant to Article XIII
of the Participation Agreement) to which any Participant or any of their
respective Affiliates, agents, officers, directors or employees is entitled
pursuant to the Operative Documents;

 

                (b)           any
amounts (other than Basic Rent or amounts payable by Lessee pursuant to Section 15.2
or Articles XVI, XVIII, XIX or XX of the Lease) payable under any
Operative Document to reimburse the Lessor or any of its respective Affiliates
(including the reasonable expenses of the Lessor or such Affiliates incurred in
connection with any such payment) for performing or complying with any of the
obligations of the Lessee under and as permitted by any Operative Document;

 

                (c)           any
amount payable to any Participant by any transferee permitted under the
Operative Documents of the interest of any Participant as the purchase price of
the Participant’s interest (or a portion thereof);

 

                (d)           any
insurance proceeds (or payments with respect to self-insured risks or policy
deductibles) under liability policies, other than such proceeds or payments
payable to any Participant or Collateral Agent;

 

                (e)           any
insurance proceeds under policies maintained by the Collateral Agent or any
Participant in accordance with Section 13.4 of the Lease;

 

                (f)            Transaction
Expenses, Contingent Rent or Fees paid or payable to or for the benefit of the
Collateral Agent, Arranger or any Participant;

 

                (g)           all
right, title and interest of the Lessor to the Subject Property, the CSC
Sublease, any Fifth Floor Sublease or any portion thereof or any other property
to the extent any of the foregoing has been released from the Liens of the
Security Instruments following the payment of the Lease Balance; and

 

                (h)           any
payments in respect of interest to the extent attributable to payments referred
to in clauses (a) through (g) above.

 

“Excess Sales Proceeds” means proceeds received upon a sale of
any or all of the Subject Property, the CSC Sublease and any Fifth Floor
Sublease in excess of the amounts required to pay the Lease Balance and other
amounts then due and owing under the Participation Agreement and the other
Operative Documents.

 

 

“Exchange Act” means the Securities Exchange Act of 1934, and the
regulations promulgated thereunder, in each case as amended from time to time.

 

“Expiration Date” means the date which is sixty (60) months after the
Closing Date.

 

“Extended Remarketing Period” is defined in Section 20.3 of the
Lease.

 

“Facility” means (i) the six story, approximately 220,000
square foot, office and retail building located at 200 W. Cesar Chavez in
Austin, Texas, (ii) the other Improvements and (iii) the Appurtenant
Rights.

 

“Fair Market Value” means with respect to the Subject Property or any
portion thereof, as of the date of the determination, the amount (which in any
event shall not be less than zero) as determined by an independent MAI
appraiser chosen by the Collateral Agent (at the direction of the Lessor) and
reasonably acceptable to Lessee that would be paid in an arm’s-length
transaction between an informed and willing buyer (other than a buyer currently
in possession) and an informed and willing seller, neither of whom is under any
compulsion to buy or sell, and neither of which is related to Lessor,
Collateral Agent, Lessee or any Affiliate thereof, for the purchase of the
Subject Property, or such portion thereof, as applicable.  Such Fair Market Value shall (a) be
calculated assuming that the Leased Property is in the condition and state of
repair required to be maintained by the terms of the Lease (unless such Fair
Market Value is being determined for purposes of Section 20.3(e) of
the Lease or for purposes of evaluating the Fair Market Value as of the
Expiration Date in the End of Term Indemnity in Section 13.2 of the
Participation Agreement, in which case this assumption shall not be made) and (b) take
into account the affect of the CSC Sublease and any Fifth Floor Sublease on the
Subject Property.

 

“FASB Statement No. 13” means Statement of Financial Accounting
Standards No. 13, Accounting for Leases, of the Financial Accounting
Standards Board or any applicable successor provision or regulating body for
purposes of establishing standards of financial accounting and reporting for
Leases by Lessees.

 

“Federal Funds Effective Rate” means, for any day, the rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, “H.15(519)”) on the preceding Business Day opposite the caption
“Federal Funds (Effective)”; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Collateral Agent, of the rate for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by Collateral Agent.

 

“Fee Letters” means, collectively, the Arrangement Fee Letter and
the Collateral Agent Fee Letter.

 

 

“Fees” is defined in Section 4.5 of the Participation
Agreement.

 

“Fifth Floor Sublease” means a sublease of some or all of the
fifth floor of the Facility between Lessee, as landlord and an Eligible
Sublessee, as tenant, pursuant to (a) a sublease agreement in form and substance
substantially similar to the CSC Sublease whereby the Eligible Sublessee agrees
to pay rent on a square footage basis (i) in an amount at least equal to
the rent per square foot payable by CSC under the CSC Sublease or (ii) in
the sole discretion of the Lessee, that is equal to or in excess of the fair
market rent on a square footage basis for buildings located in the City of
Austin of a type and quality comparable to the Facility, based on comparable
lease transactions or comparable offerings and (b) an SNDA with respect to
such sublease executed by such Eligible Sublessee, Lessor, Lessee, and the
Collateral Agent.”  For purposes of
comparing the rent payable under the CSC Sublease and the proposed rent to be
paid under the Fifth Floor Sublease, appropriate adjustments shall be made to
determine the net rental amount paid taking into consideration all relevant
economic and other material terms, including without limitation the following
terms and concessions: (i) the rental rate and escalations, (ii) the
amount of rent or other charges for parking, (iii) operating expense and
tax protection granted, such as a base year, expense stop or triple net
scenario (base rent shall be adjusted to a triple net base rent using
reasonable estimates of operating expenses and taxes as reasonably determined
by Lessor and Required Lenders; (iv) rental abatement concessions, if any,
being granted, (v) the condition of the applicable premises and Lessee’s
responsibility with respect thereto, tenant improvements or allowances provided
or to be provided for such comparable space, taking into account the value of
the existing improvements, if any, in such space, such value to be based upon
the age, quality and layout of the improvements and the extent to which the
same could be utilized by general office users (as contrasted to any particular
value placed on such improvements by the tenant), (vi) all other monetary
concessions, if any, being granted to the tenant, (vii) the fact that the
particular transaction does or does not involve the payment of real estate
brokerage commissions, and (viii) the period of rental abatement, if any,
granted to the tenant in connection with the design, permitting and
construction of tenant improvements or otherwise; provided, however, that after
applying any such adjustments the rent payable on a square foot basis under the
Fifth Floor Sublease shall be in an amount at least equal to the rent per
square foot payable by CSC under the CSC Sublease.

 

“Financial Officer” means the Lessee’s chief executive officer, chief
financial officer, chief operating officer, controller, assistant treasurer,
president, treasurer or any of its vice presidents whose primary responsibility
is for its financial affairs, all of whose incumbency and signatures have been
certified to the Participants by the secretary or other appropriate attesting
officer of the Lessee.

 

“Funded Debt” means any of the following items:

 

                   (a)        borrowed money;

 

                   (b)        Capitalized Lease obligations;

 

                   (c)        all scheduled payment obligations under
any operating lease having a term of greater than one year;

 

 

                   (d)        reimbursement obligations, whether
contingent or matured, with respect to letters of credit, bankers acceptances,
other financial guarantees and interest rate protection agreements (without
duplication of other Funded Debt supported or guaranteed thereby); and

 

                   (e)        all Guarantees in respect of Funded Debt
of the type described in clauses (a) through (d) above.

 

“FIRREA” means the Financial Institution Reform, Recovery and
Enforcement Act of 1989, as amended, and all regulations promulgated pursuant
thereto.

 

“F.R.S. Board” means the Board of Governors of the Federal Reserve
System or any successor thereto.

 

“Fund,”  “Funded” or “Funding” means each funding by a Participant of a portion
of the principal under its Note or a portion of its Lessor Amount (as the case
may be) constituting a portion of the Advance as described in Article III
of the Participation Agreement.

 

“Funding Indemnity Letter” is defined in Section 6.1(e) of
the Participation Agreement.

 

“GAAP” means United States generally accepted accounting
principles (including principles of consolidation), in effect from time to
time.

 

“General Indemnitee” or “Tax Indemnitee”
means each Lender, the Lessor, the Collateral Agent (in its individual capacity
and as agent), the Arranger, any additional, separate or co-trustee or co-agent
appointed in accordance with the terms of the Participation Agreement and the
respective Affiliates, successors, permitted assigns, permitted transferees, employees,
officers, directors, shareholders, partners, participants, representatives and
agents of each of the foregoing Persons; provided, however,
that in no event shall Lessee or any of its Affiliates be a General Indemnitee
or Tax Indemnitee.

 

“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 Laws, and shall
include, without limitation, all environmental and operating permits and
licenses that are required for the full use and operation of the Subject
Property.

 

“Governmental Authority” means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, the City of Austin,
Texas (each, an “Authority”), and having
jurisdiction over the Subject Property, the Lessee or any Indemnitee or the
Operative Documents, as applicable; provided, however,
with respect to Impositions and Tax indemnification obligations, the term “Governmental
Authority” shall not include any Authority of a jurisdiction outside of the
United States of America.

 

 

“Grossed-Up Basis” is defined in Section 13.4(c)(ii) of the
Participation Agreement.

 

“Gross Proceeds” means the gross proceeds realized from the sale of
the Subject Property, the Lessee’s interest in the CSC Sublease and any Fifth
Floor Sublease, as applicable, to the extent that either or both of such
subleases will be in effect as of the date such sale is consummated pursuant to
Article XX of the Lease (i.e., without
deductions for any marketing, closing, sales or other costs, taxes, expenses,
fees, prorations or commissions).

 

“Ground Lease” means the Ground Lease Agreement dated as of April 10,
2000 between Seller, as ground lessee and the Ground Lessor, as the same has
been and may be amended, modified or supplemented from time to time.

 

“Ground Lessor” means the City of Austin.

 

“Guarantee” means, with respect to a specified Person:

 

                   (a)        any guarantee by the specified Person of
the payment of any Funded Debt of any primary obligor;

 

                   (b)        any other arrangement whereby credit is
extended to a primary obligor on the basis of any obligation of the specified
Person to a creditor or prospective creditor of such primary obligor, to pay
the Funded Debt of such primary obligor; and

 

                   (c)        reimbursement obligations, whether
contingent or matured, of the specified Person with respect to letters of
credit, bankers acceptances, other financial guarantees and interest rate
protection agreements;

 

in each case whether or not any of the foregoing are
reflected on the balance sheet of the specified Person or in a footnote
thereto.

 

“Hazardous Substances” means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics to the extent such
substance is regulated under applicable Environmental Laws.

 

“Highest Lawful Rate” is defined in Section 4.6(b) of
the Participation Agreement.

 

 

“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 and imposed by a
Governmental Authority (“Taxes”)
(including (i) real property taxes and 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; (ii) sales taxes, use taxes and other similar taxes; (iii) any
excise taxes; (iv) real estate transfer taxes, conveyance taxes, mortgage
taxes, intangible taxes, stamp taxes and documentary recording taxes and fees; (v) taxes
that are or are in the nature of franchise, income, value added, gross
receipts, privilege and doing business taxes, license and registration fees;
and (vi) assessments on the Land, including all assessments for public
improvements or benefits, whether or not such improvements are commenced or
completed within the Term), and in each case all interest, additions to tax and
penalties thereon, which at any time may be levied, assessed or imposed by a
Governmental Authority upon or with respect to (a) any Tax Indemnitee, the
Subject Property, the CSC Sublease, any Fifth Floor Sublease or any part
thereof or interest therein, or the Lessee or any sublessee or user of the
Subject Property, the CSC Sublease or any Fifth Floor Sublease; (b) the
financing, refinancing, demolition, construction, substitution, subleasing,
assignment, control, condition, servicing, maintenance, repair, ownership,
possession, purchase, rental, lease, activity conducted on, delivery, insuring,
use, operation, improvement, transfer, return or other disposition of the
Subject Property, the CSC Sublease, any Fifth Floor Sublease or any part
thereof or interest therein; (c) the Notes or Lessor’s Interest or other
indebtedness with respect to the Subject Property, any CSC Sublease, any Fifth
Floor Sublease or any part thereof or interest therein or transfer thereof; (d) the
rentals, receipts or earnings arising from the Subject Property, any CSC
Sublease, the Fifth Floor Sublease or any part thereof or interest therein; (e) the
Operative Documents or any payment made or accrued pursuant thereto; (f) the
income or other proceeds received with respect to the Subject Property, the CSC
Sublease, any Fifth Floor Sublease or any part thereof or interest therein upon
the sale or disposition thereof; (g) any contract relating to the
construction, acquisition or delivery of the Subject Property, the CSC
Sublease, any Fifth Floor Sublease or any part thereof or interest therein; (h) the
issuance of the Notes and Lessor’s Interest; or (i) otherwise in
connection with the Overall Transaction.

 

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
and impositions imposed upon a Tax Indemnitee (other than Taxes that are, or
are in the nature of, sales, use, value added, rental, transfer, property or ad
valorem taxes with respect to the Subject Property, the CSC Sublease, any Fifth
Floor Sublease or any transfer thereof) that are imposed by any Governmental
Authority and that are based upon or measured by the gross or net income or
gross or net receipts (including, without limitation, any minimum taxes, income
or capital gains taxes, or taxes on, measured by, with respect to, or in the
nature of capital, net worth, excess profits, items of tax preference, capital
stock, franchise, business privilege or doing business taxes or any taxes in
the nature of an intangibles tax, an ad valorem tax or property tax imposed on
a Participant, Subparticipant, or any holder of a Note or Lessor’s Interest by
reason of owning or holding a Note or Lessor’s Interest); provided
that this clause (i) shall not be interpreted to prevent a payment
from being made on an After Tax Basis if the payment is otherwise required to
be so made; provided further that this clause (i) shall
not apply to Taxes and Impositions imposed on a Tax Indemnitee as a result of
Lessee’s activities or the location of the Subject Property in the jurisdiction
imposing such Taxes or Impositions;

 

 

                (ii)           any
Tax or imposition 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 (but not any Tax or imposition to the extent, but only
to such extent, that it relates to any period prior to the termination of the
Lease with respect to the Subject Property, the CSC Sublease, or any Fifth
Floor Sublease to which such Tax or Imposition relates);

 

                (iii)          any
Tax or imposition for so long as, but only for so long as, it is being
contested in accordance with the provisions of Section 13.4(b) of the
Participation Agreement, provided that
the foregoing shall not limit the Lessee’s obligation under Section 13.4(b) of
the Participation Agreement to advance to such Tax Indemnitee amounts with
respect to Taxes or impositions that are being contested in accordance with Section 13.4(b) of
the Participation Agreement or any expenses incurred by such Tax Indemnitee in
connection with such contest;

 

                (iv)          any
Taxes or impositions imposed upon a Tax Indemnitee with respect to any
transfer, sale, financing or other disposition of any interest in the Subject
Property, the CSC Sublease, any Fifth Floor Sublease or any part thereof, or
any interest therein or any interest or obligation under the Operative
Documents or any Note or Lessor’s Interest, or from any sale, assignment,
transfer or other disposition of any interest in a Tax Indemnitee or any
Affiliate thereof, (other than any transfer in connection with (1) the
exercise by the Lessee of its Early Termination Option or any termination
option or other purchase of the Subject Property by the Lessee or the exercise
by Lessee of the Sale Option, (2) the occurrence of an Event of Default, (3) a
Casualty or Condemnation affecting the Leased Property or (4) any
assignment, sublease, modification or addition of or to the Leased Property by
the Lessee);

 

                (v)           any
Taxes or impositions imposed on a Tax Indemnitee to the extent such Tax
Indemnitee actually receives a credit (or otherwise has a reduction in a
liability for Taxes) in respect thereof against Taxes that are not indemnified
under the Participation Agreement (but only to the extent such credit is not
taken into account in calculating the indemnity payment on an After Tax Basis);

 

                (vi)          any
Taxes imposed against or payable by a Tax Indemnitee resulting from, or that
would not have been imposed but for, the gross negligence or willful misconduct
of such Tax Indemnitee or its Affiliates, provided that a
default under, or the failure of Lessor to perform any obligation, covenant or
agreement in, any Related Agreement, the CSC Sublease, any Fifth Floor Sublease
or otherwise required by Applicable Law, Governmental Action or third parties
with respect to the Subject Property, any CSC Sublease or the Fifth Floor
Sublease shall not be deemed gross negligence or willful misconduct;

 

                (vii)         Taxes
imposed on or payable by a Tax Indemnitee to the extent such Taxes would not
have been imposed but for a breach by such Tax Indemnitee or any Affiliate
thereof of any representations, warranties contained in Section 8.1 or 8.3
of the Participation Agreement or covenants set forth in the Participation
Agreement or the Lease (unless such breach is caused by the Lessee’s breach of
its representations, warranties or covenants set forth in the Operative
Documents);

 

 

 

 

                (viii)        Taxes
to the extent resulting from a Tax Indemnitee’s failure to comply with the
provisions of Section 13.4(b) of the Participation Agreement, which
failure precludes the ability to conduct a contest pursuant to Section 13.4(b) of
the Participation Agreement (unless such failure is caused by the Lessee’s
breach of its obligations);

 

                (ix)           [Intentionally
Omitted].

 

                (x)            Taxes
imposed on or with respect to or payable as a result of activities of a Tax
Indemnitee unrelated to the Overall Transaction;

 

                (xi)           any
interest, additions to tax or penalties imposed on an Indemnitee as a result of
such Indemnitee’s or an Affiliate’s failure to file any return or other
documents provided to it pursuant to Section 13.4(d) of the
Participation Agreement on a timely basis; provided that
this clause (xi) shall not apply 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 13.4(b) of the
Participation Agreement;

 

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

 

                (xiii)         any
Tax imposed against or payable by an Indemnitee that is a transferee from
another Indemnitee to the extent that, under the law in effect on the date of
transfer, the amount of such Tax exceeds the amount of such Tax that would have
been imposed against or payable by the transferor; provided,
however, that this exclusion (xiii) shall not apply to any
transferee that acquires its interest while an Event of Default is continuing;
and

 

                (xiv)        Taxes
imposed on or with respect to or payable by an 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 (1) arises
due to, or in connection with there having occurred, an Event of Default or (2) is
required by the terms of the Operative Documents or is executed in connection
with any amendment to the Operative Documents required by law.

 

Notwithstanding the foregoing, the exclusions from the
definition of “Impositions” set forth in clauses (i), (ii), (iv) and (x) shall
not apply (but the other exclusions shall apply) to any Taxes or any increase
in Taxes imposed on a Tax Indemnitee net of any decrease in Taxes realized by
such Tax Indemnitee, to the extent that such tax increase or decrease would not
have occurred if on the Closing Date the Participants had advanced funds to the
Lessee in the form of a loan secured by the Subject Property, the CSC Sublease
and any Fifth Floor Sublease in an amount equal to the amount Funded on the
Closing Date, with debt service for such loan equal to the Basic Rent payable
on each Payment Date and a principal balance at the maturity of such loan in an
amount equal to the then outstanding amount of the Loans and Lessor Amount at
the end of the Term of the Lease.

 

 

“Improvements” means all buildings, structures, facilities,
fixtures, tunnels, parking areas, garages and lots, plaza, common areas and
other improvements of every kind existing at any time and from time to time on
or under the Land and within any easements for offsite improvements benefiting
the Land, including, without limitation, related attached heating, electrical,
switch gear, uninterrupted power supply, and 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, communications systems
(including satellite dishes and antennae), sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems, motors,
engines, machinery, pipes, pumps, tanks, conduits, fittings, fixtures, HVAC and
other building systems attached to any buildings or improvements presently
existing on the Land or to the Subject Property and including all modifications
and other additions to or changes in the Improvements at any time.

 

“Indemnitee” means any General Indemnitee or a Tax Indemnitee, as
applicable.

 

“Industry Standards” means the latest edition or revision of all industry
codes, standards or regulations (hereinafter referred to collectively in this
definition as “codes”) applicable to the operation, use, maintenance, repair or
modification of the Subject Property or any portion thereof, as such codes may
be changed from time to time.

 

“Insolvency Event” means an event described in Section 16.1(g) of
the Lease.

 

“Inspecting Parties” is defined in Section 4.2(a) of the Lease.

 

“Insurance Requirements” means all terms and conditions of any
insurance policy required by Article XIII of the Lease to be maintained by
the Lessee.

 

“Interest” means the interest accruing on the Loans as computed
and payable in accordance with the terms of the Loan Agreement and the
Participation Agreement.

 

“Interest Expense” means, for any period, total interest expense
(including the interest component of any Capitalized Leases) of the Lessee,
determined in accordance with GAAP.

 

“Interest Period” means with respect to any Loan or Lessor Amount
bearing Interest or Yield, respectively, by reference to the LIBO Rate or the
Alternate Base Rate, initially the period commencing on (and including) the
Closing Date and ending on (but excluding) the next succeeding Payment Date
thereafter, and thereafter each period commencing on (and including) a Payment
Date and ending on (but excluding) the next succeeding Payment Date.

 

“Interest Rate” means (i) with respect to any Loan, for each
Interest Period, a rate per annum equal to the LIBO Rate plus the Applicable
Lender Margin, and (ii) with respect to any Loan at any time that any
Lender shall not have received two (2) Business Days advance notice of the
Advance Request or sale or funding or the provisions of Section 15.1 or Section 15.2
of the Participation Agreement shall apply, the Alternate Base Rate until the
date which is three (3) Business Days after such Lender has received such
notice or Section 15.1 or Section 15.2 of the Participation Agreement
shall not apply, as the case may be.

 

 

“Investment Company Act” means the Investment Company Act of
1940, as amended, together with the rules and regulations promulgated
thereunder.

 

“Land” means the approximately 1.754 acres of real property
in Austin, Texas described on Exhibit A to the Lease, and the Appurtenant
Rights.

 

“Lease” means the Lease, Deed of Trust and Security Agreement
dated as of March 14, 2008, among the Lessor, the Lessee and the Deed of
Trust Trustee, as amended, supplemented or modified from time to time.

 

“Lease Balance” means, as of any date of determination, an amount
equal to the sum, without duplication, of the Loan Balance and the Lessor
Balance and all other amounts owing by the Lessee under the Operative Documents
(including, without limitation, accrued and unpaid Rent).

 

“Lease Expense” means, for any period, total lease expense under all
operating and capital leases of the Lessee, determined in accordance with GAAP.

 

“Leased Property” means the Subject Property, but excluding (i) any
Improvements owned by the sublessee (or its successors, assigns or sublessees)
under the Retail Sublease, and (ii) the portion of the ground floor of the
Facility that is subject to the Retail Sublease.

 

“Leased Property Records” means those maintenance and other
records relating to the maintenance and operation of the Leased Property in the
possession of Lessee.

 

“Lenders” means the financial institutions party to the Loan
Agreement and the Participation Agreement and listed as Lenders on the
signature pages thereto and their permitted successors and assigns.

 

“Lenders’ Policy” is defined in Section 6.1(r) of the
Participation Agreement.

 

“Lessee” means Silicon Laboratories Inc., a Delaware
corporation, together with its permitted successors and assigns, in its
capacities as Lessee under the Lease.

 

“Lessee Collateral” is defined in Section 24.2 of the Lease.

 

“Lessee Improvement” is defined in Section 10.2(b) of the Lease.

 

“Lessee Interest Rate” means the Certificate of Deposit Rate
for the Interest Period commencing as of the Closing Date.

 

 

“Lessor” means BA Leasing BSC, LLC, a Delaware limited
liability company.

 

“Lessor Amount” means, with respect to Lessor as of any date of
determination, the aggregate amount advanced by Lessor from its Lessor
Commitment pursuant to Section 3.1 of the Participation Agreement, net of
any distributions (other than distributions of Yield) with respect thereto, in
an aggregate principal amount, with respect to Lessor, not to exceed Lessor’s
Commitment.

 

“Lessor Balance” means as of any date of determination an amount equal
to the sum of the outstanding Lessor Amount of Lessor, together with all
accrued and unpaid Yield thereon.

 

“Lessor Collateral” is defined in Section 2 of the Assignment of
Leases and Rents.

 

“Lessor Commitment” means the Commitment of the Lessor to make available
funds in an aggregate principal amount not to exceed the amount set forth on
Schedule I of the Participation Agreement, as revised pursuant to Article XII
of the Participation Agreement.

 

“Lessor Lien” means any Lien, true lease or sublease or disposition
or other transfer of title to or any interest in the Leased Property or rights
in the Operative Documents arising as a result of (a) any claim against
the Collateral Agent or any Participant not resulting from the Overall
Transaction or otherwise contemplated by the Operative Documents, (b) any
act or omission of the Collateral Agent or any Participant which is not
required or permitted by the Operative Documents or is in violation of any of
the terms of the Operative Documents, (c) any claim against the Collateral
Agent or any Participant with respect to Taxes or Transaction Expenses against
which Lessee is not required to indemnify or has indemnified the Collateral
Agent or any Participant, in its individual capacity, pursuant to Article XIII
of the Participation Agreement, (d) any claim against the Lessor or the
Collateral Agent arising out of any transfer by the Lessor or the Collateral
Agent of all or any portion of the interest of the Lessor or the Collateral
Agent in the Subject Property, the CSC Sublease, any Fifth Floor Sublease or
the Operative Documents other than the transfer of title to or possession of
the Subject Property, the CSC Sublease or any Fifth Floor Sublease by the
Lessor pursuant to and in accordance with the Lease or the other Operative
Documents or pursuant to the exercise of the remedies set forth in the
Operative Documents, or (e) any claim against any Participant arising out
of any transfer by such Participant of any Note or Lessor’s Interest, or any
interest therein, other than in accordance with the Participation Agreement
and, in the case of a transfer of any Note, the Loan Agreement, in all cases,
excluding, all rights, title and interest of the other parties under the
Related Agreements, the CSC Sublease, any Fifth Floor Sublease and any Liens
created or suffered to exist by such parties.

 

“Lessor Marketing Costs” means all Marketing Costs incurred by
Collateral Agent or Lessor in an aggregate amount not to exceed $50,000.

 

“Lessor’s Interest” means all rights and interests of Lessor in the
Subject Property, the Operative Documents, the Lessor Amount and the Excepted
Payments.

 

 

“LIBO Rate” means with respect to any Interest Period at any
time, the applicable London interbank offered rate per annum for deposits in
Dollars appearing on Bloomberg LIBO Page as of 11:00 a.m. (London
time) two (2) Business Days prior to the first day of such Interest
Period, and having a maturity approximately equal to such Interest Period; or
if no London interbank offered rate of such maturity then appears on Bloomberg
LIBO Page , then the rate equal to the London interbank offered rate per
annum for deposits in Dollars maturing immediately before or immediately after such
maturity, whichever is higher, as determined by the Collateral Agent from
Bloomberg LIBO Page; or if Bloomberg LIBO Page is not available, the
applicable LIBO Rate for the relevant Interest Period shall be the rate per
annum determined by the Collateral Agent to be the arithmetic average of the
rates at which Bank of America offers to place deposits in Dollars with
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such
Interest Period, in the approximate amount of Bank of America’s or its
Affiliate’s relevant portion of the aggregate outstanding principal amount of
the Notes and Lessor Amount and having a maturity approximately equal to such
Interest Period.

 

“LIBO Rate
(Reserve Adjusted)”
means, relative to any Loan or Lessor Amount for any Interest Period, a rate
per annum (rounded up and to the nearest 1/100 of 1%) determined pursuant to
the following formula:

 

LIBO Rate           =  
                  LIBO Rate                    

(Reserve
Adjusted)   1.00 - LIBOR Reserve
Percentage

 

The LIBO Rate (Reserve Adjusted) for any Interest
Period will be determined by the Collateral Agent, on the basis of the LIBOR
Reserve Percentage in effect on, and the applicable LIBO Rate obtained by the
Collateral Agent, two Business Days before the first day of such Interest
Period.

 

“LIBOR Reserve Percentage” means, relative to any Interest Period,
the reserve percentage (expressed as a decimal) equal to the maximum aggregate
reserve requirements for a member bank of the Federal Reserve System (including
all basic, emergency, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) specified under regulations issued from time to time by the
F.R.S. Board and then applicable to assets or liabilities consisting of and
including “Eurocurrency Liabilities”, as currently defined in Regulation D
of the F.R.S. Board, having a term approximately equal or comparable to such
Interest Period.

 

“Lien” means any mortgage, hypothecation, deed of trust,
pledge, security interest, encumbrance, lien, easement, declaration or
servitude of any kind, including, without limitation, any irrevocable license,
interest of a vendor, conditional sale or other title retention agreement, any
lease in the nature thereof, or any other right of or arrangement with any
creditor to have its claim satisfied out of any specified property or asset
with the proceeds therefrom prior to the satisfaction of the claims of the
general creditors of the owner thereof, whether or not filed or recorded; provided that, solely for purposes of Section 9.1 of
the Participation Agreement, the term “Lien” means
with respect to any specified Person, (a) any lien, encumbrance, mortgage,
pledge, charge or security interest of any kind upon any property or assets of
the specified Person, whether now owned or hereafter acquired, or upon the
income or profits therefrom, (b) the purchase of, or the agreement to
purchase, any property or asset upon conditional sale or subject to any other
title retention agreement device or arrangement (including a Capitalized
Lease), and (c) the sale, assignment, pledge or transfer for security of
any accounts, general intangibles or chattel paper of the specified Person,
with or without recourse.

 

 

“Limited Recourse Default” means any condition, occurrence or event
which, after notice or lapse of time or both, would constitute a Limited
Recourse Event of Default.

 

“Limited Recourse Event of Default” means any of the following Events of
Default:

 

                   (a)        an Event of Default occurring under Section 16.1(f) of
the Lease solely as a result of a breach by Lessee of the representations set
forth in (1) Section 8.2(h)(ii), (2) Section 8.2(k)(A)(iii),
(3) Section 8.2(k)(A)(iv), (4) Section 8.2(k)(A)(v), (5) 8.2(k)(B),
(6) 8.2(k)(C), (7) Section 8.2(s) or (8) Section 8.2(ff)(ii) of
the Participation Agreement;

 

                   (b)        an Event of Default occurring under Section 16.1(e) of
the Lease solely as a result of a breach of the covenant set forth in (1) Sections
9.1(c)(iv)(A)(y) of the Participation Agreement, (2) Section 9.1(c)(iv)(B) (but
only to the extent such Event of Default is based solely upon the failure by
Lessee to provide notice of any Limited Recourse Event of Default) of the
Participation Agreement or (3) Clause (iii) of the last proviso of
the first paragraph of Section 6.1 of the Lease; or

 

                   (c)        an Event of Default occurring under Section  16.1(j)(ii) of
the Lease.

 

“Loan” or “Loans” is
defined in Section 2.1(b) of the Loan Agreement.

 

“Loan Agreement” means the Loan Agreement dated as of March 14,
2008, among Lessor, as Borrower thereunder, Collateral Agent and the Lenders,
as amended, supplemented or otherwise modified from time to time.

 

“Loan Agreement Event of Default” is defined in Section 5.1 of the
Loan Agreement.

 

“Loan Balance” means, as of any date of determination, an amount
equal to the sum of the principal amount outstanding under all the Loans of all
Lenders, together with all accrued and unpaid Interest thereon.

 

“Loan Commitment” means with respect to a Lender, the Commitment of
such Lender to make a Loan to the Lessee on the Closing Date in an aggregate
principal amount not to exceed the amount opposite such Lender’s name on
Schedule II to the Participation Agreement, as it may be revised pursuant
to Article XI of Participation Agreement.

 

“Loan Documents” means the Loan Agreement, the Note and the Security
Instruments.

 

 

“Marketing Costs” means, with respect to the Subject Property, the
Lessee’s interest in the CSC Sublease and any Fifth Floor Sublease, as
applicable, to the extent that either or both of such subleases will be in
effect as of the date such sale is to be consummated to be sold pursuant to Article XX
of the Lease, all charges, costs and expenses incurred in marketing and
preparing for sale all or any portion of the Subject Property, the Lessee’s
interest in the CSC Sublease and any Fifth Floor Sublease, as applicable, to
the extent that either or both of such subleases will be in effect as of the
date such sale is to be consummated 
including without limitation, all legal fees and expenses and all
advertising costs and all costs incurred in connection with the delivery of an
appraisal, a survey and an environmental audit, but excluding (i) any
Sales Costs and (ii) any costs incurred to bring the Leased Property to
the condition required by the Lease.

 

“Marketing Costs Cap” is defined Section 20.1(h) of
the Lease.

 

“Master Agreement” means the Master Agreement dated February 1,
2000 between the Seller and the City of Austin, as the same has been or may be
amended, modified or supplemented from time to time.

 

“Material Adverse Effect” means a materially adverse effect on (i) the
assets, business, operations, properties, income or financial condition or
prospects of the Lessee, (ii) the validity or enforceability of any of the
Operative Documents of the type described in clauses (a) through (h),
inclusive, and clauses (j) through (k), inclusive and (m) through
(q), inclusive, of the definition thereof or any rights or remedies under any
thereof, (iii) the rights or interests of Lessor, the Collateral Agent or
any Lender in and to the Subject Property, the CSC Sublease or any Fifth Floor
Sublease or (iv) the Fair Market Value, use, utility, useful life or
residual value of the Subject Property taking into account the affect of the
CSC Sublease and any Fifth Floor Sublease on such Subject Property.

 

“Material Environmental Violation” is defined in Section 14.3 of the
Lease.

 

“Material Plan” means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.

 

“Material Subsidiary” means any Subsidiary representing not
less than 5% of the Lessee’s Consolidated Net Income, total stockholders’
equity, or EBITDAR, all as determined as of the last day of each fiscal
quarter, for the four consecutive fiscal quarters ended as of such day.

 

“Maturity Date” means the Expiration Date.

 

“Memorandum of Lease” means the Memorandum of Lease dated as
of March 14, 2008, among the Lessor, the Lessee and the Deed of Trust
Trustee, as amended, supplemented or modified from time to time.

 

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

 

“Moody’s” means Moody’s Investor Service, Inc., or any
successor thereto.

 

 

 

 

“Multiemployer Plan” means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.

 

“Net Income” means, for any period, the net income (or loss) after
taxes for such period of the Lessee, determined in accordance with GAAP.

 

“Net Sales Proceeds” means the difference between (i) Gross Proceeds
and (ii) Sales Costs.

 

“Non-Consenting Participant” has the meaning in Section 4.8(a) of
the Participation Agreement.

 

“Nonseverable” means a Modification or part of a Modification the
removal of which from the Leased Property would materially impair the Fair
Market Value, utility, useful life or residual value thereof as set forth in
the Appraisal.

 

“Notes” is defined in Section 2.2(b) of the Loan
Agreement.

 

“Obligations” means all obligations (monetary or otherwise) of the
Lessee arising under or in connection with any of the Operative Documents.

 

“OECD” means the Organization for Economic Cooperation and
Development.

 

“Offeree Letter” is defined in Section 6.1(m) of the
Participation Agreement.

 

“Operative Documents” means the following:

 

                   (a)        the Participation Agreement;

 

                   (b)        the Lease and any memoranda thereof;

 

                   (c)        the Deed of Trust;

 

                   (d)        the Ground Lease and any memoranda
thereof;

 

                   (e)        the Loan Agreement;

 

                    (f)        the Notes;

 

                   (g)        the Security Instruments;

 

                   (h)        the Assignment of Ground Lease and any
memoranda thereof;

 

 

 

 

 

                    (i)        the Related Agreements;

 

                    (j)        the Assignment of Related Agreements and
any memoranda thereof;

 

                   (k)        the Assignment of Leases and Rents and
any memoranda thereof;

 

                    (l)        the Purchase Agreement;

 

                  (m)        the Estoppel Certificate;

 

                   (n)        the Fee Letters;

 

                   (o)        the Deed;

 

                   (p)        the Assignment of Subleases;

 

                   (q)        the Assignment of Purchase Agreement;

 

                    (r)        the CSC Sublease;

 

                   (s)        any Fifth Floor Sublease; and

 

                    (t)        any SNDA entered into among Lessor,
Collateral Agent, Lessee and CSC and/or an Eligible Sublessee.

 

“Overall Transaction” means all the transactions and
activities referred to in or contemplated by the Operative Documents.

 

“Overdue Rate” means, with respect to any Loan or Lessor Amount, the
LIBO Rate or Alternate Base Rate then in effect for such Loan or Lessor Amount,
plus 2.0% per annum.

 

“Owner’s Policy” is defined in Section 6.1(r) of the
Participation Agreement.

 

“Participant Balance” means, with respect to any Participant
as of any date of determination:  (i) with
respect to any Lender, the Loan Balance held by such Lender or (ii) with
respect to the Lessor, the Lessor Balance.

 

“Participants” means, collectively, the Lessor and the Lenders.

 

“Participation Agreement” means the Participation Agreement dated
as of March 14, 2008, among the Lessee, as Lessee; the Lessor; the
Lenders; and the Collateral Agent; as amended, supplemented or otherwise
modified from time to time.

 

“Participation Response Notice” has the meaning in Section 4.8 of
the Participation Agreement.

 

 

“Payment Date” means (i) the 30th day of each March, June, September and
December, or, in each case, if such 30th day is not a Business Day, the next
succeeding Business Day unless the result would be that the Payment Date would
be in the next succeeding calendar month, in which case such Payment Date shall
be on the next preceding Business Day, and (ii) in any case, the Maturity
Date.

 

“Payment Default” means the failure of Lessee to make any payment of (i) Basic
Rent when due and such failure shall continue for a period of five (5) days
or (ii) any amounts due pursuant to Sections 15.1, 18.1, 18.2, 19.1(b) or
Article XX of the Lease when due.

 

“Payment Office” means the office of each Participant and the
Collateral Agent identified on Schedule III to the Participation Agreement
as its Payment Office.

 

“PBGC” means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.

 

“Permitted Investments” means (i) full faith and credit
obligations of the United States of America, or fully guaranteed as to interest
and principal by the full faith and credit of the United States of America,
maturing in not more than one year from the date such investment is made, (ii) certificates
of deposit having a final maturity of not more than one year after the date of
issuance thereof of a Participant or of any other commercial bank incorporated
under the laws of the United States of America or any state thereof or the
District of Columbia, which bank is a member of the Federal Reserve System and
has a combined capital and surplus of not less than $100,000,000 and with a
senior unsecured debt credit rating of at least “P-1” by Moody’s and “A” by
S&P, (iii) commercial paper of the Participants having a remaining
term until maturity of not more than 180 days from the date such investment is
made, (iv) commercial paper of companies, banks, trust companies or
national banking associations (in each case excluding Lessee and its
Affiliates) incorporated or doing business under the laws of the United States
or one of the States thereof, in each case having a remaining term until
maturity of not more than 180 days from the date such investment is made and
rated “P-1” by Moody’s or at least “A-1” by S&P, (v) repurchase
agreements maturing within one year with any financial institution having
combined capital and surplus of not less than $100,000,000 with any of the
obligations described in clauses (i) through (iv) as collateral so
long as title to the underlying obligations pass to Collateral Agent and such
underlying securities shall be segregated in a custodial or trust account for
the benefit of Collateral Agent and (vi) investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by any financial institution having a combined capital and surplus
of not less than $100,000,000 or an Affiliate of any such financial institution
and the portfolios of which are limited to any of the obligations described in
clauses (i) through (iv). The Lessor and the Collateral Agent,
as applicable, are hereby authorized in making or disposing of any Permitted
Investment to deal with themselves (in their individual capacities) or with any
one or more of their Affiliates whether or not they or such Affiliates are
acting as an agent of the Lessor or Collateral Agent or for any third person or
dealing as a principal for their own accounts.

 

 

“Permitted Liens” means any of the following:

 

                    (i)        the respective rights and interests of
the parties to the Operative Documents as provided in the Operative Documents;

 

                   (ii)        the rights of any sublessee under a
sublease permitted by the terms of the Lease;

 

                  (iii)        Liens for Taxes that either are not yet
subject to interest or penalties or are being contested in accordance with the
provisions of Section 12.1 of the Lease;

 

                  (iv)        Liens arising by operation of law,
materialmen’s, mechanics’, workers’, repairmen’s, employees’, carriers’,
warehousemen’s and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the ordinary
course of business for amounts that either are not more than 60 day past due or
are being diligently contested in good faith by appropriate proceedings, so
long as such proceedings to contest satisfy all applicable conditions for the
continuation of proceedings set forth in Section 12.1 of the Lease;

 

                   (v)        Liens of any of the types referred to in
clause (iv) 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 arrangements) shall comply with
Applicable Laws, and has effectively stayed any execution or enforcement of
such Liens;

 

                  (vi)        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 set forth
in Section 12.1 of the Lease;

 

                 (vii)        easements, rights of way and other
encumbrances on title to real property pursuant to Section 11.2 of the
Lease;

 

                (viii)        Lessor’s Liens; and

 

                   (ix)        Liens described on the title insurance
policy delivered with respect to the Subject Property pursuant to Section 6.1(r) of
the Participation Agreement, other than Liens described in clause (iv) or
(vi) above that are not removed within forty (40) days of their discovery
by the Lessee.

 

“Permitted Modifications” is defined in Section 10.1(a) of
Lease.

 

“Person” means an individual, partnership, limited liability
company, corporation (including a business trust), firm, joint stock company,
trust, unincorporated association, enterprise, joint venture or other entity,
or a government or any political subdivision or agency thereof.

 

 

“Plan” means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.

 

“Post-Closing Sales Costs” means the actual costs and expenses
incurred by or charged to the Lessor, the Collateral Agent or any Lender to
sell all or any portion of the Subject Property, the CSC Sublease and any Fifth
Floor Sublease, including all broker or sales commissions and fees, transfer,
filing and document taxes and fees, legal fees, escrow fees, fees and costs
incurred for any reports required to be delivered to the purchaser of such
property, and any other costs incurred and which would customarily be charged
to a seller and reflected in a closing statement produced in consummating a
sale of real property located in the State of Texas.

 

“Post-Expiration Date Balance” means the sum of (i) the aggregate
of the remaining Lease Balance, after application of the Sale Option Recourse
Amount actually paid to Lessor on or before the Expiration Date pursuant to Section 20.3
of the Lease, plus (ii) all reasonable
costs and expenses incurred by or payable to Lessor (including management,
supervisory or any remarketing fees payable to any Person) following the
Expiration Date to maintain, lease or sell the Subject Property, the CSC
Sublease and any Fifth Floor Sublease (including any allocated internal costs
of Lessor), plus (iii) an amount equal to the
amount of Property Carrying Costs accruing during the period following the
Expiration Date through the date Lessor recovers Gross Proceeds equal to the
sum of items (i) and (ii) above.

 

“Proceeds Account” is defined in Section 14.1(a) of the Lease.

 

“Property Carrying Costs” means, as of any date of determination,
for the period commencing on the Expiration Date and ending on the date of such
determination, (i) the product of (A) the Yield Rate and (B) the
outstanding Lessor Amount as of the Expiration Date, in each case after giving
effect to the amount of Basic Rent paid by Lessee on the Expiration Date and
actually distributed to the Lessor by the Collateral Agent pursuant to Section 5.3
of the Participation Agreement and (ii) the number of days in such period.

 

“Purchase Agreement” means the Purchase Agreement With Joint Escrow
Instructions dated as of December 26, 2007 by and between Seller and
Lessee, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Purchase Amount” means, as of any date of determination, the sum of (a) the
Lease Balance, plus (b) other sums then due and payable under the
Operative Documents by Lessee, including, without limitation, all accrued and
unpaid Supplemental Rent and any liquidated amounts of money due and owing
pursuant to Article XIII of the Participation Agreement.

 

 

“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 Early Termination Option,
and the proposed purchase date therefor.

 

“Purchase Option” is defined in Section 19.1(b) of the Lease.

 

“Regulation U, T, or X” means
Regulation U, T, or X, respectively, of the F.R.S. Board as from time to time
in effect and any successor to all or a portion thereof.

 

“Related Agreements” means, collectively, the agreements listed on
Schedule I to the Assignment of Leases and Rents.

 

“Release” means any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance into the environment, including,
without limitation, ambient air, surface water, ground water or land.

 

“Remediation” is defined in Section 14.2 of the Lease.

 

“Rent” means, collectively, the Basic Rent and the
Supplemental Rent, in each case payable under the Lease.

 

“Replacement Participant” means Persons who become Participants
pursuant to the terms of Section 12.4 of the Participation Agreement.

 

“Reportable Event” means an event that is reportable under Section 4043(c)(1),
(2), (3), (4), (5), (6), (7), (10), (11), (12) or (13) of ERISA and for which a
waiver is not available.

 

“Required Lenders” means Lenders whose aggregate Credit Exposures
constitute more than 51% of the aggregate Credit Exposure of all Lenders at
such time.

 

“Required Modifications” is defined in Section 10.1(a) of
the Lease.

 

“Required Participants” means Participants whose aggregate
Credit Exposures constitute more than 51% of the aggregate Credit Exposure of
all Participants at such time.

 

“Requirement of Law” means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or
of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property is
subject, including without limitation Environmental Laws.

 

“Responsible Officer” means, (i) relative to the Lessee,
those of its officers responsible for the Leased Property whose signature and
incumbency or position shall have been certified to the Participants and the
chief financial officer, vice president of worldwide operations or the
corporate treasurer, (ii) relative to the Collateral Agent, any officer
within the corporate trust department of the Collateral Agent, including any
vice president, assistant vice present, assistant secretary, assistant
treasurer, trust officer or any other officer of the Lessor who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporation trust matter
is referred because of such person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Participation Agreement or Operative Documents relating thereto
and (iii) relative to any other Person, including Lessor, the President,
the Treasurer or comptroller of such Person.

 

 

“Responsible Officer’s Certificate” means a certificate signed by an
applicable Responsible Officer, which certificate shall certify as true and
correct the subject matter being certified to in such certificate.

 

“Retail Sublease” means  the
Retail Sublease Agreement dated as of April 10, 2000 between Seller and
the City of Austin, Texas, as the same may be amended, supplemented, assigned,
transferred or otherwise modified from time to time.

 

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

 

“Sale Option” is defined in Section 19.1(b) of the Lease.

 

“Sale Option Recourse Amount” means, as of any date of determination,
the product of (i) 79.84% multiplied by (ii) Lease Balance.

 

“Sales Costs” means the actual expenses, credits, costs, fees and
Impositions incurred by or charged to the Subject Property, Lessor, Collateral
Agent, any Lender, Lessee or any other Person arising from the sale of the
Subject Property, including, without limitation, all broker or sales
commissions, recording fees, escrow fees, filing fees, title insurance fees
cost associated with any assignment and assumption of the CSC Sublease of any
Fifth Floor Sublease, if either or both of such subleases are in effect as of
the date of sale of the Subject Property and any and all document, documentary,
transfer, sale and other taxes incurred as a result of the actual sale of the
Subject Property, the CSC Sublease and any Fifth Floor Sublease; provided, however, that any Sales Costs incurred as a result
of the assignment and assumption of the CSC Sublease and any Fifth Floor
Sublease shall not exceed $15,000.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.

 

“Security Instruments” means the Deed of Trust, the Assignment
of Leases and Rents, the related UCC filings and any other documents granting a
Lien to the Collateral Agent or any Participant.

 

“Seller” means Computer Sciences Corporation, a Nevada
corporation.

 

 

 

 

“Significant Casualty” means that the Leased Property shall
suffer (i) damage or destruction resulting in an insurance settlement on
the basis of an actual, constructive or compromised total loss, (ii) destruction
or damage beyond repair, or (iii) damage which, in Lessee’s good faith
judgment, makes repair uneconomic or renders the Leased Property unfit for
commercial use.

 

“Significant Condemnation” means that (i) (x) title to
all or any material portion of the Leased Property shall be taken or appropriated
by a Governmental Authority under the power of eminent domain or otherwise, (y) all
or any material portion of the Leased Property shall be taken, confiscated,
seized or requisitioned for use by any Governmental Authority under the power
of eminent domain or otherwise, and such taking, confiscation, seizure or
requisition for use pursuant to this clause (y) is for a period that
exceeds 180 days or, if less, the remaining portion of the Term, or (ii) as
a result of any rule, regulation, order or other action by any Governmental
Authority, the use of the Leased Property in commercial operation shall have
been prohibited, directly or indirectly, for a period of 60 days.

 

“Significant Environmental Event” means an Environmental Violation the
cost of Remediation of which, in the reasonable judgment of an independent
environmental legal counsel would exceed $2,000,000.

 

“SNDA” has the meaning in Section 6.1 of the Lease.

 

“Solvent” means with respect to any Person on a particular date,
that on such date (i) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities of such Person, (ii) the present fair saleable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the normal course of business, (iv) 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 (v) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such
Person’s property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person
is engaged.  In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability taking into account any subrogation and
contribution rights.

 

“Subject Property” means, collectively, (i) the Facility and (ii) Lessor’s
rights in and to (w) the Land, (x) the Ground Lease, (y) the
other Related Agreements and (z) for the purposes of
Sections 16.2(c), 16.2(e), 16.2(i), 16.4, 20.1, 20.3 and 21.1 of the
Lease, the Lessee’s interest in the CSC Sublease, and if applicable, any Fifth
Floor Sublease.

 

“Sub-Participant” is defined in Section 12.2 of the Participation
Agreement.

 

 

 

“Subsidiary” means, for any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through one or more other Subsidiaries, and (ii) any
partnership, association, joint venture or other entity in which such Person,
directly or indirectly through one or more other Subsidiaries has a greater
than 50% equity interest at the time.

 

“Supplemental Rent” means all amounts, liabilities and obligations for
the payment of money (other than Basic Rent) which Lessee assumes or agrees to
pay or is otherwise obligated to pay under the Lease or any other Operative
Document (whether or not designated as Supplemental Rent) to Collateral Agent,
any Participant or any other Person, including, without limitation, Break
Costs, any Sale Option Recourse Amount and any Lease Balance.

 

“Syndication Agent”means JPMorgan Chase Bank, N.A.

 

“Tax Indemnitee” or “General Indemnitee”
means each Participant, the Collateral Agent (in its individual capacity and as
agent), the Arranger, any additional, separate or co-trustee or co-agent
appointed in accordance with the terms of the Participation Agreement, and the
respective Affiliates, successors, permitted assigns, permitted transferees,
employees, officers, directors, shareholders, partners, participants,
representatives and agents of each of the foregoing Persons; provided, however, that in no event shall Lessee or any of
its Affiliates be a General Indemnitee or Tax Indemnitee.

 

“Taxes” is defined in the definition of Impositions.

 

“Term” is defined in Section 2.2 of the Lease.

 

“Termination Date” means such date as the Lease may be terminated
pursuant to the terms thereof, including without limitation, of
Sections 15.2 or 18.1 of the Lease.

 

“Termination Notice” is defined in Section 15.1(a) of the Lease.

 

“Title Insurance Company” means Chicago Title Insurance Company or
another a title insurance company selected by Lessee and satisfactory to the
Collateral Agent.

 

“Title Policies” is defined in Section 6.1(r) of the
Participation Agreement.

 

“Transaction Expenses” means all reasonable costs and expenses
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 and expenses of
Chapman and Cutler LLP, as special document counsel;

 

 

 

(b)        the Arranger’s Fee (which shall be
payable if and only if the Advance is made and the transactions contemplated by
the Operative Documents are consummated) and Arranger’s reasonable costs and
expenses, in connection with the consummation of the Overall Transaction on the
Closing Date and distribution and syndication costs;

 

(c)         the initial and ongoing fees and
reasonable expenses of the Collateral Agent and its special counsel;

 

(d)        all title insurance premiums and
applicable appraisal fees and reasonable expenses;

 

(e)         search fees, recording fees and filing
fees incurred in connection with Lien searches and the filing of UCC Financing
Statements, memoranda of lease and ground lease, and any and all mortgages or
deeds of trust, including fees and expenses of the title company;

 

(f)         the fees and costs of the environmental
consultant;

 

(g)        insurance premiums with respect to the
residual value  insurance obtained by the
Lessor to insure Lessor’s capital lease treatment of the Overall Transaction;

 

(h)        costs and expenses for the survey of the
Land; and

 

(i)          any other reasonable out-of-pocket
expenses of the Collateral Agent and the Lessor incurred in connection with the
consummation of the Overall Transaction on the Closing Date.

 

“Transferee” is defined in Section 12.3(a) of the
Participation Agreement.

 

“UCC Financing Statements” means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to (i) protect the Lessor’s interest in the Lessee Collateral
under the Lease to the extent the Lease is a security agreement and (ii) perfect
(assuming compliance with the UCC) a security interest in favor of the
Collateral Agent for the benefit of the Participants in the Lessor Collateral.

 

“Unfunded Liabilities” means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit
liabilities under such Plan, determined on a plan termination basis using the
assumption prescribed by the PBGC for purposes of Section 4044 of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.

 

“Uniform Commercial Code” and “UCC” means the
Uniform Commercial Code as in effect in any applicable jurisdiction.

 

 

 

“United States” means the United States of America.

 

“Upfront Fees” means fees referred to in Section 4.5(i) of
the Participation Agreement.

 

“Yield” means, with respect to each day of the applicable
Interest Period (a) the Yield Rate for such Interest Period multiplied by (b) the
aggregate Lessor Amount outstanding divided by 360 or 365, as determined in
accordance with Section 4.1 of the Participation Agreement.

 

“Yield Rate” means, with respect to any Interest Period, (a) the
sum of the LIBO Rate (Reserve Adjusted) for such Interest Period, plus the Applicable
Lessor Margin, or (b) if the Lessor Amount accrues Yield pursuant to Section 15.1
or 15.2 of the Participation Agreement, at the Alternative Base Rate.Exhibit 10.1

 

KODIAK OIL & GAS CORP.

NON-INCENTIVE PERFORMANCE-BASED STOCK OPTION AGREEMENT

 

This NON-INCENTIVE STOCK OPTION
AGREEMENT (the “Agreement”)
is made this        day of               ,
          , by and
between Kodiak Oil & Gas Corp., a Yukon Territory corporation (the “Company”) and                         ,
an individual resident of               
(“Employee”).

 

1.             Grant of Stock Options.  The Company hereby grants Employee stock
options (the “Stock Options”) to purchase all or any part of an aggregate of                 
shares (the “Shares”) of Common
Stock of the Company at the exercise price of               
per share according to the terms and conditions set forth in this Agreement and
in the Kodiak Oil & Gas Corp. 2007 Stock Incentive Plan (the “Plan”). 
The Stock Options will not be treated as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).  The Stock Options are issued under the Plan
and are subject to its terms and conditions. 
A copy of the Plan will be furnished upon request of Employee.

 

The Stock Options shall terminate at the close of business five years from the date hereof.

 

2.             Vesting of Stock Option Rights.

 

(a)   Except as otherwise provided in this Agreement, the
Stock Options shall vest and may be exercised by Employee in accordance with
the performance vesting conditions set forth at Exhibit A (“Performance
Vesting Conditions”).

 

(b)   During the lifetime of Employee, the Stock
Options shall be exercisable only by Employee and shall not be assignable or
transferable by Employee, other than by will or the laws of descent and
distribution.

 

3.             Exercise of Stock Options after
Death or Termination of Employment. The Stock Options shall terminate and
may no longer be exercised if Employee ceases to be employed by the Company or
its affiliates, except that:

 

(a)           If Employee’s employment shall be
terminated for any reason, voluntary or involuntary, other than for “Cause” (as defined in Section 3(e))
or Employee’s death or disability (within the meaning of Section 22(e)(3) of
the Code), Employee may at any time within a period of 3 months after such termination exercise the Stock Options to
the extent the Stock Options were exercisable by Employee on the date of the
termination of Employee’s employment.

 

(b)           If Employee’s employment is
terminated for Cause, the Stock Options shall be terminated as of the date of
the act giving rise to such termination.

 

(c)           If Employee shall die while the Stock
Options are still exercisable according to its terms or if employment is
terminated because Employee has become disabled (within the meaning of Section 22(e)(3) of
the Code) while in the employ of the Company and Employee shall not have fully
exercised the Stock Options, such Stock 

 

 

Options may be exercised at any time within 12 months
after Employee’s death or date of termination of employment for disability by
Employee, personal representatives or administrators or guardians of Employee,
as applicable or by any person or persons to whom the Stock Options are
transferred by will or the applicable laws of descent and distribution, to the
extent of the full number of Shares Employee was entitled to purchase under the
Stock Options on (i) the earlier of the date of death or termination of
employment or (ii) the date of termination for such disability, as
applicable.

 

(d)           Notwithstanding the above, in no case
may the Stock Options be exercised to any extent by anyone after the
termination date of the Stock Options.

 

(e)           “Cause”
shall mean (i) the willful and
continued failure by Employee substantially to perform his or her duties and
obligations (other than any such failure resulting from his or her incapacity
due to physical or mental illness), (ii) Employee’s conviction or plea
bargain of any felony or gross misdemeanor involving moral turpitude, fraud or
misappropriation of funds or (iii) the willful engaging by Employee in
misconduct which causes substantial injury to the Company or its affiliates,
its other employees or the employees of its affiliates or its clients or the
clients of its affiliates, whether monetarily or otherwise.  For purposes of this paragraph, no action or
failure to act on Employee’s part shall be considered “willful” unless done or omitted to be
done, by Employee in bad faith and without reasonable belief that his or her
action or omission was in the best interests of the Company.

 

4.             Method of Exercise of Stock
Options.  Subject to the foregoing,
the Stock Options may be exercised in whole or in part from time to time by
serving written notice of exercise on the Company at its principal office
within the Stock Options period.  The
notice shall state the number of Shares as to which the Stock Options are being
exercised and shall be accompanied by payment of the exercise price.  Payment of the exercise price shall be made
in cash (including bank check, personal check or money order payable to the
Company).

 

5.             Miscellaneous

 

(a)   Plan Provisions Control.  In the event that any provision of the
Agreement conflicts with or is inconsistent in any respect with the terms of
the Plan, the terms of the Plan shall control.

 

(b)   No Rights of Stockholders.  Neither Employee, Employee’s legal
representative nor a permissible assignee of these Stock Options shall have any
of the rights and privileges of a stockholder of the Company with respect to
the Shares, unless and until such Shares have been issued in the name of
Employee, Employee’s legal representative or permissible assignee, as
applicable.

 

(c)   No Right to Employment.  The grant of the Stock Options shall not be
construed as giving Employee the right to be retained in the employ of, or as
giving a director of the Company or an Affiliate (as defined in the Plan) the
right to continue as a director of the Company or an Affiliate with, the
Company or an Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment or position at any time, 

 

2

 

with or without cause or remove
a Director in accordance with applicable law. 
In addition, the Company or an Affiliate may at any time dismiss
Employee from employment, or terminate the term of a director of the Company or
an Affiliate, free from any liability or any claim under the Plan or the
Agreement.  Nothing in the Agreement
shall confer on any person any legal or equitable right against the Company or
any Affiliate, directly or indirectly, or give rise to any cause of action at
law or in equity against the Company or an Affiliate.  The Stock Options granted hereunder shall not
form any part of the wages or salary of Employee for purposes of severance pay
or termination indemnities, irrespective of the reason for termination of
employment.  Under no circumstances shall
any person ceasing to be an employee of the Company or any Affiliate be
entitled to any compensation for any loss of any right or benefit under the
Agreement or Plan which such employee might otherwise have enjoyed but for
termination of employment, whether such compensation is claimed by way of
damages for wrongful or unfair dismissal, breach of contract or otherwise.  By participating in the Plan, Employee shall
be deemed to have accepted all the conditions of the Plan and the Agreement and
the terms and conditions of any rules and regulations adopted by the
Committee and shall be fully bound thereby.

 

(d)   Governing Law.  The validity, construction and effect of the
Plan and the Agreement, and any rules and regulations relating to the Plan
and the Agreement, shall be determined in accordance with the internal laws,
and not the law of conflicts, of the Yukon Territory.

 

(e)   Severability.  If any provision of the Agreement is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Agreement under any law deemed applicable
by the Committee (as defined in the Plan), such provision shall be construed or
deemed amended to conform to applicable laws, or if it cannot be so construed
or deemed amended without, in the determination of the Committee, materially
altering the purpose or intent of the Plan or the Agreement, such provision
shall be stricken as to such jurisdiction or the Agreement, and the remainder
of the Agreement shall remain in full force and effect.

 

(f)    No Trust or Fund Created.  Neither the Plan nor the Agreement shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and Employee or any
other person.  To the extent that any
Person acquires a right to receive payments from the Company or any Affiliate
pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Company or any Affiliate.

 

(g)   Headings.  Headings are given to the Sections and
subsections of the Agreement solely as a convenience to facilitate
reference.  Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Agreement or any provision thereof.

 

(h)   Conditions Precedent to Issuance of Shares.  Shares shall not be issued pursuant to the
exercise of the Stock Options unless such exercise and the issuance and
delivery of the applicable Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
of 1933, as amended, the Exchange Act of 1934, as 

 

3

 

amended, the rules and
regulations promulgated thereunder, the requirements of any applicable stock
exchange and the laws of the Yukon Territory. 
As a condition to the exercise of the purchase price relating to the
Stock Options, the Company may require that the person exercising or paying the
purchase price represent and warrant that the Shares are being purchased only
for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation and
warranty is required by law.

 

(i)    Withholding.  In order to provide the Company with the opportunity
to claim the benefit of any income tax deduction which may be available to it
upon the exercise of the Stock Options and in order to comply with all
applicable federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state payroll, withholding, income or other taxes are
withheld or collected from Employee.

 

(j)    Consultation With Professional Tax and
Investment Advisors.  The holder of
these Stock Options acknowledges that the grant, exercise, vesting or any
payment with respect to these Stock Options, and the sale or other taxable
disposition of the Shares acquired pursuant to the exercise thereof, may have
tax consequences pursuant to the Code or under local, state or international
tax laws.  The holder further
acknowledges that such holder is relying solely and exclusively on the holder’s
own professional tax and investment advisors with respect to any and all such
matters (and is not relying, in any manner, on the Company or any of its
employees or representatives).  Finally,
the holder understands and agrees that any and all tax consequences resulting
from the Stock Options and their grant, exercise, vesting or any payment with
respect thereto, and the sale or other taxable disposition of the Shares
acquired pursuant to the Plan, is solely and exclusively the responsibility of
the holder without any expectation or understanding that the Company or any of
its employees or representatives will pay or reimburse such holder for such
taxes or other items.

 

[SIGNATURE PAGE FOLLOWS]

 

4

 

SIGNATURES

 

IN WITNESS WHEREOF, the Company
and Employee have executed this Agreement on the date set forth in the first
paragraph.

 

	
   

  	
  KODIAK
  OIL & GAS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
				

 

5

 

EXHIBIT A

PERFORMANCE VESTING CONDITIONS SCHEDULE

 

This
Exhibit A to the Non-Incentive Performance-Based Stock Option Agreement
(the “Agreement”) contains the Performance Vesting Conditions with respect to
the Stock Options.  To the extent that
any of the Performance Vesting Conditions result in a number of Stock Options
that is not a whole number, then the total number of vested Stock Options shall
be rounded down to the nearest whole number. 
The satisfaction by the Company of the performance results underlying
the Performance Vesting Conditions shall be determined by the Committee in its
sole discretion.  Capitalized terms used
but not defined herein shall have the same meanings assigned to them in the
Agreement.

 

1.1                                         Performance
Vesting Condition — Net Worth.  The vesting of the Stock Options shall, in
part, be subject to a Performance Vesting Condition based on total stockholder’s
equity of the Company as of December 31, 2008 as reflected in the Company’s
audited consolidated balance sheet as of December 31, 2008 (“Net Worth”),
as follows:

 

(a)          If the Company achieves actual Net Worth in an
amount greater than or equal to $81,952,039, then exactly 7.5% of the [total]
Stock Options granted under the Agreement shall vest on March 20, 2009
pursuant to Section 1.1.

 

(b)         If the Company achieves actual Net Worth in an
amount less than $68,293,366, then exactly 0% of the [total] Stock Options
granted under the Agreement shall vest on March 20, 2009 pursuant to this
subsection 1.1.

 

(c)          If the Company achieves actual Net Worth in an
amount between $68,293,366, inclusive, and $81,952,039, exclusive, then Stock
Options shall vest pursuant to this subsection 1.1 on March 20, 2009 in an
amount equal to the result of (i) actual Net Worth divided by (ii) $81,952,039
multiplied by (iii) 7.5% multiplied by (iv) [the total Stock Options
granted under the Agreement].

 

1.2                                         Performance
Vesting Condition — Income (Loss).  The vesting of the Stock Options shall, in
part, be subject to a Performance Vesting Condition based on the net income
(loss) of the Company for the year ended December 31, 2008 as reflected in
the Company’s audited consolidated statement of operation for the year then
ended (“Income (Loss)”), as follows:

 

(a)          If the Company achieves actual Income (Loss) in an amount
greater than or equal to $0, then exactly 11.25% of the [total] Stock Options
granted under the Agreement shall vest on March 20, 2009 pursuant to Section 1.2.

 

(b)         If the Company achieves actual Income (Loss) in an
amount less than ($38,185,890), then exactly 0% of the [total] Stock Options
granted under the Agreement shall vest on March 20, 2009 pursuant to Section 1.2.

 

(c)          If the Company achieves Income (Loss) in an amount
between ($38,185,890), inclusive, and $0, exclusive, then Stock Options shall
vest on March 20, 2009 pursuant to Section 1.2 in an amount equal to
one (1) minus the result of (i) the absolute value of actual Income
(Loss) divided by (ii) $38,185,890, which result shall be multiplied by (x) 11.25%
multiplied by (y) [the total Stock Options granted under the Agreement].

 

 

1.3                                         Performance
Vesting Condition — Adjusted EBITDA.  The vesting of
the Stock Options shall, in part, be subject to a Performance Vesting Condition
based on the Adjusted EBITDA of the Company for the year ended December 31,
2008, as set forth in this Section 1.3. 
As used herein, the term “Adjusted EBITDA” shall have the meaning and
value assigned to it in the Company’s Form 10-K filed with the Securities
and Exchange Commission for the fiscal year ended December 31, 2008 (“Adjusted
EBITDA”).

 

(a)          If the Company achieves Adjusted EBITDA in an amount
greater than or equal to $3,216,678, then exactly 11.25% of the [total] Stock
Options granted under the Agreement shall vest on March 20, 2009 pursuant
to Section 1.3.

 

(b)         If the Company achieves Adjusted EBITDA in an amount
less than $2,680,565, then exactly 0% of the [total] Stock Options granted
under the Agreement shall vest on March 20, 2009 pursuant to Section 1.3.

 

(c)          If the Company achieves Adjusted EBITDA in an amount
between $2,680,565, inclusive, and $3,216,678, exclusive, then Stock Options
shall vest on March 20, 2009 pursuant to Section 1.3 in an amount
equal to the result of (i) actual Adjusted EBITDA divided by (ii) $3,216,678
multiplied by (iii) 11.25% multiplied by (iv) [the total Stock
Options granted under the Agreement].

 

1.4                                         Performance
Vesting Condition — Oil and Gas Sales Volume. 
The vesting of the Stock Options shall, in part, be
subject to a Performance Vesting Condition based on the amount disclosed in the
Company’s financials for the year ended December 31, 2008 for oil and gas sales
volume expressed in BOE (6Mcf:1Bbl) (“Oil and Gas Sales Volume”), as follows:

 

(a)          If the Company achieves Oil and Gas Sales Volume in
an amount greater than or equal to 163,535, then exactly 22.5% of the [total]
Stock Options granted under the Agreement shall vest on March 20, 2009
pursuant to Section 1.4.

 

(b)         If the Company achieves Oil and Gas Sales Volume for
the year ended December 31, 2008 in an amount less than 136,279, then
exactly 0% of the [total] Stock Options granted under the Agreement shall vest
on March 20, 2009 pursuant to Section 1.4.

 

(c)          If the Company achieves Oil and Gas Sales Volume in
an amount between 136,279, inclusive, and 163,535, exclusive, then Stock
Options shall vest on March 20, 2009 pursuant to Section 1.4 in an
amount equal to the result of (i) actual Oil and Gas Sales Volume divided
by (ii) 163,535 multiplied by (iii) 22.5% multiplied by (iv) [the
total Stock Options granted under the Agreement].

 

1.5                                         Performance
Vesting Condition — Proved Reserves.  The vesting of
the Stock Options shall be subject to a Performance Vesting Condition based on
total oil and gas proved reserves expressed in MBOE (6Mcf:1Bbl) of the Company
for the year ended December 31, 2008 as reflected in the Company’s
financial statements for the period ended December 31, 2008 (“Proved
Reserves”), as follows:

 

(a)          If the Company achieves Proved Reserves in an amount
greater than or equal to 1,658, then exactly 22.5% of the [total] Stock Options
granted under the Agreement shall vest on March 20, 2009 pursuant to Section 1.5.

 

2

 

(b)         If the Company achieves Proved Reserves for the year
ended December 31, 2008 in an amount less than 1,381.3, then exactly 0% of
the [total] Stock Options granted under the Agreement shall vest on March 20,
2009 pursuant to Section 1.5.

 

(c)          If the Company achieves Proved Reserves for the year
ended December 31, 2008 in an amount between 1,381.3, inclusive, and
1,658, exclusive, then Stock Options shall vest on March 20, 2009 pursuant
to Section 1.5 in an amount equal to the result of (i) actual Proved
Reserves divided by (ii) 1,658 multiplied by (iii) 22.5% multiplied
by (iv) [the total Stock Options granted under the Agreement].

 

1.6                                         Performance
Vesting Condition — Discretionary.  The vesting of
the Stock Options shall, in part, be subject to a Performance Vesting Condition
such that the Committee may, in its discretion, permit up to 25% of the [total]
Stock Options granted under the Agreement to vest on March 20, 2009
pursuant to this Section 1.6.

 

3

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